Population
The latest official census, carried out in 2018 by the National Statistics Institute ("INE", by its Spanish acronym), showed a total population of 14,901,286 inhabitants, of which 48.47% are male and 51.53% are female. 41.66% identify as part of the various indigenous peoples of Mayan descent.

Location
The Republic of Guatemala is in the North of the Central American isthmus, bordering to the North and Northwest with Mexico, to the Southeast with El Salvador and Honduras, and on the East with Belize. Although Guatemala recognizes Belize’s statehood, it maintains a territorial, insular and maritime claim over a portion of the mainland and various islands. The resolution of this claim is currently pending before the International Court of Justice.

Climate and Ecosystems
Guatemala is a highly biodiverse country, with various ecoregions and ecosystems, microclimates, flora, and fauna. It has a tropical climate with only two seasons: dry (November to April) and rainy (May to October).

Infrastructure
As of March 2024, there were over 100 infrastructure projects in varying stages of development and advancement, including roads and highways, airports, bridges, and ports. A new government was installed in January 2024, currently in charge of repairing and restarting various infrastructure projects left pending by the previous administration. A bill to enact a special Infrastructure Act is pending before Congress, which would create a new institutional framework aimed at making road and highway infrastructure more efficient, with input from the private sector.

Ports and Waterways
Guatemala has five ports on both coasts: Santo Tomás de Castilla and Barrios on the Caribbean; Quetzal, San José, and Champerico on the Pacific. Quetzal, Barrios, and Santo Tomás de Castillo are the main ports used for cargo shipments. The National Ports Commission represents the State before national and international bodies in matters related to ports and regional maritime transportation.

Airports
Guatemala has three international airports: La Aurora (GUA), in the capital city; Mundo Maya (FRS), in the northern department of Petén, where the Mayan archaeological site of Tikal and other important tourist locations are located; and Occidente (AAZ) (formerly Los Altos), in the department of Quetzaltenango. There are also airports in Cobán (CBV), Puerto Barrios (PBR), Rubelsanto (RUV), Retalhuleu (RER), San José (GSJ), and Santa Cruz del Quiché (AQB).

Water and Sanitation
Water and sanitation are entrusted to local governments (municipalities) and provided by private companies in some places. According to the 2018 official census, water is supplied to homes mainly through tubing (inside or outside the house), public fountains, wells, rivers, or lakes, or carried by truck.

Electricity
Since 1996, the General Electricity Act created a legal and regulatory framework designed to reduce government intervention and attract private investment into the energy sector. The Act regulates generation, transmission, and distribution, establishing the National Electric Energy Commission and the Wholesale Market Authority as the main sector institutions.

Tourism
Guatemala has a National Tourism Institute to articulate and coordinate the development and promotion of the country’s tourism activities. Its main tourist destinations and attractions include the city of Antigua Guatemala, lake Atitlán and its surrounding villages, Tikal and other archaeological sites, the Caribbean towns and beaches of Izabal, the beaches of Escuintla, cities such as Quetzaltenango and the country’s capital, and natural parks and reserves in Cobán and Huehuetenango, among others.

Any business legally established in a foreign country can invest in Guatemala, either by creating or acquiring a Guatemalan entity or opening a branch. Among other aspects, the tax laws of the investors’ home country should always be considered when determining whether to operate through a branch or a Guatemalan entity.

Guatemalan Business Entities
The Guatemalan Commerce Code provides six structures for business entities, setting requirements for their registration and some basic or default rules for their governance and operations:

• Stock Corporation (Sociedad Anónima)
• General Partnership (Sociedad Colectiva)
• Limited Liability Company (Sociedad de Responsabilidad Limitada)
• Limited Partnership (Sociedad en Comandita Simple)
• Partnership by Shares (Sociedad en Comandita por Acciones)
• Startup Corporation (Sociedad de Emprendimiento)

The creation of a business entity begins with the execution of a deed before a Guatemalan notary, culminating with the entity’s registration by the Commercial Registry. Corporate status is maintained until the entity is dissolved, normally upon expiration of a term set by the parties or through voluntary dissolution.

