REGISTRATION OF THE ULTIMATE BENEFICIAL OWNER IN BOLIVIA: LEGAL OBLIGATION FOR COMPANIES AND ENTITIES

The registration of the ultimate beneficial owner is a key measure in the fight against money laundering and tax evasion. In Bolivia, this process is mandatory for all legal entities registered in the national taxpayer registry. Below, we explain what this obligation entails, how to identify the beneficial owner, and why it is essential for tax compliance in the Plurinational State of Bolivia.

BENEFICIAL OWNER IN BOLIVIA: LEGAL DEFINITION AND IDENTIFICATION CRITERIA

The beneficial owner is the natural person who ultimately owns or controls a legal entity. This also includes anyone conducting a transaction on behalf of another person. The concept applies both to direct owners and to those who exercise effective control through other means.

IDENTIFICATION CRITERIA ACCORDING TO BOLIVIAN REGULATIONS

Bolivian regulations adopt a progressive approach to identify the beneficial owner:

Shareholding participation: A person who directly or indirectly owns 20% or more of the shares or ownership interest is considered a beneficial owner.
Indirect control: If no individual meets the ownership threshold, the person who exercises control through other means must be identified.
Executive positions: If control cannot be clearly determined, the beneficial owner is the highest-ranking executive officer.

In the case of trusts or similar legal structures, the settlor, trustee, beneficiaries, and anyone with ultimate effective control must be identified.

PRACTICAL CASES OF IDENTIFICATION

Case 1: Family-owned company
An SRL in La Paz has four partners. Three of them each own 25%, and the fourth owns the remaining 25%. All three are considered beneficial owners because they exceed the 20% threshold.
Case 2: Multilayered company
A Bolivian company has a foreign company as a partner. If it is determined that a natural person owns 100% of the foreign company, that individual is the beneficial owner—even if they do not appear directly in the Bolivian company’s structure.
Case 3: No evident partners
A civil association has no partners exceeding 20% ownership and no clear evidence of control. In this case, the beneficial owner is the executive director or general manager, as per the residual rule established by the regulations.

WHO IS REQUIRED TO REGISTER THE BENEFICIAL OWNER IN BOLIVIA?

According to Bolivian tax regulations, all legal entities subject to national taxes and registered with the Tax Administration Service (Servicio de Impuestos Nacionales, SIN) must:

Provide information on their beneficial owner(s) at the time of registration.
Update this information annually, in accordance with the deadline for submitting the sworn declaration and payment of the Corporate Income Tax (IUE).

IMPORTANCE OF BENEFICIAL OWNER REGISTRATION IN BOLIVIA

This obligation responds to the need for transparency and tax compliance, aligning Bolivia with international standards such as Recommendation 24 of the Financial Action Task Force (FATF). It enables Bolivian authorities to detect opaque structures used for illicit purposes and promotes a fairer, more transparent business environment.

Timely compliance also helps avoid penalties and demonstrates the company’s commitment to legal and ethical business practices.

Do you have questions about whether you’re required to declare a beneficial owner or need help registering with the SIN? Our team of tax and corporate law experts in Bolivia is ready to assist you. Contact us and ensure your company’s legal compliance.

Frequently Asked Questions (FAQs)

What happens if I don’t declare the beneficial owner?

You may be subject to administrative sanctions imposed by the Tax Administration Service (SIN).

Can I be a beneficial owner without holding shares in the company?

Yes, if you exercise effective control through other means or hold a managerial position such as general manager.

What if there is more than one beneficial owner?

All individuals who meet the established criteria must be registered.

How is this information updated with the SIN?

Through the tools provided in the taxpayer registry, in coordination with a legal advisor or accountant.

Does this requirement also apply to NGOs and foundations?

Yes, as long as they are incorporated as legal entities and registered with the SIN.

Bibliography

Decreto Supremo N° 4904, April 5, 2023
Bolivian Tax Code, Law N° 2492
Servicio de Impuestos Nacionales (2023). Regulatory resolution on beneficial owner registration
Financial Action Task Force (FATF). (2022). Recommendation 24

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.