Do you need an EOR in Guatemala?

If you are interested in doing business in Guatemala, a number of possible options for entering the market are available. Depending on the size or timescale of your operation in the Central American nation, using an employer of record (EOR) in Guatemala could be your best option. Because an EOR in Guatemala will be able to hire staff on your behalf, meaning you can get your business moving in only the time it takes to find suitable team members, while avoiding the need for company formation or branch registration.

A map showing Guatemala and its position within Central America. Hiring through an EOR in Guatemala could be the best choice for your business.
Guatemala links Mexico and Central America

An EOR in Guatemala can also be known as a ‘professional employer organization (PEO),’ and may be referred to as a ‘PEO firm’ or a ‘PEO payroll company,’ while some of the services it can offer are known as ‘payroll outsourcing.’

Guatemala has the largest economy in Central America, with a gross domestic product based on purchasing power parity (GDP-PPP) of $153.3 billion (all figures in USD) in 2019, while its gross national income (GNI) of $8,870 for 2019 placed Guatemala as one of the most prosperous countries in the sub-region.

With major ports on its Pacific and Caribbean coasts, this nation of 17.5 million people is also a trade hub, with its international trade flows representing 30% of all trade for Central America. Some of the country’s main export commodities include agricultural products, metals, oil, and timber. The country has also reached free trade agreements (FTAs) with the United States, the European Union, and numerous Latin American markets, such as Colombia, Costa Rica, the Dominican Republic, and Panama.

In this context, and having registered consistent growth over recent decades, Guatemala is seen as an increasingly attractive destination for investment and registered foreign direct investment (FDI) inflows of almost $1 billion in 2019.

Read on to find out how an EOR in Guatemala could be your best option for capitalizing on this significant and growing market, or just go ahead and contact us now.

Services offered at Biz Latin Hub
Services offered at Biz Latin Hub.

What will an EOR in Guatemala do for you?

An EOR in Guatemala will hire local staff on your behalf via its locally registered entity, meaning that while those staff are official employees of the EOR in the eyes of local authorities, you will maintain total managerial control over their day-to-day duties and task management.

Guatemala City, where an EOR in Guatemala could hire staff for you.
Guatemala is a growing investment destination

Under such an arrangement, the EOR will oversee the payment of all salaries and statutory benefits related to those employees, including sick pay, severance, annual vacation, and national insurance contributions, for which you will reimburse the EOR. The EOR will also oversee all aspects of employee on-boarding and off-boarding, including drawing up contracts, and registering or de-registering those employees with local authorities.

An EOR in Guatemala will also be able to offer you expert advice on the likes of local labor and related tax law, both prior to hiring employees and as new legislative developments emerge. Meanwhile, when you choose an EOR in Guatemala with an established international presence, you can expect all contracts and paperwork to be drawn up in both English and the official local language, Spanish.

In addition to overseeing all legal and administrative aspects of your hiring, maintaining, and firing staff, an EOR in Guatemala will also have an established recruitment network, through which they will be able to assist you in finding the ideal personnel.

While an EOR in Guatemala will be able to provide you with expert and up-to-date advice on all aspects of local labor law, they will also remove the need for you to be concerned about it, because they will guarantee compliance.

Some of the key requirements set out by Guatemalan labor laws that an EOR will take care of for you include:

  • A maximum working week of 44 hours
  • Honoring of 11 national holidays celebrated in Guatemala
  • Honoring of statutory bonuses due in July and December, equal to a month’s earnings
  • Honoring the legal entitlement to five days of sick leave, 12 weeks of maternity leave, and two days of paternity leave
  • Contribution of 12.67% of each salary to national social security
  • Written contracts given to the employee registered with the relevant authority
  • Timely payment of outstanding salary and applicable severance pay after contract termination

Key benefits of using an EOR in Guatemala

A person filling out paperwork, representing someone signing a contract prepared by by an EOR in Guatemala.
An EOR will prepare all legal documentation

The key benefits you can expect from hiring staff via an EOR in Guatemala include:

  • Protection from legal disputes: An EOR takes legal responsibility for fulfilling employee requirements, therefore you will be free from risk in that regard.
  • Quick access to new markets: Using an EOR will avoid the need for full company incorporation or registering a branch.
  • Cost reduction: The time and money required to form and maintain a legal entity within Guatemala will be greatly reduced.
  • Company development: Leaving an EOR to deal with your staff will free you up to focus on other aspects of the business.
  • Market familiarity: Hiring through an EOR in Guatemala will allow you to get a better impression of the market, local business culture, and labor law, meaning you will be well-informed ahead of any potential deeper investment.

Biz Latin Hub can be your EOR in Guatemala

If you are interested in hiring staff quickly in Guatemala, engage with our multilingual team of legal, accounting, and recruitment specialists, who are equipped to support your commercial operations in the country. With our full suite of market entry and back-office services, we can be your single point of contact to successfully establish a branch in Guatemala.

Reach out now for further advice or a free quote. 

Learn more about our team and expert authors.

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