According to UNCTAD's World Investment Report 2023, FDI flows to Bolivia turned negative again in 2022 (after 2019 and 2020), to USD -26 million, mainly due to the extraordinary payment of dividends in the hydrocarbon sector. However, other economic sectors showed increased investment. At the end of the same period, the total stock of FDI was estimated at USD 10.1 billion, around 23.4% of the country’s GDP. The country's many natural resources offer investment opportunities (hydrocarbons, mining sector), as do the transport and communications sectors. Bolivia’s wealth of natural resources attracts significant investment, particularly from Russia and China (the country has the continent's second-largest gas reserve and the world's largest lithium reserve). Lately, the majority of significant foreign projects in Bolivia have come from China. In 2023, a consortium led by the Chinese Contemporary Amperex Technology signed an agreement with the government to invest more than USD 1 billion in infrastructure construction the mining, refining, processing, and sale of lithium. According to figures from the Central Bank of Bolivia, in the first three months of 2023 the country received USD 60 million in net FDI inflows.
The 2014 Investment Law ensures equal treatment for both national and foreign companies. However, public investment takes precedence over private investment, as determined by the Bolivian government, which identifies sectors open to private investment. Public policies aim to boost domestic consumption of locally manufactured goods and foreign investment is restricted in matters directly related to national security. Both foreign and domestic private entities have the right to establish and own businesses and engage in profitable activities, although investments are subject to monitoring by the relevant ministry overseeing each sector. However, government decisions, control, and prioritization of key strategic sectors, such as natural resources and broadcast licenses, may restrict private companies, both foreign and domestic, from investing. Enforcement of laws concerning dispute settlements, intellectual property, and real property is inconsistent, leading to legal uncertainties and varied enforcement practices, which in turn affect the investment climate negatively. Moreover, many state-owned enterprises are managed inefficiently, contributing to the fragility of the economy and its susceptibility to external shocks. Bolivia's natural resources, including fossil energy and mining, are under full state control. While temporary authorizations for resource exploitation may be granted, ownership cannot be transferred to private interests through concessions or contracts. Overall, Bolivia does not provide a good investment climate, and the country ranks 133rd among the 180 economies on the Corruption Perception Index 2023 and 165th out of 184 countries on the latest Index of Economic Freedom.
Bolivia | Latin America & Caribbean | Estados Unidos | Alemanha | |
---|---|---|---|---|
Index of Transaction Transparency* | 1.0 | 4.1 | 7.0 | 5.0 |
Index of Manager’s Responsibility** | 5.0 | 5.2 | 9.0 | 5.0 |
Index of Shareholders’ Power*** | 6.0 | 6.7 | 9.0 | 5.0 |
Source: Doing Business - Latest available data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
Foreign Direct Investment | 2020 | 2021 | 2022 |
---|---|---|---|
FDI Inward Flow (million USD) | -1,129 | 584 | -26 |
FDI Stock (million USD) | 10,276.3 | 10,585.5 | 10,131.0 |
Number of Greenfield Investments* | 5.0 | 7.0 | 3.0 |
Value of Greenfield Investments (million USD) | 312 | 224 | 72 |
Source: UNCTAD - Latest available data
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
Personal income tax |
13% (12.5% effective tax rate for individuals engaged in a profession or business activity) |
Bolivia | Latin America & Caribbean | Estados Unidos | Alemanha | |
---|---|---|---|---|
Number of Payments of Taxes per Year | 42.0 | 28.2 | 10.6 | 9.0 |
Time Taken For Administrative Formalities (Hours) | 1,025.0 | 327.5 | 175.0 | 218.0 |
Total Share of Taxes (% of Profit) | 83.7 | 46.8 | 36.6 | 48.8 |
Source: Doing Business - Latest available data.
Setting Up a Company | Bolivia | Latin America & Caribbean |
---|---|---|
Procedures (number) | 12.00 | 8.00 |
Time (days) | 39.50 | 25.22 |
Source: Doing Business.
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Latest Update: May 2024