Tips for Doing Business in Guatemala?

Shira Smolko

At initially look, Guatemala might not be the initially location in Latin The usa to shift into and established up a company. But with its continually escalating overall economy, tax-free of charge financial zones and shut proximity to the much larger marketplaces of Mexico and the United States, performing small business in Guatemala could possibly be the right choice for sure companies and folks.

What are the pros of executing business enterprise in Guatemala?

There are a lot of positives to accomplishing business in Guatemala (as properly as worries, much more on that later) but the upsides could shock you:

  • Guatemala is welcoming of overseas investment decision
  • It features consistently strong financial progress
  • Possesses a qualified labor pressure
  • Is residence to present day telecommunications infrastructure
  • Has free of charge trade agreements with the US, Central The united states

SEE ALSO: How to Include a Enterprise in Guatemala

1. Open to foreign financial investment

There are extremely couple boundaries for foreigners who are contemplating of doing business in Guatemala. It’s an open, free-marketplace financial system, and nearly all sectors of its financial system are open up to overseas expense. Foreigners can personal home this sort of as cars and serious estate cost-free of any require for nearby co-signers, companions or stakeholders, and there is no limit to how a great deal of a corporation a foreigner owns. There are also no limitations about the greatest proportion of foreign shareholders in a business enterprise.

2. A continually growing financial system

The Central American country’s economic climate dwarfs its neighbors in terms of dimensions. Guatemala signifies 35 p.c of the region’s GDP, and has noticed foreign direct investment decision mature by 376 % considering the fact that 2013. The principal sectors of the Guatemalan economic system are production, expert services, and retail commerce, which blended make up 45 % of its GDP. Guatemala’s currency, the Quetzal, has been steady against the US greenback for the last 10 years – this on your own could be reason adequate to take into consideration executing company in Guatemala.

Most businesses carrying out organization in Guatemala are in one particular of these services sectors.

3. A competent labor drive

One may possibly consider that a reasonably inadequate, unequal place like Guatemala has high unemployment and a very low-experienced labor force. And though that factor is correct, there is a developing segment of the get the job done pressure that is properly educated and very proficient – particularly among the young. Roughly 81 p.c of younger Guatemalan staff hold diplomas or levels from schools or universities. Guatemala’s get the job done power is produced up of about 6.7 million persons, 70 % of whom are beneath the age of 30, so for folks or corporations imagining of executing organization in Guatemala, there is no lack of community talent to decide on from. 

4. Fashionable telecommunications infrastructure

Providers that are carrying out small business in Guatemala have accessibility to a robust telecommunications infrastructure of a hugely privatized, free-current market telecoms sector. The country is really connected with 99 per cent redundancy of fiber optic cable connections. Quite a great deal all people has a smart cell phone in Guatemala – there are extra than 19 million in the nation, which is equal to 112 p.c of the population.

5. Totally free trade agreements with the US, Latin The us

Those people executing small business in Guatemala will have been ready to get benefit of the cost-free trade agreements that the government has negotiated. Amongst the international locations with which Guatemala has cost-free trade agreements are the entirety of Central The us, the United States, Mexico, the Dominican Republic, Colombia, Panama, Chile, and the European Union. 

Like anyplace else in Latin The united states, Guatemala has a host of social and political difficulties that can complicate any conclusion to do enterprise or domicile there. 

GDP across central america an infographic by Biz Latin Hub
If you are thinking of doing business in Guatemala, study some statistics about the region.

What are some of the challenges in undertaking business enterprise in Guatemala?

  • Paperwork
  • Corruption
  • Political possibility
  • Interior stability danger
  • High reliance on exports, remittances

Here’s a breakdown of the challenges that you ought to contemplate ahead of performing business enterprise in Guatemala:

1. Forms is alive and very well

Latin Individuals feel to have a really like affair with paperwork, and Guatemala is no distinct. When placing up a business there, be well prepared for purple tape – the place is rife with it. The rather straight-ahead act of setting up shop in Guatemala can choose up to 40 times to total. Notarized files are expected at numerous stages of the system and the organization will have to be registered with quite a few authorities and business enterprise entities. Lawful illustration is expected for any enterprise, so any person doing business in Guatemala will have to hire a attorney. 

2. Corruption is widespread

The political predicament in Guatemala is marked by continuing allegations of corruption and common calls for reform. As a consequence, in Guatemala quite a few commercial successes are tough fought. A growing variety of US stakeholders in the nation have complained of rampant corruption in Guatemala and say that transparency is non-existent. Even so, corruption tends to be business specific, so individuals performing small business in Guatemala may possibly or may perhaps not encounter this. 

3. Guatemala has no lack of political threat

An ongoing scandal involving alleged persecution/abuse of ability of Guatemalan judges by the government department has led to an increase of political tensions in the place. Not long ago the Global Bar Association’s Human Rights Institute condemned what it referred to as an assault on the independence of the authorized career and the ongoing deterioration of the rule of regulation. Incidents of Guatemalan judges and prosecutors – significantly people worried with cracking down on corruption – are currently being harassed, intimidated, arrested, and pressured to resign, according to media experiences. For now, this is mainly a political combat, but for these who are considering of accomplishing business enterprise in Guatemala, it’s some thing that just cannot be dismissed.

4. Interior safety hazard

Whilst Guatemala is fairly steady economically, advancement is distributed unequally, and costs of poverty and starvation continue being significant. Those people accomplishing small business in Guatemala are most likely well informed that the nation has 1 of the best violent criminal offense fees in Latin The usa. Crime charges are significant in Guatemala, especially around border crossings. Drug-linked armed attacks occur in regions close to its borders. The southwestern division of San Marcos at the Guatemala-Mexico border and the zone at the border with Belize are especially influenced.

5. High dependency on agriculture, remittances

Agriculture is the major industry of Guatemala’s overall economy. The work is labor intense but mainly unskilled, and this kind of get the job done employs one particular-3rd of the Guatemala’s inhabitants. A huge share of persons of all ages rely on cash designed by family members working abroad – much more than 15 per cent of the country’s GDP will come from remittances. These kinds of statistics counsel that the country is nonetheless fairly below-produced, and they are things that individuals thinking of undertaking business enterprise in Guatemala could possibly want to mull about in advance of generating the go there. 

Biz Latin Hub Can Help You with performing small business in Guatemala

At Biz Latin Hub, we deliver built-in industry entry and back again-place of work products and services in the course of Latin The us and the Caribbean, with workplaces in Bogota and Cartagena, as very well as around a dozen other important towns in the region. We also have trusted associates in lots of other marketplaces.

Our unrivalled get to implies we are preferably put to guidance multi-jurisdiction industry entries and cross border operations.

As effectively as understanding of accomplishing company in Guatemala, our portfolio of companies consists of hiring & PEO accounting & taxation, firm formation, lender account opening, and company lawful products and services.

Contact us now to find out far more about how we can assist you finding best expertise or in any other case carrying out business in Latin America and the Caribbean.

If this posting on the advantages and difficulties of undertaking business enterprise in Guatemala was of curiosity to you, examine out the rest of our coverage of the region. Or go through about our staff and qualified authors.

A BLH infogrpahic showing key services offered by the company
Carrying out Business: Crucial products and services presented by Biz Latin Hub

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