Bolivia does not lack declarations welcoming investment. Its difficulty lies in the gap between an approval contemplated by law and the state's ability to process it. The Investment Bill sent by the Executive to the Plurinational Legislative Assembly on 11 August 2026 tries to narrow that gap through new institutions, common deadlines and a digital case file.
The bill contains 103 articles in nine titles and would repeal Law No. 516 of 4 April 2014. It is broad in scope but restrained in what it claims to achieve. It reorganises procedures, defines protections and creates incentives while leaving foreign-currency shortages, financing conditions and demand to economic policy and the market. Investors will need to keep that boundary in view.
Implementation is the first test
The bill reflects a familiar diagnosis. Much of the cost of investing in Bolivia comes from fragmented procedures, repeated requests for the same documents and decisions that pass among agencies without clear ownership. Administrative coordination therefore receives more attention than new declarations of investor rights.
The predictability promised by the proposal will ultimately be judged in the first projects that try to use it.
Article 22 creates a National Investment Agency, an autonomous body overseen by the Ministry of Economy and Public Finance and chaired by the Minister. Articles 44 and 45 establish a Single Investment Window for central government, autonomous territorial entities and public universities. It would maintain one digital file and prevent an agency from requesting documents already held elsewhere in government. A Project Manager appointed under Article 47 would coordinate the process, but could not approve, inspect or license a project.
The proposed timetable is demanding: 30 working days for procedures handled through the window and ten for certain coordination reports. Yet Article 63 rejects deemed approval. An unanswered application does not confer a qualification, score, tax credit or exemption, and it cannot replace sectoral, environmental or municipal licences. The investor may request an order requiring a prompt decision and pursue the liability of the officials concerned, but silence does not authorise the investment.
Protections with defined limits
Articles 32 to 38 contain the protections normally found in investment legislation: fair and equitable treatment, legal certainty, respect for final administrative acts, protection of property and expropriation only for public necessity or utility, subject to fair and prior compensation. The significant feature is the care taken to define their limits.
Article 33 states that a legitimate exercise of tax, labour, environmental or public-health powers does not by itself breach fair and equitable treatment. Protected expectations must arise from final acts or from specific written commitments issued by a competent authority. Articles 37 and 38 exclude speculative profits from expropriation compensation and provide that a decline in investment value does not automatically create a right to compensation.
The drafting appears informed by disputes that have reached investment tribunals elsewhere. Rather than assume that broad standards will receive a consistent interpretation, the bill places weight on documented state commitments. Due-diligence reports, final approvals and contractual language would accordingly matter more. The approach also makes it harder to recast an ordinary commercial expectation as a public guarantee after a project has disappointed.
Incentives tied to performance
The most straightforward benefit would exempt imports of new capital goods, machinery and equipment used in an eligible investment from customs duty and VAT. It would apply for three years after project registration, with one extension of up to two years, provided that no equivalent domestic production is registered under the “Hecho en Bolivia” scheme. The larger incentives require an assessment of the project.
Article 57 creates a 100-point matrix. Formal employment and training receive up to 20 points; exports and net foreign-currency generation, 15; value added and industrialisation, 15; innovation and technology transfer, 15; domestic procurement and supplier development, ten; territorial decentralisation, ten; sustainability and clean technology, ten; and reinvestment and long-term commitment, five. A score below 40 brings no tax credit. A project receiving no sustainability points would not qualify as a promoted project at all.
The score determines the credit against corporate income tax (IUE): 25% for 40-54 points, 40% for 55-69, 60% for 70-84 and 80% for 85-100. In any tax year the amount used could not exceed 80% of IUE calculated before the credit, and unused amounts could neither be accumulated nor carried forward. Article 59 offers accelerated depreciation as an irrevocable alternative, shortening the tax life of the same assets by as much as half. The two options cannot be combined.
Tax planning would therefore begin with the design of the investment rather than after approval. Plant location, local procurement, training and export plans all affect the score and may shift a project between bands. Important questions are left for regulation: how commitments will be measured, how often performance will be verified and how the authorities will treat outcomes affected by market conditions beyond an investor's control.
