With a rising labor force that constitutes approximately 78.7% of the population aged 15 and above in 2024, Bolivia presents a wealth of expansion opportunities. Global employers can avail a bilingual workforce that works on US time zones at cost-efficient prices.
However, you must ensure hiring compliance according to the Bolivian Labor Ministry. Along with entities like CNS (Caja Nacional de Salud) and AFPs (Administradoras de Fondos de Pensiones), it manages labor laws, payroll, regulations, and employee benefits.
An Employer of Record service can help you navigate the Bolivian labor code and taxation, ensuring full compliance while allowing your business to focus on growth and expansion.
Bolivia: Employment laws at a glance
Currency Bolivian Boliviano (BOB) | Minimum monthly salary About $360 (BOB 2500) | Working hours 8 hours per day, 48 hours per week (Men), 40 hours per week (Women) |
Overtime 200% standard rate, max 2 hours per day | Annual leave 15 days minimum, and | Probation period Up to 90 days |
Note: If you wish to increase your legal know-how and seek more detailed information on Bolivia’s labor laws, you can consult these legal resources for Bolivian law, available to the general public.
What does Employer of Record mean in Bolivia?
An Employer of Record is a third-party organization that legally employs workers on behalf of a foreign company, taking the responsibility for all formal employment tasks, including payroll, benefits, taxes, and compliance with local labor laws.
In Bolivia, an EOR is permitted to function as a legal employer, provided it ensures compliance with the LGT (General Labor Law of Bolivia). It also requires registration with authorities such as the Ministry of Labor, Employment, and Social Welfare (Ministerio de Trabajo, Empleo y Previsión Social), the National Tax Service (Servicio de Impuestos Nacionales – SIN), CNS, and AFPs.
Essentially, you retain control over the employee’s day-to-day work and responsibilities, while the EOR manages the administrative and legal aspects of employment in Bolivia.
Is hiring through an EOR regulated by law?
EORs are a safe, legal way for global employers to hire workers in Bolivia. While the term ‘Employer of Record’ does not exist explicitly in Bolivian national law, both PEO (Professional Employer Organization) and EOR services are legally indistinct according to the labor laws.
The arrangement makes them legally responsible for ensuring compliance with Bolivian employment regulations and registering with the Ministry of Labor and social security entities, along with the Public Registry of Commerce and local municipalities.
Division of responsibilities: What your company does vs what the EOR handles
One of the pain points that EOR clears is the extensive legal and administrative responsibilities that come with hiring, especially in a foreign country. This table clarifies the role of an EOR and your company in employee management:
| Responsibility | EOR role | Your company’s role |
|---|---|---|
| Employment contracts | Employment compliance and contract approval with the Ministry of Labor, Employment, and Social Welfare | Provides job responsibilities and requirements |
| Payroll and taxes | Payroll processing, tax management, and statutory reporting | Funds compensation and reviews payroll reports |
| Employee benefits | Social security contributions to CNS and AFPs, leave tracking, and benefit administration | Approves usage of benefits and communicates company policies |
| Work management | The EOR is not involved in day-to-day supervision | You assign tasks and manage performance |
| Legal compliance | Ensures compliance with LGT and SIN standards | Not responsible for compliance |
Now that we understand what an EOR service does for you, let us examine how it manages these responsibilities to ensure compliance.
How do EOR services work in Bolivia?
EOR services in Bolivia adhere to a structured workflow to ensure full compliance with all relevant legal requirements. This means handling end-to-end hiring for your business, specifically tailoring it to the local context.
Here is what the plan looks like:
Step 1: Planning
EOR identifies your needs and role requirements, matching them with LGT standards to ensure the employment terms are compliant with Bolivian law.
Step 2: Hiring and onboarding
Employment contracts are drafted in accordance with compliance requirements and registered with the Ministry of Labor. This makes the EOR a legal employer on behalf of your business, handling all documentation.
Step 3: Setting up payroll
The EOR registers with SIN for the tax identification number (NIT), CNS for health insurance, and AFP for pension contribution. The wages, withholding, and benefit administration become part of the monthly payroll system handled by the EOR.
Step 4: Ensuring compliance
It maintains communication with the labor ministry for any law changes and files mandatory monthly tax declarations (Form 608) with SIN.
Step 5: Offboarding
Your EOR calculates severance and final contributions to be submitted with SIN, CNS, and AFP, and closes the worker registration with the Ministry of Labor.
Each of these steps is designed to ensure full compliance with the Bolivian authorities, allowing your business operations to run smoothly without issues.
