When you form a branch in Bolivia, you maintain broader control over the business than if you incorporate a subsidiary, while avoiding the need to perform a full company formation process. Forming a branch in Bolivia can therefore be a great strategy when unfamiliar with the market, as it is relatively quick and you are able to count upon the brand recognition enjoyed by your parent company.
If you don’t want to form a branch in Bolivia, an alternative market entry option is to hire staff through a PEO payroll company in Bolivia — often referred to as a Professional Employer Organization (PEO) or Employer of Record (EOR). A PEO payroll company will hire and administer staff on your behalf, eliminating the need for any sort of entity formation.
There are many reasons you might want to form a branch in Bolivia. It is one of the fastest-growing economies in the region, while its unsaturated markets present many opportunities. The South American country has experienced consistent growth in gross domestic product (GDP) during the second decade of the 21st Century, reaching a high 6.8% growth per year and never dropping below 3.4% between 2008 and 2018, according to figures from the World Bank.
The country is the fifth-largest nation by area while being one of the least-populated in the region, highlighting the importance of non-urban economic activities to the economy, such as agriculture, mining, and hydrocarbon exploitation. Bolivia is a landlocked country that has developed strong trade relations with its neighbors, including Argentina, Brazil, Chile, Paraguay, and Peru.
Its regional integration is also set to deepen, as the country is in the process of joining the Southern Common Market (Mercosur), a regional economic association that includes Argentina, Brazil, Paraguay, and Uruguay. The country’s prime export commodities include oil, gas, zinc, and gold and its main imports include automobiles and refined petroleum.
If you are considering potential business opportunities in the country, read on to learn how to form a branch in Bolivia, or go ahead and reach out to us now to discuss your business options.
How does a local branch operate?
If you form a branch in Bolivia, you will incorporate an extension of your parent company in the country and, unlike a subsidiary, it is not established as a separate legal entity. Therefore, your branch will operate under the broad oversight of the headquarters, so you have greater control over its administration and related decision-making. In addition, when you form a branch in Bolivia you will be able to start your operations much faster than if you go through the full process of forming a company.
As branches in Bolivia are mostly managed from abroad, they do not have their own legal personality. Consequently, certain tax and legal liabilities extend to the parent company. However, a branch in Bolivia can be controlled by a director or manager living in the country, who is normally designated by the parent company.
How to form a branch in Bolivia in 5 steps:
To form a branch in Bolivia, you will have to follow these five key steps:
- Step 1: Prepare the required documentation.
- Step 2: Legalize the required documentation.
- Step 3: Open a corporate bank account.
- Step 4: Register the branch with the commercial registry office.
- Step 5: Register the branch with the National Tax Service (SIN) and obtain a municipal license.
Step 1: Prepare the required documentation
To form a branch in Bolivia, you will need to prepare the following legal documents:
- Minutes signed by the shareholders of the parent company in which the opening of the branch is authorized and a legal representative is appointed. This document must also specify the authorized capital for the incorporation of the branch and define a period of operation that can last from one to 99 years.
- Certificate issued by the parent organization that describes the commercial registration of the company, proving that its operations in the country of origin are still active.
- Statutes of the parent company which will regulate the new branch in Bolivia.
Note that these documents must be apostilled according to the Hague Convention, of which Bolivia has been a party since 2018. If the country of the parent company is not part of the Hague Apostille, these documents must be legalized before the authorities of the country of origin and a Bolivian Consulate. In both cases, all documents must be officially translated into Spanish.
Step 2: Legalize the required documentation
To form a branch in Bolivia, you must legalize all requested documents so that a notary public can review them. After this, you will be able to present the documentation to the Bolivian authorities.
Step 3: Open a corporate bank account
The designated legal representative is required to open a corporate bank account and deposit the authorized capital to start operations in Bolivia. Note that the bank will open a temporary corporate bank account for the branch until the commercial registry office grants a branch registration certificate.
Step 4: Register the branch with the commercial registry office
To form a branch in Bolivia, you must present all legalized documents to the commercial registry office. This entity will announce the creation of the branch in the ‘trade gazette’ (gaceta de comercio) and will grant a branch registration certificate.
Step 5: Register the branch with the National Tax Service (SIN) and obtain a municipal license
The legal representative must register the branch with the SIN and request a tax identification number (NIT). Once this step has been completed, the municipal office will be able to grant a license so that the branch can operate legally.
Why form a branch in Bolivia?
When you form a branch in Bolivia, as opposed to entering the market some other way, you benefit from the following advantages:
- Higher level of control: A branch in Bolivia offers a higher level of control than other types of legal entities.
- Market recognition: If you form a branch in Bolivia, your brand will enjoy the visibility and recognition already acquired in other countries, which means that your business will remain competitive, increasing the possibilities of profitability and commercial success.
- Cost reduction: Forming a branch in Bolivia is much cheaper than establishing a company. This will allow you to save money or focus economic resources on other projects in your business.
- Tax benefits: The Bolivian government provides a number of tax incentives to investors, and maintains double taxation treaties with numerous countries.
Form a branch in Bolivia with the assistance of Biz Latin Hub
At Biz Latin Hub, our team of multilingual company formation agents has expert knowledge of local corporate requirements and has ample experience helping foreign companies to form a branch in Bolivia.
With our complete portfolio of high-quality HR, legal, accounting, and tax advisory services, we are equipped to be your single point of contact to enter the market in Bolivia, or any of the other 15 countries across Latin America and the Caribbean where we are present.
Contact us now to find out how our services can be tailored to your specific needs.
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