From: OVERSEAS BUSINESS REPORTS (BOLIVIA)
University of Missouri-St. Louis
Match 11 DB Rec# - 24,985 Dataset-MARKET
Source : USDOC, International Trade Administration
Source key :IT
Program key :IT MARKET
Program :Market Research Reports
Update sched. :Monthly
ID number :IT MARKET 111102804
Title :BOLIVIA - OVERSEAS BUSINESS REPORT - OBR9212
Data type :TEXT
End year :1993
Date of record:01/15/1993
Keywords 1 :
| ANDEAN COUNTRIES
| ANDEAN GROUP
| ENTERPRISE FOR THE AMERICAS
| LATIN AMERICA
| LATIN AMERICAN COUNTRIES
| LATIN AMERICAN FREE TRADE ASSOCIATION
| LATIN AMERICAN GROUP
| ORGANIZATION OF AMERICAN STATES
| SOUTH AMERICA
| SOUTH AMERICAN COUNTRIES
| SOUTH AMERICAN GROUP
| WESTERN HEMISPHERE
BOLIVIA - OVERSEAS BUSINESS REPORT - OBR9212
This article is derived from a report dated December 1992, prepared at the
U.S. Department of Commerce - Washington, DC. The article consists of 37
pages and discusses the economic and commercial climate in Bolivia, with
emphasis on information useful for potential U.S. sellers and investors.
OVERSEAS BUSINESS REPORT
Prepared by Paul Treseler and Laurie MacNamara
Office of Latin America
U.S. Commerce Department
With Assistance from the Economic/Commercial Section,
U.S. Embassy La Paz
The United States remains Bolivia's major trading partner, consistently
accounting for over one-fifth of its imports and exports. U.S. exports to
Bolivia rose by 37 percent during 1991 to a total of $190 million, according
to official U.S. Department of Commerce statistics. U.S imports from
Bolivia also increased slightly to $209 million, with tin, gold, and wood
products representing the largest proportion of imports. In contrast, a
wide array of products, from heavy industrial machinery to processed foods,
make up the bulk of U.S. sales to Bolivia.
U.S. exports to Bolivia should grow strongly in 1992, particularly in the
mining and petroleum sectors, resulting from a major swing in investment in
these areas. This accelerated rate of investment should guarantee solid
growth for several years. Moreover, most Bolivians turn to the U.S. for the
disproportionate share of Bolivia's imports, based on quality, and in some
cases, price considerations. U.S. products are now price competitive with
Japanese and European products but some items can still be purchased more
cheaply from Brazil and Argentina. However, the increasing number of U.S.
investors in Bolivia will likely generate more opportunities for U.S.
exporters; exporters can enhance their sales chances through competitive and
BEST EXPORT PROSPECTS
Mining equipment sales to Bolivia totalled approximately $100 million in
1991. Estimated sales in 1992, 1993 and 1994 are expected to more than
double the 1991 figure to reach a projected $250 million, $270 million, and
$290 million, respectively. Historically, about 50 percent of all mining
equipment sold in Bolivia was purchased by the state-owned mining company,
COMIBOL. Since 1990, private sector sales comprise about 90 percent of
The success of the major open pit Inti-Raymi gold mine has inspired several
other large companies to seek significant claims in Bolivia. An excellent
example is Cyprus Minerals, which is planning to develop a minerals deposit
owned by COMIBOL near the Chilean border. Foreign firms have also signed
joint ventures with COMIBOL to take over operations at two COMIBOL mines.
U.S. investors, working with Bolivian partners, are planning to build a
plant to produce sodium cyanide, a chemical used for leaching gold and
silver by an increasing number of Bolivian mining companies.
Best sales prospects for mining equipment in Bolivia include equipment for
medium-sized open pit mines and heap leaching operations and for small and
medium-sized alluvial gold mining cooperatives. For medium-sized open pit
operations, best prospects are drills (open pit production drills), crushers
and pulverizers, conveyors, compressors, front loaders, bulldozers, 15 to 30
ton heavy-duty trucks, gravimetric or flotation concentrators, and pumps.
For small mines, best prospects include small drills, front-loaders,
crushers, concentration tables, flotation concentrators, hand tools and
Bolivia's agricultural sector, including livestock and lumber production,
accounted for 21 percent of its GDP in 1991 and employed approximately half
of the work force. In the Santa Cruz region alone, 20,000 to 40,000 new
hectares come into production each year. Nevertheless, over 80 percent of
the agricultural land under cultivation is farmed without modern machinery
The 1992 census indicated that 48 percent of the population is rural.
Bolivia's agricultural potential is vast, as less than 4 percent of the
country's usable land is under cultivation.
The agricultural sector expanded by 7.2 percent in 1991. Wheat production
increased by 90 percent, soybeans by 65 percent, and cotton by 295 percent.
As hectares under cultivation increase, so does the demand for modern
agricultural imports such as farm machinery and equipment, cultivators,
silos, harvesting machines, spraying machines, irrigation equipment and
The oil and gas industry accounted for 6 percent of Bolivia's GDP and 27
percent of exports in 1991. Natural gas sold to Argentina represented over
96 percent of the $241 million of hydrocarbon exports.
The enactment of the new Hydrocarbons Law in November 1990 has attracted a
number of foreign investors, including U.S. producers Chevron, Mobil, Santa
Fe, Texaco, Exxon and Maxus. These companies have recently signed
exploration/exploitation contracts, and others are in the negotiating
stage. Most of the foreign oil companies currently only need exploration
equipment and drilling equipment, but demand for additional equipment and
services will expand quickly if large oilfields are discovered.
The chief potential trade opportunity in the hydrocarbons sector is the
planned $400 million gas pipeline to Brazil. The 28-inch, 584 km long
pipeline will extend from Santa Cruz, Bolivia to Sao Paulo, Brazil. A
portion of the project will be financed by the Japanese Export-Import Bank
and will require the use of Japanese equipment and services; however, the
share of the project financed by multilateral development banks (e.g. World
Bank, Inter-American Development - Bank - IDB) will be tendered via
international public bid. Additional major pipeline projects also are being
considered to Chile, Paraguay and Peru.
Bolivia's Ministry of Transportation and Communications has an ambitious
ten-year road construction plan, 1990-2000, which includes the construction
of 8,000 kilometers of new roads, fifty percent of which will be paved
roads, with a total estimated investment of 2.6 billion dollars. Many of
the projects already have been promised funding by the Spanish, German and
Japanese Governments, as well as by donor countries and the IDB. The IDB
has pledged to asphalt three major roads in Bolivia, at a cost of just over
In addition, the World Bank has authorized a $60 million project to be
carried out between 1992-96 to rehabilitate railroad tracks, facilitate
better transport for exports, and acquire new rolling stock.
Electrical Energy Generation Equipment
The average annual growth rate for electricity consumption is about 7
percent. Estimated annual investment by the Bolivian Government for power
generation during the next three years will be about $90 million. A $20
million World Bank loan will enable the state electricity company, ENDE, to
connect the existing eastern and western grid systems. In addition, COBEE,
the U.S.-owned private firm that generates and distributes electricity to La
Paz and Oruro, is planning a $120 million investment to substantially
increase its hydro-generating capacity. This last project alone will entail
equipment purchases totalling approximately $60 million. In general,
excellent opportunities exist for suppliers of power generation equipment
and electrical cabling.
Steady investment in the Bolivian telecommunications network has resulted in
strong growth in the country's telecommunications market. The market was
estimated at almost $26 million in 1990. With virtually no domestic
production, Bolivia relies heavily on imports to supply its
telecommunications needs. In 1991, U.S. companies exported just over $5
million to Bolivia for a 22 import market share. Continued growth is
expected following the state-owned telecommunications company (ENTEL)'s
announcement of plans to construct digital microwave links with Paraguay,
Chile, and Argentina.
Best sales prospects continue to be in digital network equipment and
satellite earth station equipment, as well as cellular infrastructure
equipment and telephones.
Ambitious plans for large investments in the health sector are underway in
both the public and private health sectors. Most of these projects are
being financed by foreign donors, bilateral agreements and grants supplied
by international health organizations. Estimated annual investment over a
five-year period (1991-96) will be about $30 million per year for new
hospital construction, equipment and services.
Best sales prospects include general surgical instruments and supplies,
X-ray equipment, electro-medical equipment and surgical beds.
Other Best Prospects
Other up-and-coming prospects include computers and peripherals, food
processing and packaging equipment, cars and automotive parts, and consumer
goods and electronics.
In 1985 the Government of Bolivia initiated a series of economic reforms to
arrest hyperinflation and open the economy. The currency was allowed to
float, commercial banks were allowed to set their own interest rates, import
and investment permit requirements were eliminated, economic activities
which had been reserved for government corporations were opened for private
investment, and the government entered into an IMF standby program. The Paz
Zamora administration, which took office in 1989, has institutionalized and
advanced these market-oriented economic reforms.
After four years of steady but slow growth averaging 2.7 percent, Bolivia's
gross domestic product surged by 4.1 percent in 1991 to about $5.8 billion.
