Guatemala Info
Joined: 23 Nov 2006
Posts: 14
Home Country: guatemala
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 Posted: Thu Nov 30, 2006 8:14 am Post subject: DOING BUSINESS IN GUATEMALA / GUATEMALA BUSINESS GUIDE |
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DOING BUSINESS IN GUATEMALA
STARTING A BUSINESS
STANDARDIZED COMPANY
Legal Form: Sociedad Anónima (SA) - Corporation
Minimum Capital Requirement: 5,000
City: Guatemala City
Registration Requirements:
Procedure 1. Check the proposed company name at the Mercantile Registry of Guatemala
Time to complete: 1 day
Cost to complete: GTQ 1
Comment: Before initiating the constitution process, a name search to determine the availability of the name is necessary in order to avoid giving the corporation a name already existent.
Procedure 2. Obtain letter from a Guatemalan notary Public to open bank account
Time to complete: 1 day
Cost to complete: no charge
Comment: A deposit in a local bank of the minimum paid capital requirement of Q.5,000 is needed before signing the articles of incorporation. For this purpose a notary must issue a letter, stating that he/her has been requested to record the deed of constitution of the corporation so that the letter serves the bank to open a temporary bank account while the process of registration is completed. If the company capital is composed of an asset, instead of cash, then this procedure is not required.
Procedure 3. Deposit the subscribed capital in a bank and obtain a receipt
Time to complete: 1 day
Cost to complete: no charge
Comment: The deposit slip or bank statement is not required to be filed with the registry. The notary transcribes it in the articles of incorporation.
Procedure 4. A Notary Public draws the Deed of Constitution
Time to complete: 3 days
Cost to complete: GTQ 6,800 average notarial fees + tax
Comment: The deed is executed by the founding shareholders and attested by the Notary Public, and provisional stock certificates are issues. Once the company is duly registered, definitive stock certificates should be issued and substituted for the provisional stock certificates.
The notaries generally charge a package fee for the entire process of setting up a company. The total fee is up to US$2,000. Generally, the Notary Public will prepare the provisional stock certificates and they will be issued and signed by the President and Secretary of the first Board of Directors of the company, which is appointed in the Deed of Incorporation of the company.
Procedure 5. The notary buys the fiscal stamps and issues a certified copy of the deed of incorporation for filing with the commercial register.
Time to complete: 1 day
Cost to complete: GTQ 250 stamp tax, GTQ 300 notarial stamp and minor photocopy and stamp tax expenses
Comment: Only notaries public can buy the fiscal stamps at the Superintendence of Tax administration (SAT).
Procedure 6. File notarized unique registration form and documents with the commercial registry (Registro Mercantil)
Time to complete: 2 days
Cost to complete: registration fee GTQ 275 + 0.6% of the authorized capital up to a maximum cost of GTQ 25,000 + GTQ 15 (for the issuance of the publishing notification -edicto) + GTQ 15 (for the certificate of provisional registration)
Comment: In May 2006, a new fast-track system was introduced. Only a single registration form (which has to be legalized either by a notary or lawyer) is required for the following formalities: notice of issuance of stock certificates, notice of appointment of legal representative, commercial registration, application for business license (patente), tax and social security registration. As of June 2006, the system was not fully implemented, and tax and social security registration still had to be completed separately.
Documents to be submitted include:
(1) Form of the Commercial Registry sold for Q2;
(2) Original and a simple photocopy of the certified notarized copy of the Deed of Constitution; The Commercial Registry analyzes the documents presented and if they fulfill legal requirements it issues the public notice of authorization (edicto) and assigns a provisional registration number. Once the previous is completed, a certification of provisional registration is issued and the company may start most business activities.
The constitution of a company is subject to the payment of Q250 on the first sheet of the deed and Q0.5 on last sheet of the deed in the form of fiscal stamps, payable when the certified notarized copy is issued.
The company Nneeds to be registered within 1 month from the date of the deed containing the bylaws.
Procedure 7*. Present notice to be published to the Official Gazette (Diario Oficial de Centro America)
Time to complete: 14 days (6 days until publication, 8 days waiting period)
Cost to complete: GTQ 462.3 for 20 lines and GTQ 18.09 for each additional line (VAT 12% included). Generally edicts contain 30 lines.
Comment: If there is no opposition within 8 days following the publication, the Mercantile Registrar proceeds to the final inscription.
