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Last Updated on February 15, 2025

Contrary to what many foreigners believe, Bolivia offers some highly profitable investment opportunities, though they might not be what you initially expect. While some sectors in this country present significant advantages for investment, others involve numerous challenges related to the legal system, local customs, market size, tax evasion, informal businesses, and other factors.

To invest successfully in Bolivia, you have two particularly lucrative options: 1) real estate investment and 2) investment in small, specialized companies targeting high-income individuals. Large corporations, franchises, import businesses, and general product companies often struggle to succeed in this environment.

As a foreigner, identifying the best investment strategies in Bolivia can be challenging. In this article, we aim to clarify this topic, discussing the most promising investment options, as well as those to avoid. We are real estate experts with a lifetime of experience living and working in Bolivia.

Disclaimer:

The insights we share are based on our extensive experience and *our perspective* on the Bolivian real estate market. As Bolivian real estate professionals who have lived here our entire lives, we believe we can offer valuable guidance to help you make informed decisions.

The Best Investments for Foreigners in Bolivia

Bolivia presents a unique investment landscape, offering excellent opportunities in certain sectors while posing significant risks in others. It’s crucial to understand which areas are likely to yield the best returns and which are less suitable for foreign investors like yourself.

A) Investing in the Bolivian Real Estate Market

After exploring various business ventures and observing the performance of both local and foreign-owned companies, we’ve concluded that *real estate is by far the most promising investment avenue in Bolivia.*

Here’s why:

• Bolivian laws and institutions provide robust protection for real estate property and owners’ rights. Contrary to common misconceptions among foreigners, *once you acquire a property in Bolivia, it’s exceptionally difficult for it to be taken from you*. With proper precautions, your property will remain secure and generate both equity and rental income. Moreover, Bolivian law applies equally to both foreign and Bolivian citizens.
• Extensive expertise in this field isn’t necessary to make successful real estate investments in Bolivia. You don’t need an MBA or specialized training to invest in Bolivian real estate. In fact, many Bolivians without formal training invest in properties. Caution: Thorough knowledge of the paperwork process is *essential* to avoid becoming a target for scammers!
• You can begin with as little as $10,000. Urban properties can be found for as low as $3,000. While many of these are undeveloped urban land lots, you can also find one-bedroom apartments for around $18,000 to $20,000.
• Bolivian real estate values consistently appreciate. The Bolivian real estate market is highly profitable, driven by a growing population and a significant migration from rural to urban areas. This trend ensures that nearly all urban properties increase in value, *regardless of market fluctuations*.
• You don’t need to establish a company to invest in real estate. You can invest as an individual, avoiding the complexities and high bureaucratic hurdles associated with forming a Bolivian company, which we strongly advise against. Laws and regulations are particularly burdensome for businesses in Bolivia.
• Property prices range from $3,000 to over $1 million, similar to developed countries. You’ll find a diverse range of properties, from affordable land lots at around $3,000 to luxury homes and buildings in exclusive areas priced at $1 million to $2 million or more. In prime neighborhoods, prices can reach up to $150 per square foot.
• Real estate investment taxes are relatively low. Property ownership taxes range from 0.01% to 0.001% of the property’s market value, paid annually. Rental income is taxed at approximately 16% per month. Individuals may also be subject to an additional income tax of around 5%.
• There are additional advantages that we will explore later.

A following section provides a detailed explanation of these reasons and why investing in Bolivian real estate is currently the best option available. You can jump to this section.

As you can see, the Bolivian real estate market is currently highly favorable for investment. This is why we have also chosen to focus our activities in this area. The legal framework offers significant advantages to both Bolivians and foreigners alike.

While some documentation and paperwork differ for foreigners, and there are restrictions on purchasing rural properties, these are minor, easily resolvable issues. The most significant real estate opportunities are in urban areas, where the majority of the Bolivian population resides and where the greatest financial gains are to be made.

B) Operating Small, Highly Targeted Businesses

Another viable investment option in Bolivia is to establish small businesses or companies focused on a specific product or service, *exclusively targeting high-income individuals*. These are typically companies valued between $50,000 and $1 million, with small teams of 3 to 10 employees.