Agricultural output, which accounts for 21 percent of Bolivia's GDP, grew
strongly as the result of favorable weather and the expansion of cultivated
areas. Output in mining, petroleum, construction and manufacturing also
grew in real terms, in part from increased investment. The government
estimates that private investment grew by 52 percent to $367 million, while
public sector investment reached $430 million, a 19 percent increase.
For the first time since 1977, the Bolivian economy's growth rate outpaced
the population growth rate last year. However, despite five years of
financial stability and steady growth, the Bolivian economy still faces some
difficult problems. With an estimated population of 6.3 million people,
Bolivia's GDP per capita was approximately $950 in 1992, the lowest in South
Bolivia's inflation rate stabilized at 14.5 percent in 1991, a phenomenal
improvement over the 24,000 percent hyperinflation recorded prior to the
launching of the recovery program in 1985. The inflation rate in Bolivia is
now among the lowest in the region.
Bolivia decreased its foreign debt by 9 percent in 1991, to $3.4 billion,
the chief result of several key bilateral debt reduction agreements. With
donor money, the Bolivian Government has managed to buy back many debt
claims at 11 cents on the dollar on the secondary market and has exchanged
other debt claims for investment bonds which will mature with the full face
value of the claim in 25 years. Most of the investment bonds have already
been redeemed for private investment projects in Bolivia. Commercial bank
debt has been reduced from over $700 million in 1985 to about $185 million
by mid-1990, accounting for just 8 percent of Bolivia's foreign debt. The
government is making no payments on its debt to commercial banks, proposing
to exchange the remaining commercial debt at 22 cents on the dollar.
Commercial bank deposits have doubled since 1989 to over $1.3 million,
following the return of significant amount of flight capital. The average
term of bank deposits increased from 81 to 103 days during 1991,
demonstrating increased confidence in the Bolivian economy. Net
international reserves registered $200 million at year-end 1991, up from
$132 million at the end of 1990.
Bolivia was the first South American country, with the exception of Mexico,
to sign a bilateral framework agreement establishing the U.S. - Bolivian
Trade and Investment Council. This agreement, signed in May 1990,
established the U.S.-Bolivia Trade and Investment Council (TIC), a
high-level commission of U.S. and Bolivian Government officials who meet
yearly to attempt to resolve outstanding trade and investment concerns. As
a companion to the TIC's efforts, the U.S. and Bolivian Governments are
negotiating a Bilateral Investment Treaty (BIT) to establish clear ground
rules for foreign investors. Bolivia acceded to the General Agreement on
Tariffs and Trade (GATT) in August 1990.
Bolivia is also a member of several regional trade and economic
associations, the most prominent being the Andean Pact (Pacto Andino in
Spanish). Bolivia has agreed to participate (under certain conditions) in
the Pact's free trade area and common external tariff In addition, Bolivia
participates in ALADI (Latin American Integration Association), the Rio
Plata Agreement (Cuenca del Plata), URPABOL (a regional trade association
between Uruguay, Paraguay, and Bolivia), and has observer status in the
Mercosur (Southern Common Market, consisting of Brazil, Argentina, Paraguay,
and Uruguay). Bolivia initiated free trade discussions with Mexico in
In 1990 Bolivia instituted a two-tier tariff system: 5 percent for a
defined list of capital goods (largely falling in the Harmonized System - HS
- categories of 84 to 87), and 10 percent for all imports (including most
agricultural items). These rates are among the lowest in Latin America.
The tariff is calculated on the c.i.f. (cost-insurance-freight) value of the
Additional import taxes are applied as follows:
1. Customs Warehouse Service Tax - 0.5 percent, calculated on c.i.f.;
2. Pre-shipment Inspection Tax - 1.9 percent, calculated on f.o.b.
3. Customs Broker Charge - 0.5 to 2 percent, calculated on c.i.f.;
4. Customs Forms Charge - $60 to $80;
5. Fee for Services Performed by any Bolivian Chamber of Commerce,
Industry, or Agriculture - 0.3 to 0.4 percent, calculated on c.i.f.,
only if chamber's services (such as notarization) are used;
6. Consumption Tax - assessed as follows:
o 2 percent ad valorem for books brochures and other printed
o 10 percent on electrical apparatus, pottery, chinaware, automotive
vehicles, and jewelry
o 20 percent on soft drinks and electricity consumption by commerci
al and domestic users of excess of 120 kwh
o 30 percent on perfumes, cosmetics, and locally produced and
imported alcoholic beverages (excluding beer)
o 50 percent on all tobacco products
o 60 percent on locally produced and imported beer.
The consumption tax is calculated on c.i.f., plus the tariff and
taxes/charges 1 through 5 above;
7. Valued-Added Tax (V.A.T., or I.V.A. in Spanish) - 13 percent, calculated
on c.i.f., plus the tariff and taxes/charges 1 through 5 above.
Duty Exemptions and Reductions
Exemptions/reductions are permitted for:
o imports made under current international agreements and government
o imports under intraregional agreements that specifically provide for
o imports made by diplomatic and consular corps;
o travelers' personal effects not exceeding $300;
o imports of gold, except jewelry.
Andean Pact Tariffs
One of the principle objectives of the Cartagena Agreement, which
established the Andean Pact, is the formation of a customs union. A common
external tariff (CET) has been proposed and accepted by four of the five
Pact members. (Peru has suspended its Pact commitments until the end of
1993). The CET, which is to be applied to all imports not originating in
the Andean Pact (including those form the United States), is 5 to 20
percent, with capital goods and inputs receiving the 5, 10, and 15 percent
rates, and consumer goods charged the 20 percent rate. As Bolivia maintains
lower rates of 5 and 10 percent, the country has been granted an exception
allowing it to maintain those rates.
Import licenses are currently required only for firearms. Pharmaceutical
products have to be registered in the Ministry of Health, and approved under
World Health Organization (WHO) guidelines.
Import permits from the Ministry of Exports and Economic Competitiveness
(MECE) are required for used clothes and rags. The permit must be obtained
prior to shipping. These items also must have a sanitary certificate from
the proper health authorities in the exporting country. There are no
special non-tariff requirements affecting the import of other used goods.
Prohibited items include:
o Firearms and other weapons without special permit from the Ministry of
o Pharmaceuticals and drugs not registered in the country
o Spoiled or adulterated beverages and food products, or products that
contain noxious substances
o Selected liquors, such as pisco and similar products
o Diseased animals
o Plants, fruits, seeds, and other vegetables that contain parasites and
germs, or plants that are declared harmful by the Ministry of Agriculture
o Foreign lottery bills
o Advertisements imitating money or bank certificates, postage stamps, and
other government-valued papers
o Pornographic books, booklets, paintings, engravings, figures, and other
o Roulette machines and devices used for gambling.
o Merchandise with the same registered trademark as a product made in
o Used clothes without a sanitary certificate from the country of origin
(except in personal baggage)
o Used hats and shoes (except in personal baggage)
o Vicuna furs, hair, and its products.
The government sets the prices for only two commodities, petroleum and the
most commonly sold bread rolls.
The following five documents should be presented to customs for all
shipments to Bolivia. It is not necessary to present these documents to
Bolivian consulates in the United States.
Seller's Commercial Invoice
This invoice may be completed in either Spanish or English on the shipper's
letterhead. The invoice must include a detailed description of the products
by item, the unit price, and the total FOB price. The invoice also must
include the freight costs, either air or ocean, and the insurance to port of
destination. If the invoice does not include the insurance and freight,
Bolivian Customs will charge 5 percent of the f.o.b. price. This is
necessary because the value-added tax is calculated on the basis of the
Bill of Lading or Airwaybill
The bill of lading must be presented with two original bills signed and
sealed by the freight forwarder and two non-negotiable copies. One of the
bills of lading, or a copy, should accompany the original bill and the
commercial invoice. Bills of lading may not be drawn to the order of the
shipper, but they may be drawn to the order of the consignee, who is
permitted to endorse it to a third party. For air cargo, the airwaybill is
the bill of lading.
Customs requires a copy of the insurance policy to calculate the value-added
The packing list facilitates customs inspections and is of benefit to the
importer in case of loss.
Pre-shipment inspection is required on imported products with an f.o.b.
value of $1.00 or more. Overseas agencies under contract to the Bolivian
Government administer the program; inspections may be performed by in the
port of origin or in Bolivia by either SGS Control Services of New York
(212-482-8700) or SGS Government Programs of Miami (305-592-0410), or by
Inspectorate of Miami (305-599-1124).
Sanitary and Purity Certificates: Certificates of origin indicating state
of health are required for the import of live animals. Purebred livestock
imported for breeding purposes also require a pedigree certificate. Live
plants and all seeds except vegetable and flower seeds require sanitary
Pharmaceuticals are subject to strict quality control regulations. Imports
must be accompanied by a certificate of analysis in Spanish, which may be
issued by a reliable manufacturer. This certificate must include expiration
dates. Labels on pharmaceutical products should be in Spanish. In
addition, pharmaceuticals must be registered with the Ministry of Health and
Welfare before importation.
