ACCOUNTING OBLIGATIONS FOR FOREIGN COMPANIES IN BOLIVIA

Foreign companies operating regularly in Bolivian territory are subject to specific accounting and financial obligations. These requirements ensure operational transparency, fiscal oversight by the State, and the protection of third-party interests. According to national commercial regulations, any foreign entity must keep separate and accurate records of its activities within Bolivia, as part of its integration into the formal economic system.

INDEPENDENT ACCOUNTING RECORDS

A foreign company engaging in regular commercial activities in Bolivia must maintain independent accounting for all its local operations. This means that transactions conducted within Bolivian territory must not be mixed with those of the parent company or other foreign affiliates.

The purpose of this requirement is to ensure that financial records accurately reflect the income, expenses, and results exclusively derived from the company’s activity within Bolivia.

For example, if a Brazilian corporation that sells industrial machinery opens a branch in Cochabamba, it is obligated to keep its own accounting books for that branch, without integrating financial results with those of its headquarters in São Paulo. This separation allows for proper tax oversight and facilitates the submission of financial statements to the competent authorities.

COMPLIANCE WITH BOLIVIAN ACCOUNTING STANDARDS

In addition to maintaining separate records, the foreign company must adjust its accounting practices to comply with Bolivia’s national commercial regulations.

This includes:

Maintaining accounting books that are properly numbered and certified by the Commercial Registry
Recording commercial transactions conducted in Bolivia in chronological order
Keeping supporting documentation (invoices, contracts, bank statements, payrolls)
Preparing and submitting financial statements in accordance with generally accepted accounting principles in Bolivia

Compliance with these standards enables companies to demonstrate the legality of their operations and provides assurances to shareholders, clients, and suppliers.

ACCOUNTING AUDITS FOR FOREIGN COMPANIES

Bolivian authorities may carry out audits and inspections of foreign companies engaged in economic activities in the country.

In cases of non-compliance—such as outdated books, missing records, or lack of supporting documentation—the company may face penalties including fines, suspension of operations, or even cancellation of its commercial registration.

Furthermore, the law mandates that foreign companies must retain their accounting books and documents for a specified period, so they may be reviewed upon request by authorities, particularly during tax procedures or judicial audits.

ACCOUNTING AND LEGAL LIABILITY IN FOREIGN COMPANIES

Complying with accounting obligations also affects the legal liability of the foreign company’s legal representatives in Bolivia.

If the company fails to keep its books in accordance with the law or if inconsistencies are detected, its representatives may be held jointly liable for any damages caused to the company, third parties, or the State.

Therefore, proper accounting management not only protects the organization but also shields its administrators from potential legal consequences.

In summary, every foreign company operating in Bolivian territory must maintain separate, complete, and legally compliant accounting records. Meeting these requirements strengthens transparency, fosters trust in business relationships, and ensures legal security—key elements for economic development and international investment in the country.

Contact our law firm for expert legal services in the incorporation, compliance, and registration of foreign companies in Bolivia. We also provide specialized guidance in accounting and regulatory compliance.

Frequently Asked Questions (FAQs)

Must a foreign branch maintain independent accounting records?

Yes. Every foreign company operating regularly in Bolivia is required to record its local transactions separately.

What happens if the company does not comply with Bolivian accounting standards?

The company may be penalized with fines, temporary suspension, or loss of registration with the Commercial Registry.

Must financial statements be submitted in Spanish?

Yes, all accounting documentation must be prepared in Spanish and denominated in the national currency.

Who oversees the accounting of foreign companies?

Oversight is conducted by the Commercial Registry, as well as the tax authority and other sector-specific regulators.

The content of this article does not reflect the technical opinion of Rigoberto Paredes & Associates and should not be considered a substitute for legal advice. The information presented herein corresponds to the date of publication and may be outdated at the time of reading. Rigoberto Paredes & Associates assumes no responsibility for keeping the information in this article up to date, as legal regulations may change over time.