• Mar 23, 2017
  • by Jorge Inchauste | José Bernal


1. Overview of the market and the country

In the last couple of years, the Bolivian mergers and acquisitions market, which for a considerable amount of time was limited to very few deals principally structured abroad with effects in the country, has seen some significant developments that have revived the market and made the M&A practice relevant again.

Authorities and legislation

The legislation governing mergers is dispersed.  In general terms, mergers of Bolivian corporations are mainly regulated by the Bolivian Commercial Code, which requires that Bolivian companies involved in a merger give notice to their creditors and shareholders, and allows them to object to the merger process.

In the case of Bolivian companies that have outstanding instruments issued in public securities markets, they must inform the markets and the Supervisory Authority of the Financial System (ASFI) of any relevant change regarding the company, including mergers, acquisitions and spin-offs.

There are also a number of specific regulations applicable to different regulated industries, as merger control is imposed on certain sectors and industries in Bolivia.  As a result, regulations that pertain to mergers can be found in the Electricity Law, the Telecommunications Law, the Hydrocarbons Law, the Banks and Financial Institutions Law, the Securities Law and the Insurance Law.  These specific regulations are administered and enforced by the supervisory and control authorities for each sector.  Therefore, any merger within the electricity industry in Bolivia, for example, will have to be notified and sometimes approved by the Supervisory and Control Authority for Electricity prior to the merger taking place; to the extent the operator, subject to the merger, has instruments issued and traded in public markets, then it must also inform the Supervisory Authority of the Financial System (ASFI).

Foreign exchange rules and controls in Bolivia are minimal.  Currently there are taxes on, but no restrictions to, the entry or exit of capital, or the remittal of dividends, interests and royalties for the transfer of technology or other commercial concepts.  Foreign investments and loans into Bolivia, as well as payments to foreign investors, must be reported to the Bolivian Central Bank, but there are no prior approvals or restrictions to foreign investment. 

In addition, there is freedom to hold and deal in foreign currencies, there are close-to-market exchange rates that can be easily and safely accessed through regulated exchange, and the law allows the remittal abroad of foreign currency with few restrictions.  However, there is a growing public policy towards the “Bolivianization” of transactions in Bolivia.  As a result, there is a Financial Transaction Tax on any operation with foreign currency involving Bolivian financial institutions.  This tax has recently been raised to 0.20% from 0.15%, and it is expected to be increased again in the next years.  In addition, there is a tax on the exchange of foreign currency, and there is an obligation to inform of the origin and destination of currency or account movements that exceed US$ 10,000.

Principal mechanics of acquisition

As to the principal mechanics of an acquisition at present, it is important to bear in mind that the number of publicly traded firms in Bolivia is minimal.  Most companies are either limited liability partnerships or stock corporations, and are closely held.  Furthermore, the structure of most corporations in Bolivia generally involves a principal who owns a majority of the corporation’s stock (unlike other countries in the world where dispersed ownership is common).  For the purposes of this analysis, we are going to refer to the Bolivian corporation structure as a ‘concentrated ownership’ structure.  In this structure, the dominant shareholder usually owns a sufficient amount of shares to allow him or her to appoint all directors of the board, or at least a majority of them.  As a result, the possibility of hostile acquisitions of companies is minimal (or, at least, different in its essence) because acquisitions must generally be consented to and recommended by the majority shareholder of the target, and the concentrated structure leaves little room for hostile takeover attempts through proxy fights or tender offers.

The transfer of stock or share participations in corporations is generally unrestricted and straightforward, requiring only registration in the company books with no prior filing.  Transfer of participation in limited liability partnerships is more cumbersome, as it requires that documentation evidencing the existence and legal representation of the acquirer be legalised in Bolivia and thereafter filed before the Registry of Commerce.

Mergers and acquisitions between large international companies that hold assets in Bolivia generally do not trigger regulatory scrutiny, unless they take place in a regulated sector.  As a result – and unless the acquisition involves the merger of two Bolivian companies – most acquisitions can proceed without regulatory filings and approvals.  In many cases, an acquisition is completed by acquiring interests in holding companies that may be several levels above the target with assets in Bolivia.  This form of acquisition may be rapid and outside the scrutiny of certain regulators.