Food shipments require a sanitary certificate issued by the pertinent
authority of the exporting country, for example, the U.S. Department of
Agriculture. Foodstuffs may be subject to analysis by an official entity in
Bolivia, and most food and beverage labels must be registered in Bolivia.
Exporters are encouraged to check with importers regarding relevant policies
prior to shipment. For specific information regarding existing foreign
agricultural standards and testing, packaging and certification systems,
contact the Technical Office for International Trade, U.S. Department of
Agriculture, Building 1072, BARC-East, Beltsville, MD 20705, tel:
301-344-2651. For more information on procedures relating to animals and
plants, and their products, contact the Animal and Plant Health Inspection
Service (APHIS), U.S. Department of Agriculture, 6505 Beltcrest Road,
Hyattsville, MD 20782; tel (301) 436-8590 (Veterinary Services)/x8537
(Plant Inspection). APHIS maintains a service office in Lima headed by an
officer based in Caracas, Venezuela.
Labeling and Marking
Special labeling indicating origin and type of merchandise is not required
for imports to Bolivia. However, retail packages must show weight or
measure of contents in metric units. Special regulations governing cigars,
cigarettes, and tobacco also exist. All goods shipped by ocean to Bolivia
pass through foreign ports of entry. Packages and containers should clearly
indicate gross weight in kilograms, serial numbers, and the words "En
Transito a Bolivia." For Chilean ports, markings must be stenciled.
Air cargo shipments require airwaybills instead of bills of lading. Follow
IATA and/or ICAO rules governing labeling and packaging of dangerous and
restricted goods as well as issuance of the special shipper's certificate
required under IATA rule for such items. Airlines will supply information
and forms upon request.
A commercial invoice signed by a Bolivian consulate is required for a parcel
valued at over $100. Bolivian consulate regulations must be followed.
Contact the nearest Bolivian consulate (see section on "Sources of
Commercial and Economic Information" in this report for a complete list of
consulates) for procedural information.
Entry and Warehousing
As a landlocked country, Bolivia maintains ports of entry in Chile, Peru,
Brazil, Argentina, and Uruguay (by river) through free transit agreements
with each country. Arica, Chile is generally considered to be the best port
of entry. Other main ports are Antofagasta, Chile; Matarani and Ilo, Peru;
Santos, Brazil; and Rosario, Argentina. Bolivian Customs maintains
warehousing facilities in these ports where incoming goods may be stored for
90 days. The charge for customs storage is 0.5 percent of c.i.f. for goods
stored for each 30-day period or fraction thereof. Once clearing documents
are signed, goods must be removed from storage within 8 days to avoid an
additional charge of 2 percent of c.i.f.
Imported merchandise may be considered abandoned either by an explicit
request or by failure to claim it within the required 90 days. By law such
goods are subject to public auction, the proceeds of which go to the
interested party after expenses are paid. If the importer wishes to remove
his merchandise after the 90-day period but before the auction takes place,
he must pay a 5 percent charge over the customs tariff plus 2 percent of
c.i.f. Due to the expense and time involved in reshipment, U.S. exporters
usually prefer to sell refused goods in Bolivia.
Samples and Advertising
Samples and advertising materials are usually subject to the regular duties,
except those articles specifically prepared as samples, for example, shoes
cut in half, small fabrics, and pharmaceuticals and liquors contained in
bottles of reduced size marked "Free Sample" (muestra gratuita). If
commercial samples do not exceed $25 in value, they do not require
DISTRIBUTION AND SALES CHANNELS
Government activities traditionally represent approximately 70 percent of
Bolivia's GNP. The government and its publicly-owned corporations and
agencies are the main buyers of machinery, equipment, materials, and other
products. They are legally required to call for bids when proposed
purchases are above 100,000 Bolivianos (notated as "Bs.", and equivalent to
approximately $24,570 at early December 1992's 4.07 Bs./US$ exchange rate).
Only those firms legally established under Bolivian laws may bid for
government purchases. Thus, it is essential that U.S firms be formally
represented in Bolivia through import houses, commission or independent
sales agents, or local subsidiaries.
It is important not only to select the type of distribution system most
suitable for the exporting firm and its product, but also to appoint an
experienced, aggressive, financially solvent representative. Capital goods
exporters should ensure that potential representatives have access to key
decisionmakers among the buyers. Periodic visits by representatives of U.S.
suppliers are essential in order to provide assistance to the distributor or
agent and to establish personal contact with customers.
Most heavy equipment, machinery, and general merchandise must be delivered
through seaports in Peru, Chile, Brazil, and Argentina. Occasionally, bad
weather, landslides, port congestion, or other factors may block all import
channels. It is important to cooperate closely with Bolivian importers in
arranging transportation and preparing and submitting shipping documents.
Air cargo transportation may at times be desirable even for heavy items.
There are four principal types of commercial import channels: commission or
independent sales agents or representatives, import houses, subsidiaries of
foreign firms, and direct importation by government agencies.
Manufacturers may distribute products through international trade fairs.
When this channel is used, capital goods destined for the production sector
enter under temporary import permission for an exhibition period of 90 days,
with a bank guarantee note of 1 percent over the c.i.f. value. Within this
period the goods may be nationalized or reexported. If nationalized, duties
for certain capital goods may be discounted by 50 percent under the
preferential customs policy granted to international trade fairs.
Free Trade Zones
Thus far, Bolivia has established six free trade zones, three of which are
now in operation (in El Alto, Puerto Aguirre, and Oruro. Bolivian free
trade zones are regulated by the National Council of Free Trade Zones
(CONZOF), created by Article 20 of the 1990 Investment Law and FTZ
Regulations promulgated under Supreme Decree 22526. These FTZ's are
operated by private companies which are selected by the Government of
Bolivia through public bids. There are special procedures which must be
followed to obtain approval to operate within these zones. As of this
writing, the zones of Santa Cruz, Cochabamba, and Tarija have yet to open.
Agents, Distributors and Representatives
The majority of the numerous agents, distributors and representatives in
Bolivia are very effective in dealing with government agencies, as well as
with private industry. Commission agents take orders on a direct shipment
basis. Some specialize in certain products or in supplying customers
engaged in specific activities. These agents and representatives do not
stock products. Agents are required to have a minimum paid-in capital of
$2,000 to initiate a business activity in Bolivia. They must also meet
certain other requirements and register with the Bolivian Chamber of
Commerce, the internal revenue service, the Ministry of Industry and
Commerce, the National Directory of Commerce, and the local municipality.
Agents and representatives require a letter or agreement from the foreign
firm appointing them as representative or agent. This document should
clearly indicate the validity of the contract, the sales area covered by the
agent, the financial terms, and whether the exporting firm has the right to
appoint other agents in other areas of the country. Legal counsel is
recommended in drawing up the contract, which enables the agent to
participate on behalf of the foreign firm in government tenders. The usual
commission in Bolivia varies from 5 to 10 percent, depending on the product
and the agreement reached by the interested parties.
Import houses in Bolivia are normally large, although there are some small
well-established importers. These firms import for their own use and also
represent foreign firms on a commission basis. Many operate general
merchandise outlets. Larger importers have subsidiaries and branches
throughout the country, as well as subdistributors, and a sales force to
canvass retailers, wholesalers, and consumers. This method offers the U.S.
exporter a degree of financial security, as the importer assumes the risk of
importing general merchandise. More importantly, they are authorized to
sell to government agencies in response to tenders.
Wholesale and Retail Merchandising
Thousands of Bolivians are engaged in merchandising, usually in small
facilities or as street vendors. Although many goods are available through
wholesalers, a significant percentage enter the country as contraband, thus
avoiding the usual tax and tariff regulations. In addition, many
wholesalers import directly and then distribute goods through their own
retail outlets. Many import houses maintain such outlets in Bolivia's major
cities, in addition to distributing to other firms.
Many retail establishments are small operations, often family owned. Others
are direct outlets run by local producers. Over half of Bolivia's
manufactures are nondurable consumer goods such as food, beverages, coffee,
clothing, and shoes.
The main distribution center is La Paz, Bolivia's largest city and the seat
of government. Most import houses, distributors, and agencies use La Paz as
their major central outlet, though some are located in Cochabamba and Santa
Cruz. Setting up a local branch or subsidiary provides a greater advantage
when selling and servicing machinery to government agencies.
All government purchases are regulated by Supreme Decree 21060 and Annex III
of Supreme Decree 21660, which establish the requirements for the
procurement of goods and services for public sector entities, companies, and
institutions. The Bolivian Government signed a contract with the Office for
Project Services (OPS) of the United Nations Development Program (UNDP) on
January 29, 1988; on March 31, 1988, with a British Government corporation,
Crown Agents; and on February 1, 1990 with the French Government Corporation
C3D. All three contracting offices currently are arranging purchases for
Public entities interested in purchasing goods or contract services valued
at over 100,000 Bolivianos (notated as Bs., and equivalent to approximately
$24,570 at early December 1992's exchange rate of 4.07 Bs./US$) must contact
one of the above qualifying agencies to solicit, qualify, and select bids,
and to provide to the agencies the terms of reference or the technical
specifications as appropriate. Public sector procurement of goods and
services requires competition and agreement between parties. Purchases of
national security items for the Armed Forces are regulated by specific
proceedings established by the Ministries of Defense and Aeronautics.
