Challenges Of Doing Business In Bolivia

Establishing and running a business in Bolivia can be hard with many processes that take much time; it is important to understand the challenges.

Bolivia has a growing economy, with growth of over 4% over the last ten years, leading their South American counterparts. This has led to an increased size and spending power of the middle class.

Investors are attracted to Bolivia's large reserves of natural resources, such as tin, silver, lithium and iron ore, plus the second-largest natural gas reserves in South America. An array of natural reserves can be found in the region, including gold, copper, zinc, plumb, antimony, sulphur, potassium and semi-precious stones, as well as forests with fine and exotic woods. It's no surprise, that the key sectors for Bolivia include mining, manufacturing and petroleum. However, Bolivia's agriculture sector is also set to grow over the next ten years, but to do so, it will need new technology. The government is considering the use of bio engineered crops to increase production, providing opportunities for foreign firms with agricultural expertise.

While Santa Cruz is not the capital city of Bolivia, it is the economic, productive and industrial capital of Bolivia. It has a population of almost 3 million and it is expected to double the population in the next 15 years. It is considered a growth pole and contributes almost 30% of the gross Domestic Product of the country. Santa Cruz also produces 70% of the food consumed in Bolivia with the highest regional growth in construction at an annual rate of 8%.

The Bolivian government is focused on promoting foreign direct investment, understanding that this is key to maintaining growth. However, establishing and maintaining a business in Bolivia is a challenge. So much so, that the World Bank Ease of Doing Business survey ranks Bolivia 152nd overall, mainly due to its bureaucracy around starting a business and paying taxes.

Starting a business

Bolivia is not the easiest place to start a business. In fact, in the World Bank Ease of Doing Business survey, it is ranked 179th! This is due to the extensive processes necessary (14) and the excessive time it takes to establish the business (45 days). The steps which take the most time are obtaining a municipal business license and a municipal registration card (Padrón Municipal) from the municipality where the business is located, which takes 12 days and registering for national health insurance and short-term disability...