IMPORTANCE OF BUSINESS PROMOTIONS
Depending on the intended objectives, business promotions can have the following impacts:
- Increase in Sales: Promotions generate immediate sales growth, as consumers are attracted by the chance to win additional prizes.
- Attracting New Clients: Well-designed promotions can attract new customers eager to take advantage of special offers and discounts.
- Customer Loyalty: Providing incentives and prizes helps maintain customer loyalty, ensuring repeat purchases and ongoing engagement.
- Brand Image Enhancement: Promotions can improve brand perception, associating it with added value and customer benefits.
WHAT ARE BUSINESS PROMOTIONS?
- Increase the sales of goods and services.
- Attract new clients.
- Incentivize and retain existing customers through prizes awarded by random draws, chance, or other access mechanisms.
It is important to note that certain activities are not considered business promotions under Article 3 of Regulatory Resolution No. 01-00004-19 R-008 of October 4, 2019. These excluded activities include discounts, product bundling or combos, corporate image promotion through giveaways, free samples or gifts, public events organized by government institutions, charitable activities, and gambling activities that require a payment to participate, which are separately regulated under Law No. 060.
REQUIREMENTS TO REQUEST AUTHORIZATION FOR BUSINESS PROMOTIONS
In Bolivia, business promotions are regulated by the Gambling Supervision Authority (Autoridad de Fiscalización del Juego – AJ), the sole entity authorized to grant licenses and approvals for such activities. According to the “Regulation for Granting Authorizations for Business Promotions,” the following steps must be followed:
- Authorization Request: The company (whether an individual or legal entity) must submit a request to the AJ, including details of the promotion such as the type of prizes, distribution mechanisms, and promotion duration.
- Required Documentation: The application must be accompanied by various documents, including the applicant’s legal credentials, the project plan for the business promotion, and the cost structure.
- Duration: Business promotions must be time-limited. Under current regulations, the maximum duration allowed is three years.
Once the application is submitted with all required documentation, the AJ has five business days to issue an administrative resolution either approving or rejecting the promotion. This resolution is formally notified to the applicant and a copy is sent to the Tax Administration.
It is essential for companies conducting business promotions to maintain detailed records of all transactions and prizes awarded. Furthermore, they must comply with all current legal requirements to facilitate audits by regulatory authorities, ensure transparency with consumers, and evaluate the business results generated by the promotion.
Business promotions are a powerful tool for growth and market positioning. However, complying with all legal and regulatory requirements is crucial to ensure their success and avoid sanctions. Companies must be well-informed and advised on the applicable regulations to carry out effective and lawful promotional campaigns.
At our corporate law firm, we offer specialized legal advice for the design, implementation, and authorization of business promotions, ensuring your company complies with all regulations while maximizing the benefits of these commercial strategies. Contact us for more information and discover how we can help you boost your business through effective and legally compliant business promotions.
Need expert legal guidance for your business promotion?
Contact our corporate law specialists today and ensure your promotional strategy complies with Bolivian law while delivering maximum commercial impact.
Frequently Asked Questions (FAQs)
What types of business promotions require authorization in Bolivia?
Any business promotion offering prizes (cash, goods, or services) through raffles, draws, or chance without requiring payment for participation must be authorized by the Gambling Supervision Authority (AJ).
How long can a business promotion last in Bolivia?
According to current regulations, the maximum duration for a business promotion is three years.
What activities are not considered business promotions under Bolivian law?
Activities such as discounts, product combos, giveaways, public institutional events, charitable actions, and games requiring payment are not considered business promotions and fall outside the scope of Law No. 060.
What documentation is needed to apply for a promotion authorization?
Applicants must submit their legal documentation, a detailed promotion plan, and a cost structure, among other requirements specified by the AJ.
How long does it take to obtain authorization for a business promotion?
The AJ issues a resolution within five business days after receiving the complete application and required documentation.
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.
