( DOING BUSINESS IN GUATEMALA )
LEGAL FRAMEWORK FOR FOREIGN INVESTMENT
All sectors of Guatemala's economy are open to
both local and foreign investment and ownership. Other than applicable
taxes, no restrictions apply to remittance of profits and repatriation
of capital. Guatemala's legal framework is that of an pen market that
maintains a healthy respect for both entrepreneurial activity and
foreign investment. The Guatemalan legal framework actively promotes
investment and includes provisions that recognize, reaffirm and
guarantee private property rights for both national and foreign
investors. Additionally, Guatemalan law grants favored nation status to
foreign investment through the Foreign Investment Law (Decree 9-98).
DIRECT FOREIGN INVESTMENT
Direct foreign investment in Guatemala is
accomplished by registering a local corporation or establishing a branch
of a foreign corporation.
REGISTERING A LOCAL CORPORATION
Registering a local corporation is a simple and
quick procedure, taking close to 48 hours for provisional registration
and a maximum of four months to achieve final registration. Corporations
may initiate operations under provisional registration.
REGISTERING A LOCAL CORPORATION INCLUDES THE
A minimum of two persons, individual or corporate,
is necessary to form a corporation. There are no restrictions on the
origin of the parties. The charter of the corporation must be executed
in a public deed.
A certified copy of the public deed must be filed
at the Commercial Registry within thirty days of the corporation's
After verifying compliance with legal
requirements, the Commercial Registry provisionally registers the
corporation. One notice of the registration request must be published in
the Official Gazette and one other local newspaper. If no opposition is
tendered, the Registry proceeds with final registration. Legal
organization of Guatemalan companies.
GUATEMALA'S COMMERCIAL CODE PROVIDES FOR THE
ESTABLISHMENT OF THE FOLLOWING TYPES OF COMPANIES:
General Partnership (Sociedad Colectiva): all
partners are equally responsible for all of the debts of the partnership
to an unlimited extent. This form of organization is equivalent to the
simple partnership in the US. Limited Liability (Sociedad de
Responsabilidad Limitada): a maximum of twenty partners in which
liability is limited to the amount of equity paid by each partner.
Limited partnership (Sociedad en Comandita Simple): formed by two types
of partners: one or more general partners who direct business and' are
jointly and severally liable for debts, and one or more limited partners
whose liability is limited to the amount of equity paid in. Limited
partners have no management voice in the firm's operation. Special
limited partnership (Sociedad en Comandita por Acciones): same as
limited partnership except shares represent equity. Stock corporation (Sociedad
Anonima): this type of organization compares with the incorporated
business in the U.S. Equity is divided and represented in equal value
shares. Stockholder responsibility is limited to the amount of shares
purchased. The corporation must have a board of directors, or a sole
administrator, and must record annual stockholders meetings in a
minute's book duly authorized by the Ministry of Finances and the
Commercial Registry. No limitations are placed on the number or
percentage of foreigners serving on the board of directors of a
Guatemalan corporation. Corporations are required a resident manager who
can be a resident alien with a work permit or a Guatemalan citizen.
Shares may be issued to the bearer or made out to the stockholders'
ESTABLISHING A BRANCH OF A FOREIGN CORPORATION
A corporation legally established in a country
other than Guatemala may obtain registration and approval to operate in
Guatemala by meeting the following requirements before the Commercial
Demonstrate it has been duly organized in accordance with the laws of
the country of origin. Present a certified copy of its articles of
incorporation, by-laws and amend men ducted locally establishing a bond
for US$50,000.00 extended by a Guatemalan bonding company issued to the
Ministry of Economics.
2- Agree to submit to the jurisdiction of the
Guatemalan courts and law.
3- Submit a declaration of commitment to fulfill
legal obligations prior to withdrawing from Guatemala.
4- Present certified copies of the latest
financial statements (balance sheets, profit and loss statement).
5- All documents must be notarized and translated
into Spanish by an accredited translator and authenticated at a
Guatemalan Consular office and then legalized by the Ministry of Foreign
Affairs. Subsequently they must be entered into the records of a
registered Guatemalan notary prior to submission to the Commercial
6- The Commercial Registry must verify compliance
with all legal requirements and establish that charter provisions are
not contrary to Guatemalan law. Subsequently, one notice of the
registration request is published in the Official Gazette and one other
newspaper. If no opposition is tendered, the Commercial Registry
proceeds with registration, after verifying that the operating capital
has been duly deposited in an authorized bank.
7- Operations must be initiated within a year of
the date of registration. The process of filing for registration and
approval is usually completed in approximately 4 months.
8- Registration with the Internal Revenue Service
(Superintendence of Tributary Administration (SAT)) Registration at the
Unified Revenue Registry of the SAT is required to obtain the necessary
tax identification number (NIT).
The following are required for registration:
A- Affidavit of provisional registration from the Commercial Registry.
B- Copies of the public deed and legal representatives appointment filed
before the Commercial Registry.
C- Form No. SAT-0011 provided by the Internal Revenue Service, supplying
the corporationís general information.
Any changes of the corporation's by-laws, capital,
legal representative or purpose must be reported to the Commercial
Registry. Liquidation or bankruptcy in the country of origin must also
be reported to the Internal Revenue Service.
Foreign corporations may also request approval for
temporary operations for a period of less than two years at the
Commercial Registry. Corporations are required to post a US$50,000.00
bond and provide proof of being duly organized in their country of
origin and must appoint a representative in Guatemala.
OPERATIONS REQUIRING NO REGISTRATION OR
Foreign corporations do not require registration
and/or approval to engage in the following:
1- Sell to or purchase from independent commercial
agents legally established in Guatemala.
2- Seek orders through agents legally established
in Guatemala, provided such orders are subject
to confirmation or acceptance abroad.
3- Open or maintain accounts in authorized banks.
4- Acquire real estate or other property, with the
exception of land near international borders
and waterfront properties, as long as this is not the company's
5- Grant loans to businesses established in
6- Draw, endorse or protest credit instruments in
7- Participate in any legal action or proceeding
before a Guatemalan court or public office. It is
sufficient to extend a power of attorney to an accredited Guatemalan
According to Guatemalan law taxable income is all
income generated by capital, property, services, and rights invested or
used in the country as well as income derived from any type of
activities taking place in Guatemala. All individuals, corporations and
businesses, domiciled or not in Guatemala, are subject to income tax.
Income tax filing must be presented 90 days after the end of the
accounting year. For companies the fiscal year ends in December or June.
Individuals must file by June 30 of each year.