Here’s why this business model works well in Bolivia:

• Commodities and basic goods are incredibly inexpensive in Bolivia. For example, a slice of bread costs around $0.07, and an apple costs about $0.15. You can cover your monthly grocery needs with just $50. Similar low prices apply to everyday clothing, entertainment, transportation, internet services, and so on. Consequently, large companies serving these basic needs will generate minimal profits.
• High-income individuals and expatriates readily support well-targeted businesses. Residents of exclusive neighborhoods (where many foreigners also reside) are often affluent individuals who can afford high-end, luxury, or first-world products and services. These goods can be priced similarly to those in smaller cities in developed countries. Therefore, creating small businesses that cater to this demographic offers the highest returns with a relatively modest investment (between $50,000 and $1 million).
• The market for general products and services is quite small. The majority of Bolivians are low-income earners who can only afford basic necessities. The entire Bolivian market’s purchasing power is comparable to that of a U.S. city or town with a population of 500,000. Moreover, high-income individuals in Bolivia (with monthly incomes above $3,000, similar to average incomes in developed countries) constitute only about 4% of the population, resulting in a high-income market of roughly 200,000 people.
• Bureaucracy and local culture become increasingly challenging as businesses grow. Bolivia has had a socialist government for the past two decades, making it difficult for large businesses to navigate paperwork and operations. Social unrest, strikes, and work stoppages are common. Tax evasion is widespread, giving informal businesses an advantage over larger, formal ones. Additionally, very large companies often become targets of corruption and other illicit activities.
• Certain Bolivian labor laws are overly protective of employees. Dismissing an employee is extremely difficult and carries significant financial consequences, even after only three months of employment. Labor unions are prevalent in many industries. Employees tend to seek long-term employment, and companies are wary of potential legal disputes with their workers. Informal employment is also widespread, benefiting informal businesses that avoid paying employee benefits and taxes, putting large companies at a significant financial disadvantage.
• Finding qualified employees and scaling operations can be difficult. Few Bolivian businesses or companies are competitive in the international market. One reason is that Bolivian employees are often not adequately prepared to meet the demands of a globalized economy. We’ve observed that locally produced goods and services frequently lack the quality standards expected in first-world countries. Therefore, offering world-class services or products in Bolivia can present scaling challenges.

We’ve frequently witnessed this pattern in Bolivia: Foreigners arrive and establish small businesses, such as:

• Specialty restaurants.
• Small supermarkets.
• Branded clothing and fashion boutiques.
• Innovative spa and beauty services.
• Other services typically found in small towns in developed countries.

These businesses, offering narrowly targeted products or services to high-income Bolivians (approximately 200,000 people, or 2% of the population), should be located in exclusive neighborhoods where the market for these goods exists.

We’ve often seen foreigners introduce business concepts *that haven’t yet been implemented in Bolivia*. Bolivians perceive these as innovations, when in reality, they are simply first-world products or services that were previously unavailable.

Real Estate is the Best Sector to Invest in Right Now in Bolivia

The following list of advantages will detail why investing in Bolivian real estate can be the most profitable investment you can currently make in this country.

This section is based on a comprehensive and detailed guide (written in Spanish) on how to invest in Bolivian real estate. We encourage you to read it for a complete understanding of this topic: Translated Link.

1) It’s a “Set and Forget” Investment

While the paperwork to purchase a property in Bolivia is complex, once you own the property, there’s minimal ongoing management required. It’s essentially a “set and forget” solution. You’ll need to change tenants every few years (2 to 4 years) to prevent potential legal claims of adverse possession, but that’s generally the extent of it.

Furthermore, it’s *standard practice* in Bolivia for tenants to be responsible for property maintenance and repairs. Therefore, you won’t have to worry excessively about upkeep. In most cases, the tenant should return the property *in the same condition* as when it was rented. Property taxes can also be conveniently paid online or through a representative.

2) It’s Safer Than Most People Realize

Local laws and the government’s real estate system provide strong protection for property ownership in Bolivia. People generally avoid legal disputes related to real estate because these lawsuits *can span several years and cost thousands of dollars*, a financial burden most Bolivians cannot afford.