Further, joint ventures that do not result in a merger or change of ownership of the relevant regulated company typically do not fall under the scrutiny of merger control.  However, joint ventures that involve regulated companies are subject to some review and could be opposed by the relevant regulator to the extent that they could be considered contrary to antitrust or competition policies.

Asset purchase deals, as opposite to stock purchase deals, are also common.  This method avoids certain tax and labour liabilities in the underlying target.  However, this ‘cherry picking’ – which requires adequate identification of the productive assets that are of interest – may take more time than a stock purchase and may involve a tax impact on the value of the assets being acquired.

Overview of market and key sectors

As mentioned before, the Bolivian M&A market has revived in the last few years.  Bolivia is still a small market in comparison to most of its neighbours in Latin America, but the growth perspectives are encouraging.

So, why has the level of activity resurged during the last years?  It is hard to ascribe the increased level of activity to a single factor.  In all likelihood, it is the result of a series of developments and events in the economic, legal and political arenas.  Among these several factors, one should include the continuous and sustained growth of Bolivian GDP during the last years, the enactment of a new investment promotion law, and the fast-paced development of the city of Santa Cruz.  All these points are further developed below in this report.

It is also hard to point out specific key sectors of development.  M&A transactions have ranged from mining companies to hospitality to telecoms and media.  Nevertheless, it may be possible to single out the banking industry as a key sector for recent M&A activity, as this activity has surged from a specific event, the economic distress of certain smaller financial institutions called “mutuales” in Bolivia.  This is also covered below.

Most M&A activity in Bolivia takes place in private transactions; public M&A transactions (i.e. through the Bolivian Stock Market) are rare, but there are some notable exceptions.  In December of 2014, CIMSA (part of the Doria Medina family group) sold its controlling shares in the largest Bolivian cement company, Sociedad Boliviana de Cemento (SOBOCE), for US$ 300m, and listed the sale on the Bolivian Stock Exchange.  The stock was acquired by the Peruvian company “Consorcio Cementero del Sur”, and this transaction is recorded as the largest in the history of the Bolivian Stock Exchange. 

2. Significant deals and highlights

One of the most significant deals took place in the cement industry.  Sociedad Boliviana de Cemento (SOBOCE) is the leading cement company in Bolivia, and one of the largest companies of the country.  Samuel Doria Medina and his family were the controlling shareholders in this company.  At the end of 2014 and beginning of 2015, Doria Medina sold his shares in the company to the Peruvian company “Consorcio Cementero del Sur”, which amounted to around 50% of the market capital of the company.  The remaining shares were the subject of arbitration between Doria Medina, Consorcio Cementero del Sur, and the Mexican company Grupo Cementos de Chihuahua.

This transaction was made through the Bolivian Stock Exchange, and is recorded as the largest in the history of the Bolivian Stock Exchange.

Other important deals took place in the banking sector.  The financial institution “Mutual La Paz” was undergoing economic distress during 2016 and, in May, the Bolivian comptroller of banking institutions (ASFI) intervened the bank, fearing that it would go into bankruptcy.  There was also a general panic of a bank rush, as other financial entities of similar characteristics (mutuales) could also be under risk.  As a result of this, the bank “Mercantil Santa Cruz” bought the client and deposits portfolio of the distressed Mutual La Paz.

In October of 2016, Mercantil Santa Cruz started a merger process with another financial entity, bank “Los Andes ProCredit”.  The combined entities will have close to 20% of market share over the financial industry of Bolivia.  This transaction was approved by the comptroller of financial institutions (ASFI) in December of 2016.

There were also many cases where the M&A activities of foreign giants have had effects on the companies and assets of those companies in Bolivia.  In these cases, the acquisition is completed by acquiring interests in holding companies that may be several levels above the target with assets in Bolivia.  For example, the mergers of American Airlines and US Airways, or the merger of AB InBev and SABMiller, had regulatory repercussions in Bolivia.

3. Key developments

Some important developments in Bolivian legislation have impacted, and will continue to propel changes, in the mergers and acquisitions market during the next couple of years.  At least one of these legislative developments is still at the proposal stage, but it is expected to be enacted during 2017.

