The Guatemalan private sector is accustomed to doing business with the United States and key contacts in large corporations are often highly proficient or fluent in English. Most Guatemalan importers have traveled extensively to the United States and/or have done business with American firms. Nevertheless, to maximize the probability of success in the Guatemalan market, U.S. exporters should be aware that when the time comes to formalize a business relationship, for example, through a contract or writing materials, it is most recommended that such formalities are conducted in Spanish.

Almost half of all firms selling into the Guatemalan market do so by means of a Guatemalan agent or distributor. The rest sell directly to Guatemalan buyers. In general, the more pre-sales marketing and after-sales support and service that a product requires, the more important it is to have a local agent and distributor.

Most business conducted in Guatemala is based on personal relationships. Guatemalan business executives and government officials place great importance on personal contacts with suppliers. U.S. suppliers should be prepared to travel to Guatemala often and have a local representative or distributor. U.S. businesspersons are often surprised by the accessibility of key decision makers and the openness and frankness of local buyers.

Sales to government agencies and corporations are best achieved through local agents, distributors and other types of representatives; in some cases, this is a requirement. It is not very practical to target government sales if a firm does not have contacts in Guatemala who are aware of opportunities and able to assist in obtaining the specifications and meeting deadlines for submission.

Using an Agent or Distributor

One of the most critical decisions for U.S. companies entering the Guatemalan market is the selection of a qualified and capable sales representative or distributor. A well-established distributor with strong commercial presence can significantly improve market penetration and brand visibility.

Careful due diligence is essential when selecting local partners. Key criteria should include industry knowledge, reputation, track record, and commitment—beyond English language skills. U.S. firms are advised to apply the same rigorous standards used domestically when evaluating potential partners.

Guatemalan agents or distributors often request exclusivity, sometimes covering Guatemala and broader Central America. U.S. exporters should assess such requests carefully. Generally, the prevailing trend is toward non-exclusive, time-bound agreements with clear performance expectations.

Strong legal protection of intellectual property (IP) is also critical. U.S. firms should directly manage the registration of trademarks and trade names and not delegate this to local agents or partners. A qualified Guatemalan attorney should be engaged to ensure proper IP protection from the outset, reducing the risk of future disputes.

Agency or distribution agreements must be clearly defined and mutually understood. Importantly, unless otherwise specified, exclusivity is assumed under Guatemalan law. Agreements should be reviewed by an attorney who represents the U.S. exporter independently of the local partner. Given the potential for slow legal processes and strong local protections for agents, it is essential that all contractual terms are transparent and enforceable.
Taking the time to build relationships, both professionally and socially, can provide valuable insight and foster stronger, more reliable partnerships.

Establishing an Office  

Guatemala has the largest economy in Central America, with a gross domestic product (GDP) of USD 112B in 2024. The economy grew by an estimated 3.5% percent in 2024 according to the International Monetary fund (IMF).

In 2024, the average inflation rate in Guatemala was about 3.6%. Between 1980 and 2024, the figure dropped by approximately 7.80% points, though the decline followed an uneven course rather than a steady trajectory. The annual inflation rate in Guatemala eased to 1.17% in July 2025, from a four-month high of 1.79% in June. This was mainly due to a slowdown in prices of food and non-alcoholic beverages.

Standard & Poor’s credit rating for Guatemala stands at BB+ with stable outlook. Moody’s credit rating for Guatemala was last set at Ba1/BB+ with stable outlook. In general, a credit rating is used by sovereign wealth funds, pension funds, and other investors to gauge the credit worthiness of Guatemala, thus having a significant impact on the country’s borrowing costs.

The United States is Guatemala’s most important economic partner. The Guatemalan government continues to make efforts to enhance competitiveness, promote investment opportunities, and work on legislative reforms aimed at supporting economic growth. More than 200 U.S. and other foreign firms have active investments in Guatemala, benefitting from the U.S. Dominican Republic-Central America Free Trade Agreement (CAFTA-DR).

