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Financial Regulatory Compliance in Guatemala: a Guide


A map of Guatemala and some of its main cities. If you are planning to enter the market you will need to understand financial regulatory compliance in Guatemala
A map of Guatemala with some of its major cities

If you’re interested in entering Guatemala’s market, you need to understand the financial regulatory compliance in Guatemala.

Because  failure to comply with financial regulations can result in legal issues or financial penalties that could diminish your company’s standing in the eyes of local authorities and adversely affect your business. 

Financial regulatory compliance can be incorporated into what is generally referred as corporate compliance. This is often covered by third-party providers under the name corporate secretarial services.

Anyone interested in starting a business in Guatemala, the following guide to financial regulatory compliance in Central America’s largest economy by  gross domestic product (GDP) will be of interest.

If you are already in Guatemala and need assistance to comply with the laws, contact us todayWe would love to help you.

Guatemala is a promising investment opportunity

Guatemala is strategically located as the gateway between North America and Central America, with Mexico and Belize at its northern border and El Salvador or Honduras at the south. 

Guatemala is the only country that requires goods to travel between Central and North America must pass through it. With a landmass that spans the width of the Central American isthmus and high volumes of ports serving the Pacific Ocean and Caribbean Seas, Guatemala also has high volume ports.

Guatemala is Central America’s biggest economy with a GDP of $27 billion reaching $76.71 billion in 2019(All figures in USD). Services sector is the largest contributor. accounting for approximately 63%That figure is shown below. 

Guatemala also has a sizable manufacturing sector, responsible for around 22% of GDP, while the country’s agricultural sector contributes 10% — more than double that of neighbors MexicoAnd El SalvadorThis is a reflection of the continuing importance of agriculture to the economy. 

Bananas, coffee, and clothes are the country’s most important export products. However, Guatemala also has significant hydrocarbons- and mineral deposits. The country is also home of a variety of other species. growing tech sectorIt is a. expected to contribute significantlyto economic recovery after the pandemic.

Guatemala is known for its high crime and security levels. However, the country has made huge strides to improve the situation in recent years. slashed in half between 2009 and 2019.

This dramatic improvement has led to an increase in investor interest. Foreign direct investment (FDI), nearly doubled during the same period, reaching $966.8million in 2019.

Investors must be aware of Guatemala’s financial regulatory compliance requirements in Guatemala in the context this market is rapidly evolving.

A snapshot of the market in Guatemala, where you will need to comply with financial regulatory compliance regulations
A snapshot of Guatemala’s market

Key responsibilities in Guatemala’s financial regulatory compliance

Financial regulatory compliance in Guatemala can vary depending on the type of company you haveThese aspects of corporate compliance are applicable to everyone.

A general meeting (AGM), for shareholders
The general assembly of shareholders is the highest corporate body of any company and is attended by the shareholders registered in the ‘share registry book,’ or their representatives or agents. Its operation and powers are regulated under corporate law in Guatemala, as well as the company’s bylaws. AGMs are required to be held at the least once per fiscal year. Most companies need to hold them within four month of the end of the fiscal year on December 31.

Sword declaration to national tax authority (DGI).
Every year, after the close of the corporate books, each company must submit a sworn declaration in Guatemala to the national tax authority.

Filing and payment (VAT)
Companies and individuals must file monthly VAT returns. The current VAT rate in Guatemala, 12%, is applied to most goods and services. Companies that charge VAT must report each month the total amount they have charged.

Corporate income tax (IRAE).
It is necessary to file quarterly corporate income tax (also known as Income From Economic Activities (IRAE)). It depends on the company and the operating regime, it can be either monthly, quarterly or annually.

Withholding tax
You must pay withholding tax on a monthly basis.

Additional salary bonus
An annual bonus of up to one month’s pay is available to many employees. It must be divided in two parts. The first half is paid in December, and the second in January.

Contributions to the Statutory Fund
Companies are required to pay all contributions to the government within 20 days of receiving a salary payment in Guatemala as part of financial regulatory compliance.

Biz Latin Hub can help you with Guatemalan financial regulatory compliance

Biz Latin Hub’s local team of corporate accounting and legal experts can assist you with Guatemalan financial regulatory compliance. We also offer a range of back office services. We offer company formation? accounting & taxation? legal services? hiring & PEO, visa processingWe offer a wide range of corporate solutions. This means that we can tailor a package of integrated back office services to meet your needs in Guatemala or in any of the 17 other markets in Latin America and the Caribbean.

Contact us nowRequest a consultation or a quote for a no-obligation estimate.

You can also read about our team and expert authors

Key services offered by BLH including legal services, accounting & taxation, hiring & PEO, due diligence, tax advisory, and visa processing
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