Investment promotion law and related norms

The first relevant development in the Bolivian legislation is the approval of a new investment promotion law on April 5, 2014 in order to establish a general legal framework for the promotion of investments in Bolivia.  Up to that point, the framework for investment in Bolivia had been on hold, because the previous investment law of Bolivia, which was enacted in 1990, had been largely made inapplicable by the Bolivian constitution of 2009 and the political reforms of the government of Evo Morales.  So, until 2014, the legal framework applicable to investments in Bolivia was uncertain.

The new law regulates not only foreign investments, but also domestic and public investments.  The law follows the same political and economic principles set out in the Constitution and, as a result, it gives greater importance to Bolivian State participation – particularly with regard to the exploitation of natural resources.  The law focuses on investments that: 1) promote economic and social growth; 2) generate employment; and 3) contribute to the eradication of poverty, and reduce inequality.

There are several sections of the new investment law that are unclear and are far from ideal for increasing the flow of investment to the country (for example, the regulation of international arbitration as a means of solving investment disputes is largely rejected by the law).  Nevertheless, the issuance of the new investment law has provided a certain degree of certainty to the market, which was lacking since the previous law seemed to lose validity in 2009.

The most relevant aspect of the investment promotion law on this subject is that any acquisition or merger that involves a change in control or a foreign direct investment or loan to a Bolivian Company must now be registered before the Bolivian Central Bank.  The Registration before the Bolivian Central Bank involves the periodic filing of certain forms and should be performed after the acquisition or merger has been completed.

Project of a new antitrust law

As of now, there are no regulations in Bolivia applicable to non-regulated industries.  This means that, at this moment, an M&A transaction that does not involve a regulated industry would not have to comply with any particular requirements in order to be completed, in regard to merger control.  However, there is a proposal for a “general” antitrust law, which will develop merger control regulations.  This new law would apply to all non-regulated industries and is currently under consideration by the Bolivian senate.  It is likely that this law will be enacted at some point during this year.

The content of the draft law is, unfortunately, very broad and unspecific.  Most of the relevant sections of the law are reserved to a regulatory supreme decree to be issued later by the executive branch, and which will contain the rules of application of the law.  Therefore, it is not possible at this point to analyse at large the impact that the law may have on mergers.  In any case, it seems obvious that the implementation of the new merger control law will significantly impact the M&A practice, probably impose further requirements for the completion of a merger or acquisition, and even impose restrictions thereon.

Increased level of activity of the regulator

The third novelty is the increased level of activity of the enterprise supervision and regulation entity, Autoridad de Supervisión de Empresas (“AEMP”).  This entity is in charge of regulating Bolivian companies in regard to corporate governance, restructuring, and antitrust.  It is expected that AEMP will become a more active participant and enforcer of corporate governance and merger control regulations in the future (in the same way that it has gradually become a more active participant in the field of antitrust law during the past five years).  Because of its scope of regulatory authority, this entity may play an important role in the Bolivian M&A market in the future.

It is hard to know, however, what is going to be the impact of the increasing level of activity of the regulator in the M&A market.  It is logical to think that the increased level of regulation (by both the new law and the involvement of AEMP) will impose more obligations on the companies, and this could adversely affect the market.  It is also obvious that the increased involvement of the regulator is due to the increased activity of the market, as a reaction to it.  The effects of the involvement of the regulator will be seen in the long-run.

4. The years ahead

There are mixed signals regarding the M&A market for the following years.  M&A thrives in stable and predictable environments.  Although Bolivia has continued to be politically and economically stable and predictable over the past decade, its “socialist” economic orientation has, however, created somewhat of a hostile investment environment for certain industries.  Such is the case with Hydrocarbons (where the State has taken a much larger role) and Mining (where transfers of ownership have been restricted), and which are traditionally the largest productive sectors of the Bolivian Economy.  Notwithstanding the above, certain events and legislative alterations may change this scenario and positively impact the investment market, even in complicated and regulated sectors as those mentioned above.

In general terms, we consider that it is likely that the M&A market will continue to grow and expand in coming years.  It is important to remark that the next presidential elections will take place in 2019, but the political panorama of Bolivia is certainly unclear, as president Evo Morales (currently serving his third term as president) has been denied the possibility of running again for office for a third term.  Yet his political party has publicly announced that it is looking at ways to circumvent the constitutionally imposed restriction and present Mr. Morales for a re-re-election.  So, a certain political friction is to be expected as the 2019 election comes closer.