A Stock Corporation (Sociedad Anónima or “SA”) is the most common business vehicle used by foreign investors in Guatemala. It requires at least two shareholders, one of which is often an affiliate, subsidiary or officer of the investor. Since it cannot be set up through agents, incorporators or third parties, investors will usually grant a power of attorney ("POA") for an individual or firm to appear before a notary in Guatemala for the deed’s execution.

Creating an SA requires a minimum paid-in capital of GTQ 200.00 (approximately USD 27.00). If the starting paid-in capital is above GTQ 2,000.00 (approximately USD 267.00), it must be deposited in a bank in Guatemala to an account previously opened in the future entity’s name.

In-kind contributions may be in any form of property which can be assessed in monetary value. Shareholders must agree upon this, based on the market value and other considerations, and they are liable before third parties for wrongful valuation of in-kind contributions.

Registration fees will be calculated on the amount of authorized capital stated in the deed. There is no registration fee if the authorized capital is less than GTQ 499,999.99. If it is Q 500,000.00 or more, the fee is Q 8.50 per thousand quetzals of authorized capital, up to a limit of Q 40,000.00.

Shareholders may choose either a single administrator or a Board of Directors and appoint one or more board members as legal representatives.

Once the Deed of Incorporation is executed, the notary extends a certified copy to file before the Commercial Registry. The entity is also assigned a taxpayer by the Tax Authority. From this moment, the entity may legally operate. The registration procedure may also be carried out electronically. In any case, the Tax Authority requires the entity’s legal representative to personally appear to be registered as such.

Local Branches of Foreign Entities
A local branch is an extension of a foreign entity in Guatemala, subject to the same ownership and control as those of the headquarters, and liable for assets located in Guatemala and elsewhere in the world.

The headquarters must declare its submission to Guatemalan courts and to the application of Guatemalan laws in all claims arising from the branch’s operations, as well as appoint a Guatemalan lawyer as attorney-in-fact. It must also file a sworn declaration stating it will comply with Guatemalan laws upon closing the branch.

The branch requires capital assigned for its operations and post bond for at least USD.50,000.00, which must be in effect for the entire period of operations in the country.

While a branch is liable for corporate taxes on its Guatemalan profits, the owners do not have to pay income tax on payments in Guatemala for services provided by headquarters in favor of the branch. Any other transfer of money from branch to headquarters is considered a dividend, subject to Guatemalan corporate and income taxes.

Operations Not Requiring Authorization
Foreign entities may perform the following operations without the need for authorization or registration:

• Be a part of any judicial or administrative proceedings in Guatemala.
• Open or maintain bank accounts in any local bank.
• Buy from or sell to independent trade agents legally established in the country.
• Manage orders through legally established agents in Guatemala, if subject to confirmation or acceptance outside the country.
• Grant loans or open credit in favor of persons established in the country.
• Issue, endorse, protest, collect or hold securities and credit instruments in Guatemala or issued in it.
• Acquire any kind of property, if it is not part of a business enterprise nor of the kind it usually trades with.

Guatemalan has direct and indirect taxes, on both a national and a local level. The National Tax Administration has a certain degree of independence from the central government. Taxing power belongs to Congress, leaving extremely limited power to municipal governments. The territorial principle is predominant, so foreign-sourced income is not taxed.

The Guatemalan Constitution, more than others in the region, details principles and limitations applicable to taxing power and to taxes, such as legality and ability to pay, thus providing for ample judicial review. A Tax Code establishes all substantive and procedural aspects of Guatemalan tax law, overseen by the Tax Administration, and specific taxes are regulated in specific acts of Congress.

Income Tax
There are three main categories of taxable income:

