Mining 2025

BOLIVIA Law and Practice Contributed by: Ramiro Guevara, Jorge Inchauste and Rosario Echeverría, Dentons Guevara & Gutiérrez S.C.

4.3 Transfer Tax and Capital Gains on the Sale of Mining Projects Mining rights cannot be directly transferred or sold; the transfer of a mining project must occur through the transfer of shares (either locally or abroad). The transfer of shares in a Bolivian company is exempt from Bolivian VAT or trans - fer taxes. The sale of the shares in a Bolivian mining com - pany may generate a capital gain that would be taxable as part of the corporate yearly income tax of the seller, to the extent the seller is sub - ject to such a tax. Therefore, careful structuring of the transfer of a mining project must include consideration of potential tax consequences. 5. Mining Investment and Finance 5.1 Attracting Investment for Mining The main features attracting investment for min - ing projects in Bolivia include: • extensive and proven mineral reserves in dif - ferent areas of the country; • a long mining tradition in several regions of the country; • foreign companies may indirectly hold 100% interest in Bolivian mining companies; and • a stable and simple tax system, with few and simple taxes, that has been largely unchanged over the last 40 years. 5.2 Foreign Investment Restrictions and Approvals in the Exploration and Mining Sectors Bolivia’s foreign investment regime is primarily contained in the Bolivian Constitution of 2009, the Investment Law of 4 April 2014 and the Bolivian Mining Code itself. In general, foreign persons and companies are allowed to own and

operate mining operations with very few limita - tions. Pursuant to the Bolivian Constitution, foreign persons and companies are not allowed to hold any property (including mining rights) within 50 km of Bolivia’s international borders, directly or indirectly. In addition, pursuant to Article 151 of the Mining and Metallurgy Law, Mining Co- operatives (a special type of association sup - posedly owned and managed by the workers themselves) are expressly prohibited from enter - ing into joint venture contracts with private com - panies, whether domestic or foreign. 5.3 International Treaties Related to Exploration and Mining Over the past decade, Bolivia denounced and withdrew from all its Bilateral Investment Trea - ties and from the ICSID international investment dispute resolution mechanism. However, it has remained a full member of the Andean Commu - nity (with Colombia, Ecuador and Perú) and has become an associate member of the Mercosur multilateral trade and co-operation agreements (with Brazil, Argentina, Paraguay and Uruguay). Although such multilateral agreements do not refer investment disputes to international arbi - tration, they do set forth some protections and principles that protect and grant foreign inves - tors at least the same rights as local investors in mining projects. 5.4 Sources of Finance for Exploration, Development and Mining According to studies conducted by the Central Bank of Bolivia between 1990 and 2017, private investment is the main source of financing for metal production. This sector reached 77% of total lead production, 70% of zinc production and 68% in silver production.

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