On the other hand, a change in the government might be beneficial for M&A markets.  The legal and economic panorama of the country under the left-leaning government of Evo Morales is not very favourable to investment and business development.  Over the last decade, Bolivia has undergone a shift in economic orientation that has resulted in the “nationalisation” of over 15 companies since 2006.  The great majority of these “nationalisations” affected former state-owned companies that were privatised during the 1990s as a form of recuperating the companies and assets that originally belonged to the Bolivian State.  In this sense, the new investment promotion law is intended to bring clarity and certainty to the investors and the market, signalling that the nationalisations are over and that the new laws of the country are solid.  It is still unclear whether the markets are going to agree with the signals sent by the Bolivian government, and will increase the flow of capital to the country. 

The economic perspectives of the country also seem uncertain.  The annual growth rate of Bolivian GDP was, for several years, higher than 5%, and it relied heavily on gas and minerals.  The low prices of these commodities have hit the Bolivian economy, and the growth rate of GDP has started to slow down its pace.  Notwithstanding, it continues to be one of the highest in Latin America, at around 4.4% according to official government reports.

  • Sep 21, 2016
  • by Jorge Inchauste


What is the relevant legislation and who enforces it?

Merger control is imposed on specific regulated sectors and industries in Bolivia. As a result, certain regulations that pertain to mergers and joint ventures can be found in the Electricity Law, the Telecommunications Law, the Hydrocarbons Law, the Banks and Financial Institutions Law, the Securities Law and the Insurance Law. These specific regulations are administered and enforced by the supervisory and control authorities for each sector. As a result, any merger within the telecomunications industry in Bolivia, for example, will have to be notified and sometimes approved by the Supervisory and Control Authority for Telecomunications, and to the extent the operator subject to the merger has instruments issued and traded in public markets, then it must also inform the Financial System Supervisory Authority (ASFI).

In addition, mergers of Bolivian corporations are regulated by the Bolivian Commercial Code, which requires that the companies involved in the merger give notice to their creditors and shareholders regarding the proposed merger, and such creditors and shareholders may object through a judicial procedure before a civil judge.

If the merger will result in a foreign direct investment into Bolivia, then such investment must be registered before the Bolivian Central Bank as a result of the recently approved Investment Promotion Law.

What kinds of mergers are caught?

Only regulated sectors, industries and activities are caught within the merger control policies. Regulated sectors that contain certain merger control policies are:

oil, gas and other fossil fuel distributors and transporters;
electricity generation, transmission and distribution;
telecommunications providers that provide services in Bolivia;
banks and other financial institutions, including loans and savings cooperatives or associations and foreign exchange houses; and
insurance and registered foreign reinsurance companies.

Companies that have outstanding instruments issued in public securities markets must inform the markets and the ASFI of any relevant change regarding the company, including mergers and joint ventures.

What types of joint ventures are caught?

Joint ventures that do not result in the merger or change of ownership of the relevant regulated company are not caught within the scrutiny of merger control. However, joint ventures that involve regulated companies are subject to review and may be opposed by the relevant regulator where the joint ventures could be deemed contrary to antitrust or competition policies.

Is there a definition of ‘control’ and are minority and other interests less than control caught?

To trigger regulatory intervention, mergers must typically involve the change of effective control over the relevant regulated company. ‘Control’ is defined in laws, such as the Electricity Law, as the ability of a company to control others through its direct or indirect participation in more than 50 per cent of the capital stock or voting rights or in the control of the direction of subsidiaries or affiliates.

Certain sectors such as banking and insurance, however, have additional considerations above and beyond a mere change in control to exercise regulatory scrutiny in a change of ownership, such as the provision of adequate guarantees that the services will continue to be provided pursuant to industry standards.

What are the jurisdictional thresholds for notification and are there circumstances in which transactions falling below these thresholds may be investigated?

There are no general thresholds in terms of economic importance that would determine whether a merger is subject to regulatory scrutiny or not. As discussed above, the mergers that will be subject to regulatory scrutiny and, in certain cases, prior authorisation, are dependent on sector-specific regulations. We can make reference to thresholds within the electricity sector, whereby a merger or acquisition that would grant an electricity generation company a market share of more than 36 per cent would be restricted. Other regulated sectors do not have the same clearly defined jurisdictional thresholds.

