When a company incorporated abroad decides to establish permanent operations in the Plurinational State of Bolivia, it must appoint one or more representatives with broad powers to act on its behalf. These individuals are responsible for representing the company before national authorities and for carrying out the necessary acts to develop its commercial activities in the country.
REGISTRATION OF LEGAL REPRESENTATIVES OF FOREIGN COMPANIES
Every foreign company intending to operate regularly in Bolivia must appoint a legal representative with authority to act both judicially and extrajudicially on its behalf.
This appointment must be formalized through a public deed, include express powers, and be registered with the Commercial Registry, in order to have legal effect before third parties and public authorities.
The representative may be either a Bolivian citizen or a foreign national with legal residence in Bolivia. The appointment remains valid until a new designation is registered. The registration ensures that the State and private individuals know who holds legal authority to represent the foreign company in Bolivia.
POWERS OF THE LEGAL REPRESENTATIVE
The appointed representative is granted broad powers to carry out all acts included within the corporate purpose of the foreign company.
This includes signing contracts, executing documents, representing the company in judicial proceedings, and fulfilling tax and labor obligations.
In practical terms, the representative acts as the “legal face” of the company in Bolivia.
For example, if an Argentine company dedicated to the commercialization of pharmaceutical products opens a branch in La Paz, its designated representative may sign contracts with local distributors, appear before the National Tax Service, and respond to potential claims from consumers or health authorities.
LEGAL LIABILITY OF THE LEGAL REPRESENTATIVE
Commercial regulations stipulate that representatives of foreign companies are subject to the same responsibilities as administrators of domestic companies.
This means they may be held civilly and commercially liable for damages caused by fraud, abuse of authority, gross negligence, or failure to comply with business regulations.
In cases where the foreign company adopts a legal structure not contemplated by Bolivian law, the representative assumes the same liability as that imposed by law on directors of corporations (sociedades anónimas).
This provision protects third parties and strengthens the transparency of the commercial system, ensuring that foreign companies act responsibly and that their representatives are held accountable for their actions.
LEGAL OBLIGATIONS OF REPRESENTATIVES OF FOREIGN COMPANIES
Representatives must:
- Comply with the company’s accounting, labor, and tax obligations.
- Ensure the accuracy of the information submitted to authorities.
- Retain legal and accounting documentation within Bolivian territory.
- Inform the parent company in a timely manner about all actions taken.
Failure to comply with these duties may result in direct, and even personal, liability—especially when it is proven that the representative acted with intent or manifest negligence.
CHANGE OF LEGAL REPRESENTATIVE OF FOREIGN COMPANIES
When a foreign company decides to replace its representative, the new appointment must be registered with the Commercial Registry, as the previous representation remains valid until the new one is officially recorded.
This prevents gaps in legal representation or conflicts in decision-making.
If the representative resigns or dies, the company must promptly appoint a replacement to maintain continuity in its operations in the country.
In summary, the role of a representative of a foreign company in Bolivia involves not only the authority to act but also the obligation to assume legal responsibility for those actions. Proper registration, compliance with legal obligations, and transparency in management are essential elements for protecting the company’s interests and ensuring legal certainty in the national territory.
Contact our law firm for specialized legal guidance in the appointment, registration, and legal responsibilities of foreign company representatives in Bolivia.
Frequently Asked Questions (FAQs)
Is it mandatory for a foreign company to have a representative in Bolivia?
Yes. Any foreign company operating on a regular basis in Bolivia must appoint a representative with broad legal powers to act on its behalf.
What happens if the company does not register the representative’s appointment?
The representation will have no legal effect before third parties, and the company may be sanctioned for non-compliance with commercial regulations.
Is the representative personally liable with their own assets?
Yes, in cases of fraud, abuse of authority, or serious breach of obligations, the representative may be held personally liable with their own assets.
Can the representative delegate their functions to another person?
Only if they have express authorization in the granted power of attorney and the delegation is formalized through a legal instrument.
What happens if the foreign company changes its representative?
The new appointment must be registered with the Commercial Registry for the substitution to have legal effect before third parties.
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.
