Starting a business in Guatemala can have many advantages for foreign investors, especially given that the country provides special economic zones, where beneficial tax policies apply (such as tax exemptions). The process of company formation in Guatemala follows the same steps regardless if investors opt for a special economic zone or a location anywhere else in the country.
Our consultants, specialized in the process of company incorporation in Guatemala, can offer tailored support during the registration procedure and can advise on any issue that can be of interest for foreign businessmen who invest for the first time in this country (laws, taxes, benefits, accounting, employment, visas, etc.).
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What are the main registration procedures?
When starting a business in Guatemala, businessmen have to abide by a set of procedures that are imposed by the local commercial law. First of all, investors must choose a company type that is most suitable to their investment strategies. In this sense, they can choose the limited liability company or the public limited company, as these are very popular structures for doing business here.
Both entities have separate legal personality than the one of the founders and the shareholders are liable for the company’s debts only to the amount of their capital participation. Once the decision has been made, the investors need to propose a company name that is unique at a national level (the procedure is completed with the Commercial Registry).
Further on, the company’s statutory documents need to be drawn. For these 2 company types (LLC and Joint Stock), the statutory papers are represented by the articles of association, through which the business form gains legal recognition. The document must include details such as:
- the details of the founders;
- the company’s trade name and registered address;
- the minimum share capital;
- the objects of activity, etc.
Once this document is signed, it can be submitted to the Commercial Registry, after which the legal entity can be registered for tax purposes with the Superintendence of Tax Administration. The institution will assign the legal entity with a Tax Identification Number (TIN), and after this, the next step can be initiated – the registration for employment taxes.
Depending on the company’s activity and hiring strategy, investors will need to contact the Guatemalan Social Security Institute and the Ministry of Labour and Social Welfare and submit the paperwork required by each authority. Our specialists can present the list of documents that must be prepared in this case.
Why invest in Guatemala?
It is recommended to set up a company in Guatemala given that the country has a stable economy and reliable legal framework. For instance, the local authorities constantly improve the manner in which the process of company formation in Guatemala is conducted (improving bureaucracy, simplifying the process of obtaining business permits, etc.).
The country is also committed to promoting foreign direct investments. Some of the strong assets of the local economy are:
- young and large workforce (average age of 26 years old, with 11,3 million persons engaged in the active workforce);
- special economic zones where those who open a company in Guatemala can benefit from a 10 years exemption on the payment of the income tax;
- access to 15 trade agreements;
- low rental costs (70% lower than in the United States of America);
- in 2024, the level of foreign direct investments in Guatemala stood at $1,694 million.
Our consultants can provide more information on the commercial legislation and other types of companies regulated by it. Foreign businessmen may also open a company in Guatemala through a branch office. We can offer full legal assistance for its incorporation, as well as for the registration of any other type of entity designed for commercial purposes.