• Business Income from any for-profit activity, such as services, commercial and industrial businesses, financial services, insurance, agriculture and farming, mining, international trade, and transportation.
  • Payroll and Other Compensation, such as ordinary salaries, bonuses, and commissions.
  • Income from Capital, passive income from investments and the sale and disposition of fixed assets, such as rent and leasing of property, interest, royalties, profit distributions, capital gains, and prizes.
• Residents and non-residents are taxed only on Guatemalan-sourced income. The notion of taxpayer extends to all resident or non-resident individuals and corporations, partnerships, trusts, de facto corporations, joint venture arrangements, permanent establishments and, in general, any business firm or establishment deriving Guatemalan-sourced income.
• A business vehicle must pay corporate income tax on Guatemalan-sourced income, regardless of its nationality or residence. However, while tax-resident vehicles are taxed according to the nature of their income, non-resident vehicles are subject to withholding taxes, with rates varying across categories of income (interest, dividends, remuneration for services, royalties on IP, etc.). Tax-resident businesses are not taxed on worldwide income.
• Corporate business vehicles are by default subject to a 25% tax rate on net income. There is an alternative regime available to all taxpayers where gross income is taxed at 7%. This may be the best choice for taxpayers with an effective tax rate of 7% or more, as there is no need to determine applicable deductions or their amount.
• Dividends distributed to shareholders, whether resident or non-resident, are taxed at 5% and withheld by the paying company. Dividends received from foreign companies, that do not operate in nor are residents of Guatemala, are considered foreign-source income and not taxed in the country. Dividends are not deductible.
• Payment of interest is taxed at 10% withholding, whether paid to residents or non-residents, with some exemptions, such as government bonds, insured mortgage-backed securities for low-income housing projects, or loans granted by fully licensed banks or financial institutions to Guatemalan companies. However, if a resident regularly charges interest, the income will be subject to corporate income tax.
• IP royalties paid to non-residents are subject to a 15% withholding tax.

Alternative Flat Income Tax

• A minimum tax creditable to income tax, called Impuesto de Solidaridad ("ISO"), is levied on commercial or agricultural activities with a gross margin of more than 4% of their gross revenue. ISO is due on a quarterly basis.
• The tax base is the greatest amount between 25% of net asset value and 25% of gross revenue. When net asset value exceeds four times the gross revenue, the tax base will be 25% of gross revenue.

Value-Added Tax ("VAT")

• VAT is levied on the supply of goods, services and imports, at a rate of 12%, filed and paid monthly.
  • With respect to sales and services, the taxable amount is the price excluding any discounts granted in accordance with trade practices, and including amounts charged separately to the acquiring party also including taxes other than VAT.
  • With respect to imports, the taxable amount is the CIF value plus customs duties and other related charges.
  • With respect to the leasing of movable or immovable property, the taxable amount is equal to the rent plus any financing charge.
• Exemptions include temporary imports; exports of goods and services; transfers of ownership resulting from mergers, acquisitions, contributions to corporations or other entities, and inheritance; services provided by supervised financial institutions, reinsurance and counter guarantee operations; issue or transfer of negotiable instruments and of any kind of shares, except negotiable invoices; creation of trusts and the reversion of the trust assets to the grantor; among others.
• VAT Credit is the sum of the tax charged each month to the taxpayer on imports and/or purchases of local goods and services. A VAT Debit is the sum of the tax charged by the taxpayer in their transactions subject to VAT in the same period. The difference between total VAT Credit and Debit is the amount of tax to be paid for the corresponding month.
• Exporters have the right to request a tax refund for the VAT Tax Credit in their favor. The refund is made on a monthly, quarterly or semi-annual basis depending on the applicable tax regime.

Stamp Tax

• Stamp tax is levied at a general rate of 3% on transactional documents not subject to VAT, as well as on documents executed abroad to be enforced in Guatemala.
• Besides the general rate, there are some specific rates applicable to specified documents, subject to some exemptions as provided in the Stamp Tax Act.

Excise Taxes
Guatemalan law levies taxes on the distribution of specific consumer goods: crude oil, fuels and other derivatives; alcoholic beverages; non-alcoholic beverages of various kinds; and cement. There is also a specific tax on the manufacture and import of tobacco products.

The Labor Code is the main source of labor law, but other important rules are found in the Constitution, statutes creating new obligations or benefits, international treaties, collective bargaining agreements, and binding precedents from the Constitutional Court. The application will privilege constructions favoring the protection of employees, at times overriding statutory text, for example, by invoking Constitutional or international rules or principles.

Such applications will not necessarily depend on the will of the parties as expressed in any agreement, but on the facts of the situation. For example, a labor judge is likely to find an individual service contract is subject to labor laws where there is evidence of employment hierarchy and direction, working time, disciplinary measures, or other elements considered typical to a labor relationship. The parties can only agree to override provisions of the Constitution, Labour Code, treaties or collective agreements if such contractual provisions improve upon the rights and conditions set forth by these other sources for the employee. Rights and conditions can also be improved by workplace custom or practice.

