Guatemala has experienced significant growth over recent years, turning it into one of the most competitive markets in Central America and a popular destination for investment in the sub-region. Find out about the advantages of doing business in Guatemala.
Annual economic growth has only dropped below 2.5 percent on one occasion since 2000, according to the Bank of Guatemala (pdf), while the country’s international commerce represents more than 30 percent of Central America’s total imports and exports. The government has made great efforts to stimulate Guatemala’s foreign direct investment (FDI) and trade with key regional players, and has reached free trade agreements with numerous other Latin American countries, including Colombia, Costa Rica, the Dominican Republic, Honduras, Panama, and El Salvador.
Under such conditions, more and more investors are becoming aware of the advantages of doing business in Guatemala.
Doing business in Guatemala: geographic location
Guatemala is located in the northern part of Central America and borders Mexico and Belize to its north. As such it forms something of a gateway between North America and the rest of Central and South America. With coasts on the Pacific Ocean and Caribbean Sea, Guatemala also has five important maritime ports, as well as two international airports, providing attractive logistics to commerce.
According to data from the Bank of Guatemala, in 2018 the Central American country and Mexico had a commercial exchange that amounted to $238 billion (USD). Meanwhile, according to data from Mexico’s Ministry of Foreign Affairs, since the 1990s Mexican companies have made an accumulated investment in Guatemala of more than $577 billion (USD). This positions Mexico as a crucial trade partner to Guatemala.
Doing business in Guatemala: human resources
Guatemala has the largest population in Central America with more than 16.3 million inhabitants according to data from the Central American Integration System. The country also has a young population, with 70 percent of Guatemala’s population under 40 years of age.
The country has a solid academic base, both in the public and private sectors, with the National Institute of Statistics of Guatemala (INE), reporting that there were 22,633 graduates in 2018, highlighting the availability of young and skilled labor available if you are doing business in Guatemala.
An additional advantage of doing business in Guatemala is the competitive cost of the labor force. In 2020, the monthly minimum wage stood at:
- Agricultural Activities: $2,992 (GTQ) = $384 (USD)
- Non-Agricultural Activities: $3.075 (GTQ) = 395 (USD)
Doing business in Guatemala: economic diversity
Guatemala’s economic diversity is highly attractive to individuals and firms interested in doing business in Guatemala. Key sectors for foreign investment include the likes of agriculture, aquaculture and fisheries, manufacturing, services, call centers , clothing and textiles.
Guatemala’s exports in 2019 closed at $11 billion (USD), which meant a variation of 1.95 percent between 2018 and 2019. The most exported products during 2019 were:
- Bananas: $844 million (USD)
- Sugar: $695 million (USD)
- Coffee: $662 million (USD)
- Cardamom: $648 million (USD)
- Oil: $103 million (USD)
Take advantage of the opportunities for doing business in Guatemala
Engage with local experts to take advantage of business opportunities in Guatemala. At Biz Latin Hub, our team of experienced professionals provide market-leading assistance in a host of sectors, such as company formation and a full suite of back-office services. Contact us now for more information on doing business in Guatemala.
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