Hola amigos! If you are a business owner based in Bolivia but operating in the USA, you may be familiar with the challenges of navigating compliance, legal, and beneficial ownership reporting requirements in both countries. From La Paz to Santa Cruz, understanding and meeting these obligations is crucial for the success and sustainability of your business.

Whether you are running a small artisanal shop in Sucre or a tech startup in Cochabamba, staying compliant with regulations in both Bolivia and the USA can be a complex and daunting task. In this blog, we will explore the key requirements and best practices for ensuring that your business operates smoothly and ethically in both countries. ¡Vamos a empezar!

Registration Requirements

The United States consists of 50 states and 5 territories, each with its own set of business regulations. To operate legally, businesses must adhere to both state-specific rules and federal laws.

State-Level Registration:

When establishing a business presence in the United States, businesses from Bolivia must complete state-level registration in any state where significant business activities occur. This requirement typically applies if your company:

• Has a physical presence in the state
• Frequently meets with clients in the state
• Derives a significant portion of revenue from the state
• Has employees working in the state

Incorporating your Bolivian Company in the US

Even if none of the specific criteria apply, a Bolivian company must still choose a home state for registration when conducting business in the US. This involves forming a U.S. entity, such as a corporation, LLC, or other business structure, in that state. This registration ensures that the company is officially recognized and compliant with US regulations, regardless of its level of business activity in any individual state.

The newly formed U.S. entity will operate as a subsidiary of the foreign company. This means that while the U.S. entity is legally independent, it remains under the ownership and control of the parent company based in Bolivia. This structure allows the company to conduct business in the US while maintaining its international headquarters.

We recommend using Northwest Registered Agent if your foreign company needs to incorporate. They offer expert guidance and can serve as a reliable registered agent for your business, ensuring compliance and smooth operations.

Federal Requirements

In addition to state requirements, Bolivian companies must also comply with federal regulations:

• Federal Tax ID: Obtain an Employer Identification Number (EIN) from the IRS. This number is essential for tax reporting and opening U.S. bank accounts.
• Industry Regulations: Companies may need to follow specific federal regulations depending on the industry. For example:
• Import/Export Laws: If the company is involved in importing or exporting goods, it must meet U.S. customs regulations. This includes adhering to rules for tariffs, duties, and necessary documentation.

Beneficial Ownership Information Reporting Requirements

For Bolivian businesses conducting operations in the U.S., adhering to Beneficial Ownership Information Reporting (BOIR) requirements is crucial. The Corporate Transparency Act mandates that companies disclose the individuals who own or control them. This applies to most entities, including those that are incorporated or registered in any U.S. state. The goal is to enhance transparency and combat illicit activities such as money laundering and terrorism financing.

A beneficial owner is an individual who controls the company or owns 25% or more of its shares, either directly or indirectly. For compliance with BOIR requirements, businesses must report information about these individuals, including their names, addresses, and identification details. Failure to file this report can result in significant penalties and legal consequences. Therefore, companies from Bolivia need to ensure they meet these reporting obligations promptly and accurately.

For your convenience, you can file your Beneficial Ownership Information Report directly on our website. Click here to complete the process in just a few minutes and ensure your business complies with U.S. regulations.

Additional Considerations for Bolivian Businesses:

Tax Treaties

As a Bolivian business operating in the United States, it’s crucial to understand that there is no tax treaty between Bolivia and the USA. This absence means you may face double taxation on your income earned in the US, as both countries can claim the right to tax the same income. Without a treaty in place to provide relief or exemptions, your business could be subject to paying taxes on the same income to both the US and Bolivian tax authorities. It’s essential to consult with tax professionals familiar with international tax laws to navigate this complex situation and explore potential strategies to minimize your tax burden.

Trade Considerations

When conducting business with the USA, Bolivian companies should be aware of the Generalized System of Preferences (GSP) program, which provides duty-free access for certain products from Bolivia to the US market. However, it’s crucial to note that Bolivia’s eligibility for GSP benefits was suspended in 2008 due to concerns about coca eradication efforts. While efforts have been made to reinstate these benefits, Bolivian businesses should stay informed about the current status of trade agreements. Additionally, companies should familiarize themselves with US import regulations, including those set by the Food and Drug Administration (FDA) for food and agricultural products, and the Consumer Product Safety Commission (CPSC) for consumer goods. It’s also important to comply with US Customs and Border Protection requirements for documentation and labeling. Given the dynamic nature of international trade policies, Bolivian businesses are advised to regularly consult with the US Embassy in La Paz or seek guidance from trade associations for the most up-to-date information on trade agreements and regulations affecting their specific industry.

Your Path to Compliance: Key Takeaways for Bolivian Businesses in the U.S.

Operating a Bolivian business within the USA requires careful attention to legal obligations, from establishing your home state to incorporating and filing a beneficial ownership report. Meeting these requirements is essential for ensuring compliance and securing your business’s success in the American market. By understanding and adhering to these steps, you can confidently navigate the complexities of doing business in the U.S. and focus on growing your enterprise.

Ready to get started? Click here to file your BOIR in just a few short minutes. We make the process easy, fast, and secure so you can focus on what matters—your business.