The same rules apply to national, resident, and foreign employees working in Guatemala. Frequently, when foreign companies wish to reproduce employment policies from their original jurisdiction, employee benefits are considered in addition to, rather than instead of, those already established by Guatemalan law.

Employment Agreements
Employment agreements must be executed in writing, and a copy must be sent to the Ministry of Labor. The burden of proof of the written agreement lies on the employer: if no written contract can be produced before a labor judge, the employment conditions argued by the employee will be taken as fact.

All the legally established employee benefits are deemed automatically included in any employment agreement. If no written contract is signed, the legal defaults will apply, unless custom or practice in the workplace or an applicable collective agreement includes any term improving conditions for the employee.

Main Obligations Arising From the Employment Agreement

• 12 monthly salaries per year
  Wages can be agreed by time unit (monthly, biweekly, weekly, daily or per hour), by work unit (by piece, task, by the lump, or by fixed price), or by participation in utilities, sales or charges. A minimum wage is set yearly through a Presidential Decree, based on recommendations from the Ministry of Labor and the National Wages Commission. It is usually set at a different rate between agricultural and non-agricultural activities
• A mid-year and a Christmas bonus
  Each is equivalent to one monthly salary that the employer pays in the middle and at the end of the year.
• 301 working days a year, not including public holidays
  15 working days’ vacation per worked year. Vacations are not exchangeable for money, except for unused accrued leave (up to five years) upon termination. Employees cannot accumulate accrued vacation periods with the purpose of receiving a longer period afterward. Employees must receive a full, uninterrupted vacation period; it may only be split into two periods for work whose specific nature does not allow prolonged absence.
• The distinction between ordinary and extraordinary working hours, with the right to overtime pay Ordinary work may be agreed by the parties within the following parameters: (a) Day shift: Between 6:00 am and 6:00 pm, not exceeding 8 daily hours or 44 hours per week; (b) Night shift: Between 6:00 pm of one day to 6:00 am of the next day, not exceeding 6 hours a day or 36 hours per week; (c) Mixed shift: Within time including hours from both day shift and night shift, not exceeding 7 hours a day or 42 per week. All work carried out beyond the ordinary shift parameters constitutes overtime and must be paid at 1.5 times the employee’s regular hourly rate. The total time of ordinary shifts plus overtime may not exceed 12 hours a day. Some categories of employees, specified by law, are not subject to shift limitations.
• Part-time workers have the right to minimum wage determined on an hourly basis and are entitled to all labor benefits calculated in proportion
  All work carried out beyond their contractual schedule constitutes overtime payable as such, even if within the ordinary hours of full-time employment.
• Productivity bonus
  Should be agreed between companies and employees and paid with the monthly salary. A mandatory minimum amount of Q 250.00 must be paid in this concept.
• Right to severance in case of dismissal without just cause
  Employees may be terminated at will and without notice. Dismissal without cause entitles the terminated employee to a severance payment equivalent to one month’s salary for each year worked. If severance is not paid, or if the employee challenges the just cause invoked, they may sue the employer for severance plus damages and litigation costs. The dismissal may be challenged on both substantive and procedural grounds: i.e., an employer may have to pay severance, damages and costs not only if they do not prove the invoked cause, but also if such cause, although true and proven, is legally insufficient, or if dismissal occurred without applicable due process. If severance was paid but unduly calculated, the employee may sue for recalculation and full payment.
• Maternity leave, during which termination requires prior judicial approval.

Salary Deductions and Employee Tax
Tax-resident employees are taxed at 5% or 7%, depending on the amount of taxable income. Employees with income above the equivalent of around USD.37,975.00 are taxed at 7%; others at 5%. The only deductions allowed include:

• Cost of living allowance at approximately USD 6,076.00 per year.
• Social security contributions and contributions to pension funds. Social security contributions are calculated as a total of 17% of salary (12.67% from employer and 4.83% from employee).
• Life insurance premiums, do not provide for a rescue value.

The employer must calculate monthly withholdings to be made throughout the year, but a final payment is made at the end of the fiscal year, if more or less than the required tax would have been withheld. Employers must withhold and pay on behalf of their employees the applicable income tax and social security contributions, including employer's social security contributions.