Therefore, it’s very unlikely that someone would initiate a legal challenge to attempt to seize your property. Additionally, *if your property paperwork is properly executed*, you can effectively defend your ownership in the Bolivian legal system. However, such legal conflicts rarely arise because, as mentioned, they are *extremely expensive and impractical for scammers to pursue.*

3) Property Taxes are Very Low

The taxes associated with property ownership are as follows:

• A 3% transfer tax on the purchase price, paid when you buy the property.
• An annual property ownership tax ranging from 0.01% to 0.001% of the property’s value.
• A 16% VAT (Value Added Tax) on the monthly rental income, paid monthly.
• For individuals, *occasionally* an additional 5% to 10% tax on rental income, paid quarterly.

As you can see, the percentage of your rental income allocated to taxes in Bolivia will generally not exceed 20%, and will typically be around 16% or 17%.

4) You Can Start with Even $10,000

New land lots are available for as little as $3,000 on the outskirts of Bolivian cities, although the average price for these properties is closer to $10,000. Some may already have existing structures, while others will require you to build a dwelling for the tenant, who will then be responsible for its maintenance.

You can also purchase one-bedroom apartment units for as little as $20,000. If they are still in the pre-construction phase, you can often finance their construction, potentially securing a discount and reducing the purchase price to $18,000 or less.

5) The Bolivian Real Estate Market is Not Yet Mature

You’ll discover a wealth of opportunities due to the lack of a well-defined real estate market. There’s a significant amount of asymmetrical information on both the buyer and seller sides.

While you might need to evaluate hundreds of properties to find a good deal in developed countries, it’s considerably easier to find attractive offers here. Bolivians are generally less experienced in real estate compared to those in countries where it’s a more established investment area. Consequently, property owners often lack the necessary tools to accurately appraise their properties.

In short, it’s much simpler to find desirable properties for sale or rent in Bolivia because the market contains numerous hidden opportunities.

6) Property Values in Bolivia Consistently Appreciate

This statement might seem surprising, but it’s accurate, and here’s why:

• Bolivia’s population is growing rapidly. In 2000, the population was 8 million; now, two decades later, it’s nearly 12 million, representing a 50% increase.
• Significant migration is occurring from rural areas to urban centers like Santa Cruz and El Alto. This means that properties previously located on the city outskirts are now situated in the middle or even the center, driving up property values.
• Bolivia’s GDP is experiencing robust growth. Our GDP has been increasing at a rate of 3% to 5% annually for over a decade. This economic growth contributes to the appreciation of real estate values across the country.

These factors create a phenomenon where, *regardless of fluctuations in the Bolivian real estate market*, the underlying prices and intrinsic values of properties are consistently increasing.

The average rate of value increase for a property in Bolivia over a five-year period is approximately 1.5 times. This means that a property currently valued at $100,000 could be worth $150,000 in five years. This range typically falls between 1.3 and 1.7, with new land lots averaging 1.7.

7) Monthly Rental Income is Competitive

Residential properties in Bolivia generate gross annual rental income ranging from 4% to 8%. This means that a $100,000 property would yield between $4,000 and $8,000 per year, resulting in a net income of approximately $3,000 to $6,000 annually.

It’s important to note that obtaining a loan from a Bolivian bank typically requires permanent residency and proof of income through employment. Banks are generally hesitant to approve loans for foreigners. Additionally, mortgage interest rates range from 8% to 13%. *Therefore, we strongly recommend purchasing property in Bolivia with your own funds.*

8) You Don’t Need a Company to Invest in Real Estate

There’s no requirement to establish a company to purchase property for investment purposes in Bolivia. You can hold ownership under your own name as an individual. This is significant because individuals in Bolivia pay a relatively low income tax (ranging from 5% to 10% of their income), while companies pay 25% of their net income in taxes.

Managing your property in Bolivia is also considerably simpler because you don’t need to hire anyone. Simply establish an agreement with the tenant, who will also be responsible for maintaining your property (*always sign a public deed for the rental!*), collect rental income, pay taxes, and replace the tenant every few years (every 2 to 4 years). That’s the extent of your management responsibilities.

9) Properties Range in Price from $3,000 to Over $1 Million

There are properties suitable for various investment budgets. You can invest as little as $3,000 (with considerable risk, as you won’t have funds to construct a dwelling for a tenant, you’ll only acquire the land) in new land lots on the city outskirts, or up to $1 million or more for a home in Bolivia’s most exclusive neighborhoods.