Employment contracts through EOR
Employment contracts are a crucial component of legal employment in Bolivia. LGT offers indefinite, fixed-term, and project-based contracts, which are managed according to their duration, work type, and classification. Clauses specified in the labor code, only for indefinite contracts, are :
Probationary period Up to 90 days | Termination notice 30-day notice period or equal payment | Severance pay 1 month’s salary per year of service for unjustified dismissal |
Additional contract requirements specified in Bolivian law are:
- All contracts must be drafted in Spanish.
- Employment contracts can be verbal or written, but written contracts are more common.
- Verbal contracts are assumed to be for an indefinite term.
Draft Bolivian employment contracts in minutes
An EOR like Multiplier can help you generate compliant contracts for your workers in Bolivia within minutes.
Payroll and tax compliance with EOR
EORs help you navigate Bolivia’s complex payroll system, including mandatory employee benefits and tax obligations. These are the aspects that your EOR service will account for every month for each employee, generating reports for record-keeping and audit submissions.
| Payroll cycle | Monthly (typically end of month) |
|---|---|
| Employer social security | 16.71% of gross salary |
| Employee contributions | 12.71% (pension and social security) |
| Tax year/filings | Calendar year; monthly declarations due 13th-22nd of the following month |
| 13th salary | Mandatory Christmas bonus (Aguinaldo) equivalent to one month’s salary |
Benefits and leave via EOR
The benefits and leave system, according to LGT, is based on the various authorities and contributions made by both employers and employees. This includes social security, insurance, pension, and a 13th-month salary. Let’s use this glance table to gain a better understanding of this system.
| Annual leave 15 days (after 1 year), 20 days (after 5 years), and 30 days (after 10 years) | Public holidays 10-11 days | Sick leave 26 weeks of paid leave annually (75% reimbursed by Social Security from day 5) |
| Maternity leave 90 days paid leave (45 days before, 45 days after delivery) | Paternity leave 3 days paid leave | Parental leave No statutory parental leave provisions |
| Employer Social Security 16.71% | Pension Included in the employee’s social security contribution | Health Insurance Mandatory |
Moreover, a 13th-month salary is provided as a Christmas bonus under the statutory benefits system. EORs are adept at administration and tracking these through dedicated payroll mechanics in Bolivia. Beyond managing benefits, EORs also assist with the necessary documentation for international workers.
Work permits, visas, and foreign hires
Hiring and expansion in Bolivia means travel, project visits, and even employee transfers. In these cases, you will require types of visas approved by the Bolivian government. These are:
- Specific Purpose Visa (Visa de Objeto Determinado): 30-day entry visa for employment purposes
- Temporary Residence Visa (Visa de Permanencia Temporal): 6-month to 1-year duration for longer-term employment and residence
- Work permits: Valid up to 1 year, renewable, and required for any employment or business functions in Bolivia
The Ministry of Foreign Affairs, in coordination with the National Migration Service, oversees the work visa process.
This is how EOR simplifies work authorization for you:
- Sponsors visa applications and demonstrates financial ability to support employment
- Provides required corporate documentation, including business license, tax ID (NIT), and incorporation papers
- Handles registration of employment agreements with labor authorities within 90 days
- Manages registration with immigration authorities for residence permits
- Ensures compliance with the 15% foreign workforce limitation
EOR vs PEO vs legal entity: What are your other options for hiring in Bolivia?
The choice between employment models depends on your level of control preference, risk tolerance, and the timeline for expansion. The two alternate employments are:
- Working with a PEO
- Setting up a Legal Entity
Let’s compare each of them for a clearer picture:
| Factor | EOR | PEO | Legal entity |
|---|---|---|---|
| Legal employer | EOR assumes full liability | Shared responsibilities with you | Your local entity |
| Setup time | 1-2 days | 2-4 weeks | 4-12 months |
| Control level | Employee activity with management support | Retain day-to-day control with shared HR, accounting, and legal management | Complete control |
| Compliance risk | EOR handles all compliance | Shared compliance responsibility | You bear the responsibility |
| Cost efficiency | Flat fee | Shared overhead plus management fees | Setting up cost, maintenance costs, and management overheads |
For businesses of varying sizes and objectives, choosing between an EOR, PEO, and entity setup depends on factors such as desired control level, risk tolerance, and complexity of the local employment laws.
Can I employ people as independent contractors in Bolivia?
Hiring both employees and independent contractors is legally allowed in Bolivia. Moreover, it can provide you with more control and cost savings.
Misclassification, however, is a major risk in hiring independent contractors. Avoiding it requires careful compliance with the country’s labor laws, as failure can lead to fines, penalties, back pay, and forced reclassification.