Procedure 8. Present the published edict of company organization and obtain corporation license
Time to complete: up to 4 days
Cost to complete: GTQ 200 on fiscal stamps
Comment: Eight days after the publication of the edict, the company presents the publication to the Mercantile Register for the definitive registration.
Procedure 9. Register with the tax authority (Superintendencia de Administracion Tributaria, SAT) and obtain the tax identification number (Número de Identificación Tribunaria - NIT); apply for authorization of company invoices
Time to complete: 1 day
Cost to complete: GTQ 0.5/page, assuming 100 pages
Comment: A representative office of the tax administration is located in the same building as the commercial registry.
The following document are required (original and photocopy):
- Certificate of the provisional registration issued by the Commercial Registry
- Form obtained at the Superintendence of Tax Administration (SAT)
- Certified copy of the constitutional deed.
- Photocopy of identification document of the legal representative.
- Notary deed appointing the legal representative.
This procedure needs to be completed within 30 days following the definitive registration of the company. Late registration will be subject to a penalty of Q1,000.
Procedure 10*. Present accounting books and books of minutes to the Commercial Register for its authorization
Time to complete: 1 day
Cost to complete: GTQ 0.5/page, assuming 100 pages
Procedure 11. Apply for registration of the Company's Mercantile Enterprise, obtain Trading License
Time to complete: 2 days
Cost to complete: GTQ 165
Comment: Both the corporate and business licenses are given by the commercial registry and they cannot be requested at the same time, it is necessary to obtain the corporate license first in order to obtain the business license.
Procedure 12. Obtain the authorization of a book of salaries by the Inspection of the Department of Labor
Time to complete: 1 day
Cost to complete: GTQ 0.5/page, assuming 100 pages
Comment: This requirement applies to entities employing more than 10 workers.
Procedure 13. Register for social security
Time to complete: 1 day
Cost to complete: no charge
Comment: The procedure is mandatory for firms with more than 3 workers
The documentation required is the following:
a)Copy of the business license (patente de comercio);
b) Copy of the deed of constitution;
c) Copy of the appointment of the legal representative;
d) Copy of the identity card of the legal representative;
e) Copy of the certificate of tax identification number.
Note: Procedures sometimes take place simultaneously. Instances of this are marked with an asterisk (*).
TAXATION
Corporate tax
Main rate: 31% of net income
Guatemala operates a territorial system where income tax is levied only on Guatemalan-source income. Resident companies may opt to be taxed under one of two regimes: the general regime, where a flat 5% tax is imposed on gross income of each month; or the optional regime, where tax is levied at a rate of 31% on net taxable income. An asset tax is also imposed, amounting to 2.5% of the income or net assets of the previous year. The asset tax may be credited against corporate income tax liability.
Individual tax
Progressive rates to 31%
Resident individuals are subject to income tax at progressive rates ranging from 15% to 31% on their Guatemalan-source income. Non-resident individuals are taxed via withholding at a flat rate of 31% on their Guatemalan-source income. Employment and professional services income is taxed at progressive rates ranging from 10% to 31%, generally via withholding at source. Other income is taxed at a flat rate of 31%.
Capital gains
Gains are taxable
Capital gains are taxed at 10% under the general regime and 31% under the optional regime.
Indirect tax
Standard rate: 12%
Value-added tax (VAT) applies at a 12% standard rate to most transactions. Exemptions include basic foodstuffs, certain financial services and sales of some low-cost housing. Exports are zero-rated, and exporters may obtain a refund of 60% (or 75% for smaller amounts) of input tax paid. A simplified regime applies for small taxpayers.
Tax administration and compliance
Tax year: Calendar year
The fiscal year corresponds to the calendar year for both companies and individuals. Companies are required to make quarterly advance payments of tax under the optional regime. A final payment is due at the time the tax return is filed. Employment income is taxed by withholding. An alternative regime is available for small-business taxpayers.
Additional tax information
Withholding taxes: Dividends and Interest 10%, Royalties 31%. Interest paid on loans from foreign financial institutions and brought into a Guatemalan bank is exempt from withholding tax.
Tax treaties: Guatemala has not concluded any double-tax treaties.
Dividends: Dividends are not taxable if the distributing company has paid income tax in Guatemala; otherwise, the dividend is taxed at 10%.
Revenue protection: There is no transfer-pricing or anti-tax-haven legislation.
Groups: There are no provisions for group taxation.
Incentives: Export promotion; mining; assembly operations.
Other taxes: Asset tax, Import duties, Inheritance and gift tax, Property tax, Tax on alcoholic beverages. |
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