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Advantages of doing business in Guatemala

Advantages of doing business in Guatemala

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 Location encourages doing businesses in Guatemala 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,...

When Do You Need a Legal Representative in Guatemala?

When Do You Need a Legal Representative in Guatemala?

When incorporating a company in Guatemala, it is mandatory to appoint someone as a legal representative. That person will be a principal local point of contact, representing the company to Guatemalan authorities and taking responsibility for overseeing every aspect of the legal and regulatory processes related to launching the business. Guatemala is one of the largest economies in Central America, with a promising outlook for foreign investment, which offers a host of investment and business growth opportunities. The first step to accessing those opportunities is appointing a reliable legal representative. What type of legal representative in Guatemala do you need? There are three types of legal representatives for companies operating in Guatemala: A legal representative is in charge of representing the company before the Guatemalan authorities. Administrator: The administrator is elected through the General Assembly of Members for a 3-year term, which can be renewed. Manager: Managers can be appointed as the legal representative of a company as long as the legal assignment is granted by the General Assembly of Members. Additionally, the administrator can also appoint the manager as the legal representative of the organization, but only for certain activities.Legal representation through a power of attorney: A power of attorney is granted to a person to act as the legal representative of an organization. The permitted actions and period for which the power is granted must be clearly stipulated. Note that the power of attorney must be issued by the legal representative or...

What Should Companies Know About Guatemala’s Labor Code?

What Should Companies Know About Guatemala’s Labor Code?

Understanding Guatemala's Labor Code is essential when looking to expand in the country and hire local staff. The Central American country has experienced progressive economic stability in the last 4 years, with economic growth of 3.1% in 2019. Currently, Guatemala is considered one of the largest economies in Central America with a promising outlook for foreign investment. Understand Guatemala’s Labor Code to hire staff in the country.   Understanding Guatemala's Labor Code is essential when looking to expand in the country. Guatemala's labor code When hiring an employee in Guatemala, companies must issue an employment contract. Even if the employee doesn't sign a formal contract, the existence of it is presumed and therefore the worker is granted all legal protections and rights. Thus, employers doing business in the country should issue a contract to avoid misunderstandings regarding job tasks and conditions.   Furthermore, employers hiring staff in Guatemala must always have an Internal Work Policy. Note that this document must provide a detailed description of the employees’ responsibilities. How to set salaries in Guatemala Guatemala’s labor code’s provisions are fairly standard and similar to other countries in Central America. As stated in Guatemala's Labor Code, employees must work a maximum workweek of 45 hours, allowing for 10 hours of overtime. Note that overtime pay is 1.5 times the normal hourly wage. In addition to a limited workday, there is also the obligation to give employees one day off a week. Furthermore, there is an obligation to give employees one...

How to Obtain a Business Visa in Guatemala

How to Obtain a Business Visa in Guatemala

Obtain a business visa in Guatemala to leverage business opportunities in a country that emerges as an attractive destination for foreign business. Guatemala has experienced exponential growth in foreign investment in recent decades, as it has shown constant economic growth, good government reputation, and has reached multiple regional free trade agreements with countries such as Colombia, Costa Rica, Panama, Dominican Republic, Honduras and El Salvador. Learn how to obtain a business visa in Guatemala to take advantage of business opportunities in Central America. A business visa in Guatemala or residency? Obtain a business visa in Guatemala to leverage business opportunities in the country. A business visa in Guatemala is legal authorization for foreign nationals to enter and remain in the country when the main purpose of their visit is to represent a for-profit company located overseas or to provide a specific service on behalf of a foreign company. According to the Guatemalan Migration Institute, his visa is granted for a period of 180 days and can be extended for an additional period of 180 days. On the other hand, a Guatemalan residence permit allows a foreign person to stay regularly in the country for an extendable period. However, if you wish to extend your stay in Guatemala as a resident for a period of more than five years, you must apply to permanent residency. In accordance with article 78 of the Migration Code, foreigners looking to remain for more than five years in the country must apply for a permanent residence, except for those who stay in Guatemala for...

Embrace Guatemala’s Business Etiquette when Expanding in Central America

Embrace Guatemala’s Business Etiquette when Expanding in Central America

Understanding Guatemala's business etiquette could increase the possibilities of success when doing business in the country. Business etiquette creates an overall picture of a company, which radiates onto the market and thus has a significant impact on entrepreneurial success. Learn about the most important aspects foreign executives should consider in regard to Guatemala’s business etiquette.  Guatemala's business etiquette by Hofstede Business etiquette includes the norms and values that shape human behaviour in corporate environments. It involves internal and external communication, social engagement, employee motivation, and, last but not least, economic goals.The Dutch social psychologist and anthropologist Geert Hofstede is one of the best-known representatives in the field of business etiquette. He created a model of four cultural dimensions - power distance, collectivism vs individualism, masculinity vs femininity, and avoidance of uncertainty - commonly used in the analysis of business culture. To understand Guatemala’s business etiquette, we will analyze each Hofstede's cultural dimension and the scores given to Guatemala based on this .  Guatemala’s business etiquette has the second-highest power distance worldwide. Power distribution in Guatemala   Power distance defines how the less powerful members of organizations expect and accept unequally distributed power. Scoring 95, Guatemala’s business etiquette has the second-highest power distance worldwide. This means that decision-making processes run from “top to bottom” and...

6 Steps to Liquidate a Company in Guatemala

6 Steps to Liquidate a Company in Guatemala

As business projects may don't always go as planned, foreign executives might want to liquidate a company in Guatemala. In some cases, this decision can be due to reasons related to the market conditions, product demand or political environment. However, regardless of the reason why you decide to exit the market, you must follow a formal liquidation process. Steps to liquidate a company in Guatemala 1. Inscription of dissolution agreement The first step to liquidate a company in Guatemala is to sign a dissolution agreement. In this step, the General Assembly of Shareholders meets to hold an Extraordinary General Meeting of Shareholders, where they make the decision to dissolve and liquidate the company. To exit the market in Guatemala, you must follow a formal liquidation process. At this point, a liquidator and a special executor will be appointed. The latter will be in charge of carrying out the dissolution process and undertaking other essential tasks, such as: Formalize the agreements made by the General Assembly of Shareholders.Grant the deed of dissolution of the company and register it before the Mercantile Registry of Guatemala.Carry out any other activity agreed by the Shareholders Assembly. Both the dissolution agreement and the appointment of the special executor must be registered at the Mercantile Registry of Guatemala. 2. Company dissolution deed The next step to liquidate a company in Guatemala is to grant the dissolution deed. To do this, you must go to a notary public in Guatemala, who will be responsible for preparing the company's public deed of...

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