In 2024, Foreign Direct Investment (FDI) in Guatemala reached USD 1.69B, representing a 5.1% increase over the previous year. The main recipient sectors were financial activities, insurance, manufacturing, and trade. The leading countries in investment were Central America, Mexico, and the United States, reaffirming the region’s importance. Some of the activities that attracted most of the FDI flows in the last three years were information and communications, financial and insurance activities, manufacturing, commerce and vehicle repair, water, electricity, and sanitation services.

Despite steps to improve Guatemala’s investment climate, international companies choosing to invest in Guatemala face significant challenges. Complex laws and regulations, inconsistent judicial decisions, bureaucratic impediments, and corruption continue to impede investment.

Guatemala’s Climate Change Framework Law established the groundwork for Guatemala’s Low Emission Development Strategy (LEDS) and is designed to align Guatemala’s emissions and development targets with national planning documents in six sectors: energy, transportation, industry, land use, agriculture, and waste management. In November 2020, the Guatemala government endorsed the LEDS as the country’s official strategy for climate change mitigation.

Registration of a Foreign Commercial Entity

A foreign company, legally registered in its country of origin, and intending to do business in Guatemala must register with the Mercantile Registry (Registro Mercantil de Guatemala):

Address:  7a. Avenida 7-61, Zona 4, 01004 Guatemala
Contact:  Diego Jose Montenegro Lopez, Registrador
E-mail:  info@registromercantil.gob.gt

Steps to register for a foreign company with the Mercantile Registry:

• Fill out a registration form for foreign companies at http://www.registromercantil.gob.gt/.
• Pay the registration fees at the bank located at the Mercantile Registry.
• Submit the following documents to the Mercantile Registry:
• Foreign company registration form
• Power of attorney registration form 
• Proof that the entity is legally constituted in accordance with the laws of the country (state) in which it is organized or registered.  Proof should include a certified copy of the deed of incorporation (charter), the by-laws, and modifications thereto.
• Proof that the Board of Directors has duly resolved to establish a branch in Guatemala and has assigned capital for its operation in the country.
• A power of attorney in which the person named is given ample powers to act and to represent the company in all legal matters.
• Proof that the capital assigned for the operations of the branch in Guatemala was deposited in a local bank. 
• A declaration that the foreign company will respond to its obligations in Guatemala with all its assets, both in Guatemala and abroad.
• A declaration that the company recognizes the jurisdiction of the courts and laws of Guatemala, with respect to its activities and operations in the country, and that neither the entity nor its representatives and employees will seek special rights as foreigners.
• A declaration that the company, prior to concluding operations in Guatemala, will fulfill all legal requirements in connection therewith.
• Proof of payment for registration

Certified copies of its latest financial statements (balance sheet and income account).  The documents must be certified by an authorized official in the country (state) of origin and must be authenticated by an appropriate Guatemalan Consular Official.  For additional documentary and process requirements to register foreign companies in Guatemala, refer to the Mercantile Registry’s website.

Beside registering with the Mercantile Registry, a foreign company wishing to operate a Guatemala-based branch must also register with:

• The Guatemalan tax administration authority-  Superintendencia de Administracion Tributaria- SAT\
• The social security institute- Instituto Guatemalteco de Seguridad Social –IGSS
• The Ministry of Labor- Ministerio de Trabajo y Previsión Social
• Companies wanting to sell to the Guatemalan government must also register with the General Registry for State Acquisitions- RGAE

Please visit the State Department’s Investment Climate Statement for pertinent information related to establishing and operating an office and to hiring employees.  

Franchising  

Overview

For the past ten years, Guatemala has seen a steady influx of international franchises and the emergence of successful homegrown brands, some of which have expanded into the U.S., Europe, South America, and Asia. This growth has boosted investor confidence and positioned Guatemala as a viable market for franchising. Notably, 52% of franchise-operated businesses in Guatemala remain active for more than ten years.
Franchise distribution in Guatemala includes:

•  31.6% in fast food
• 31.6% in services (e.g., gyms, salons, personal care clinics)
•  10.5% in real estate

Consumers in the retail sector increasingly prioritize quality, efficiency, and customer experience over quantity. Time-saving, streamlined shopping—both online and in-store—is a key driver in purchasing behavior.