The qualifying agency will call for bids, which must be presented in
Bolivian territory for bids valued at over 200,000 Bs. (approximately
$49,140). It will qualify proposals and then submit them to the requiring
public entity, along with recommendations.
The qualifying agency will sign the purchasing or services agreement in the
name of the public entity, although the public entity will maintain control
and supervision of the agreements. Final decision on the purchase must be
made by the minister, in the case of a ministry, or by the general manager
or executive director in the case of other government institutions.
Government imports or services contracts made through the qualifying agency
will not require the certificate of goods inspection at port of origin.
Domestic goods and services will receive a 10 percent preference bidding, in
order to protect local industry.
When a project is financed by an international institution (for example, the
World Bank or Inter-American Development Bank), the bids will follow that
institution's own rules. Otherwise, the qualifying agency will call for an
international public tender when the amount is over $200,000. The agency
may direct invitations to suppliers when the amount is less. OPS publishes
all international tenders through the United Nations' publication
Bolivian law specifies that American or other foreign firms interested in
providing goods and services to the Bolivian Government must have a local
address in Bolivia and a legal representative or a local agent in order to
bid. Foreign bidders may register their firm by sending its name, address,
and a list of its products to the qualifying agency's computerized list of
suppliers. Interested firms must send an introductory letter with a
complete package of catalogs to one of the following addresses:
Head Offices: Offices in Bolivia
CROWN AGENTS CROWN AGENTS
Saint Nicholas House Av. 20 de Octubre 2475
Saint Nicholas Road P.O. Box 11393
Sutton Surrey SM1 1EL La Paz, Bolivia
United Kingdom Contact: John Bell
Tel: 011-44-81-643-3311 Tel: 591-2-39-0696
CROWN AGENTS SERVICES LTD.
910 Ponce de Leon Blvd.
Coral Gables, FL 33134
Tel: (305) 448-9866
OFFICE OF PROJECT SERVICES OFICINA DE SERVICIOS PARA
304 East 45 St., Room 952 PROYECTOS (OSP)
New York, NY 10017 Edf. Santa Isabel, bloque C
Contact: Jorge Claro 2do. Mezanine
International Coordinator La Paz, Bolivia
Contact: Carlos Fernandez
C3D International C3D
27 Rue Louis Vicat Calle Hnos. Manchego 2571
75738 Paris Cedex 15 Tel: (591-2) 379-428
Tel: (33-1) 4638-3475/76 Tlx: 3347 Bv
Tlx: 250620 Fax: (591-2) 391-614
Fax: (33-1) 4638-3482 Contact: Ma. Eugenia Ayala
Less formal price competitive procedures are allowed whenever the underlying
price is between Bs. 30,000 and Bs. 100,000 (approximately $7,371 -
$24,570), including procurement of similar domestically produced food. The
public institution will call for public bidding, and the bid will be
approved by the Administrative Contracting Committee, formed by five
authorities from interested public entity. Such contracts will not require
approval by decree or supreme resolution. Bid specifications containing
technical and commercial requirements will be available through the relevant
government entity and will be published three times consecutively in local
media at least 20 days before the bid deadline.
No form of public bidding is required if the price of goods is lower than
Bs. 30,000 (approximately $7,371). Invitations to bid will be submitted to
three or more suppliers of such goods. Bid specifications will include
specific instructions on how to present the bid. Tender terms vary
according to the requirements of the government agency issuing the tender.
Both the price and quality of the product will be considered when awarding
The names and addresses of government ministries and agencies active in
government procurement are given below.
MINISTERIO DE ASUNTOS CAMPESINOS Y AGROPECUARIOS
(Ministry of Agriculture and Rural Affairs)
Subsecretario de Asuntos Agropecuarios
MINISTERIO DE EXPORTACIONES Y COMPETIVIDAD ECONOMICA
(Ministry of Exports and Economic Competitiveness)
Subsecretario de Inversiones
MINISTERIO DE DEFENSA NACIONAL
(Ministry of National Defense)
Subsecretario de Defensa
MINISTERIO DE EDUCACION Y CULTURA
(Ministry of Education and Culture)
Subsecretario de Educacion Urbana
MINISTERIO DE MINERIA Y METALURGIA
(Ministry of Mining and Metallurgy)
MINISTERIO DE ENERGIA Y HIDROCARBUROS
(Ministry of Energy and Hydrocarbons)
MINISTERIO DE TRANSPORTES Y COMONUICACIONES Y AERONAUTICA CIVIL
(Ministry of Transportation, Communication and Civil Aeronautics)
Subsecretario de Comunicaciones
Subsecretario de Transportes
COMPLEJO INDUSTRIAL DE LOS RECURSOS EVAPORITICOS DEL SALAR DE UYUNI (CIRESU)
(Industrial Complex of Evaporitic Resources of the Salar de Uyuni)
CORPORACION REGIONAL DE DESARROLLO DE CHUQUISACA
(Regional Development Corporation of Chuquisaca)
CORPORACION REGIONAL DE DESARROLLO DE CHOCHABAMBA
(Regional Development Corporation faa Cochabamba)
CORPORACION REGIONAL DE DESARROLLO DE LA PAZ
(Regional Development Corporation of La Paz)
Tel: 591-2-34-2325 or 591-2-36-7313
CORPORACION REGIONAL DE DESARROLLO DE POTOSI
(Regional Development Corporation of Potosi)
CORPORACION REGIONAL DE DESARROLLO DEL BENI
(Regional Development Corporation of Beni)
CORPORACION REGIONAL DE DESARROLLO DEL NOROESTE
(Northwest Regional Development Corporation)
Oficina en La Paz: Edif. Libertad,
Tel: 591-35-2358 or 35-2232 (you cannot dial directly)
EMPRESA NACIONAL DE ARROZ (ENA)
(National Rice Company)
Tel: 591-3-22045 or 591-3-48979
EMPRESA NACIONAL DE FERROCARRILES (ENFE)
(National Railroad Company)
EMPRESA METALURGICA VINTO
(Vinto Foundry Company)
Superintendente de Adquisiciones
Tel: 591-52-32550 or 591-52-32553
EMPRESA NACIONAL DE TELECOMUNICACIONES (ENTEL)
(National Telecomunications Company)
EMPRESA NACIONAL DE TELEVISION BOLIVIANA
(National Bolivian Television Company)
CORPORACION DE LAS FF. AA. PARA EL DESARROLLO NACIONAL (COFADENA)
(Armed Forces Corporation for National Development)
CORPORACION MINERA DE BOLIVIA (COMIBOL)
(Bolivian Petroleum Company)
Division de Adquisiciones
CENTRO NACIONAL DE COMPUTACION (CENACO)
(National Computation Center)
Tel: 591-2-35-5670 or 591-2-36-4319
ADMINISTRACION DE AEROPUERTOS Y SERVICIOS AUXILIARES A LA NAVEGACION AEREA
(Airport and Auxiliary Air Navigational Services Administration)
LLOYD AEREO BOLIVIANO (LAB)
(Bolivian Airline - Lloyd)
Tel: 591-2-35-3054 or 591-2-36-7708
TRANSPORTES AEREOS MILITARES (TAM)
(Military Air Transport)
INSTITUTO BOLIVIANO DE TURISMO
(Bolivian Institute of Tourism)
CORPORACION DE FOMENTO ENERGETICO RURAL (COFER)
(Corporation for Rural Energy Development)
DIRECCION GENERAL DEL TRIGO
Ministerio de Industria, Comercio y Turismo
(General Wheat Administration)
INSTITUTO BOLIVIANO DE SEGURIDAD SOCIAL
(Bolivian Institute of Social Security)
CAJA NACIONAL DE SEGURIDAD SOCIAL
(National Social Security Fund)
CAJA PETROLERA DE SEGURIDAD SOCIAL
(Social Security Petroleum Fund)
SERVICIO AUTONOMO MUNICIPAL DE AGUA POTABLE Y ALCANTARILLADO (SAMAPA)
(Municipal Water and Sewage Service)
SERVICIO NACIONAL DE CAMINOS
(National Road Services)
Jefe Departamento Equipos
Tel: 591-2-35-7074 or 591-2-35-7220
BANCO AGRICOLA DE BOLIVIA
BANCO CENTRAL DE BOLIVIA
(Central Bank of Bolivia)
FONDO DE VIVIENDA
TRANSPORTATION AND UTILITIES
Transportation is hindered by lack of a developed infrastructure. Bolivia
has roughly 41,000 kilometers of roads, but only the roads between Oruro, La
Paz and Lake Titicaca; the road to Cochabamba; and the new road under
construction between Cochabamba and Santa Cruz are paved. Road links to
other countries, except for Peru, are either nonexistent or virtually
impassable during wet weather. Rail links exist to Chile, Brazil, and
Argentina, and are to be extended to Peru. The railroads are generally in
bad condition, however, a World Bank financed project is designed to improve
them. Bolivia uses the ports of Arica, Antofagasta, and Iquique in Chile.