Is the filing mandatory or voluntary? If mandatory, do any exceptions exist?

Within regulated industries, not only is filing mandatory but prior written authorisation may also be required from the relevant regulatory authority before the merger.

If companies are not regulated industries but have issued instruments before the regulated securities market, then filing is mandatory before the ASFI and the Bolivian securities market.

The merger of Bolivian companies, in addition to any industry-specific regulatory requirements, must be filed before the Registry of Commerce.
Filing before the Bolivian Central Bank in order to register a foreign investment in Bolivia is mandatory.

Do foreign-to-foreign mergers have to be notified and is there a local effects test?

Typically, the Bolivian authorities are strict regarding mergers, joint ventures or the change of ownership of companies in regulated companies or markets at a national level. They are generally less concerned about changes of ownership or joint ventures made among parent companies or ultimate shareholders that are located and operate outside Bolivia. Nonetheless, the test to determine whether a foreign-to-foreign merger is caught by the regulatory scrutiny will depend on the relevant industry sector and the activity involved. Also, in regulated sectors, a local effects test may be applied by the regulator to determine whether the resulting company’s local presence will create a dominant market player or a prohibited vertical integration.

Under the new Investment Promotion Law, foreign-to-foreign mergers will now have to be notified to the Bolivian Central Bank.

Are there also rules on foreign investment, special sectors or other relevant approvals?

There is a constitutional prohibition on foreigners owning real estate property within 50 kilometres of Bolivia’s international borders. Aside from that prohibition, there are limitations in relation to private ownership (foreign or national) in Bolivia’s natural resources, particularly hydrocarbons and mining, as a result of which foreign entities must enter into agreements with state-owned hydrocarbons or mining companies so as to participate in the relevant industry. In addition, the Investment Promotion Law requires the registration of any foreign investment before the Bolivian Central Bank.

What are the deadlines for filing? Are there sanctions for not filing and are they applied in practice?

Before implementing any merger process, a regulated company must obtain regulatory authorisation. Failure to adequately file or obtain regulatory authorisation will typically result in the initiation of a regulatory procedure for the revocation of the licence or concession under which the regulated activity is carried out.

Non-regulated companies that are registered before the Bolivian securities market must file a notice of a relevant change with the securities regulator in the event the merger or acquisition involves a substantial change in the control of the company within 24 hours of closing.

The merger of Bolivian companies must be filed before the Registry of Commerce and notified to creditors 30 days before closing. Failure to follow the notice procedure will result in the merger not being approved or registered before the Registry of Commerce until the process is completed.

The registration of a foreign investment in Bolivia is regulated by the Bolivian Central Bank and as a result any company with foreign capital must file a special form called the Registration of Foreign Investments in Bolivia and Financial Operations Abroad (RIOF) every quarter with the Bolivian Central Bank updating it on issues in relation to the foreign investment and any distribution to the foreign owner.

Central Bank Regulations that require the RIOF provide that in case of delay or omission in the filing of the RIOF, sanctions would be applicable. However, at the moment there have been no new regulations providing what these sanctions would be. Consequently, in practice, no sanctions are being applied for omitting to file the RIOF.

Who is responsible for filing and are filing fees required?

The Bolivian-regulated company is required to file. Filings before the specific sector regulators have no filing fees; however, there may be fees for the legalisation of documents before the Bolivian consulate in order for them to be filed with the regulator (when required).

The filing and registration of the merger of Bolivian entities before the Registry of Commerce will entail the payment of filing fees.

The person responsible for filing the RIOF is the legal representative of each local company, and no filing fees have been issued to date.

What are the waiting periods and does implementation of the transaction have to be suspended prior to clearance?

The merger of a regulated company must be suspended prior to clearance from the relevant regulatory authority.

The merger of Bolivian companies entails a 30-day waiting period once all the required information has been filed before the Registry of Commerce and notified to the creditors and shareholders of the companies.

What are the possible sanctions involved in closing before clearance and are they applied in practice?

Within regulated sectors, the failure to file and obtain the requisite authorisation may entail the intervention of the regulator in the operation of the regulated company, the revocation of the relevant licence or concession and the initiation of a bidding procedure to grant the concession or licence to a different company along with all the assets of the outgoing company. In practice, there has never been an instance where an authority has sanctioned a company for a merger or acquisition that was contrary to the relevant legislation.

