Welcome Message from the Chargé d'Affaires
Welcome to the business page of the U.S. Embassy, La Paz. The Embassy Commercial Team and I hope you find the information within these pages instructive and are always happy to help should you or your business need assistance. Investing and working in Bolivia is challenging for both domestic and international companies. Political risk and a lack of judicial security, for both investments and investors, should cause those considering investing in Bolivia to conduct very careful due diligence. Investors should not rely on the Bolivian judicial system to settle disputes, as resolution of cases is slow and decisions can be arbitrary.
The Bolivian government is actively increasing the state's role in the economy, which has lead to increased political risk for investors. Since 2006, the Bolivian government has nationalized 28 companies, 9 of them in the last year. The Minister of Finance has said publicly that the government intends to regain ownership of all the public companies that were privatized during the 1990s, which would include more than 65 businesses involved in areas such as water distribution, dairy product production, and transportation.
U.S. companies interested in investing here should note that Bolivia has abrogated the Bilateral Investment Treaties (BIT) it had signed with the United States and a number of other countries. The Bolivian Government stated that the abrogation of these agreements was necessary to come into compliance with its new constitution. Companies that invested under the U.S. BIT will be covered until June 10, 2022, but investments made after June 10, 2012 are not covered.
Dispute resolution is of particular concern in Bolivia. The Government of Bolivia has stated that it will not recognize third country arbitration in any of its commercial agreements, so potential investors working directly with the government or which might be at risk of government actions should consider how disputes would be resolved. Investors should be aware that the judicial system faces a huge backlog of cases, is short staffed, and has problems with corruption. Swift resolution of cases, either initiated by investors or against them, is unlikely. Commercial disputes can often lead to criminal charges. Cases are processed slowly, and suspects can be held legally for 18 months without formal charge as a case is investigated and for 36 months before their case is resolved by a judge. These time limits are not always respected. Foreigners are more likely to be deemed a flight risk than Bolivian nationals and, as such, may not receive bail in lieu of pretrial incarceration. Foreigners considering investing in Bolivia would do well to review our Human Rights Report as background on the judicial system, labor rights, and other important issues.
Investors who have adequately assessed the risks can find profitable opportunities. With real GDP growth estimated at 5% in 2012, Bolivia experienced a 14% increase in per capita GDP in nominal terms; similar growth is projected for 2013. This increased wealth led to an increase in imports from the United States. Sectors such as construction, heavy equipment, and telecommunications have all benefitted from Bolivia's strong economy.
While the opportunities are great, investing in Bolivia is not for the timid. I advise that you take your time in evaluating potential partners and be prepared for all contingencies.
The Economic and Commercial Office (part of the Economic/Political/Commercial Section of the U.S. Embassy) manages the bilateral economic agenda, promoting trade and investment between the U.S. and Bolivia, and advocating for Bolivian adherence to sound economic policies. The Office assists U.S. firms in Bolivia with investment-related matters or disputes, and identifies strategies to reduce obstacles to U.S. investment. We report on Bolivian economic issues for Washington agencies, covering macroeconomic indicators, trade, energy, telecommunications, agriculture, civil aviation, and productive sectors. We also work to expand cooperation in the areas of environment, science, technology, health, anti-money laundering, and intellectual property protection.
The U.S. Embassy in La Paz, Bolivia does not have a U.S. Department of Commerce-sponsored Foreign Commercial Service Office. However, our Commercial Office provides a variety of services designed to support U.S. business activities in Bolivia. We promote the export of U.S. goods and services and seek to protect U.S. business interests, including U.S. investments. We accomplish our goals via advocacy and outreach on behalf of U.S. businesses. We aim to keep U.S. firms informed of the risks and rewards of doing business in Bolivia; continually seek transparent business practices and a level playing field for U.S. companies involved in on-going public tenders and investment opportunities in Bolivia; and to provide relevant market research.
To contact the U.S. Embassy's Economic and Commercial Office, please write to CommerceLaPaz@state.gov.
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