Grain export facilities on the Paraguay River near Brazil are being
improved. Airline connections to other Latin American capitals and to
Miami are reasonable. High air transport costs are an important factor in
expensive Bolivian production and export costs.
Utilities are adequate to good. Electric power is reliable in the major
cities. Residential current in La Paz is 120 and 220 volts, 50 cycles.
Cochabamba, Santa Cruz, and most other cities operate on 220 volts, 50
cycles. Water shortages occur during the dry season in La Paz. Water may
not be considered potable by American standards in any Bolivian city,
although the major cities have improved their water supply systems in recent
The Bolivian advertising industry has grown and is now more professional and
competitive. The tremendous increase in private television channels now in
operation prompted the industry to devote special attention to television
commercial spots. La Paz remains the principal advertising center.
Nineteen advertising agencies operate in Bolivia, of which PRISA LTDA.,
PROMEGA, AVILA PUBLICIDAD, and MULTICOM are the leading companies. All
companies are members of the Association of Advertising Agencies. The
association's address is:
Asociacion Boliviana de Agencias de Publicidad
Av. 6 de Agosto, Pasaje Caracas 5
La Paz, Bolivia
Phone: (591-2) 35-1154
Cable: ABAP, La Paz
Contact: Eduardo Siles, Vice-President
Advertising agencies usually charge a 15 percent commission, although this
percentage is negotiable.
Television is the principal forum for advertising, followed by the press and
radio. According to the latest statistics supplied by the Association of
Advertising Agencies, television accounts for 80 percent of advertising
expenditures. Eight percent of expenditures are for newspapers and magazine
advertisements and 7 percent for radio spots. Other media such as movie
theaters, neon signs, billboards and direct mailing account for the
remaining 5 percent.
Television: There are 38 television stations in Bolivia, two of which
operate from 7 a.m. to midnight. There are five private TV channels in La
Paz. One also reaches to Oruro, Cochabamba, Santa Cruz, Potosi, Sucre and
other smaller cities. The government owned channel broadcasts throughout
the country except in some northern areas. Other private TV channels
operate in Santa Cruz, Cochabamba, Oruro, Sucre, and several other areas.
All TV stations have color transmission using the U.S. System (NTSC) with
525 lines and 50 cycles. There are approximately 250,000 black and white TV
sets and 400,000 color TV sets in use throughout the country.
Radio: There are 125 radio stations ranging in size from 25KW (Radio
Illimani) to 1/2 KW in rural areas. La Paz has 40 stations (28 AM, 10 FM, 2
Stereo). Most of the stations are privately owned and operated, although
the government also operates radio stations. The approximately 3.5 million
radios in Bolivia reach an audience of some 4.5 million people. Radio
stations are very effective in reaching rural populations, particularly
given the proliferation of programs in the two native languages, Aymara and
Newspapers: Newspapers are the second most important advertising media.
The six newspapers in La Paz have a daily circulation of between 30,000 and
80,000. The five major La Paz newspapers are Presencia, La Raz n, El
Diario, Ultima Hora and Hoy, all of which are circulated nationally. The
major newspapers from Santa Cruz and Cochabamba also are circulated
Theaters: There are about 25 motion picture theaters in La Paz, with an
estimated total seating capacity of 20,000.
Market Research and Trade Organizations
Only one U.S. market research firm, Coopers and Lybrand, currently operates
in Bolivia. However, 10 Bolivian market research firms represent foreign
consulting companies. Most of these firms also provide engineering and
industry feasibility studies. An updated list of consulting firms and their
services is available in the Economic/Commercial Section of the U.S. Embassy
in La Paz (see "Sources of Commercial and Economic Information" in the
All market research and consulting companies are required to register with
the National Association of Consulting Companies. All correspondence to the
association may be addressed as follows:
Asociacion Nacional de Empresas Consultoras (ANEC)
Casilla 8560, Edif. Batallon Colorados Piso 4
La Paz, Bolivia
Contact: Hernan Zeballos H., President
The engineering consultants association, the Society of Consulting
Engineers, may be contacted at the following address:
Sociedad de Ingenieros Consultores
La Paz, Bolivia
Other local trade organizations providing business assistance are:
Camara Nacional de Comercio
(National Chamber of Commerce)
La Paz, Bolivia
Camara Nacional de Industrias
(National Chamber of Industry)
La Paz, Bolivia
Camara Boliviana de Construcciones
(Bolivian Chamber of Construction)
La Paz, Bolivia
Camara de Comercio Espanola en Bolivia
(Spanish Chamber of Commerce in Bolivia)
La Paz, Bolivia
Camara Departmental de Minerea
(Departmental Chamber of Mining)
La Paz, Bolivia
Camara Nacional de Minerea
(National Chamber of Mining)
La Paz, Bolivia
Confederacion de Empresarios Privados de Bolivia
(Confederation of Private Businessmen)
La Paz, Bolivia
Asociacion de Bancos Privados de Bolivia
(Bolivian Private Bankers Association)
La Paz, Bolivia
Asociacion Nacional de Industriales Textiles
(National Association of Textile Industries)
La Paz, Bolivia
Camara Boliviana-Americana de Comercio
(Bolivian-American Chamber of Commerce)
La Paz, Bolivia
Credit is extremely difficult to obtain at the present time, and is
generally extended only on a short-term basis. Interest rates range from 16
to 20 percent for loans in U.S. dollars and 32 to 36 percent for Boliviano
loans without maintenance of value provisions. (Note: These rates were as
of March 1992.) Collateral requirements for all but the most valued
clients are very high. Interest rates are influenced by Central Bank of
Bolivia certificate of deposit rates, as well as high administrative costs
resulting from bank operational inefficiency. Foreign companies are
eligible to borrow from the local financial system.
International and bilateral organizations provide some credit lines at lower
interest rates. These lines include lines from the Inter-American
Development Bank, the World Bank, the Andean Development Corporation, and
the U.S. Agency for International Development (USAID). They are channeled
through the Central Bank for on-lending to private Bolivian banks that make
loans for productive purposes to the private sector.
Overseas Private Investment Corporation (OPIC) financing is available for
U.S. firms wishing to invest in Bolivia.
Banking and Currency
Bolivia's banking system includes the Central Bank (Banco Central) and three
state owned banks for agriculture, housing and mining. The government also
has a large interest in the State Bank (Banco del Estado) and a part
interest in the Industrial Bank (Banco Industrial). In addition, there are
19 privately owned commercial banks, including 15 locally-owned and 4
foreign banks. The First National City Bank of New York (Citibank) is the
only U.S. bank with a branch office in Bolivia. Commercial banks account
for over 90 percent of the deposits and loan portfolio of the formal
Bolivian financial system. The remaining 10 percent is concentrated in
savings and loans, credit unions, and other financial institutions.
All commercial banks provide regular banking services, accepting deposits
for both checking and savings accounts and offering loans at short and
medium term. Foreign banks generally do not accept foreign currency time
and demand deposits, nor do they issue small personal loans at more than
short term (1 year). The government has authorized local banks to hold
dollar-denominated time deposits. The Central Bank performs the function of
the U.S. Federal Reserve Bank. It also provides government guarantees on
loans to official agencies.
A new banking law aimed at modernizing the Bolivian banking system has been
under consideration by the Bolivian legislature since mid-1991. A new draft
version of the law will be presented to the Congress in the latter part of
1992. The current banking law dates back to 1928 and has been amended
numerous times, resulting in a web of conflicting regulations. Drafters of
the new law anticipate that the law will address such emerging areas as
factoring and leasing, parameters for bank holding companies, regulatory
roles of the Central Bank and the Superintendency of Banks, how banks will
interface with capital markets, and generally ensure compatibility with the
The official currency of Bolivia is the Boliviano (Bs.) It is divided into
units of 100 centavos, although coins denominated at less than 50 cents are
rarely used. Travelers checks, dollars, and other currencies can be readily
exchanged in exchange houses, banks and major hotels. It is difficult to
cash personal checks in Bolivia as a nonresident.
Several money exchange houses legally operating in Bolivia offer prompt
conversion of several currencies at legal rates, in addition to transfers.
For more detailed information on Bolivia's financial system, including
information on securities exchanges, debt-equity investment bonds, export
financing lines for Bolivian exporters, project facilities, and financing
for private enterprise development, consult the Financing Guide published by
the U.S. Department of Commerce's Latin America/Caribbean Business
Development Center. (See section on "Publications" in this report for
There are OPIC finance programs available for Bolivia. Inconvertibility,
expropriation and violage coverages are also available through OPIC.
Lines are available through the International Monetary Fund, World Bank,
International Finance Corporation, Agency for International Development,
Inter-American Development Bank, United Nations Development Project, and the
International Fund for Agricultural Development.