Pursuant to law, the merger of Bolivian companies will not be effective until after the filing and waiting periods have been duly complied with.

Are sanctions applied in cases involving closing before clearance in foreign-to-foreign mergers?

In general there are no filing requirements for foreign-to-foreign mergers. However, in certain regulated industries such foreign-to-foreign mergers may have a local impact and require prior written authorisation from the regulator. The sanction for failing to obtain the requisite prior authorisation may result in revocation of the relevant licence and as a result the inability of the regulated company to continue to do business in Bolivia.

What solutions might be acceptable to permit closing before clearance in a foreign-to-foreign merger?

As described above, there is a lesser degree of scrutiny on the part of the regulators with regard to foreign-to-foreign mergers. As a result ‘hold-separate’ arrangements, whereby the local companies remain as separate institutions, may work in certain circumstances and certain industries. However, they will not work to the extent the relevant regulatory prohibition or limitation extends to effective control or indirect ownership situations.

Are there any special merger control rules applicable to public takeover bids?

At present, there are no special merger control rules for public takeover bids.

What is the level of detail required in the preparation of a filing?

The preparation of a filing for a regulated company will be different depending on the regulatory agency involved. For most regulated public services, filing involves describing the transactions of the involved parties and to a certain extent the ability of the regulated company to continue to provide the public service.

Financial entities and banks have more stringent and detailed filing requirements when requesting authorisation for a merger and may involve greater scrutiny by the ASFI.

The basic filing in the merger of Bolivian companies involves the preparation of a series of corporate documentation, the list of dissenting shareholders or creditors of each company as well as a special merger balance that describes the assets and liabilities of the companies to be merged. This information, to be presented before the Registry of Commerce, will be published but will not typically be questioned or objected to unless there is opposition to the merger.

The registration of a foreign investment before the Central Bank must include information regarding the origin, destination, investment amount and investment mechanism.

What is the statutory timetable for clearance? Can it be speeded up?

The filing and approval procedure will vary depending on the regulatory body for regulated companies and may take up to one month to be completed. This process may be speeded up substantially in the event that there is significant public interest in the project.

What are the typical steps and different phases of the investigation?

This will vary depending on the regulated company in question, but typically the regulatory agency will rely on the documentation and information provided by the regulated entity.

What is the substantive test for clearance?

With regard to regulated companies, the main concern is that the resulting entity will have the technical and financial capacity to provide the regulated services.

The change in the regulators, from the now-extinct superintendencies to the supervision and advisory authorities, has affected the regulatory oversight and approach followed by the new regulator. It would seem that the new regulator will be more strict in the review of any transaction including mergers and acquisitions.

In addition, in certain sectors a test will be conducted to identify whether the resulting entity will have such market dominance so as to infringe regulatory prohibitions regarding vertical integration, market share or the danger of anticompetitive or predatory practices.

Is there a special substantive test for joint ventures?

Joint ventures may be subject to scrutiny in certain regulated industries to determine whether they will result in anticompetitive or predatory practices.

What are the ‘theories of harm’ that the authorities will investigate?

At present, there is very little regulatory development and the ground has been largely untested before the Bolivian Supreme Court, and as a result there is no substantive case law to determine which theories of harm would be acceptable.

To what extent are non-competition issues relevant in the review process?

As described briefly above, certain regulated sectors have substantial requirements regarding industry policy. For example, electricity generating companies may not be related to hydrocarbon transporting companies that operate within Bolivia. Furthermore, such electricity companies may not be vertically integrated, and as a result there is a prohibition on generation companies participating in electricity transportation or distribution companies.

Although no cases have yet been reviewed by the newly formed regulators, it would seem from the direct involvement of the relevant ministries in the newly formed regulators that public interest issues may become more relevant and many proposed transactions will be considered in a political light by the new supervision and control authorities.

To what extent does the authority take into account economic efficiencies in the review process?

As described above, there are very few guidelines in this regard, and as a result it is unlikely that economic efficiency arguments will be taken into account.

What powers do the authorities have to prohibit or otherwise interfere with a transaction?

