Overview of best prospect sectors, major infrastructure projects, significant government procurements and business opportunities.
Guatemalan businesspeople are accustomed to doing business with the United States, and most key contacts in large corporations are fluent in English. They also travel regularly to the United States to conduct business and attend trade shows and conferences related to their field.
The Guatemalan market is competitive and price-sensitive. Businesspeople expect good after-sales service and support. U.S. brands enjoy a good and long-standing reputation in the market for superior quality, and for offering the after-sales support that competitors may not supply.
Despite a growing Asian presence in certain markets, the Guatemalans value conducting business with a neighboring partner who stands behind the “Made in the U.S.A.” label.
As a signatory member of CAFTA-DR, Guatemalan importers and business representatives of U.S. products obtain CAFTA-DR benefits for their products when conducting business with the United States.
Almost all agricultural goods are now duty free under CAFTA-DR, except for few products that still have tariff-rate-quotas (TRQs) such as beans, rice, dairy, and white corn. TRQs will be completely phased out in 2023 for all, except white corn, that will continue to be protected into perpetuity.
In 2017, Guatemala began the implementation of the Trade Facilitation Agreement, under the World Trade Organization (WTO). Guatemala’s participation in this initiative will benefit commerce through harmonization and automated systems in Customs, less discretional rulings, increased public-private sector dialogue, certainty and transparency on doing business internationally.
In 2019, a customs integration agreement was formalized between the three countries of the Northern Triangle - Guatemala, Honduras and El Savador. The Central America Customs Union facilitates the flow of people and merchandise within the sub-region. The customs union between Guatemala, Honduras and El Salvador represents 75% of the region’s population (33 million out of 44 million Central Americans) and 48.5% of the regional GDP. More than 77% of products are now in free circulation and 98% of tariffs are harmonised. There was a commercial exchange of more than US$ 3.89 billion in 2019.
The government of Guatemala welcomes foreign investment and generally accords foreign investors national treatment. There are few legal or regulatory restrictions placed on foreign investors. However, the country needs to overcome several of the challenges aforementioned in order to make Guatemala a truly business and investment friendly market. Total accumulated FDI from 2007 through 2019 is approximately US$13.59 billion. United States FDI in Guatemala represents 24.4% and the main Industries Include manufacturing, commerce, electricity, water and sanitation supply, financial and insurance activities, agriculture, mining and quarrying and information and communications.
Guatemala Legal framework for investment:
· Decree 16-2010 Economic Infrastructure Development Alliances Act
· Decree 29-89 Export Promotion Act
· Decree 52-2003 Renewable Energy Projects Development Act
· Decree 9-98 Foreign Investment Act
· Decree 65-89 Free Economic Zones
· Decree 94-200 Free currency negotiation
· Decree 22-73 Santo Tomas de Castilla’s Free Trade and Industry Zone Act