Bolivia: Investing

FDI in Figures

According to UNCTAD's World Investment Report 2023, FDI flows to Bolivia turned negative again in 2022 (after 2019 and 2020), to USD -26 million, mainly due to the extraordinary payment of dividends in the hydrocarbon sector. However, other economic sectors showed increased investment. At the end of the same period, the total stock of FDI was estimated at USD 10.1 billion, around 23.4% of the country’s GDP. The country's many natural resources offer investment opportunities (hydrocarbons, mining sector), as do the transport and communications sectors. Bolivia’s wealth of natural resources attracts significant investment, particularly from Russia and China (the country has the continent's second-largest gas reserve and the world's largest lithium reserve). Lately, the majority of significant foreign projects in Bolivia have come from China. In 2023, a consortium led by the Chinese Contemporary Amperex Technology signed an agreement with the government to invest more than USD 1 billion in infrastructure construction the mining, refining, processing, and sale of lithium. According to figures from the Central Bank of Bolivia, in the first three months of 2023 the country received USD 60 million in net FDI inflows.

The 2014 Investment Law ensures equal treatment for both national and foreign companies. However, public investment takes precedence over private investment, as determined by the Bolivian government, which identifies sectors open to private investment. Public policies aim to boost domestic consumption of locally manufactured goods and foreign investment is restricted in matters directly related to national security. Both foreign and domestic private entities have the right to establish and own businesses and engage in profitable activities, although investments are subject to monitoring by the relevant ministry overseeing each sector. However, government decisions, control, and prioritization of key strategic sectors, such as natural resources and broadcast licenses, may restrict private companies, both foreign and domestic, from investing. Enforcement of laws concerning dispute settlements, intellectual property, and real property is inconsistent, leading to legal uncertainties and varied enforcement practices, which in turn affect the investment climate negatively. Moreover, many state-owned enterprises are managed inefficiently, contributing to the fragility of the economy and its susceptibility to external shocks. Bolivia's natural resources, including fossil energy and mining, are under full state control. While temporary authorizations for resource exploitation may be granted, ownership cannot be transferred to private interests through concessions or contracts. Overall, Bolivia does not provide a good investment climate, and the country ranks 133rd among the 180 economies on the Corruption Perception Index 2023 and 165th out of 184 countries on the latest Index of Economic Freedom.

Country Comparison For the Protection of Investors

	Bolivia	Latin America & Caribbean	United States	Germany
Index of Transaction Transparency*	1.0	4.1	7.0	5.0
Index of Manager’s Responsibility**	5.0	5.2	9.0	5.0
Index of Shareholders’ Power***	6.0	6.7	9.0	5.0

Source: Doing Business - Latest available data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.

Foreign Direct Investment	2020	2021	2022
FDI Inward Flow (million USD)	-1,129	584	-26
FDI Stock (million USD)	10,276.3	10,585.5	10,131.0
Number of Greenfield Investments*	5.0	7.0	3.0
Value of Greenfield Investments (million USD)	312	224	72

Source: UNCTAD - Latest available data

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.

Tax Rates

Value added tax (VAT) - Impuesto al valor agregado (IVA): 13% (standard rate - however, the effective rate is 14.94% as VAT must be included in the sales price).
Exports are zero-rated.
Exempt items include: goods imported by members of diplomatic corps recognized in Bolivia; “Bona fide” introduced merchandise, up to a limit of USD1,000; life insurance quotas (monthly payments with respect to a life insurance contract); for securities registered on the Bolivian Stock Exchange, capital gains generated by sales, results derived from the valuation processes determined by the Financial Supervisory Authority of Bolivia (Autoridad de Supervisión del Sistema Financiero, or ASFI) and results generated in the application of generally accepted accounting principles; transfers of goods or assets subject to the securitization process (titularización) administered by the securitization association, at the beginning and end of the process (under this process, the goods must be transferred to an independent fund [patrimonio autonomo] and, when the process is completed, the goods are returned to the original owner); operations regarding sales or transfers of portfolios (financial intermediation, insurance and pension); interest from loans received by financial entities; inbound tourism and lodging services for foreign tourists without a residence or address in Bolivia; artistic events focused on production, presentation and promotion of theater, dancing, national folklore, painting, sculpture and movies of Bolivian artists, if they are sponsored or developed in locations in Bolivia that are managed or owned by a municipal government or the Bolivian government; sale of books printed in Bolivia or those imported by or published by Bolivian institutions.
Company Tax: 25%
Withholding Taxes: Dividends: 0 (resident)/12.5% (non-resident), Interest: 0 (resident)/12.5% (non-resident), Royalties: 0 (resident)/12.5% (non-resident).
Social Security Contributions Paid By Employers: 14.71% of gross salary (16.71% for the mining sector). The employer also must contribute 2% to the National Housing Fund.
Other Domestic Resources: Bolivian Taxation Authority; Overview of Bolivia's tax measures in response to Covid-19; Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

	Bolivia	Latin America & Caribbean	United States	Germany
Number of Payments of Taxes per Year	42.0	28.2	10.6	9.0
Time Taken For Administrative Formalities (Hours)	1,025.0	327.5	175.0	218.0
Total Share of Taxes (% of Profit)	83.7	46.8	36.6	48.8

Setting Up a Company	Bolivia	Latin America & Caribbean
Procedures (number)	12.00	8.00
Time (days)	39.50	25.22

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Bolivia: Investing

FDI in Figures

Country Comparison For the Protection of Investors

Tax Rates

Individual Taxes

Country Comparison For Corporate Taxation

Investment Opportunities

Business Setup Procedures