When Do You Need a Legal Representative in Guatemala?

When incorporating a company in Guatemala, you need to appoint a legal representative in Guatemala as well, who will act as the main local point of contact. They will represent the company to local authorities and be responsible for managing all aspects of the legal and regulatory procedures involved in launching the business.

In recent decades, Guatemala has seen consistent growth in its gross domestic product (GDP), which reached $85.99 billion in 2021 (all figures in USD). Despite the pandemic’s challenges, the country’s economy recorded an impressive 8% growth rate from 2020-2021. This growth has resulted in increased prosperity for the population, with GDP per capita reaching $5,025 in the same year. Guatemala’s positive economic performance is fueled by significant levels of Foreign Direct Investment, with over $3.5 billion invested in the country in 2021 alone. But, having a legal representative in Guatemala can help you prepare for economic fluctuations and make sure the company is protected.

Located in the Northern Triangle with El Salvador and Honduras, Guatemala has an important geographic position between these countries and Mexico. The country’s major ports on both its Pacific and Caribbean coasts have helped make it a key logistics center for Central America, accounting for 30% of all goods transported through the sub-region. The strategic location of the country makes it a popular destination for investors. Make sure to hire a legal representative in Guatemala if you decide to invest in the nation.

Guatemala’s top exports include oil and gas, bananas, coffee, sugar, and non-precious metals. The largest importers of Guatemalan goods are the United States and China, as well as Mexico, El Salvador, and Panama. A legal representative will have a holistic understanding of the export industry and how to assist your company within that sector.

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 in Guatemala.

What type of legal representative in Guatemala do you need?

There are three types of legal representatives in Guatemala that your company can choose from:

• Administrator: The administrator is elected through the General Assembly of Members for a 3-year term, which can be renewed.
• Manager: The General Assembly of Members can grant a legal assignment allowing managers to serve as the legal representative of a company. Moreover, administrators have the authority to appoint managers as the legal representative in Guatemala for specific activities of the organization.
• 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 the General Assembly of Members.

What can a legal representative in Guatemala do?

A legal representative in Guatemala is in charge of the proper administration of a company and must ensure the company remains in full compliance with local regulations.

Some of the activities undertaken by a legal representative in Guatemala include:

• Registering the company before public institutions
• Signing contracts
• Sale and purchase of goods
• Making legal transactions
• Carrying out administrative and commercial activities for the company
• Hiring employees
• Exercising judicial power

Who can be a legal representative in Guatemala?

A legal representative in Guatemala can be any person of legal age, according to local legislation. The law does not discriminate between Guatemalan citizens or foreign nationals acting as the legal representative of an organization.

What are the obligations of the legal representative in Guatemala?

Guatemala’s Commercial Code regulates the obligations of legal representatives. It states that a legal representative in Guatemala is responsible for any damages caused to the company, its shareholders, or creditors. When you have more than one legal representative or administrator, the responsibility will be joint.

Foreign company branches are an existing legal entity in Guatemala. When implementing commercial activities, you must register a legal representative in Guatemala before engaging in local commercial activities.

How to choose your legal representative?

It is extremely important to pick someone that adequately represents your organization and supports its goals and vision. You must also take into account that the legal representative wields some decision-making and managerial power for the entity. Therefore, when appointing a legal representative in Guatemala, it is important to:

• Choose a trusted person.
• Ensure that the candidate’s knowledge and skills match the requirements of your company.
• Confirm that your legal representative is eligible for the position.

Choose the right legal representative in Guatemala with the help of Biz Latin Hub

Selecting the right legal representative is an essential part when incorporating a company into the Guatemalan territory. At Biz Latin Hub, we have broad experience in company formation, legal and accounting services. With our full suite of market entry and back-office services, we are your single point of contact for the expansion of your business in Central America. Contact us now to receive personalized assistance and learn more about the types of legal entities in Guatemala.

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