Umbrella Company in Bolivia
Independent contracting in Bolivia isn’t always straightforward. You’ve got immigration issues, tax difficulties, and mountains of complex admin work. Even worse, missteps can cost you serious money, or even land you in legal trouble.
Before you consider taking a contract in Bolivia, you should be aware of what you’re getting into – and how you can make it simpler.
Difficulties of Contracting in Bolivia
Generally, you need to have an employer sponsor in order to secure the appropriate work permit and work visa for Bolivia.
If you’re working independently, it can be difficult to find clients willing to sponsor you. Moreover, even if your client can do this, you’ll need a new sponsor each time you decide to take on a new contract. Of course, every new sponsor will mean more paperwork.
Also, are you familiar with the intricacies of the tax system in Bolivia, as well as your own country’s laws on overseas earnings? If so, good on you!
However, if you’re like the rest of us, figuring out (much less reducing) your tax liability in Bolivia and your home country can seem like full-time work in itself.
How Umbrella Companies Work
Most freelance workers aren’t superheroes who successfully tackle these issues all on their own. There are companies that specialize in helping workers make the most out of their contracts.
They’re called Umbrella Companies (or, contractor management companies).
Basically, an Umbrella Company acts as your full-time employer, even though you maintain your independence as a contractor. They collect and filter payments from your clients, filtering out the necessary social security and fees. You send them your timesheets, and they send you payments.
Because they act as your “employer,’ they can sponsor you and provide a single work permit for multiple contracts in Bolivia. Even better, most are experts in Bolivian and expat tax law, meaning they’ll also help you optimize your earnings in Bolivia.
Although the Umbrella Company is technically your “employer,” you’re essentially freeing yourself to work even more independently. You still dictate your contracts, your hours, your schedule. The Umbrella Company simply filters out the time-consuming admin and immigration issues, allowing you to focus on your new contract.
Why Use an Umbrella Company in Bolivia
Most people want to do their work, earn their money and enjoy their spare time without taking on loads of admin in a new country. That is why an umbrella company can help.
When you’re working through an Umbrella Company, you’ll essentially be outsourcing the admin and tax issues to specialists.
While the umbrella company will charge a fee, you’ll likely end up saving more money in the long run: you’ll be able to focus on your work, expertly reduce your tax liability, and comply with all laws and regulations in Bolivia (which means avoiding fees, fines, or even worse penalties).
How We Can Help You
There’s a huge variety of Umbrella Companies with different specialties and advantages in Bolivia. How do you find the right one for your circumstances?
We work closely with Umbrella Companies all throughout Bolivia and match contractors with the right company for them. If you’ve already secured a contract in Bolivia, we can help you find your best match (for free). Or, we can simply give you feedback on your situation (for free).
A Contractor’s Guide to Taxes in Bolivia
One of the most consistently challenging aspects of contracting in Bolivia is complying with the country’s tax system. As well as paying tax in Bolivia, you might also still be eligible to pay some tax in your home country, and understanding the legislation behind this can be a challenge.
How do I calculate my taxable income in Bolivia?
If you’re working in Bolivia under a permanent contract, many employers will handle your tax under the PAYE (pay-as-you-earn) system. This means that they calculate and process your taxes in Bolivia for you and then send you a net wage. Your income tax, public health insurance, social security, and other deductions will all be covered by this payment. This is the easiest way to handle your income tax in Bolivia, but contractors may not be offered this service because of their short stay with each employer.
Anybody who can’t pay their tax in Bolivia through PAYE is left with the prospect of doing everything themselves.
Do you know much about Bolivian Tax Law? Does Bolivia have a tax treaty with your home country? You will need to find out or find someone who can help!
Tax Filing in Bolivia
|When Do You Need to Lodge Your Tax Return?||30 April (of the year following the income tax year)|
|Tax Filing Deadline||30 April (of the year following the income tax year)|
|Can you file it online?||Yes, https://ov.impuestos.gob.bo/|
How to File Taxes in Bolivia
Individuals receiving employment income are not required to file taxes. Employers will file and pay taxes withheld on your behalf.