Employer of record in Bolivia

The economy

Politics has played a huge role in holding back the Bolivian economy, but that changed in recent years. In 2006, the country’s nominal GDP was US$11.5 billion, and it increased all the way to US$41 billion in 2019. In 2016, the country had the world’s highest proportional rate of financial reserves, making it a very stable country.

Since the 1980s, the country’s government worked to stabilize prices, in wake of a major blow the economy experienced after the price of tin plummeted. The country has a large natural gas reserve and is a major exporter of the material.

The importance of small and medium-sized companies

Small and medium-sized enterprises (SMEs) are extremely important to the Bolivian economy. In fact, SMEs employ roughly 83% of the country’s total workforce, and contribute 26% of the country’s Gross Domestic Product. SMEs are particularly crucial to the agricultural industry, where they employ more than 30% of its workforce and are responsible for 14% of the GDP.

Population characteristics

The Bolivian population has exploded in the last 50 years. In that time, the population has more than tripled, with the population growth rate sitting at 2.25%. Most of the people in the country (67.49%) live in urban areas of the country. Roughly 70% of the population is concentrated in the Cochabamba, Santa Cruz and La Paz departments.

The population is generally considered young, with 59% between the ages of 15 and 59, and 39% younger than 15. In fact, roughly 60% of the total population is 25 years old or younger.

Key sectors of the national economy

Bolivia has one of the fastest-growing economies in all of South America. Under the former Morales administration, the GDP averaged a growth of 5% per year. In addition to large natural gas reserves, Bolivia is a major exporter of lithium. In fact, it has 5.4 million cubic tonnes of it, representing between 50% and 70% of the reserves for the entire world. The government has hesitated to mine for it yet, though, as it would disturb the country’s salt flats.

Tourism is also a very important industry.

Human talent

The Bolivian government has worked hard to ramp up education of all its residents. They are particularly focused on increasing education in the country’s natural resources as well as STEM fields (science, technology, engineering and math). In fact, they made it part of their Agenda 2025.

La Paz

La Paz is home to 18 universities, offering multiple degrees in systems engineering and computer science. In the last six years, the department has produced roughly 200 new engineers every year.

Technological ecosystem

Bolivia has become a major player in nearshoring, especially for software development. There are more than 10,000 software development engineers in the country for its relatively small population of 11 million. The country has worked to beef up its technology infrastructure to support further growth.

Facilities for foreign investment

Over the last 13 years, Bolivia has achieved reduced poverty levels, inequality and illiteracy, while also boosting connectivity levels. These technological advances and many tech hubs that are popping up make nearshoring to this country very attractive. 

Bolivia gastronomy: regional and traditional cuisines

Potatoes are huge in Bolivia. In fact, there are more than 200 different varieties of the vegetable, which is why you’ll find it in a lot of dishes. That, and their meat, is of much higher quality than a lot of other surrounding countries, so you’ll eat a very varied menu. The influences here come from Spanish cuisine, along with some influence from Arabs, French, Italians and Germans–all of which arrived in the country as immigrants over its history.

General highlights

What you need to know about employing personnel in Bolivia

Laws that regulate labor relationships

Key tax and labor authorities 

Labor contracts

Basic requirements

Labour law dictates all labor agreements have to be approved by the Ministry of Labour. The employer has to provide the Ministry with:

• Employees on the monthly payroll, which is submitted periodically to both the Ministry and social security entities
• Any affiliate employees to the social security entities

Contracts must be in writing and contain:

• Name of all parties
• Nationality, age, domicile and civil status of the employee
• Nature of the work
• Amount and period of payment, as well as its method
• Duration of the contract
• Place of work
• Employee’s heirs

Payroll

Wages must be paid by the end of each month. There is no law dictating how the wages must be paid.

Legal benefits in Bolivia

● Vacation leave
● Sick leave
● Maternity leave
● Retirement
● Common risk insurance
● Solidarity pensions
● National solidarity

Employers contribution or labor cost

Employers are subject to taxes and other costs for having employees. Employers cannot recover these costs.

Annual taxable income

Corporate tax rates

Types of disabilities

Employees can get compensated for injury or illness that prevents them from working as long as they go through the social security system. If they seek to go through a private provider, then expenses will only be reimbursed if it’s an emergency and if they follow the proper procedure for reimbursement.

Maternity leave

Females are entitled to 45 days of leave that is fully paid, both before and after delivery, for 90 days. During the first year of the child, they must give the mother one hour each day for breastfeeding, subject to the schedules set by the employer. This hour has to be outside of the two-hour rest break window they’re entitled to.

Social security law also gives both pregnant employees and their spouses a prenatal subsidy starting at the fifth month of pregnancy, and also a nursing subsidy that lasts until the child turns one-year-old. These are both paid for by the employer.
You also cannot terminate a female employee and their spouse during the first year of their child’s life.

Public holidays

The Labour Law provides for public holidays that are observed in Bolivia:

Termination

The Labour Law outlines rules for termination of an employment contract:

Severance pay grades for employees who accept an unjustified dismissal are based on the following table.