To invest in Guatemala, it is important to familiarize yourself with the legal and tax context involved in the opening of any business in this country. The steps to succeed in doing this are easy, as the legal and economic conditions surrounding the process are defined within a clear, legal and dynamic framework characterized by tax incentives for new investors.
Register the company
Know the taxes to be paid
Know the tax incentives can be obtained according to the area of business
Mandatory legal implications with employees
Tourist and foreign visitors are allowed to live in Guatemala for no more than 90 days without carrying out any additional procedures, according to the Migration Law. Tourist visas can be extended for an additional 90 days, a total period of 6 months. Following this time period, paperwork bust be processed.
If a foreigner wishes to stay in the country longer, wants to hold a position of public or private work in Guatemala, or looks to be established commercially, he or she must obtain a temporary residency permit. This allows the foreigner visitor to stay in the country for up to 2 years and may be extended for up to two equal periods (a total of 6 years). This way, the person can work officially or invest in the country.
A visa issued for business purposes is valid for 180 days and can be renewed for the same amount of time. The company must authorize the applicant that will be representing.
If a foreigner wishes to reside in the country permanently, he or she can do so after establishing a home address in the country. For this case, foreigners may apply for permanent residency in the following ways:
Foreigners who have permanent income generated outside the country or are beneficiaries of a pension or retirement of governments, international organizations, or private companies may reside in Guatemala indefinitely without engaging in any paid activity.
Foreigners that have been married for at least a year to Guatemalans.
Foreigners who receive income from their operations in Guatemala.
Simple Visa and Tourist Visa $ 25.00 USD per one entry
Multiple Visa $ 50.00 USD per multiple entries (valid 90 days)
Business Visa $ 50.00 USD per multiple entries (valid 180 days)
To operate in Guatemala, the investor should register the business with the MerchantRegistry. The process takes 12 to 19 days.
The easiest and fastest way to do this is through the web portal: MiNegocio.gt, designed to make all of your arrangements online and communicate directly with the institutions involved in the process of opening a business. These institutions are: the Tax Administration, the Merchant Registry, the Guatemalan Institute of Social Security, the Ministry of Labor, and the Journal of Central America.
Link: minegocio.gtHow to open a business in Guatemala?
Is a informatics platform of the Government of Guatemala specifically to facilitate business startup procedures, this has been developed with the support of the United Nations Conference on Trade and Development (UNCTAD) and the Government of Luxembourg. They are also part of this effort several institutions such as the National Competitiveness Program, the Commercial Register, the Tax Administration, Guatemalan Social Security, Ministry of Labor and the Ministry of Economy; through which companies can register online at the Companies Registry in the SAT, the IGSS and the Ministry of Labor.
Through this platform a notary or any individual person with the required documents can speed up the registration process of corporations and LLCs avoiding visits to the Companies Registry and the Journal of Central America, paying in advance the processes that required.
Is an online database developed by the Ministry of Economy through the National Competitiveness Program; created with the objective of providing complete transparency in administrative procedures in Guatemala and provide users a productive experience in each of their visits. Here you can consult on detailed procedures from their point of view and updated regularly.
Addresses issues such as: companies, taxes, dealer and individual enterprise, business and corporate operations, dealer incentives, nonprofits, foreign trade, property, criminal and police records, permits, licenses and registrations.
The company must apply to the Ministry of Economy’s Department of Industrial Policy with a user operation authorization form through the zone operator (zone or part of the city where the business will be opened).
It must meet the following documents to apply:
Tax benefits that every company located in the Free Trade Zone can obtain:
To enjoy the benefits of this incentive, the company must submit an application to the Ministry of Economy’s Industrial Policy Agency accompanied by an economic technical report, signed by the legal representative or the business owner. For more detailed information about the requirements visit: guatemala.eregulations.org
The benefits that can be obtained under this incentive are:
Taxes that the investor and his or her business must pay:
This applies to income and capital gains and can be derived in two ways:
1.Under general regimen, the tax is 5% of the gross income minus exempt income. It is paid monthly.
2. Under optional regimen, the tax is equal to 31% of taxable income, which is determined deductible and the deduction cannot exceed 97% of taxable income (except for taxpayers who have losses for two consecutive annual fiscal periods or a lower gross margin than 4% of taxable income).
The company’s employees pay this tax, and it is applied in the following way:
Salaried workers have exempt income up to 48,000 quetzales + Q12,000 paid in VAT + Social Security (IGSS) fee. On the remaining income, income tax applies as follows: for Q0.01 - Q300,000, the rate is 5%. If income is greater than Q300,000, 5% must be paid on the first Q300,000 and 7% on the remaining amount. Value Added Tax (VAT) is generated for the sale of personal property or real property rights constituted from them, the provision of services in national territory, imports, and the leasing of real estate. The tax rate is 12%.
This tax is payable if the investor acquires a property in the country (land, structures, construction, facilities attached to the property and its improvements).
It is paid annually and established according to the registered value. Properties with values less than Q2, 000 not pay property tax. With a value up to Q20, 000, Q2 for every Q1000 must paid. For values up to Q70, 000, Q6 for every Q1000 must be paid. Properties over Q70, 000, Q9 for every Q1000 must be paid This tax is paid quarterly.
To have exact information about the relationship a company should have with employees, the investor can go to the Ministry of Labor and Social Welfare. All of the labor laws in Guatemala are registered in the Labor Code.
Companies can hire their staff in two ways:
1. Indefinitely, when the employees contract does not have a specific date of termination
2. Fixed term, when the termination date has been specified or anticipates a necessary end to the work relationship based on some fact or circumstance.Working Hours according to the Labor Code