Definitive Guide to Hiring in Bolivia

Hiring in Bolivia

Hiring employees compliantly in Bolivia means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Bolivia so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:

(a) Establish your own new legal entity, banking, accounting and payroll service in Bolivia or

(b) use an Employer of Record like Global Expansion who can handle all of the details for you.

Labor Laws in Bolivia

Employment laws in Bolivia are uniquely suited to the country’s way of life, and crucial to understand if you want to employ local talent in this country. Get the details on Bolivia's employment laws and Bolivia policies here.

Employee Probation Period

• The maximum probationary (trial) period in Bolivia is 3 months

Annual Leave in Bolivia

• If an employee has completed one year of employment, they are entitled to 15 days of paid annual leave.   
• For an employee who has been employed for at least 5 years, they are entitled to 20 days of paid annual leave.  
• For an employee who has been employed for at least 10 years, they are entitled to 30 days of paid annual leave. 

Holidays in Bolivia

Bolivia celebrates Thirteen national public holidays as well as additional public holidays that vary by state:

Maternity Leave Bolivia

• Mothers are entitled to a total of 90 days, broken down into 45 days before the expected due date and 45 after the birth of the child. 
• Pay given to a mother on maternity leave is 100% of the national minimum wage.  
• However, the employer is entitled to receive a 90% reimbursement from social security. 

Paternity Leave Bolivia

• For the birth of a child, fathers are entitled to 3 days’ pay. 
• From the date that the child is born, fathers receive job protection for 1 year.

Sick Leave in Bolivia

Working Hours in Boivia

• The effective working day is eight hours per day up to a maximum of 48 hours per week, except for women who may work only 40 hours per week
• In Bolivia businesses normally work from about 8-12:30 am and from about 2:30 to 6:30 or 7 p.m. because it's a tradition to take the 2-hour siesta and lunch hour at midday.

Overtime in Bolivia

• Overtime is work that is carried out at times of emergencies or to meet the employer's needs.
• Overtime is treated as extraordinary working hours.
• They must be compensated with a 100% extra pay, and must not exceed a total of two hours per day. 
• Extra pay of 100% also applies to work done during public holidays.
• Work on Sundays must be compensated by triple the daily salary, or, in some circumstances, by granting a leave of one working day (to be determined by management).

Termination of Employment in Bolivia

• The employer can dismiss an employee without having to make any payments on the basis of any of the reasons listed in Article 16 of the General Labor Law and Article 9 of the Regulatory Decree on the General Labor Law.
• The following reasons are listed in Article 16 of the General Labor Law:
  • Intentional material prejudice caused to working tools.
  • Disclosure of industrial secrets.
  • Omissions or imprudence relating to industrial security and hygiene.
  • Partial or total breach of the employment agreement.
  • Robbery or theft.
• Unjustified dismissal is whereby an employer can unilaterally terminate an employment relationship at any time without relying on any of the reasons listed above.
• An employee who accepts an unjustified dismissal is entitled to severance pay for years of service.
• An employee who rejects the reduction or change is entitled to severance pay.

Notice Period in Bolivia

Severance in Bolivia

Bolivia Salary and Wages

13th / 14th Salary in Bolivia

• Yes (Mandatory)
• There is a statutory requirement to pay the 13th month.
• This is the Christmas bonus.
• Recently the government has approved another Christmas bonus if the GDP is over 4.5%.
• Employers customarily also pay a profit bonus and a seniority bonus.

• Social security benefits cover old age, disability and survivor benefits; sickness and maternity benefits; worker’s medical benefits; work injury coverage; disability benefits; unemployment benefits and family allowance benefits.
• Pension funds are administered privately, and only employees contribute toward their retirement pension.
• Both the employer and the employee are required to contribute to the social security system.
• Contributions are calculated based on the employee’s income.
• The employer must contribute 14.71% (16.71% for mining companies) and the employee must contribute 12.71%.
• The employer also must contribute 2% to the National Housing Fund.
• The employee also must also contribute between 12.71% and 18.71% to the pension fund.
• The following are the contribution rates.

Immigration Bolivia

• Expatriates who want to engage in remunerated activities in Bolivia must apply for a visa or residence permit that entitles him or her to work. 
• The most common of these documents are the provisional work permits for tourists, subject-to-contract visas and temporary visas.
• Except for provisional work permits, these permits may be obtained after the expatriate has entered the country. 
• Individuals may also obtain the documents before their arrival through a Bolivian consulate abroad.
• Foreign nationals may establish businesses in Bolivia if they comply with all legal requirements. 
• Companies may be headed by foreign nationals who are resident or domiciled in Bolivia for tax purposes. 
• The visas mentioned above allow individuals to reside and work in Bolivia.
• Bolivia issues the following types of residence visas:
  • Officials: Members of the consular and diplomatic corps.
  • Temporary: Expatriates who want to work or perform other legal remunerated activities in Bolivia. This visa may be granted to individuals who have relatives in Bolivia or who intend to make investments that are considered advantageous for Bolivia.
  • Subject-to-contract: Valid for one to two years, and may be renewed for an additional one- to two-year period.
  • Student: Valid for up to one year and may be renewed for additional one-year periods, as many times as necessary.
  • Political refugee: Issued to foreign nationals who intend to establish permanent residence in Bolivia.
  • Permanent residence: An indefinite visa that grants to the expatriate the same rights as an ordinary Bolivian national, except for the right to vote and work at public offices.
• A residence visa is canceled if the expatriate, without the express authorization of the migratory authority, is absent from the country for more than two consecutive years.

Value Added Tax (VAT) in Bolivia

• VAT Standard rate: 13 percent (effective rate 14.94 percent).
•  Exemptions: 0 percent on exports. 
• VAT paid in export-related purchases or expenses may be recovered through tax refund requests.

Mandatory Benefits in Bolivia

• These are benefits as postulated by law
• These include probationary period, public holidays, annual leave, sick leave, maternity leave, paternity leave, overtime pay, severance for unjustified dismissal, 13^th month pay and 14^th month pay
• Statutory benefits also include social security benefits

Payments And Invoicing

• Tax must be paid monthly when it is paid by a withholding agent and quarterly when it is paid directly by a taxpayer. 
• The tax must be paid at the same time the tax return form is filed. The tax return form must be filed between the 13th and 22nd day of the month following the end of the reporting period.
• The due date is determined by the last digit of the Tax Identification Number (Número de Identificación Tributaria, or NIT)

Payroll Accrual in Bolivia

Country Accruals Additional Information

Description

Payroll Accruals Additional Information

Accrued Benefits in Bolivia

Why use Global Expansion to hire in Bolivia

Establishing a branch office or subsidiary in Bolivia can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Bolivia's labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Bolivia law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Bolivia. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Bolivia Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.