Includes special features of this country’s banking system and rules/laws that might impact U.S. business.

Bolivia’s banking system is comprised of the Central Bank, a state bank, and 51 privately-owned institutions.  Thirteen of the 51 privately-owned institutions are commercial banks, and the remaining are savings and loan organizations, credit unions, and other financial institutions.  As of December 2018, deposits totaled an estimated $26.3 billion.

In 2013, the government enacted the new Financial Services Law.  The key objectives of the law include: protecting and meeting the needs of financial consumers, promoting universal access to services, ensuring the stability and solvency of the financial system, protecting the savings of the people, and promoting greater transparency.

The law creates the Financial Stability Board consisting of: the Ministry of Economy and Public Finance, the Ministry of Planning and Development, the Central Bank of Bolivia, the Supervisory Authority Financial System (ASFI), and the Supervision and Control Authority of Pension and Insurance.  This new Financial Stability Board is responsible for issuing the decrees and resolutions to regulate the banking sector, leaving the prior regulator (ASFI) with the tasks of monitoring and supervising.

The Financial Services Law requires and encourages a high degree of state intervention in the management of financial institutions.  The state is expected to be a regulatory authority, an active participant in financial intermediation (through Banco Union and Productive Development Bank), and state agents should attend banks’ board meetings and shareholder meetings.

The Financial Services Law establishes a system wherein the state directs financial institutions in such a way as to encourage economic growth.  The state can instruct financial institutions to offer credit to sectors as the state considers appropriate.  In addition, the state fixes the maximum interest rates that banks can charge, determines loan repayment grace periods, and the type of collateral that can be used against a loan.  Government policy allows for unconventional loan guarantees such as: machinery, animals, stored production, etc.
The law allows the government to seek punitive punishment for financial institutions that do not comply.  Punishment can be meted on specific individuals within an institution to include the personal assets of officers and executives.

According to the 2009 Constitution (Article 366), the monetary and exchange rate policy is determined by the Ministry of Economics and Public Finance in coordination with the Central Bank of Bolivia.  Additional laws authorize the creation of private financial funds, savings and loans cooperatives, and non-governmental organizations to improve access to credit and other financial services.

In 2012, the government enacted Supreme Decree 1423, which created a tax on U.S. dollar exchanges in banks and exchange houses. 

This tax does not affect the people or companies that use dollars, but rather diminishes financial institution profits generated by the difference between the exchange rate for buying and selling U.S. dollars.

In 2016, the government increased by three percent the tax on bank profits (current taxes could reach 50 percent in total).  For a foreign bank looking to remit profits, a 12.5 percent remittance tax is applied, increasing the tax rate to above 60 percent.

Supreme Decree 28999 (dated January 1, 2007) created a new state-owned financial institution (Productive Development Bank or BDP) to provide low-rate credit to small businesses for development activities.

All bank transfers in U.S. dollars within and leaving the country must pay a Financial Transaction Tax (ITF) of 0.03 percent.  Any banking transaction above $10,000 in one operation or transactions totaling $10,000 in three consecutive days requires the filing of a form stating the source of funds.  Any hard-currency cash transfer from and to Bolivia equal or greater than $10,000 must be registered with the customs office.  For amounts between $50,000 and $500,000 the transaction must be authorized by the Central Bank, and for quantities above $500,000 it must be authorized by the Ministry of Economics and Public Finance through a ministerial resolution.  The fine for underreporting any fiscal cash transaction is equal to 30 percent of the difference between the declared amount and the actual quantity of money.

The Central Bank also charges a fee for different kinds of international transactions related to banking, trade, as well as other transactions.  The current list of fees and the details can be found in the following link.

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