The official exchange rate is set daily by the government's exchange house,
the Bolsin, which is under the supervision of the Central Bank. The Bolsin
holds daily auctions of dollars. The directors of the Bolsin meet every day
to decide the minimum rate and the number of dollars to offer for sale, with
five million the average offered in the course of a day. Sealed bids are
then collected and opened with dollars going to those bidding at or above
the minimum rate. With this mechanism the Central Bank has slowly devalued
the boliviano in line with domestic inflation and inflation in Bolivia's
major trading partners. The rates set by the Bolsin cannot ignore market
forces because currency exchanges in banks, hotels, exchange houses and on
the street corners are legal and active. The parallel market exchange rates
are seldom more than one percent different from the official rates.
Banco Boliviano Americano S.A.
Calle Loaya esq. Av. Camacho
Casilla de Correo No. 478
La Paz, Bolivia
Banco de Santa Cruz de la Sierra S.A.
Santa Cruz, Bolivia
Banco Mercantil S.A.
Calle Ayacucho esq. Mercado No. 295
La Paz, Bolivia
Banco Nacional de Bolivia
Avenida Camacho esq. Col n
P.O. Box 360
La Paz, Bolivia
Av. Camacho 1355
La Paz, Bolivia
P.O. Box 4824
La Paz, Bolivia
Plaza Venezuela 1434
La Paz, Bolivia
Asociacion de Bancos Privados de Bolivia
Edif. C mara de Comercio Piso 4
La Paz, Bolivia
Banco de Inversion Boliviano
Av. 16 de Julio 1630
La Paz, Bolivia
Av. 16 de Julio 1628
La Paz, Bolivia
Banco Industrial y Ganadero de Beni
Av. 6 de Agosto, Edif. Bigbeni
La Paz, Bolivia
Banco de La Paz
Av. 16 de Julio 1473
La Paz, Bolivia
Banco de Cochabamba
Av. Camacho esq. Col n
La Paz, Bolivia
Banco de la Uni n
Av. Camacho 1416
La Paz, Bolivia
Colon esq. Mercado
La Paz, Bolivia
Banco Central de Bolivia
Mercado esq. Ayacucho
La Paz, Bolivia
The Paz Zamora administration is committed to attracting foreign investment
as the quickest way to spur economic growth. This is particularly true in
the administration's final year in office. A higher level of investment,
both public and private, contributed to strong economic growth in 1991. The
government estimates that private investment grew by 52 percent that year,
50 percent of which was foreign investment. Half of the private investment
went into the mining and hydrocarbons industries. Public investment,
including that of the government-owned corporations, increased by 19
Bolivia provides excellent investment opportunities for U.S. companies.
Liberal trade and investment practices are in force which allow free flow of
currencies; no restrictions are placed on remittances or ownership, and
price controls or subsidies to local production are limited. Three
recently-passed investment laws solidify Bolivia's commitment to an open
Investment Guarantee Law: Bolivia enacted a liberal investment law on
September 26, 1990. The investment law permits 100 percent foreign
ownership and imposes no screening procedures nor requires any
registration. Guarantees that investors can own property, remit dividends,
interest and royalties, import and export freely, contract insurance, and
make payments or contracts in any currency are also basic tenets of the
law. Joint ventures and free zones are granted legal recognition. Only the
mining and hydrocarbons sectors have restrictions on foreign investment.
Hydrocarbons Law: The Bolivian government enacted a new hydrocarbons law on
November 1, 1990. According to this law, YPFB is assigned the
responsibility for exploration and exploitation of hydrocarbons in the
country. YPFB performs the role of an integrated oil company, performing
operations ranging from exploration to development/production of oil and gas
fields. YPFB has been given the authority to enter into operational
contracts, petroleum services contracts and joint venture operations with
foreign and domestic private firms.
Mining Law: Bolivia enacted a mining law on April 4, 1991 which contains
two major changes that concern foreign investment in the mining sector:
foreign firms can now operate within the 50-kilometer border belt in joint
venture or service contracts with Bolivian miners (with the exception of
firms from the country adjacent to the concession; and all new investments
in the mining sector will have to comply with a new taxation system
replacing a royalties tax with a tax on profits. The change should permit
most foreign firms paying taxes in Bolivia to obtain tax credits in their
home countries, thus eliminating the danger of double taxation.
Special Note for Investors: Andean Trade Preference Act (ATPA)
This U.S. program, a 10-year, unilateral trade benefits scheme, provides
duty-free access to a wide range of products imported into the U.S. from the
Andean region. The program, similar to the trade component of the Caribbean
Basin Initiative (CBI), is designed to promote economic development through
private sector initiative in Bolivia, Colombia, Peru, and Ecuador. The ATPA
is referred to as the trade pillar of President Bush's "war on drugs". One
of the goals of the ATPA is to encourage alternatives to coca cultivation
and production by offering broader access to the U.S. market. Another goal
is to stimulate investment in nontraditional sectors and to diversify the
Andean countries' export base.
Bolivia and Colombia were officially designated as ATPA beneficiaries in
July 1992, with benefits granted immediately thereafter. Leading
ATPA-eligible Bolivian exports include fresh cut roses, leather
wallets/attache cases/handbags/apparel (receive duty reduction only, not
duty elimination), wild rice, and silk products. For complete background
information on the ATPA, including a complete list of products ineligible
for benefits, consult the Guidebook to the Andean Trade Preference Act,
published by the U.S. Department of Commerce's Latin America/Caribbean
Business Development Center. (See section on "Publications" in this report
for ordering information.)
The Bolivian Government has developed an aggressive privatization program,
with plans to sell 66 companies presently owed by the Regional Development
Corporations, as well as the national airline, Lloyd Aereo Boliviano. Due
to the fact that these companies have received little investment capital
over the last several years, prospects for selling machinery and supplies to
these companies will be strong. U.S. accounting and auditing companies are
presently employed assisting the Bolivian Government in determining the
companies financial worth and in locating prospective purchasers.
Law No. 843, promulgated on May 20, 1986, established Bolivia's current tax
system, greatly simplifying the tax structure. The new tax system includes
six types of taxes, falling into two distinct categories: taxes on
consumption and taxes on "presumed personal and corporate income" based on
Taxes on consumption comprise:
o Value-Added Tax (VAT)
o Complimentary Tax to the Value-Added Tax
o Tax on Transactions
o Tax on Specific Consumption Items
Taxes on Assumed Income (based on assets) comprise:
o Tax on Assumed Corporate Profits
o Tax on Assumed Profits of Property Holders
In addition to the modifications listed above, Tax Law No. 843 introduced
compulsory measures such as jail sentences for tax evasion and fraud,
varying from one month to five years. It also established tax debt
adjustments pegged to U.S. dollar value and provides for interest charges on
tax debts at rates not less than the active commercial bank interest rates.
Value-Added Tax (VAT)
This 13 percent tax is payable by everyone who sells moveable assets, by
importers, and by those who perform any kind of services. Not included in
the VAT are interests payable to or by financial institutions, sales or
transfers of shares or titles, the sale or transfers of assets, and
exports. The VAT is payable on the total purchased amount listed in the
billed sales price, also referred to as the fiscal debt. Against this
fiscal debt, the taxpayer can discount 13 percent of all purchases and
imports as a fiscal credit.
Complementary Tax to the Value-Added Tax
This 10 percent complementary tax is payable by all citizens and estates for
income from Bolivian sources such as salaries, fees, rents, interests,
royalties, patents, trademarks, commissions, dividends, etc. Most VAT
payments are deductible from the complementary tax.
Tax on Transactions
This tax is payable by individuals or companies involved in trade,
professional or business activities, rents, services, and any other economic
activity which presumes the transfer of any assets or rights. A 1 percent
tax is paid on the gross monthly income.
Tax on Specific Consumption Items
Producers and importers are taxed on the sale of alcoholic beverages (30
percent); Beer (60 percent); cigarettes, cigars, and tobacco (50 percent);
perfumes and cosmetics (30 percent); and jewels and imported semiprecious
stones (50 percent). There are some exemptions, in very specific cases.
Tax on Assumed Corporate Profits
All public and private corporations, including individual corporations, must
pay a 2 percent tax based on the net assets at the closing of each taxable
Tax on Assumed Profits of Property Holders
This tax is applicable to all owners of real estate, vehicles, motorboats,
and airplanes, according to a tax schedule contained in the tax law.
Taxation in the Hydrocarbons Sector
Taxation in the hydrocarbons sector was established in the 1972 General Law
of Hydrocarbons (Chapter III, Title IV). All operations under the direct
execution of the state-owned oil company, Yacimientos Petroleferos Fiscales
Bolivianos (YPFB), are subject to the following taxes in lieu of the taxes
on assumed profits and total income:
o A departmental tax, termed royalty tax, equal to 11 percent of the gross
production at wellhead, payable for the benefit of the department in
which the production originates;
o A national tax equal to 19 percent of the gross production at wellhead.
YPFB also must pay hydrocarbons taxes for its operational contracts signed
with second parties.
Taxation in the Mining Sector
Pursuant to the enactment of the 1991 Mining Law, investments in mining are
no longer taxed as royalties, but instead are taxed as profits. This change
should permit most foreign firms paying taxes in Bolivia to obtain tax
credits in their home countries.