You also have the option of financing the construction of multi-family buildings or high-rises, potentially securing discounts, as mentioned earlier. In essence, Bolivia offers a wide range of real estate properties to meet your investment needs, including new land lots, small homes or apartments, average-sized houses, exclusive and luxury properties, commercial premises, and more.

The Downsides of Real Estate Investment in Bolivia

In most cases, you’ll need to pay in cash. Bank loans in Bolivia are not ideal for financing real estate investments due to their exceptionally high interest rates of 8% to 13% per year, leaving little to no positive cash flow in most situations.

It’s crucial to follow proper procedures to avoid the risk of scams. We’ve emphasized that once you own a property with the correct paperwork, it’s a very secure investment. *However, the period during which you are purchasing the property is when the risk of scams and unethical behavior is highest.* We have a **comprehensive guide** on how to buy a property in Bolivia; please follow the Link.

You also need to exercise extreme caution when renting out your property in Bolivia. It’s essential to avoid squatters and illegal occupations, *which are unfortunately common in our country*. To prevent this, you must *always sign a public deed for the rental agreement* with the tenant and consistently pay rental taxes. We have a **detailed guide** on how to rent a property in Bolivia; please visit the Link.

The Worst Investments You Can Make in Bolivia

The following are, in our view, the least advisable investments you can make in our country. We’ll explain the reasons behind this assessment.

Investing in and Creating Large Companies

As previously mentioned, large companies face numerous challenges in Bolivia: a limited market, a high proportion of low-income individuals, a socialist government, excessive employee protections, inadequate support for foreigners, extremely low prices for commodities and basic goods, a market dominated by informal businesses, widespread tax evasion among importers and businesses, and so on.

You’ll encounter unfair competition from informal businesses. Even major corporations like Starbucks have struggled to compete, except in the most exclusive neighborhoods, against small, informal food vendors.

Creating General Product Companies

As we’ve stated, commodities and basic products are exceptionally inexpensive in Bolivia, and the market is small. It’s also dominated by ingrained consumer habits, with people accustomed to purchasing unbranded clothing, groceries from informal markets, and mobile phones from informal wholesale outlets.

Investing in this sector may yield modest profits, perhaps a few thousand dollars per month, but you’ll face significant challenges comparable to those of launching a startup in a developed country.

Importing Goods into Bolivia

Import tax evasion is a major issue in Bolivia. A significant number of sellers and wholesalers avoid paying taxes when importing products. Formal import companies face substantial and unfair competition because they are legally obligated to pay taxes.

Without a thorough understanding of these practices, you’ll consistently lose money in this industry in Bolivia.

Operating Franchises of Globally Recognized Companies

With the exception of highly profitable companies, establishing a franchise affiliate in Bolivia is often unsuccessful. Real estate is an exception, with ReMax and Century 21 performing well. However, franchises related to food, clothing, entertainment, transportation, and other sectors *are likely to fail in this country*. You’ll notice that companies like McDonald’s, Burger King, Subway, Walmart, and eBay are nonexistent here.

If you’re considering opening a franchise in Bolivia, conduct thorough market research to determine its potential profitability.

Final Words

In this comprehensive overview of investment opportunities in Bolivia, you’ve learned that the two most promising strategies are real estate investment and small, well-targeted businesses.

You’ve also discovered that, from our perspective, real estate is by far the best sector for investment in this country, particularly for foreigners. It’s a “set and forget” solution requiring minimal time commitment and offering numerous advantages. Most importantly, real estate values in Bolivia consistently appreciate over time.

Businesses focused on a specific product or service catering to the needs of high-income individuals can also be highly profitable, although they are unlikely to exceed a value of $1 million in most cases. Conversely, large companies are likely to struggle and fail due to Bolivia’s small market and large low-income population.

As you’ve seen, other business models also contend with excessive bureaucracy, a socialist government, unfair competition from informal businesses, tax evasion, a limited market comparable to a 500,000-person town in a developed country, and Bolivian consumer habits favoring informal markets and companies.

We encourage you to thoroughly analyze your potential investment in our country and strongly consider real estate. There’s a reason we’ve chosen this sector for ourselves as well; it’s a highly rewarding path.

We hope this information has been helpful. If you’d like to learn more about how to buy a property in Bolivia, please visit our dedicated guide: Buying a Property in Bolivia: All the Steps and Risks.

CasasenBolivia.com: Information on living, working, investing, and traveling in Bolivia.