Additionally, employers must pay the following monthly contributions:

• Employees’ Recreation Institute ("IRTRA"): 1% of total salaries paid.
• Technical Training Institute ("INTECAP"): 1% of total salaries paid.

Foreign Employees
Foreign employees require permits to work legally in Guatemala, in addition to residence visas (temporary or permanent). To obtain a work permit, the employer must declare that the employee will be hired upon granting of the permit, and guarantee that the employee’s legal obligations in Guatemala are fulfilled.

Any foreign hire must be approved by the Ministry of Labor on the basis that the skills or expertise of the foreign employee are not available locally. At any time, a company cannot employ more than 10% of its workforce as foreigners (excluding foreign managers).

The official currency of Guatemala is the quetzal ("GTQ"), which is legal tender for the payment of any monetary obligation, except when parties have agreed otherwise. Guatemalan law allows the freedom to have, use and negotiate foreign currency in any way, including foreign currency deposits or accounts, and the trading of gold bullion.

The Foreign Investment Protection Act’s main principle is equal treatment for local and foreign investors. The Act guarantees, among others, the rights to participate in any legal economic activity in the country and to transfer or take out of Guatemala any currency and profits generated in the country.

The Act applies to some special incentives available for investments, such as incentives for the draw-back industry (involving lower tariffs on the import of raw materials, machinery, etc., for exporting products manufactured from those materials outside Central America) and forestry projects. It does not apply to limitations set forth in the Constitution, to certain economic activities that are regulated by specific statutes, and to any treatment of foreign investment that may derive from obligations contained in international trade agreements and customs, common markets, or free trade areas.

An Act to Promote Investment of Foreign Capital allows temporary special treatment for capital originated abroad used by foreign individuals or entities for acquiring property, plant and equipment destined for the production, intermediation and transformation of goods, or the provision and intermediation of services in Guatemala. It also applies to capital reinvestment in new projects on an economic activity different from that which originated the reinvested resources.

Guatemala is part of the Central American Integration System, based on a series of treaties that regulate international trade among member states (Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama, Belize, and the Dominican Republic) and between member and non-member states.

There is a Central American Uniform Customs Code and a common customs product nomenclature across the region, both developed to comply with basic WTO rules and policies. Trade among member states is free of import duties, except for a few products.

Guatemala is part of several bilateral or multilateral free trade agreements, including with the United States, Mexico, the European Union, Chile, Colombia, and Taiwan, creating an open international trade environment with only a few products subject to import duties, which will gradually be reduced. There are no export duties, but some products are subject to export quotas.

The Immigration Code grants foreigners the right to obtain Guatemalan nationality; to settle in the country with their family or with the intent to form or reunite their family; to work, have property and investments in the country; to be educated within the national systems of education and higher learning; to equal treatment and non-discrimination. The Code contains more detailed rules aimed at the protection of immigrants in areas such as the rights of immigrant workers and their families, victims of human trafficking, refugees, political asylum and humanitarian aid, etc.

Foreign investors may apply for a temporary residence of no more than five years.

Any foreigner who carries out paid activities within Guatemala is considered a “migratory worker” under one of the following categories:

• Cross-Border and Itinerant Workers
  Workers who reside in a neighboring State to which they return at the end of their workday or at least once a week.
• Seasonal Workers
  Workers whose activity depends on the conditions of a season of the year or that by its very nature is only carried out during a specific time of year.
• Specialized Consulting, Advising, or Technical Workers
  Workers who carry out their activity for a period of no more than 365 days, being required by the employer specifically as a specialized consultant, advisor or technician, and who do not require a permanent residence.
• Self-Employed Workers
  Technically not employees in the sense of Labor Law, but for immigration purposes the Code names under this category any “workers” who carry out commercial or industrial activities on their own or with their families, being legally authorized to do so within the country.

Apart from these categories of “migratory workers”, all foreigners authorized to remain in Guatemala as employees under the applicability of Labor Law are referred to more specifically as “migrant workers” and may apply for a temporary residence of one to five years. After five years of being temporary residents, they may become permanent residents. Cross-border and itinerant workers are considered under a special migratory status. Refugees and persons granted political asylum may also be legally employed in Guatemala.