According to the Federación Iberoamericana de Franquicias (FIAF), Guatemala is Central America’s largest franchise market, with:

• 300+ franchise brands
• 3,500 outlets
• Over 25,000 direct jobs (averaging 420 jobs per franchise)

Guatemala also ranks as the fifth-largest franchise market in Latin America. Of all franchises:

• 75% are foreign-owned, primarily from the U.S. (45%), followed by Mexico, Spain, Brazil, and Colombia.
• 25% are locally owned, operating across sectors such as fast food, bakeries, automotive services, gas stations, signage, hotels, beauty clinics, and retail.

With 4 million residents, the largest concentration of franchise activity is in Guatemala City, though secondary cities like Quetzaltenango, Antigua, Huehuetenango, Cobán, and Escuintla show growth.

Under CAFTA-DR, Guatemala offers full market access to franchises, including trademark protections and tariff reductions for imported equipment. However, there is no specific franchise law. Franchise agreements fall under the general commercial code and are partially governed by the Industrial Property Law (Decree 57-2000), which addresses trademark issues but lacks provisions on critical contract elements such as territory, duration, and confidentiality. Legal and technical advice is strongly recommended when entering or exiting franchise agreements.

After 40 years of effort, the Guatemalan Congress approved the Competition Law (Decree 32-2024) in October 2024. The law includes provisions on exclusivity in agency, distribution, representation, and franchise agreements, as long as the conditions are not anti-competitive as defined under the law. While exclusive territories are not entirely prohibited, they will now be subject to competition review to ensure they do not restrict market access or discourage new entrants. This framework aims to balance the protection of competition with the continued development of the franchise market in Guatemala.

A notable regional trend is the ownership structure of franchise businesses as many U.S. and international franchises in Guatemala are operated by local or regional groups, including Salvadoran and Honduran firms, which continue to expand their portfolios by acquiring additional franchise brands.

Successful U.S. franchises operating in Guatemala

While food and beverage franchises dominate the sector, Guatemala also boasts of franchises in healthcare and supplements, wellness, and beauty and cosmetics. Opportunities in this sector are promising as Guatemalans welcome new ideas and are open to new franchising possibilities, specifically for recognized brands. Because of the proximity with the United States, many Guatemalans have experienced different U.S. concepts and welcome them to Guatemala; however, it is highly suggested that franchises examine the market to determine whether the franchise needs any adaptation to the local culture and customs.

The success of operating a franchise requires time, dedication, innovation, a good business relationship with the franchisor and many other factors. Such is the case of the McDonald’s franchise in Guatemala, which began in 1974 and in February 2022 celebrated the opening of restaurant No. 100.  This franchise has created nearly 6,000 jobs across the country and this new restaurant alone generated 100 new jobs. The highly educated segment of the population is a better target to market goods and services from the United States, especially given their higher disposable income. This group may also become business partners and valuable contacts within the country and region.

Guatemalan investors are very selective when showing interest in brands that are well-known and successful. CS Guatemala has found that there is little interest in developing unknown brands, or concepts, because they would have to struggle to compete and stay afloat with the existing local brands. Also, competition in the industry – especially among food concepts has increased significantly.

Guatemala’s franchise market remains dynamic, with steady growth and new opportunities for both established brands and emerging sectors. Careful market analysis is key to successfully adapting franchises to local preferences and maximizing potential.