About 47 percent of Bolivia's work force is employed in the agricultural
sector. The supply of skilled, semiskilled, or other specially trained
labor is scarce. Bolivia has a minimum wage law, as well as an elaborate
system of compensations and bonuses for the private sector. Labor laws
include provisions for child protection, paid vacations, and protection of
The Bolivian labor movement and its communist-led umbrella organization, the
Bolivian Workers Central (COB), are traditionally militant, active, and
politically influential. Work stoppages are common, although less
disruptive than in past years, and militant union activity generally is
confined to the public sector. The Bolivian Government officially
encourages cooperatives in all sectors, especially in mining and
agriculture. Mining cooperatives now represent the bulk of all miners in
Bolivia, due in large part to the precipitous 3-year decline of the state
mining enterprise, COMIBOL.
GUIDANCE FOR BUSINESS TRAVELERS
Entry Requirements for U.S. Citizens
A business traveler or tourist needs a valid passport to enter Bolivia.
U.S. citizens traveling on nonofficial passports do not require visas for
stays up to 30 days. Travelers wishing to extend their stay must pay 70
Bolivianos (notated as Bs., and equivalent to $17.20 at the early December
1992 exchange rate of 4.07 Bs./US$) for the first 30-day renewal, Bs. 100
($24.57) for the second 30-day renewal, and Bs. 150 ($36.86) for each 30-day
Travelers intending to conduct business in Bolivia which might require
juridical sanction, such as the signing of contracts or the payment or
collection of fees, must obtain a Special Purpose Visa (Visa de Objeto
Determinado) from the Under Secretary of Immigration following arrival in
the country. The applicant must present a document prepared and legalized
by a Bolivian attorney stating the exact purpose of the visit. The Special
Purpose Visa is valid for 90 days upon the payment of $50. It can be
extended for an additional 90 days upon the payment of Bs. 150 ($36.86).
Travelers may obtain the Special Purpose Visa before traveling to Bolivia at
a Bolivian Consulate in the United States for $25. In this case the
traveler pays only the Bs. 100 ($24.57) for the form upon his arrival.
Certain foreign companies doing business in Bolivia have special agreements
with the Bolivian Government that permit their workers and supervisory
personnel to reside in Bolivia for up to 1 or 2 years without obtaining
permanent residence. In these cases the fees vary with the agreement made
with the Bolivian Government.
Inquiries concerning entry into Bolivia should be directed to one of the
Bolivian consular offices located in the United States. (See "Sources of
Commercial and Economic Information" in this publication.)
Most members of Bolivia's private sector are experienced business persons
with ample direct exposure to U.S. and West European customs and
procedures. Visiting U.S. business travelers find them sophisticated and
adept in their various fields of interest. The local representative is a
vital component in the successful operation of foreign-based firms. In the
case of investment contracts, direct sales for major projects, and all
government agency purchases, a local representative is required by law.
With regard to product promotion and distribution, Bolivia's small market
requires that most agents represent more than one line of merchandise. The
amount of effort given to promoting a particular product line is determined
in part by the interest and support expressed by the supplier, as well as by
the agent's ability and interest. Given the key role played by local
representatives, the importance of occasional personal visits from company
representatives, as well as prompt, responsive handling of communications,
cannot be overstated. After a firm business relationship has been
established, local distributors and agents generally expect to be extended
an offer to visit the foreign company's plant facilities and head offices in
order to become more familiar with the company's personnel and operating
Although privatizing, Bolivia's economy remains heavily public-sector
oriented, and many of the most promising sales and investment opportunities
are to be found in the large state-owned corporations. Therefore, business
persons should be prepared to deal with government officials and with usual
governmental procedures. U.S. exporters or shippers should adhere to the
instructions of the Bolivian importer, as well as to the instruction
outlined in the Trade Regulations section of this report regarding shipment
of goods, so as to avoid difficulties and customs fines.
Spanish is the both the official language and the language of commerce in
Bolivia. Aymara and several dialects of Quechua also are spoken extensively
outside the major cities, but Spanish is understood in all but the most
remote regions. English is widely spoken among business and public
officials, but most prefer to speak Spanish.
Office hours in Bolivia are the same throughout the year but vary somewhat
from city to city. In La Paz and Cochabamba, hours are generally 9 a.m. to
12 noon and 2 p.m. until 6:30 or 7 p.m. In Santa Cruz, one of the most
dynamic commercial centers in Bolivia, tropical climatic conditions demand
that work begin and end earlier. The Santa Cruz business day begins at 7 or
8 a.m. and ends at about 4:30 p.m. A 2-hour lunch break also is common
practice in Santa Cruz. Most business offices close completely during the
2-hour lunch break.
The following legal holidays will be observed throughout the country during
January 1 New Year's Day
February 22-23 Carnival (varies yearly)
April 9 Good Friday (varies yearly)
May 1 Labor Day
June 1 Corpus Christi (varies yearly)
August 6 Independence Day
November 1 All Saints Day
December 25 Christmas Day
The following local holidays will be observed in the locations indicated:
February 10 Oruro's Day
April 5 Tarija's Day
May 25 Sucre's Day
July 16 La Paz's Day
September 14 Cochabamba's Day
September 24 Santa Cruz's Day
September 24 Pando's Day
November 10 Potosi's Day
November 18 Beni's Day
Health: La Paz's altitude of 12,500 feet may cause headaches or more serious
problems for persons with heart or lung ailments. Persons with health
problems may wish to consult a doctor before coming to La Paz. Recent
arrivals are advised to limit their activities. Community sanitary
conditions are such that it is advisable to boil water at least 20 minutes
or to consume bottled water. There are, however, many good and safe
restaurants in the major cities. Hepatitis and rabies are endemic diseases
in Bolivia, although with proper caution both can easily be avoided.
National and international telephone and cable services are available in La
Paz and in other major cities. Direct telephone dialing is available
between the cities of La Paz, Santa Cruz, Cochabamba, Oruro, Tarija, Potosi,
and Sucre. Many business establishments operate telex machines. Direct
dialing is available between the United States and Bolivia.
Taxi fares from the El Alto airport to La Paz vary according to the number
of passengers, but generally the charge is Bs. 5 per person ($1.23) for a
collective taxi. Fares for individual taxis average 20-25 Bs.
($4.91-$6.14). Within the city, fares average about Bs. 1.50 ($0.37) during
the day and at night Bs. 2 ($0.49). Rental cars are available, but this
service is very expensive and frequently includes a driver who also must be
paid. U.S. drivers licenses are valid in Bolivia for 90 days after arrival.
The major cities of Bolivia offer a radiotaxi service with special fares.
Fares within downtown La Paz cost Bs. 5 ($1.23) for one to five persons.
Fares from downtown to the peripheral areas are Bs. 10 ($2.46). This
service may be rented for 1 full day for a special cost.
All of Bolivia experiences a rainy season during the summer months
(December-March) and a dry season during the winter-spring
(March-November). The average daytime temperature is 60 degrees Farenheit
for most of the year, but evenings are always much cooler. Cochabamba, at a
lower altitude, has a milder climate than La Paz but much milder. Santa
Cruz is a tropical city, generally hot and humid; occasional winds from the
southeast can be very cold, however.
There are several good, comfortable hotels in the central part of La Paz
where single rooms range between $35 and $79 a night including tax. Several
new hotels have been recently constructed, including the Plaza Hotel, the
Palladium, and the Libertador. There are also several good hotels in Santa
Cruz and Cochabamba.
The following trade fair will be held in Bolivia during 1993:
Feria Internacional de Cochabamba (Cochabamba International Trade Fair)
October 30-November 14, 1993
Contact: Ernesto Arandia, Gerente General (General Manager)
Feria Internacional de Cochabamba
A.A. (P.O. Box) 355
SOURCES OF COMMERCIAL AND ECONOMIC INFORMATION
U.S. Government Representation in Bolivia
The U.S. Embassy is located in the Banco Popular del Peru Building, corner
of Calles Mercado and Colon, address APO Miami 34032, Telex BX AMEMB BV,
Telephones: 591-2-350-120 or 342-355.
Members of the Embassy's Economic/Commercial Section are available to assist
U.S. business persons visiting Bolivia.
The U.S. Department of State publishes a booklet entitled Key Officers of
Foreign Service Posts on a quarterly basis. A copy may be purchased from
the Superintendent of Documents, U.S. Government Printing Office,
Washington, DC 20402.
Bolivian Government Representation in the United States
The Embassy of Bolivia in the United States is located at 3014 Massachusetts
Avenue, NW, Washington, DC 20008, Tel.: 202-483-4410.
Bolivia maintains Consulates General in the United States at the following
25 SE Second Ave. Suite 1127
Miami, FL 33131
Telephone: (305) 358-3450 or 358-3451
211 East 43rd St., Room 802
New York, NY 10020
Telephone: (212) 687-0531 or 697-0530
870 Market St.
San Francisco, CA 94102
Telephone: (415) 495-5173
Honorary Consuls are located at the following addresses:
Luis Zambrana Riveros
1183 Hampton Park Dr.
St. Louis, MO 60117
Telephone: (314) 783-1958
Ricardo Antezana M.
