FITA helps you find
service providers for:


flag Guatemala Guatemala: Investing

In this page: FDI in Figures | Why You Should Choose to Invest in Guatemala | Procedures Relative to Foreign Investment | Investment Opportunities

 

FDI in Figures

In a context where global foreign investment increased by 10.9% in 2013, in particular in Europe (+25.2%) and in Latin America (+17.5%), FDI flows to developing economies reached a new high of US$759 billion. However macroeconomic fragility and policy uncertainties are driving investors to caution.

The end of the civil war, the measures to liberate the economy and later, the implementation of the free-trade agreement ALCA, have allowed a rapid development of foreign investment inflows into Guatemala.  The global economic crisis, however, provoked a decrease of FDI in 2009, and they are beginning to restart slowly again.  Many hindrances to FDI persist:  Security problems, lack of high-skilled manpower, low quality infrastructures, the frailty of its legal institutions, administrative burdens.

In 2013 FDI reached USD 1.207 billion compare to USD 984 million in 2012.

Information on the 2013 FDI influx in this region can be accessed in the Global Investment Trade Monitor published in January 2014 by the United Nations Conference on Trade and Development (UNCTAD).

 

Country Comparison For the Protection of Investors

  Guatemala Latin America & Caribbean United States Germany
Index of Transaction Transparency* 3.0 4.0 7.0 5.0
Index of Manager’s Responsibility** 2.0 5.0 9.0 5.0
Index of Shareholders’ Power*** 6.0 9.0 5.0
Index of Investor Protection**** 3.3 5.0 8.3 5.0

Source: Doing Business - Last Available Data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.

 
Foreign Direct Investment 201120122013
FDI Inward Flow (million USD) 1,0261,2451,309
FDI Stock (million USD) 7,7518,92810,256
Performance Index*, Ranking on 181 Economies 125--
Potential Index**, Ranking on 177 Economies 84--
Number of Greenfield Investments*** 12716
FDI Inwards (in % of GFCF****) 14.616.916.4
FDI Stock (in % of GDP) 16.317.718.9

Source: UNCTAD - Last Available Data.

Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.

Return to top

Why You Should Choose to Invest in Guatemala

Strong Points
The Guatemalan market is very competitive. The country benefits of a very advantageous position due to its proximity to Mexico and the United States on one side and to the rest of Central America on the other side. The customs union established among the Central American countries and North America facilitates the passage and trade of goods. Currently, FDI accounts for 17.4% of GDP. The latest executive laws that came into force have accelerated the progress of privatization and instigated the end of monopolies. In this regard, a number of private investments will be able to get established in the next following years. The preferential sectors are the food industry, telecommunications, tourism and consumer goods.
Weak Points
Guatemala has the usual problems of the so-called "developing" countries. Corruption and the weakness of the intellectual property protection system are the two most significant loopholes. Additionally, the slowness and complexity of the administrative and bureaucratic procedures are sometimes discouraging. The lack of security and the social inequalities can be a hindrance to the development of a company as well as the decaying condition of roads and  the communication networks in certain geographical areas.
Government Measures to Motivate or Restrict FDI
Since 2004, the country has been making substantial efforts to promote foreign investment, facilitating the administrative procedures and establishing central information networks required for all foreign investors. Corruption and violence are denounced and handled by the state. The application and the success of these objectives are taking their time but Guatemala is clearly beginning a process of opening up economically and commercially. A proof of this is the number of trade treaties and agreements that have taken place in the past recent years. It is also important to remark that Guatemala is part of  the  MIGA: Multilateral Investment Guarantee Agency, a branch of the World Bank in charge of promoting and protecting foreign investment. It has also been ratified by the OPIC: Overseas Private Investment Corporation. Guatemala's membership to these types of organizations shows its determination to create a safe and attractive environment to foreign investors.

Return to top

Procedures Relative to Foreign Investment

Freedom of Establishment
The freedom of the investor to set up is complete, there are even incentives to attract them. With regard to regional incentives, production or assembly operations using machines or imported components are highly encouraged.  These products have to be exported outside the Central American zone.  Companies established in free trade zones are exempt of all taxes and custom duties (except for social security contributions).  For more information refer to the Investments Promotion Agency and the Guatemalan Development Foundation .
Acquisition of Holdings
A majority holding interest of stock in a local company is legal in Guatemala. There is however restrictions regarding certain sectors like the press, aviation, the navy for obvious security and independent reasons.
Obligation to Declare
The country's Foreign investments promotion agency enables one to get information on the necessary authorizations for establishment.  See also INVEST IN GUATEMALA.
Competent Organization For the Declaration
Company Register (Spanish only)
Requests For Specific Authorizations
None

Learn more about Foreign Investment in Guatemala on Globaltrade.net, the Directory for International Trade Service Providers.

Return to top

Investment Opportunities

Investment Aid Agency
E-regulation in Guatemala (in Spanish)
Tenders, Projects and Public Procurement
Tenders Info, Tenders in Guatemala
Inter-American Development Bank, Tenders in South America
Globaltenders, Tenders & Projects from Guatemala
DgMarket, Tenders Worldwide
Other Useful Resources
E-regulations Guatemala
 
 

Return to top

Any Comments About This Content? Report It to Us.

 

Learn more about Investing in Guatemala on Globaltrade.net, the Directory for International Trade Service Providers.

© Export Entreprises SA, All Rights Reserved.
Last Updates: January 2015