Countries › Guatemala › Guide › 3. Investing › Investing in Guatemala: the foreign investment regime, export and free zone incentives, PPPs and treaties

Investing in Guatemala: the foreign investment regime, export and free zone incentives, PPPs and treaties

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Last verified: 2026-10-28 · Status: Changing

Guatemala has no general screening, admission filing or registration for foreign investment: the Foreign Investment Law gives foreigners national treatment, lets them own any share of any lawful business, bans performance requirements and allows expropriation only for proven public interest with prior, effective compensation. The only limits are in the Constitution and a short list of sector laws the same statute preserves. For incentives, since the 2016 reform only apparel and textile producers and ICT service exporters (maquila law) and free zone users get a 10 year income tax exemption plus duty and VAT relief; infrastructure is open to foreign bidders through the PPP law, and 19 bilateral investment treaties back international arbitration.

USD figures use Q7.64427 per US dollar, the Banco de Guatemala reference rate for 28 October 2026, retrieved from the Banguat exchange rate web service on the verification date. Conversions are for orientation only.

Key facts

General screening or approval of foreign investment	None; national treatment, no admission filing textDecreto 9-98 art. 3 and 4, as of 2026-10-28 · in force
General cap on foreign ownership of Guatemalan companies	None (any proportion), save special sector laws textDecreto 9-98 art. 4 and 21, as of 2026-10-28 · in force
Performance requirements as a condition to invest	Prohibited textDecreto 9-98 art. 7, as of 2026-10-28 · in force
Compensation standard for expropriation of foreign investment	Prior and effective, nondiscriminatory textDecreto 9-98 art. 6, as of 2026-10-28 · in force
Bilateral investment treaties listed by the Ministerio de Economía	19 treatiesMINECO investor brochure 2026, as of 2026-10-28 · in force
Maquila law income tax exemption (apparel and textile producers, ICT service providers)	10 yearsDecreto 29-89 art. 12 bis as added by Decreto 19-2016 art. 7, as of 2026-10-28 · in force
Free zone user income tax exemption	10 yearsDecreto 65-89 art. 22 as worded by Decreto 19-2016 art. 23, as of 2026-10-28 · in force
Maximum suspension of duties and import VAT on inputs under temporary admission	12 monthsDecreto 29-89 art. 12 as worded by Decreto 19-2016 art. 6, as of 2026-10-28 · in force
Maximum PPP contract term including extensions (2010 text)	30 yearsDecreto 16-2010 art. 4 letter j), as of 2026-10-28 · in force
Corporate income tax rate, general regime on profits	25 %Decreto 10-2012 art. 36, as of 2026-10-28 · in force
Banguat reference rate used for conversions	7.64427 GTQ per USDDecreto 94-2000 art. 4, as of 2026-10-28 · in force

The rule

1. An investment is any activity producing, intermediating or transforming goods or providing services, including shares in any proportion, credit rights, movable and immovable property, intellectual property and concessions. Foreign investment is any transfer of capital from abroad by a foreign investor, and reinvestment in Guatemala of income or capital generated there also counts. Foreign investors and their investments are governed mainly by this law, plus any special law for the sector and laws of general application, with the same rights and remedies as Guatemalan investors. Treatment is fully equal and nondiscriminatory regardless of the investor's country, except for limits in the Constitution, sector specific laws and preferences under customs union, common market or free trade treaties. A foreigner may take part in any lawful activity and hold any share of the capital of a Guatemalan company, except where a special law requires capital from Guatemalan persons, and no official may demand any requirement not expressly set by law.
Cost to do it: The law creates no admission filing, registration or approval for foreign investment, so there is no fee to invest as such: Q0 (US$0). Costs come from forming the vehicle (see entities pages).
Example: A foreign parent can buy 100 percent of a Guatemalan manufacturer for Q7,644,270 with no investment authorization. / Q7,644,270 is US$1,000,000 at Q7.64427.Decreto Nº 9-98 del Congreso, Ley de Inversión Extranjera, Art. 1, art. 2, art. 3 and art. 4, 1998-02-04 official text · verified 2026-10-28

2. The law expressly preserves the foreign investment requirements and limits in: Ley Forestal (Decreto 101-96) art. 27; Código de Comercio art. 8, 213 to 221, 352, 354 and 355 (foreign companies and branches); the migration law; art. 12 of the maquila law (Decreto 29-89) and art. 21 of the free zones law (Decreto 65-89); the regulation on authorizing banks and branches of foreign banks; the last paragraph of art. 1 of the insurance law (Decreto Ley 473); art. 2 of the financial companies law (Decreto Ley 208); art. 2 of the supplementary land titling law (Decreto 49-79); and arts. 1 and 2 of Decreto 118-96. Any other limit, requirement or condition applying only to foreign investors and not listed was repealed when the law took effect. The same decree repealed foreign ownership limits in the transport, cable television, radiocommunications and hydrocarbons laws and opened public passenger and cargo transport companies to foreign shareholders, up to 51 percent from 1 January 2001 and 100 percent from 1 January 2004.
Cost to do it: No fee; for the preserved sectors (banking, insurance, financial companies) the cost is the sector licence, set by those laws.Decreto Nº 9-98 del Congreso, Ley de Inversión Extranjera, Art. 15, art. 19 and art. 21, 1998-02-04 official text · verified 2026-10-28