Contact
Interested parties may contact Commercial Assistant Karla Salas at karla.salas@trade.gov

Direct Marketing    

Roughly half of U.S. exports to Guatemala result from direct sales, often initiated by Guatemalan buyers contacting suppliers in traditional U.S. hubs for Latin American commerce such as Miami, Los Angeles, and Houston. Direct marketing is most effective for well-known products and niche markets. Many U.S. exporters continue to benefit from maintaining close sales contacts in-country, either directly or through local agents and distributors, to strengthen relationships with existing customers and reach new buyers.

Digital channels have expanded significantly. As of 2025, internet penetration is about 60%, supported by widespread mobile connectivity with over 20 million mobile subscriptions. The rise of smartphones has positioned social media, messaging apps, and online platforms as key tools for consumer engagement, especially in urban areas such as Guatemala City, Antigua and Quetzaltenango. Facebook, Instagram, YouTube, and Google dominate online activity, while e-commerce is projected to generate USD 2.18B in 2025 (Statista).

Despite this growth, challenges remain limited use of credit cards, consumer preference for cash payments, and logistical barriers in rural areas. To succeed, U.S. companies should combine traditional direct sales relationships with digital marketing strategies, optimize content for mobile users, leverage social commerce, and provide reliable payment and delivery options to build consumer trust.

Joint Ventures/Licensing    

Commercial companies in Guatemala are governed by the Commerce Code (Congressional Decree No. 2-70, January 28, 1970). Article 10 of the Code specifies the corporate structures recognized as “commercial companies,” which, under Article 3, are the only entities collectively considered merchants under Guatemalan law. The primary business structures include:

• Corporations (Sociedad Anónima), the most widely used vehicle
• General Partnerships
• Limited Partnerships
• Limited Liability Companies
• Public Partnership Companies

Article 12 establishes that banks, insurance and reinsurance companies, bonding companies, financial firms, general warehouses, stock markets, mutual societies, and similar entities are subject to the provisions of the Commerce Code, except where special laws and regulations apply. Additionally, the use of a trade name that includes first names and two-family names of the participating persons shall make those persons legally responsible, just as if they were members of a general partnership, assuming they consented to the use of their name.

Participation Agreements

Participation Agreements (Negocios en Participación), governed by Articles 861–865 of the Commerce Code, are contractual arrangements rather than corporate entities. Under such agreements, an “active partner” undertakes business operations in their own name and assumes associated risks, while “participants” contribute goods or services in exchange for a share of profits or losses. Importantly, no legal relationship is established between third parties and the participants.

Participation Agreements are recognized contractual forms under Guatemalan law and constitute a special category of taxpayer. The active partner bears responsibility for fulfilling all tax obligations associated with the joint operation.

Joint Ventures and Licensing

Joint Ventures, distinct from Participation Agreements, are not expressly regulated under Guatemalan law but are permitted under the principle of contractual freedom (Article 681, Commerce Code). They function as associative business models tailored to specific collaborative projects and do not constitute a partnership, participation agreement, or other recognized corporate form.

Joint Ventures are not treated as taxpayers in their own right; each party is individually responsible for compliance with its respective tax obligations.

Express Delivery      

All major shipping companies (UPS, Fedex, and DHL) as well as local companies offer express shipping between Guatemala and the U.S. with door-to-door service of 2-3 business days. The service is feasible for documents, samples, or personal effects.

Due Diligence  

While it is highly recommended, companies should note that performing due diligence in Guatemala can be challenging and time-consuming. There are very few sources of independently verifiable information about companies and individuals. Guatemalan companies are not publicly listed, and they rarely publish information regarding officers, sales or financials. Most companies are sole proprietorships and partnerships, and business is generally conducted based on personal reputation and contacts.

Companies should request bank and trade references from potential agents and customers.  Companies should also consult their own U.S. banks for information on Guatemalan banks, most of which have corresponding banking relationships with banks in Florida.

The U.S. Commercial Service in Guatemala offers an International Company Profile (ICP) report to U.S. companies, in which in depth information about the local Guatemalan company may be obtained, depending on the source availability. For more information and corresponding fees, please contact Commercial Service in Guatemala.