Supreme Decree No. 5503: Economic Emergency and a New Exceptional Legal Framework in Bolivia
Through Supreme Decree No. 5503, the Plurinational State of Bolivia has declared an Economic, Financial, Energy and Social Emergency, activating an extraordinary and temporary legal framework aimed at stabilising the economy, restoring liquidity, ensuring energy supply and reactivating investment and productivity.
The Decree introduces a broad set of macro-financial, fiscal, regulatory, energy and social measures, with direct implications for business operations, investment structuring, and financial and contractual planning in the short and medium term.
Below is a practical overview of the main regulatory pillars and their legal and economic effects.
- Macro-financial stabilisation measures
The Decree grants the Central Bank of Bolivia (BCB) exceptional authority to implement mechanisms to stabilise the balance of payments and strengthen international reserves, including:
- arranging liquidity financing lines and foreign exchange swaps;
- issuing external financial instruments;
- executing hedging operations; and
- receiving deposits and guarantees from the Treasury.
These measures seek to reduce exchange-rate pressures, improve systemic liquidity and mitigate macroeconomic risks affecting investment and foreign trade.
- Extraordinary Investment Promotion and Protection Regime
A central pillar of the Decree is the creation of an Extraordinary Investment Promotion and Protection Regime, applicable to both domestic and foreign investors, covering:
- new investments;
- expansions and reinvestments;
- public-private partnerships, concessions and joint ventures; and
- contributions of capital, technology, know-how and productive financing.
Reinforced legal stability
Eligible investments benefit from legal and tax stability for up to 15 years, including stability in:
- tax rates and structures;
- customs and tariff regimes;
- foreign trade rules;
- access to, use and repatriation of foreign currency; and
- applicable incentives.
Subsequent regulatory changes will not apply without the investor’s express consent.
Investment Contracts with normative force
Strategic projects may be formalised through Investment Contracts approved by Supreme Decree, which have binding and normative effect (“law between the parties”). These contracts must include, among other elements:
- investment amounts and timelines;
- investor obligations;
- granted incentives;
- legal stability clauses;
- dispute resolution mechanisms (conciliation and arbitration); and
- termination events.
Fast Track procedure
Strategic investments may access an accelerated approval process, featuring:
- a single investment window;
- strict deadlines (maximum 30 calendar days);
- positive administrative silence; and
- administrative, civil and criminal liability for undue delays.
- Capital regularisation and repatriation regime
The Decree establishes a temporary and voluntary capital regularisation and repatriation regime, available to individuals and legal entities, domestic or foreign.
Key features include:
- administrative, tax and financial protection for past non-declarations;
- express exclusion of assets linked to serious criminal offences; and
- enhanced confidentiality obligations.
Tax incentives
- 0% tax rate if funds remain in the Bolivian financial system for at least 24 months or are allocated to productive investment.
- 5% tax rate only if funds are withdrawn or transferred abroad before that period.
The regime aims to inject liquidity into the formal economy, strengthen reserves and support productive investment financing.
- Tax and customs incentives for economic reactivation
The Decree introduces significant temporary tax measures, including:
- incentives for the consumption of Bolivian-made products (RC-IVA), allowing full VAT credit plus an additional 20% until 31 December 2027;
- accelerated depreciation of fixed assets acquired in 2026 (useful life reduced by half);
- expanded deductibility of bad-debt provisions for corporate income tax (2025 fiscal year);
- exceptional recognition of up to 50% of employer social contributions as VAT credits for new hires;
- restoration of VAT neutrality for independent professionals;
- customs payment facilities of up to 36 months; and
- 0% import tariffs for machinery, equipment and industrial inputs until 31 December 2026.
- Simplified tax regime for entrepreneurs (SIETE-RG)
The Integrated Special System for Transition to the General Tax Regime (SIETE-RG) is introduced as a 5% turnover-based monotribute, consolidating VAT, transaction tax and income tax.
It applies to:
- sole proprietors and independent professionals;
- annual revenues up to BOB 250,000; and
- up to two establishments.
The regime facilitates formalisation and provides for automatic migration to the general regime after three years or upon exceeding the threshold.
- Foreign trade and productive deregulation
Key measures include:
- elimination of prior import authorisations (SENAVEX) for multiple tariff lines;
- elimination of the Internal Supply and Fair Price Certificate for agro-industrial exports; and
- replacement of export restrictions with monitoring and traceability mechanisms.
These measures reduce logistics costs, shorten time-to-market and improve predictability for importers and exporters.
- Energy and fuels
The Decree establishes a temporary fuel pricing regime for six months, fixing final consumer prices for gasoline, diesel, derivatives and natural gas for vehicles, and introduces:
- non-discriminatory access to hydrocarbon infrastructure for purchases at pre-terminal prices;
- temporary removal of diesel from the controlled substances list for one year; and
- regulatory adjustments to ensure electricity supply stability, including in isolated systems.
These provisions directly affect operating costs, logistics and supply contracts.
- Financial protection, tax clean-up and social measures
The framework is complemented by:
- credit deferrals (up to six months) for social housing loans and productive MSE loans, upon borrower request;
- extraordinary prescription of tax interest and penalties for obligations with triggering events prior to 31 October 2025; and
- social measures under Articles 106 et seq., including:
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- Juancito Pinto education bonus;
- increases to the universal old-age benefit (Renta Dignidad);
- the extraordinary PEPE programme; and
- an increase of the National Minimum Wage to BOB 3,300 as of 2026.
These measures indirectly affect labour costs, domestic demand and social stability.
Conclusion
Supreme Decree No. 5503 establishes an exceptional transitional legal framework, combining emergency measures with structural tools aimed at investment promotion, productive deregulation and macroeconomic stabilisation.
For companies and investors, the Decree presents significant opportunities, but also requires a careful reassessment of contractual, tax, financial and operational structures, particularly in energy-intensive, capital-intensive and trade-oriented sectors.
From a legal standpoint, effective implementation and optimisation of this framework will require case-by-case analysis, proactive planning and close monitoring of implementing regulations.
