Bolivia has entered a period of economic decline, as the long-term effects of the pandemic combined with a scarcity of US dollars in the country begin to take their toll. With presidential elections due in 2025, the political situation is also unstable. The rift between current president Luis Arce and former president Evo Morales continues to deepen, as the country is hit by protests against the decision to ban the former president from running again.
During the first half of 2023, the Bolivian stock market also faced a major crisis, when the Bolivian regulator intervened and took over one of the largest Bolivian banks, Banco Fassil. The regulator sanctioned several stockbrokers operating in the country, and permanently revoked the license of two, for financial crimes. Firms have been hit by a wave of arbitrations and are representing clients in debt recovery from Santa Cruz Financial Group, Banco Fassil’s parent company.
Companies are struggling to import products, as it is becoming increasingly difficult to find dollars in the banking system. With no US dollars in the Bolivian Central Bank, both import and export companies are turning to law firms for advice. Consequently, firms have been advising multinational companies on the restructuring of operations, as they are pushed to reorganise payment chains to suppliers.
The government has turned to the tax system in an attempt to boost revenue. As a result, clients are coming to law firms with complaints that the tax authority has become more aggressive and tax deductions harsher than in previous years. Firms are seeing an increase in representation in tax audits and inspections, particularly before the customs authority.
Foreign investment has also undergone a notable shift in Bolivia. A number of law firms noticed an increase in Latin American investors, citing their familiarity with the market, and a decrease in European and US investors. The government plans to strengthen the country’s imports and exports and increase investment overall, focusing on the farming and mining sectors.
Having relied on gas exports for a number of years, the country’s oil and gas industry is seeing decreased activity, as the reserves continue to decline and global commodity prices continue to fluctuate. The government continues to push for investment, however, and the majority of law firms have seen an influx of interest in lithium projects. The State has begun to sign agreements with foreign companies in order to grant certain types of access and allow operations to commence. In January 2024, the government launched an international tender for new foreign companies to invest in Bolivia and make a proposal to launch Direct Lithium Extraction technology.
Despite the unstable economic and political situation, the legal market has remained active. Moreno Baldivieso Estudio De Abogados remains at the forefront and is a top choice for national and international clients, advising across the gamut of industries and legal fields.
The energy and natural resources sectors continue to be prolific for firms, and PPO Abogados and Ferrere continue to dominate, advising clients in the lithium space, as part of their full-service offerings. Indacochea & Asociados is another key player in the legal market, particularly in the real estate sector, alongside other full-service firms Dentons Guevara & Gutierrez and Bufete Aguirre, Quintanilla, Soria & Nishizawa Sociedad Civil – (BAQSN). Wayar & Von Borries Abogados S.C., Serrate Paz y Asociados and C.R. & F. Rojas – Abogados are other firms to note, with broad practices and active roles in the legal market.
Würth Bedoya Costa Du Rels Abogados has streamlined its focus, strengthening its practice in corporate and M&A, dispute resolution, labour and tax, and Urenda & Urenda continues to cement its position in the market, advising significant clients in the manufacturing industry.