Bolivia aims to protect its biodiversity and at the same time, to drive its economic development forward. There are various institutions whose task it is to protect the natural resources and support the sustainable development of the native communities. There are national and international foundations at work in this area in Bolivia.

Bolivia is one of the leading countries in the world with regard to certified hectares (1 million) for the usage of timber resources, which guarantees sustained treatment of the forest.

60 % of the population are younger than 25 years.  A competitive employment market with little fluctuation offers a workforce of highly skilled craftsmen, who are easy to train, excellent managers, and technical personnel. Owing to its central location, Bolivia is developing into a “bridge” and an axis for the distribution between the main markets of the Pacific and the Atlantic.

• Favorable conditions for business
• Bolivia is one of the leading countries in the region as regards institutional structure reform
• Bolivia has a democratic and representative system with stable politics and a stable economy
• Bolivia has an economy that is in continuous growth
• The inflation rate in the last 15 years is the lowest in all of Latin America

• Bolivia has access to a market potential of more than 270 million inhabitants of the Andes region. It is a member of the Latin American Community for Integration (ALADI), the Andes Community (CAN) and associated member in the MERCOSUR
• It is a member of the World Trade Organization (WTO)
• It has preferred access to the North American market, with the status of a “most preferred” country through the “Law on the Andes Preference Role and Destruction of Drugs” (ATPDEA)
• It has preferred access to the European market with the status of a “most preferred” country through the General Preference System

• Apart from the right to ownership, the foreign investor has the same rights, responsibilities and guarantees as the national investors
• A free exchange of currencies is guaranteed; there are no restrictions for the inflow and outflow of capital, and neither are there any restrictions for the dividends, interest, technology transfer fees or other economic processes that are repatriated abroad
• Freedom is guaranteed with regard to production, commercialization, import and export of goods and services, as well as free pricing
• Exporters of goods and services are reimbursed the internal taxes and the customs duty paid for the goods included in the goods transfer
• Bolivia has an attractive and simple tax code
• Thanks to international bilateral agreements with several countries, the payment of income taxes in Bolivia prevents double-taxation abroad
  
  
• Low Taxes :
  - IVA – VAT (13 %)
  - IT – Transaction tax (3 % not deductible)
  - IU – Corporate profit tax (25 % to be paid annually)
  - ITF – Finance transfer tax (0,3 %).

Direct foreign investment in Bolivia (DFI)

In Bolivia’s market economy, the private sector is the growth engine. The Bolivian State promotes private investments. It offers an attractive legal framework that is built on legal principles of equality of investment guarantee mechanisms on a bilateral, regional and multi-lateral level. All the areas of economic activities are attractive and open for private investment.

Direct foreign investments (DFI) and technology transfer represent, for Bolivia, the main pillars for creating a competitive economy, supporting sustainable development with social justice. The direct foreign investments represent about 10 % of the BIP in Bolivia.

Direct foreign investment (DFI) is the main component of growth that private investment in Bolivia has undergone. In 1992, foreign investments were 169 million U$ and represented 45 % of the private investment and 18.4 % of the total investment in the country. The DFI increased up to 1999 to almost 1 billion US $ (see Table).

The magnitude of the DFI in the 90’s reflects the effects of the capitalization process of the State-owned enterprises. A substantial part of the investment schedule of the capitalization process was completed in 1999. That explains the reversal of the DFI in the years 2000 to 2001; it increased again in 2002.

Investment possibilities
Mining

Bolivia is a country with a long tradition of mining, where gold and silver was being mined even before the conquest by the Spaniards. It is estimated that so far, only 10 % of the existing mineral reserves have been mined. There are large reserves of minerals in the region of the border with Chile. Especially the Precámbrico region, which occupies a third of Bolivia’s area, is one of the most mineral-rich in the world. This zone has not yet been explored intensively and no estimates can yet be made.

The Mutún, which contains enormous reserves of iron ore in the region of the border with Brazil, could, with suitable investment, produce 10 million tonnes of iron annually. Bolivia plans an investment to connect Mutún by railway with Puerto Busch, so that the Atlantic can be better reached using the Paraguay-Paraná shipping route. Owing to the natural gas pipeline to Brazil, Bolivia has natural gas in this area for generating thermo-electric energy for a competitive iron and steel industry.

There are a few important international mining companies operating in Bolivia and they have already invested in raw materials like gold, silver, platinum, antimony, copper, zinc, iron, tin, sulphur, potash, lithium, borate, and semi-precious stones. There are also strategic metals like tantalum, indium and germanium in Bolivia.

The project “San Cristobal”, which is being developed by the concessioning company Andean Silver with an investment of more than 400 million dollars (for this purpose, the company had an initial public share issue of 100 million dollars in the US) will become the largest producer in the world to mine silver.

Jewellery

The Bolivian art of producing jewellery has resulted from the combination of precious stones and sem-precious stones, creativity, handcrafting skill and hard work of the craftsmen. The tradition in this industry originated in the colonial times and was passed on from generation to generation.

Gold, silver, platinum and semi-precious stones are available in plenty in Bolivia, some, in fact, are found exclusively in Bolivia. That is the case with the “Andes Diamond” and the “Bolivianita” (a stone in which the violet of the amethyst mixes with the yellow of citrin).

The gold is cleaned and worked in alloys of 9, 10, 14 and 18 carats. In 2002, Bolivia exported 8.8 tonnes of gold jewellery to the USA. Bolivian companies have also started exporting to England, Germany, Italy and Japan. 50 % of the production is concentrated on chain links or entire chains, „castings“ of earrings, rings and armlets, “tubes”, “bangles”, embossed, and jewellery with semi-precious stones. A specialized work demands the production of “Cordon” necklaces, which are mainly made in workshops in the city of El Alto by 2,500 goldsmiths.