13933 S.E. 60th St.
Bellevue, WA 98006
Telephone: (206) 641-9865
Gustavo Estenssoro Cuellar
P.O. Box 18925
Atlanta, GA 30326
Telephone: (404) 320-9312 or 261-1470 (ext. 244)
David C. Mitchell
1801 Gilbert Ave.
Cincinnati, OH 45262
2530 Pacific Hts. Rd.
Honolulu, HI 96800
Jaime R. Escobar Claros
1200 W. Superior St.
Melrose Park, IL 60160
Telephone: (312) 343-0420
Calle Munet Court, No. 10
Caparra, PR 00920
Telephone: (809) 759-7678
The Bolivian Chamber of Commerce is located at:
One World Trade Center
New York, NY 10048
Manager: Jorge Palacios
Telephone: (212) 839-7086
Below is a list of selected current reports on commercial and economic
conditions in Bolivia available from various sources.
U.S. Department of Commerce Publications
This is a list of selected current reports on commercial and economic
conditions in Bolivia available from the various offices of the U.S.
Department of Commerce. Some of these reports were prepared within the
Office of Latin America (OLA), while others were submitted by the U.S.
Foreign Commercial Service and the Economic Section of the U.S. Embassy in
Bolivia. These reports and those of the Department of State) are generally
available through the U.S. Government Printing Office (tel: 202-783-3238),
unless otherwise indicated. The reports are also available on the National
Trade Data Bank (NTDB - tel: 202-482-1986), which may be accessed at any
local or university library in your area. In addition, there are a number
of valuable reference works and periodicals, the most important of which are
listed below. The best way to obtain guidance on using these information
resources is to contact the Bolivia Desk Officer, Room 3025, U.S. Department
of Commerce, Washington, DC 20230; Tel: (202) 482-1659.
Foreign Economic Trends/Bolivia, annual
U.S. Exports/World Areas by Schedule E Commodity Grouping Report, FT 455,
Industrial Outlook Report: Minerals, 1992, annual
Industrial Outlook Report: Petroleum, 1991, annual
Industrial Outlook: Investment Climate Statement, 1990, periodic
Financing Guide (available free of charge from the Latin America/Caribbean
Business Development Center, U.S. Department of Commerce (tel: 202-482-0703
Guidebook to the Andean Trade Preference Act (available free of charge from
the Latin America/Caribbean Business Development Center, U.S. Department of
Commerce (tel: 202-482-0703 or 482-0841)
U.S. Department of State Publications
Background Notes: Bolivia, available periodically through the Department of
State, Office of Public Communications, Bureau of Public of Affairs,
Washington, DC. Provides political and other background information on
Bolivia. (Annual subscriptions to the Background Notes Series may be
purchased by contacting the Superintendent of Documents, Government Printing
Office, Washington, DC 20402.)
Area Handbook for Bolivia, periodic
Guia De Industria, Comercio y Turismo (Bolivia) 1992 (in Spanish), Calle
Manuel Aparicio No. 75, Casilla 6258, La Paz, Bolivia
Directorio de Exportadores (Bolivia) 1992, Export Directory, including
addresses (in Spanish). Ministerio de Industria, Comercio y Turismo,
DICOMEX, Pliegos Oficiales, La Paz, Bolivia
General Magazines and Newsletters
Bolivia Today, (periodically), Embassy of Bolivia, 3014 Massachusetts
Avenue, NW, Washington, DC 20008 (tel: 202-483-4410)
Business Latin America, (weekly), Business International Corporation,
Subscriptions Department, 215 Park Avenue South, New York, NY 10017 (tel:
Lagniappe Letter and Quarterly Report, (weekly), Latin American Information
Services, Inc., 222 Central Park South, Suite 18, New York, NY 10019 (tel:
Guides and Reports
Bolivia Today: Investment Law, Hydrocarbons Law, and Bolivian Mining Code
(in English translation), 1991, Embassy of Bolivia,
3014 Massachusetts Avenue, NW, Washington, DC 20008 (tel: 202-483-4410)
A Statement of the Laws of Bolivia in Matters Affecting Business, 1974,
available through the Organization of American States in Washington, D.C.
Economic and Social Progress in Latin America, Inter-American Development
Bank Annual Report, available form the IDB, 1300 New York Ave., NW,
Washington, D.C. 20420 (tel: 202-623-1000)
American Firms in Foreign Countries, Bolivia edition, 1991, World Trade
Academy Press, Inc., 50 East 42nd St., New York, NY 10017 (tel:
Investing, Licensing, and Trading Conditions Abroad, Business International
Corporation, Subscriptions Department, 215 Park Avenue South, New York, NY
10017 (tel: 212-460-0600)
Exporters Encyclopedia, Dun's Marketing Services, 3 Century Drive,
Parsippany, NJ 07054 (tel: 1-800-526-0651)
International Trade Reporter, Bureau of National Affairs, 1231 25th Street,
NW, Washington, D.C. 20037 (tel: 202-452-4200)
Capital Formation and Investment Incentives Around the World, (2 volumes)
Matthew Bender & Co., inc., 235 East 45th Street, New York, NY 10017 (tel:
Exchange Arrangements and Exchange Restrictions: Annual Report,
International Monetary Fund, Publications Office, Washington, D.C. 20402
Latin America: A Tax Tour, Arthur Andersen & Co., 69 West Washington
Street, Chicago, IL 60602 (tel: 312-580-0033)
Imports (c.i.f., US$ millions) -- 1989 619.9
Import Market Shares (percent, 1991) U.S. 18
Main Imports -- capital goods, 43 percent; raw materials and intermediary
products, 38 percent; and consumer goods, 18 percent.
Exports (c.i.f., US$ millions) -- 1989 821.7
Major Exports -- Natural gas, minerals, sugar, soya, and coffee.
Tariff rates: 5 percent on defined list of capital goods, 10 percent on all
other items. The United States maintains a strong position in the market
although competition is strong from Brazil and other neighboring countries.
Best export prospects for U.S. exporters include mining equipment,
agricultural machinery, hydrocarbon equipment, road/railroad construction
equipment, electrical energy, medical equipment, telecommunications, and
computers and peripherals.
Currency -- Boliviano (Bs). The Boliviano is freely convertible for all
Foreign Aid --The U.S. Government alone plans to provide over $200 million
in 1992 in economic, Peace Corps, and military and drug-related bilateral
assistance. The Inter-American Development Bank (IDB) projects $340 million
in soft loans for 1992 and 1993, primarily for infrastructure development.
The International Monetary Fund (IMF) currently provides about $60 million
annually in balance of payments (BOP) support.
Gross Domestic Product (GDP, 1991) -- $5.8 billion
GDP Per Capita, (1992) -- $950
Major Sectors/GDP (1990) -- Agriculture 21 percent
Manufacturing 13.2 percent
Commerce 12.9 percent
Public Adm. 9.0 percent
Mining 8.9 percent
Petroleum 6.4 percent
Transport 2.7 percent
Real GDP Growth Rates (percent) -- 1989 2.8
Natural Resources -- 424,000 square miles in area . There are three
distinct regions: the Altiplano (13,500 - 14,000 feet in elevation), which
lies between two ranges of the Andes; the Valleys to the east of the
Altiplano; and the Oriente on the tropical eastern lowlands.
Climate -- Temperatures vary from chilling to freezing at the high altitudes
to tropical in the eastern lowlands. Strong rainy season in summer, dry in
Minerals -- Important minerals include tin, silver, zinc, antimony,
tungsten, lead and gold. Bolivia also has one of the world's largest
untapped resources of lithium and potassium in the salt basins of the
Agriculture -- Agriculture is the largest sector of the Bolivian economy.
Timber is the largest agricultural export, followed by beef, coffee and
soybeans. Other major agricultural products include sugar, potatoes, rice
and corn. The combined outputs of the
Size -- Estimated at 6.3 million (1992).
Distribution -- Roughly 50 percent of the population live in urban areas.
Language -- Spanish and Quechua. Aymara is also used in northern parts of
Labor -- Total employment is estimated at 1.66 million, of which 47 percent
is in agriculture (1989). The estimated urban unemployment rate is 8
(1991), although the underemployment rate is considerably higher.
Education -- The literacy rate is estimated to be 63 percent (1990).
Public Health -- Life expectancy at birth for males is 52 years and for
females 56 years (1990). Birth rate is 35 births/1,000 population (1990).
Ethnic Groups -- Indian, 48 percent; Mestizo, 39 percent; Caucasian, 12
percent; other, 1 percent.
There are small Japanese and South Korean communities. Also important
economically are the relatively smaller Jewish and Arab (mainly Lebanese)
This file extracted from Dept. of Commerce National Trade Data Bank (NTDB)
CD-ROM SuDoc No. C 1.88:993/12. Processed 12/01/1994 by software developed
by RCM (UM-St. Louis Libraries) / OBR_0010