Some misclassification use cases are:
- Control of working conditions and methods
- Improper registration with authorities
- Ambiguous contractual terms
- Lack of deliverable scope in projects
Hiring contractors requires you to work with well-drafted contracts specifying the terms and conditions under the purview of local law. Read this guide to understand further how to hire contractors in Bolivia.
How much does it cost to employ someone in Bolivia?
Mandatory statutory costs account for a significant portion of the payroll in Bolivia. Employers contribute approximately 16.71% of gross salary for social security, with employees contributing an additional 12.71%. Employers must also withhold and remit 13% income tax monthly, in addition to providing a 13th-month Christmas bonus.
Entity setup vs EOR comparison:
Setting up a local entity adds extensively to the above expenses. You require name reservation, articles of incorporation, tax registration, business licensing, and newspaper publication, while an EOR enables quick hiring without the cost and risk of establishing a local entity. Let’s examine a sample table to determine how much you can save with an EOR service.
Cost savings with an EOR
| Cost item | Direct hire | With EOR |
|---|---|---|
| Entity setup | $10,000+ | None |
| Legal compliance | $400 per month | Included in the monthly fee |
| Payroll processing | Compensation funds plus $150 per month | Managed by EOR |
| Registration fees | $20 per month | Handled by EOR |
| Ongoing compliance | $250-300 per month | EOR responsibility |
Using an EOR saves you thousands of dollars in costs, compliance errors, and the recurring personnel time required for management. But let’s go deeper into why an EOR service is the solution for your hiring needs.
Why use an EOR in Bolivia? Risks you avoid + benefits you gain
“The minute you think beyond your city or your country, you suddenly have a much larger pool to work with.” — Hiraash Thawfeek, Chief Technology Officer, Multiplier
When you hire in Bolivia through an EOR, you are essentially utilizing a service that is experienced in the local context and already established in the country. It lets you manage the ins and outs of hiring local talent without incurring delays. Let’s look at things that an EOR helps you avoid and things it provides you with:
Key risks avoided with an EOR:
- Non-compliance leading to heavy fines, penalties, and potential litigation
- Misclassification penalties under LGT mandates
- Tax filing delays and errors, leading to fines and audit risks from SIN
- Sanctions for working without proper visas or contract approval delays
- Violations of termination procedures leading to potential lawsuits
- Errors in the monthly social security and tax reports
Benefits of using an EOR:
- Fast onboarding without local entity setup requirements
- Complete legal compliance with Labor Ministry regulations
- Reduced administrative burden, paperwork, and compliance costs
- Access to local payroll and tax experts
- Scalable workforce management across multiple countries, such as Bolivia
To get the most out of your EOR provider, ensure they can deliver on their promises. Here are some key factors to consider when selecting an EOR service.
How to choose the best EOR provider in Bolivia? A checklist
To select a good EOR provider, find out its areas of expertise and how it can assist you in continuing your business operations. These are the aspects that will let you rely on your choice of Employer of Record:
- Registration: Valid legal eligibility and coordination capabilities with Bolivian authorities
- Local expertise: Proven track record of legal, HR, and accounting excellence in Bolivia
- Data protection: Cloud computing capabilities and awareness of local data protection laws
- Payroll accuracy: Established system for country-specific benefit tracking in payroll dashboards
- Transparency in pricing: Flat fee models without hidden pricing for features
Why choose Multiplier’s EOR in Bolivia?
Bolivia offers a skilled and growing workforce across various industries, including energy, mining, and manufacturing. Don’t let its complex labor laws and payroll compliance slow down your plans.
Multiplier’s EOR services let you efficiently hire in Bolivia without the need for a local entity. You get assured legal compliance, accurate benefit accounting, and employee management support in one single platform. Our local expertise enables you to hire and onboard in days, allowing you to put your business function on a fast track.
What Capterra users say about Multiplier
“Partnering with Multiplier has helped in employing smart talent beyond the U.S. We had a goal which we were able to achieve quickly, without having to spend lots of money on setting up local entities.” — Mohit P.
Don’t let international barriers stop you from expanding into Bolivia. Partner with Multiplier for fast, compliant global hiring and tap into the country’s talented workforce. Book a demo today!
FAQs
What is the minimum wage in Bolivia?
The national minimum wage in Bolivia is $360 (BOB 2500).
How long does it take to hire through an EOR in Bolivia?
Hiring through an EOR typically takes a few days, compared to the months it takes to set up a local entity.
Are there restrictions on hiring foreign workers in Bolivia?
Yes, companies in Bolivia are limited to a maximum of 15% foreign workforce, provided they have obtained proper work permits.
What are the mandatory benefits for employees in Bolivia?
Mandatory benefits include a 13th-month bonus, a diverse leave system, social security contributions, and health insurance through CNS.