Within regulated sectors, the regulatory authority may prohibit a transaction if it deems that the transaction will violate the regulatory framework or jeopardise the normal provision of the service.

Is it possible to remedy competition issues, for example by giving divestment undertakings or behavioural remedies?

The divestments would have to occur before the closing of the transaction, otherwise regulatory authorisation will be withheld.

What are the basic conditions and timing issues applicable to a divestment or other remedy?

See question 25.

What is the track record of the authority in requiring remedies in foreign-to-foreign mergers?

There is virtually no experience in this regard.

In what circumstances will the clearance decision cover related arrangements?

There is virtually no experience in this regard.

Are customers and competitors involved in the review process and what rights do complainants have?

Customers and competitors are not involved in the review process. Complainants may, however, initiate administrative proceedings against the application of a decision of the regulatory agency approving a merger or joint venture that the complainant feels infringes the regulatory framework.

In the merger of Bolivian companies, any creditor may oppose the merger under the pretext that there are insufficient guarantees that the new company will be able to honour its obligations. A civil court judge will then intervene and decide whether sufficient guarantees are in place.

What publicity is given to the process and how do you protect commercial information, including business secrets, from disclosure?

All regulatory decisions must be published by the regulatory agency and notified to direct competitors and operators within the regulated system. Confidential information should not typically be disclosed to the regulatory agencies as such information will become public once it forms part of the review process.

Do the authorities cooperate with antitrust authorities in other jurisdictions?

There is no experience regarding the relationship with antitrust authorities in other jurisdictions or formal agreements between authorities.

What are the opportunities for appeal or judicial review?

The resolution of the regulatory agency may be resubmitted for consideration before the same authority; if the authority maintains its decision the resolution may be appealed before a higher-ranking administrative institution. If the appeal is unsuccessful the claimant may appeal before the Bolivian Supreme Court, which will determine in a final and binding resolution the validity of the administrative resolution.

What is the usual time frame for appeal or judicial review?

The appeal is typically resolved within three or four months of being raised. The request for judicial review before the Supreme Court may take between one and two years, unless there is substantial public interest in the result.

What is the recent enforcement record and what are the current enforcement concerns of the authorities?

Most sectors have been lenient with foreign-to-foreign mergers. Two exceptions to this rule are financial institutions, where there is a great deal of scrutiny of the ultimate parent, and hydrocarbons, where additional disclosure has been requested.

The focus of the regulatory agencies is currently changing from an interest in maintaining a competitive growing sector and avoiding market dominance to a focus on the consumers and a raised interest in expanding services in rural communities.

Are there current proposals to change the legislation?

The entire regulatory framework is currently under scrutiny and will most likely be substantially revised, if not modified completely. This comes as a result of the approval of the new Bolivian Constitution, which sets forth new obligations and contractual obligations for companies involved in many sectors of the Bolivian economy. In addition, there is proposed legislation to protect consumers that may affect the general control of mergers and acquisitions as a whole.

Updates and trends

The recently enacted Bolivian Investment Promotion Law is being put into effect as a result of recent regulations enacted by the Bolivian Central Bank. As a result of this, any company that has foreign investment is required to file a special form (RIOF) every trimester.

As a result of such registration the Bolivian Central Bank must issue a certificate of investment that makes reference to the origin, destination, investment amount and investment mechanism. The Central Bank will also register any distribution, capital repayment, and even payments to creditors or third-party goods and services providers.

Since the first filings occurred in the first trimester of this year no sanctions or administrative processes stemming from this filing and certification process have yet been initiated.

  • Oct 21, 2015
  • by Guevara & Gutiérrez


Guevara & Gutiérrez is proud to present its new office building in the city of Santa Cruz de la Sierra. The project has been in development since 2014, and since 2016 the office are in complete operation.


The objective of the construction of the new building that houses the office of Guevara and Gutierrez in Santa Cruz is supporting the continuous expansion and growth that the firm is having in this region of the country.


In the words of one of the founding partners, Ramiro Guevara: "We reaffirm our commitment to the thriving economy of Santa Cruz in Bolivia, which is one of the main engines of the country, and where the firm has been present for more than 20 years."


You can find us in the neighborhood of Equipetrol, Av. San Martín, Calle 8 Este, No. 19.


Welcome to the offices of Guevara & Gutierrez in Santa Cruz.

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