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Guatemala Subsidiary

Choosing to expand to Guatemala will provide many benefits to your company — you can form new business relationships, add talented employees to your team, and begin overseas operations. However, you need to learn how to set up a Guatemala subsidiary, hire employees, and give out compensation and benefits.

Globalization Partners makes it easier to expand through Guatemala subsidiary outsourcing. As a global PEO, we can use our existing subsidiary to help you start working faster. Plus, we take on all matters of compliance, so you can run your company without worrying about Guatemala subsidiary laws and employment compliance.

How to Set up a Guatemala Subsidiary

Your Guatemala subsidiary setup process will depend on a variety of business and location factors. First, you need to consider a physical location for your office and research the area around it. Some regions or cities may have separate or additional Guatemala subsidiary laws that impact incorporation.

You should also think about how you want to operate your business. Guatemala offers several different entities you can incorporate as, including a limited liability company (LLC), public limited company, branch, and representative office. Each option will either encourage or limit your activity, so it’s important to choose the best entity for your business goals.

Many companies choose to incorporate as an LLC because of the limited liability nature between the parent company and subsidiary. The steps to set up a Guatemala subsidiary as an LLC include:

  • Choosing two people to appear before a lawyer and execute the articles of incorporation
  • Depositing your minimum initial investment of Q5,000 in a local bank linked to the national financial system
  • Ensuring each shareholder owns at least one share of stock
  • Registering the company with the Registro Mercantil General de la Republica (National Mercantile Registry)
  • Receiving company credentials and a tax ID number (NIT)
  • Issuing and legalizing the company’s books for accounting and legal issues and shareholders’ meetings
  • Submitting books to the Superintendencia de Aministracion Tributaria (SAT) for review and legalization

Guatemala Subsidiary Laws

The Guatemala subsidiary laws you must follow depend on the entity you choose. LLCs need two shareholders who must invest Q2,000 in the company’s paid-up capital. You also need one director to help run the company. These individuals can all be foreigners, but you have to appoint a resident legal representative if your director does not reside in Guatemala.

LLCs also need to submit annual audited financial statements to the Register of Commercial Entities. You’ll need to pay a corporate tax rate of 25% to stay compliant. Finally, your company must register with the local tax administration and the Social Security Authority as soon as you start operations.

Benefits of the Guatemala Subsidiary Setup Process

Once you complete the Guatemala subsidiary setup process, you’ll be free to operate in the country. Operating an LLC will bring even more benefits to your parent company and subsidiary. The parent company has limited liability in the case of any litigation related to the subsidiary, and the subsidiary can operate under its own company culture and process.

The entire incorporation process can take anywhere from a few weeks to a few months, and that’s before you can hire employees and get your company off the ground. Fortunately, Globalization Partners can help you start working in a few days instead. Through Guatemala subsidiary outsourcing, we can hire employees who work on your behalf and add them to our locally compliant payroll. Instead of worrying about Guatemala’s subsidiary laws, you can feel confident knowing that we ensure total compliance and instead use the time to run your company.

Everything You Need to Succeed in Setting up a Subsidiary

Since learning how to set up a Guatemala subsidiary can take up a large portion of your time, we recommend setting aside the time needed to incorporate before you begin. You can start by clearing your schedule for a few weeks to focus on the expansion and travel back and forth to Guatemala. If you’re too busy with your parent company, you should outsource or work with another company executive to handle the project.

Next, you should set aside all the money you’ll need to incorporate. Guatemala subsidiary laws may include certain fees throughout the process, so we recommend working with your finance department to make sure you can pay for the expansion.

Contact Globalization Partners Today

At Globalization Partners, we know how important expansion is to your company. Contact us today to learn more about how Guatemala subsidiary outsourcing can save you time and ensure compliance.