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1.1.1.2. Specific Constraints of Available Legal entities

SA and SRL

Organization and functioning of an SA are relatively more complex and expensive than an SRL.

The appointment of auditors in an SA is mandatory, which is not always the case for an SRL.

An SA may only be part of stock or limited liability companies.

Only financial or investment companies, may acquire or maintain participation in one or more companies  in an amount exceeding one-third of capital and free reserves of the investor.

Companies Incorporated Abroad and Joint Ventures

Foreign companies may carry on isolated acts in Boliviawithout being incorporated therein. However, the incorporation of a subsidiary or the establishment of branch is mandatory to the extent the foreign company performs habitual activities in Bolivia.

Joint Ventures are allowed between domestic and foreign investors established in Bolivia. It has no legal personality. Besides the hydrocarbons sector, there are no specific tax regulation for Joint Ventures and is normally a JV  considered as a partnership for tax purposes. Earnings and losses are passed through to participants, who are jointly and severally liable for the joint venture’s debts proportionally to their investment.