Corporate Law at Guatemala
Corporate law in Guatemala is primarily governed by the Commercial Code (Código de Comercio) and other related legislation. Here's a concise overview of the key components of corporate law in Guatemala:
📘 Legal Framework
Commercial Code of Guatemala (Decree No. 2-70):
Main body of law for corporate entities.
Sets out rules for company formation, management, operation, and dissolution.
Civil Code and other laws:
Apply subsidiarily in matters not specifically addressed by the Commercial Code.
Superintendence of Tax Administration (SAT):
Companies must register with the SAT for tax purposes.
Mercantile Registry (Registro Mercantil):
Handles registration of companies and commercial activities.
🏢 Types of Business Entities
Sociedad Anónima (S.A.) – Corporation
Most common form for medium to large businesses.
Requires at least two shareholders.
Liability limited to contributions.
Requires a minimum capital (around GTQ 5,000).
Sociedad de Responsabilidad Limitada (S.R.L.) – Limited Liability Company
Designed for smaller businesses.
Limited to 20 partners.
Capital divided into "quotas" (not shares).
Simpler governance structure.
Individual Merchant (Comerciante Individual)
Suitable for sole proprietors.
Less regulation but no liability protection.
Branches of Foreign Companies
Must register with the Mercantile Registry.
Requires local legal representation.
🧑⚖️ Corporate Governance
Corporations must have:
A Board of Directors.
A General Assembly of shareholders.
Minutes of shareholder and board meetings must be recorded and legalized.
Annual financial statements must be submitted to tax authorities.
📝 Registration Process
Draft and notarize articles of incorporation.
Register with:
Mercantile Registry.
Superintendence of Tax Administration (SAT).
Municipality for local operations.
Open a corporate bank account.
Comply with labor and social security regulations if hiring.
💰 Tax and Compliance
Corporate income tax: 25% (subject to regimes).
VAT: 12%.
Companies must:
Maintain proper accounting.
Submit monthly and annual tax filings.
Register employees with IGSS (Guatemalan Social Security Institute).
⚖️ Legal Considerations
Foreign investors are generally treated equally under the law.
Anti-money laundering (AML) and compliance regulations are increasingly enforced.
Shareholders' and directors' liabilities are clearly delineated, but personal liability may arise from fraud or non-compliance.
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