Arbitration returns on restricted terms
Bolivia withdrew from the ICSID Convention in 2007. International arbitration of investment disputes has since remained politically sensitive and legally constrained. The bill would allow it again, but it does not provide blanket state consent.
Article 99 requires consent to be express, specific and valid. It may be contained in a treaty in force, a directly applicable rule of Community law, an Investment Contract, an Investment Contract of Public Interest, a public-private partnership contract or another instrument authorised by statute. The clause must identify the disputes it covers. Article 100 requires at least one Bolivian arbitrator and the application of the Constitution and Bolivian substantive law. Stability clauses may not be treated as guarantees of economic performance. Domestic courts retain jurisdiction over annulment on procedural grounds and over the recognition and enforcement of awards, without reopening the merits. Paragraph VI excludes corporate restructurings undertaken after the events giving rise to a dispute.
Article 101 keeps the ownership of natural resources, non-delegable state powers, taxes and royalties as regulatory matters, and criminal sanctions outside arbitration. The First Additional Provision amends Law No. 708 on Conciliation and Arbitration so that contracts governed by the new investment law can be arbitrated, and refers investment disputes to that regime. International lenders may welcome the change, but its value will depend on the wording of the clause, the applicable law and the contractual vehicle used for each project.
The risk borne by public officials
The Second Additional Provision would amend Articles 221, 222 and 224 of the Criminal Code, as previously revised by Law No. 1390 of 2021. Where a contract under the new law is supported by technical and legal reports, the occurrence of identified contractual risks, market changes, force majeure, fortuitous events or an economic result different from the forecast would not by itself establish knowledge of harm, wilful breach or manifest maladministration. Nor could criminal liability be inferred merely from a contractual or arbitral dispute. The protection would not cover fraud, corruption, undue benefit, false statements, undisclosed conflicts of interest or a conscious departure from an express legal rule.
This addresses a constraint rarely mentioned in investment promotion: the personal risk perceived by the official asked to approve or manage a contract. If any adverse outcome may later be treated as evidence of a crime, delay becomes the safer bureaucratic choice. The provision is likely to attract scrutiny in the Assembly because it tries to protect good-faith decisions without shielding corrupt conduct. Whether that distinction holds will depend on the final wording and on its interpretation by prosecutors and courts.
The foreign-currency constraint
Article 39 permits transfers abroad of capital, profits, dividends, interest, royalties and compensation. It also states that the government is not obliged to supply foreign currency or guarantee an exchange rate. Article 71 adds that the state does not guarantee profitability, demand, prices, financing, foreign-currency availability or full recovery of invested capital.
These reservations address one of the hardest expectations to meet. A legal right to remit profits is of limited comfort if foreign currency is unavailable in practice or obtainable only at a cost that changes the project's economics. Legislation can set transfer rules and protect defined rights; it cannot create central-bank reserves or correct an external imbalance by decree. That exposure will remain in many financial models even if the rest of the regime operates as intended.
The difficult work follows enactment
The system would not become fully operational on the day the bill is enacted. The Executive would have 120 calendar days to issue regulations and approve the National Investment Plan. The Central Bank, National Customs, National Tax Service and Commercial Registry would have 180 days to adjust their procedures. Existing investments and contracts would retain their current regime, with voluntary migration and no retroactive or cumulative benefits. Article 52 prevents regulations from creating or enlarging incentives, though delay or incomplete implementation could still diminish their practical value.
A company considering Bolivia need not wait to begin its analysis. It can identify the assets likely to qualify under Article 53, estimate its score, decide which commitments may warrant stabilisation and determine whether its contractual structure requires legislative approval or can be established by Supreme Decree. The exercise should also test scenarios involving foreign-currency availability, administrative delay and changes in performance indicators.
The bill improves several parts of the legal framework and acknowledges obstacles that the existing regime handles poorly. Its effect will nevertheless turn on three later decisions: the version enacted by the Assembly, the procedures adopted in regulation and the capacity of the responsible agencies to meet their deadlines. The predictability promised by the proposal will ultimately be judged in the first projects that try to use it.