The Environmental Protection Act provides basic rules and obligations for the protection and improvement of Guatemala’s natural environment. The Ministry of Environment and Natural Resources oversees and applies this statute and related regulations.

Guatemalan law prohibits bringing into the country contaminating products and materials that are banned in their country of origin, as well as multiple substances, residues, radioactive materials and waste that may infect, contaminate or degrade the environment.

An Environmental Impact Assessment ("EIA") must be approved by the Ministry before any construction, industrial project or any other activity that could harm, pollute or disturb the environment. Once the EIA is approved, the Ministry issues an Environmental License, authorizing the start of construction or operations. The EIA is done by a specialized technician approved by the environmental authority. Failure to comply with EIA obligations may result in administrative fines and the closing or suspension of the activity or project.

Any person may report any act or omission that generates pollution, detriment or loss of natural resources or affects levels of quality of life.

Private property is recognized as an inherent right of persons in the Guatemalan Constitution, guaranteeing the right to the free disposition of goods in accordance with the law.

Nationals and foreigners may acquire the same rights related to property, except for foreigners needing government authorization to acquire property in urban areas within territorial reserves along the oceans and bodies of water as defined in the Constitution. Only Guatemalan nationals and entities whose members are Guatemalan may acquire or possess land within 15km of the country’s borders.

The most common agreements over real estate in Guatemala for business developments are purchase agreements, leases and usufructs, regulated in the country’s Civil Code. Property may be subject to limitations arising from local government (municipal) regulations, related to zoning and construction permit requirements. Some buildings, such as those located in the capital’s Historic Center, are also subject to limitations arising from their status as cultural or historic landmarks.

There are two Property Registries, one in the capital city and another in Quetzaltenango, each covering different areas within the country’s administrative subdivisions (departments). The registries allow public consultation of the legal status of all registered immovable goods (land and buildings), especially their current owner and any mortgages, long-term leases or other limitations to which they may be subject. The registries also record other legally relevant facts, such as property over ships and aircraft, as well as the granting of last wills and testaments.

Possession of unregistered land may also be transferred or leased, etc. Although not a full and formal right of property recognized at the Property Registry, it will usually be registered, for tax purposes, before local municipalities or an office of the Ministry of Public Finance. In some cases, it may also be registered at the Cadastral Information Registry for land survey purposes.

Under certain conditions established by law (peaceful and public possession in good faith as the reputed owner for over ten years), possession of unregistered land may be formalized through a judicial procedure, by which a judge may order the Property Registry to record the land as full and formal property of the possessor. The term of possession is also transferable, so that, for example, if a person acquires possession from someone who has possessed it for 9 years, the new possessor will only need 1 more year before being able to file for judicial formalization.

Intellectual Property is recognized by Guatemalan Law as a constitutional right and through several international agreements. The main national statutes are the Authors’ Rights (Copyright) and Related (Neighboring) Rights Act and the Industrial Property Act.

Authors’ Rights (Copyright) and Related (Neighboring) Rights
Authors’ rights concern the moral and economic rights to be recognized as the author of a work, protect the work’s integrity, publish it and profit from its uses. Works are defined broadly and include written works, audio-visual works, choreography, conferences, illustrations, architecture, and any creative work in general.

Moral rights are recognized in perpetuity. Protection of economic rights is granted for a term of 75 years from the death of the author. Computer programs and collective works are protected for a term of 75 years from the date of “first publication” (as defined by law). Audio-visual works are protected for 75 years from the first “public exhibition” of the work.

Registration is not required for the protection of an author’s rights, but there is an Intellectual Property Registry for added legal certainty.

Several legal actions and remedies are available to the copyright holder, including injunctive relief to cease infringements. Additionally, Guatemala grants protection under copyright and related rights treaties, including all main treaties administered by WIPO.

