Employer Of Record in Bolivia

Bolivia Country Facts

A landlocked country in central South America, Bolivia is a sovereign state that’s broken down into nine departments. It has a varied geography and diverse economy. It’s the fifth-largest South American country and is one of only two landlocked countries in all the Americas (Paraguay is the other). Bolivia is one of the poorest countries in South America, but has worked hard to slash its poverty rate in recent years. While it’s considered a developing country, it is home to the fastest-growing economy in all of South America.

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 11.5 billion, and it increased all the way to 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.

Business Culture in Bolivia

Bolivians prefer to keep their business dealings tight to the chest. In other words, they prefer to deal with people they know well and can trust. This means new business dealings may take lots of time as you work to establish a working and trusting relationship. Business is Formal Once you’ve established that, you should understand that Bolivians are very formal in their business dealings. Be Professional You should always have a professional demeanor, both in your attire and how you conduct yourself in meetings.

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

Year	2022
Country	Bolivia
Capital	Sucre
Num. States/Provinces	9
Principal Cities	Santa Cruz El Alto La Paz Cocha Oruro Sucre Tarija
Language	Spanish
Local Currency	Boliviano (BOB)
Major Religion	Christianity (Roman Catholic 70.1%)
Date Format	Dd/mm/yyyy
Thousands Separator Format	999.999.999,99
Country Dial Code	+591
Time Zone	BOT (UTC -4)
Population	11,428,245 (83rd)
Border Countries	North and East: Brazil; South: Argentina and Paraguay; West: Peru and Chile
Continental surface	1,098,581 KM2 (27th)
Fiscal Year	January 1 to December 31 (banks and commercial) April 1 to March 31 (industrial, oil, gas) October 1 to September 30 (mining)
VAT %	13%
Minimum Wage	BOB 2,160 per month, plus Christmas bonus equal to one month’s pay
Taxpayer Identification Number Name in the country	Numero de Identificacion Tributaria (NIT)
Current President	Luis Arce

What you need to know about employing personnel in Bolivia: Laws that regulate labor relationships

Laws	Brief Description
Constitucion Politica del Estado (The Political Constitution of the State)	The overarching document that outlines all rules, regulations and laws for political and societal life in Bolivia
Labor Code	The law that regulates all working activities in the country
Tax Code	The law that regulates how individuals and corporations are taxed in the country
Social Security	The law that dictates social services programs in the country

Key Tax and Labor Authorities (Examples input).

The Ministry of Labour	The agency that oversees all work activities in the country.
Supportive social contribution	Employees and employers must contribute to the supportive social contribution, which covers various social services in the country

Labor Contracts (Examples input)

General Labour Law	The law that outlines all working activities in the country
Contracts	Generally, employees and workers are hired under indefinite agreements. Fixed-term agreements are acceptable in certain cases.
Work Hours	Working hours can’t exceed 8 per day or 48 per week. Ordinary daytime working hours: 6 a.m. to 8 p.m. Night-time working hours: 8 p.m. to 6 a.m.

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

Minimum Wage	BOB 2,160 per month
Wages	All wages must be paid by the end of the month. There aren’t any restrictions on how the payment must be made (by cash, check, wire transfer or deposit)
Overtime	Employees working overnight shifts must be paid at an increase of 25% to 50% of the normal salary, depending on the situation and sector. No employee can work more than 2 overtime hours per day. All overtime hours must be paid double the normal rate. The same applies to all public holidays. Any work on Sunday must be paid at triple the normal rate.
Rest Breaks	No employee can work for more than 5 hours in a row. Any employee who does so must be given a break of 2 hours at the least. Night workers get a break after 3.5 hours of continuous work.
Vacations or PTO	All employees are entitled to paid holidays annually, after they reach one year of service. 1-5 years of service: 15 working days off 5-10 years: 20 working days off 10+ years: 30 working days off
Leaves of Absence Employees have the right to paid absences for the following things:	Employees can get paid time off for an injury or illness as long as they provide the employer with a certificate showing they can’t work. This is paid as long as the employee goes through the public social security system.

Employers Contribution or Labor Cost Employers are subject to taxes and other costs for having employees. Employers cannot recover these costs. Annual Taxable Income.

Over this amount	Tax %
0	13%

Corporate Tax Rates

Description	Tax Rate
Base Rate	25%
Financial institutions and insurance companies with return on equity index greater than 6%	Additional 25%
Mining companies carrying out exploitation activities	12.5%
Mining companies carrying out manufacturing activities	7.5%

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:

Date	Holiday Name
January 1	New Year’s Day
January 22	Plurinational State Foundation Day
February 28-March 1	Carnival
April 15 (changes every year)	Holy Friday
May 1	Labour Day
June 21	Willkakuti
August 6	Independence Day
November 2	All Souls Day/Day of the Dead
December 25	Christmas Day

Termination

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

Type of Termination	Brief Description
No cause	There’s no mandatory notice period for termination, whether the dismissal is justified or not.
Example: For Cause Article 16	Employers can terminate employees for cause based on the following factors: ●       Intentional material prejudice ●       Disclosure of industrial secrets ●       Omissions or imprudence related to industrial security and hygiene ●       Theft or robbery ●       Breach of employment agreement, either total or partial

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

Length of Employment	Severance Amount
Each year worked	One month’s salary