Industrial Property

• Trademarks can be registered with the Intellectual Property Registry, granting rights for ten years, renewable for further unlimited periods of ten years each. Unregistered trademarks are not protected, except where they are protected by treaty or are well-known trademarks under the terms of the Paris Convention. The owner of a registered trademark can bring actions for injunctive relief to cease infringement and nullify trademarks that infringe pre-existing trademarks or trademarks subject to treaty protection (such as well-known trademarks), among other things. Actions may also be brought in the context of unfair competition, where trademarks are infringed through references, imitation, or the like.
• A patent recognizes the rights of inventors, for 20 years from the application’s filing date. To be granted a patent, the invention must have novelty, inventive step and be capable of industrial application. Articles referring to the protection of plant varieties were repealed in 2014, but Guatemala is a member of UPOV. Patents must be registered with the Intellectual Property Registry, also in charge of implementing the system established by the Patent Cooperation Treaty ("PCT"). Patents can be enforced by those named in the patent title or certificate, or by registered assignees or successors. Actions to enforce a patent may include seeking injunctive relief from infringement, and nullity of a patent granted in partial or complete infringement of an earlier one, among others. Guatemala is part of major international treaties on patents, which provide additional protection.
• Utility models and industrial drawings and designs comprise the plans and/or depictions of industrial and/or artisanal products. They are subject to the same rules as patent registration and enforcement. Industrial designs must be registered with the Intellectual Property Registry. Registered industrial designs and drawings can be enforced in the same way as patents. Industrial designs and drawings are protected for 10 years, and renewable only once for an additional 5 years.
• Unregistered industrial designs are also legally protected for 3 years from the date of disclosure, that is, the first time the industrial design is made public by any means and in any place by the designer, the owner or by any third party that may have legally acquired the design. The enforcement of unregistered industrial designs is the same as for patents.

Criminal Offenses
The Guatemalan Penal Code defines a series of crimes related to IP, with prison terms ranging from one to six years and fines between approximately USD 6,600.00 to USD 100,000.00.

The Consumer Protection Act grants minimum compulsory rights and guarantees for consumers, establishing administrative penalties and procedures. It applies to all agreements between suppliers and consumers in Guatemala. Goods or services provided under a specific statute or regulation, such as public services and utilities, will only be subject to this law in default of applicable rules in their specific statutes.

Among other obligations, suppliers must comply with general obligations for the protection of consumers’ lives, health and safety, provide clear and reliable information regarding the goods and services, and repair or refund consumers for the quality of the goods.

An office within the Ministry of Economy oversees compliance and may impose sanctions, such as fines, for violations of the Act and other regulations.

Guatemala has two main laws related to compliance matters: The Act Against Laundering of Money and Other Assets and the Act to Prevent and Suppress Financing of Terrorism. Under these acts and their implementing regulations, obligated persons (including banks and all other entities subject to oversight from the Banking Superintendence of the Central Bank) are required to adopt, develop, and execute programs, rules, procedures, and controls to prevent the misuse of their products and services in the laundering of money and other assets and/or the financing of terrorism. These include measures related to hiring and training of personnel, audit mechanisms, knowledge of clients, collection of information, reporting of suspicious operations, and maintenance of records.

Obligated persons must appoint a management-level compliance officer as liaison with competent authorities. Oversight of these obligations is entrusted to a Special Verification Office within the Central Bank’s Banking Superintendence.

Guatemala has no legislation regulating data privacy in detail. General rules on the matter are contained in the Access to Public Information Act, which, though focused on public sector transparency, also contains rules of broader applicability. It defines personal data as that relating to any information concerning identified or identifiable natural persons, and sensitive data or sensitive personal data as that referring to the physical or moral characteristics of persons or to facts or circumstances of their private life or activity.

The Act prohibits and penalizes the commercialization or distribution of personal and sensitive data without the express written consent of the person. Furthermore, the Penal Code criminalizes the creation of data banks or computer records of data that may affect the privacy of persons; the use or obtaining, without authorization, of data contained in computer records, data banks or electronic files; the capture by any means, without consent, of messages, conversations, communications, sounds or images which violate a person’s sexual intimacy; among other related offenses.

The Constitutional Court has recognized the right to informational self-determination, which includes the powers of reservation and exclusion and covers the use of the data by means of automated processing through information technology. This right is enforceable against private parties, including corporations, through petitions for constitutional protection ("AMPARO"). The Court has set standards that must be observed when treating personal data, including that obtention and use of the data should be in accordance with a fully defined purpose, legitimately and voluntarily, with adequate controls allowing the determination of the veracity and updating of such data.

Guatemala has no specific regulation on antitrust and competition law, beyond scattered general rules which are not specifically aimed at functions such as merger control or regulation of horizontal or vertical anticompetitive conduct.

A bill to enact a comprehensive Competition Act is pending before Congress, and some parties of the newly installed legislature are seeking to pass it before the end of 2024. However, this is uncertain given the country’s current political climate.

The Public Procurement Act and its Regulations govern these matters in Guatemala. Acquisition of goods and services by the government or other State institutions, including municipalities, must be carried out through one of four main procedures, depending on their total amount.

There are two tendering processes (licitación and cotización), and two direct purchase processes, one of which is designed specifically for low-price purchases. The difference between the two tendering modes is that licitación may only be carried out by the highest authority of the contracting office.

The Act also establishes special procedures to be used for specific situations, including single provider acquisition, open agreements, reverse bidding, and leasing of moveable and immovable property (real estate).

Procurement procedures will not be necessary when the government, with ratification from Congress, has declared a state of exception in case of emergencies, such as natural disasters. They are also not applicable to certain goods purchased by the national health authorities (the Executive’s Ministry of Health and the autonomous Guatemalan Institute of Social Security) through international agreements and organizations, acquisitions in foreign countries, the printing of currency by the Central Bank, and the acquisition of paper and ballots by the Electoral Authority during election years.

Any person or entity wishing to provide goods or services through public procurement must register at a special government acquisitions registry. Registration may be suspended or revoked as a result, among others, of criminal convictions or sanctions applied by the Ministry of Labor. The Act requires various insurances and guarantees to be provided at each stage of procurement and for the final contract when awarded.

All public procurement operations and documents are published with free online access through the Guatecompras system, maintained by the Ministry of Public Finance.

A business entity is dissolved when one or more of the causes specified by law or in the Deed of Incorporation occurs. Legal causes for dissolution include the expiration of the entity’s preset term; the impossibility of continuing its purpose; voluntary decision adopted by its members; loss of over 60% of paid capital; reunion of shares or participations in a single person; and others agreed to in the deed or set in other laws.

Dissolution may be partial or total.

Partial dissolution does not imply the extinction and liquidation of the entity, only the separation of one or more of its members, either by a decision of the shareholders to exclude another, or one of them deciding a voluntary dissociation.

Total dissolution –unless originated by a merger or acquisition– implies liquidation of the entity. Liquidating an entity entails fulfilling all obligations and distributing the remainder among the partners, through quotas proportional to their equity capital or in another agreed way.

The entity undergoing liquidation maintains legal existence throughout the procedures.

The Insolvency Act of 2022 introduced a new regime for bankruptcy procedures in Guatemala. Its rules apply to all individuals and entities, except the public sector and financial institutions. It creates a Registry of Bankruptcy Procedures and Administrators.

Bankruptcy procedures are supervised by a judge but entrusted to a bankruptcy administrator, subject to the requirements and registration established by the Act. Creditors may be represented through a committee. Creditors and credits are classified depending on their guarantees and nature, such as those backed by liens, trusts or mortgages; alimony, labor or tax obligations; those arising from monetary sanctions; or those whose creditors are parties related to the debtor, among other categories.

The main purpose of the Act is not to liquidate the bankrupt business but to try to salvage it. To that end, for example, it allows judges to rehabilitate contracts necessary to the continued economic activity of the debtor, whereas previous rules and contracts usually foresaw filing for bankruptcy as a cause for termination.

The debtor or the creditors may submit a reorganization plan for the other parties’ approval, whose purpose is the total or partial collection of recognized credits and the continuity of the debtor’s economic activity. It may contemplate financial, administrative or operative reorganization. Once approved by the required majorities of each creditor class, the plan is published, granting a period for filing oppositions based on causes foreseen by the Act. The judge will decide on the plan and opposition.

Besides voluntary reorganization plans, bankruptcy proceedings may be filed before civil courts by the debtor, creditors, codebtors or guarantors, or financial institutions acting as creditors. The administrator or any creditor may also file a suit to reintegrate the debtor’s patrimony in certain circumstances where the debtor may have disposed of assets to defraud creditors.

A special abbreviated bankruptcy procedure will apply when there are no more than five creditors, or when the total assets or debts are under USD 100,000.00.