3. The foreign investor has full ownership, use and enjoyment of its investment, subject only to the duties and limits the Constitution and laws place on Guatemalans. The State may not expropriate an investment, directly or indirectly, or adopt any measure equivalent to expropriation, except for duly proven collective utility, social benefit or social interest, and then only on a nondiscriminatory basis, under the principle of legality and with prior and effective compensation, save the constitutional exceptions to prior payment. The same decree rewrote art. 10 of the Expropriation Law: compensation covers the value of the property and all damages, losses and expenses caused, and any delay bears interest from the date of expropriation until payment at the average of the lending rates published by banks the day before the rate is fixed, with the Superintendencia de Bancos settling any doubt. Expropriation compensation may be remitted abroad freely.Decreto Nº 9-98 del Congreso, Ley de Inversión Extranjera; Ley de Expropiación (Decreto Nº 529) art. 10 as worded by Decreto Nº 9-98 art. 17, Decreto 9-98 art. 5, art. 6, art. 8 letter d) and art. 17, 1998-02-04 official text · verified 2026-10-28

4. Performance requirements, such as forced technology transfer or a set number of jobs, may not be imposed as a condition for establishing or keeping a foreign investment, and investment measures that restrict or distort trade are barred in line with Guatemala's international commitments; the only exception is labor law rules on hiring Guatemalan employees outside senior management, and the decree amended Código de Trabajo art. 13 so that managers, directors, administrators, superintendents and general heads are outside that rule. Confiscatory taxes and domestic double or multiple taxation of foreign investment are prohibited, while international double taxation is left to treaties. Political risk insurance backed by ratified treaties follows those treaties, and where a ratified treaty allows it, investment disputes with the State may go to international arbitration or other alternative mechanisms. The Ministerio de Economía's Ventanilla Única para las Inversiones is the agency that oversees the law and centralizes investment promotion.Decreto Nº 9-98 del Congreso, Ley de Inversión Extranjera, Art. 7, art. 9, art. 10, art. 11, art. 12 and art. 16, 1998-02-04 official text · verified 2026-10-28

5. Under the maquila and export law as reformed in 2016, companies may qualify in seven regimes, including maquiladora, exporter and producer under temporary admission, service provider, duty drawback, duty free replacement and total national component. A producer under temporary admission makes apparel and textile goods (Harmonized System chapters 50 to 63); a service provider supplies ICT services offered by call or contact centers, software development or digital content development, provided the services go to nonresidents. Producers and service providers get: suspension of duties and import taxes, including VAT, on inputs, samples and production machinery for up to one year from acceptance of the import declaration; total exemption from duties and import VAT on listed production machinery and equipment; total exemption of income tax on income exclusively from the qualified activity for 10 years from notice of the Ministerio de Economía qualification; exemption of fuel oil, gas and bunker used to generate their own electricity; and no VAT on locally sourced inputs and services used only in the qualified activity. The article ends by saying these benefits apply exclusively to apparel and textiles and to ICT services offered by call or contact centers. Branches or permanent establishments of foreign companies lose the income tax exemption if their home country credits the Guatemalan income tax. Benefits cannot be transferred, and suspended duties and taxes must be guaranteed by a cash deposit, bonded warehouse, bank or insurance surety, mortgage or a combination.
Cost to do it: No qualification fee is set in Decreto 19-2016. The financial cost is the guarantee for suspended duties and VAT (cash deposit, bonded warehouse, surety insurance or mortgage) plus monthly sworn declarations to SAT and IGSS payroll filings.
Example: A call center selling only to nonresidents with Q7,644,270 of annual taxable profit avoids Q1,911,067.50 of income tax a year at the 25 percent general rate, for 10 years. / About US$250,000 a year on US$1,000,000 of profit.Ley de Fomento y Desarrollo de la Actividad Exportadora y de Maquila (Decreto Nº 29-89) art. 6, 8 bis, 12, 12 bis, 18 and 27, as worded by Decreto Nº 19-2016 del Congreso, Ley Emergente para la Conservación del Empleo, Decreto 19-2016 art. 4 to 7, 9 and 11, 2016-03-30 official text · verified 2026-10-28 · changed: Decreto Nº 19-2016, issued 25 February 2016, published in the Diario de Centro América on 30 March 2016 and in force the next day, removed the subsidies Guatemala had notified to the WTO for elimination and limited the income tax exemption under Decreto 29-89 to apparel and textile producers and ICT service providers, with a 10 year term; it also added eligibility exclusions and social security based suspensions.

6. Free zone users authorized by the Ministerio de Economía are producers of industrial goods (production, transformation, assembly and processing, or technological research and development) or service users (services linked to international trade, including commerce). They get: exemption from taxes, duties and charges on importing into the zone machinery, equipment, tools, raw materials, inputs, packaging and other goods used in production or services; total exemption of income tax on income exclusively from the authorized activity for 10 years from notice of the qualification, which does not apply when a service user sells or provides services into the national customs territory, and which foreign domiciled users lose if their home country grants a credit for Guatemalan income tax; no VAT on transfers within and between free zones; exemption from stamp tax and special protocol paper on purchases, exchanges and transfers of real estate used only in the activity; and no VAT on local inputs and services used only in the activity. Activities that cannot be carried on in a free zone include crude oil and fuels, fishing, hotels, forestry, sugar, coffee, cardamom, bananas, livestock, mining extraction, alcohol, tobacco, cement, processed food and beverages, medicines, cosmetics, plastics, furniture, construction materials, financial services, electricity generation for third parties, telephony and television.
Cost to do it: No qualification fee is set in Decreto 19-2016; users must keep perpetual inventory, file monthly transformation reports with SAT and send IGSS payroll filings.Ley de Zonas Francas (Decreto Nº 65-89) art. 4, 22 and 41, as worded by Decreto Nº 19-2016 del Congreso, Decreto 19-2016 art. 21, 23 and 27, 2016-03-30 official text · verified 2026-10-28 · changed: Decreto Nº 19-2016 (in force 31 March 2016) redefined free zone users as industrial producers and service users, set the 10 year income tax exemption, removed the machinery import exemption for users qualified before the reform, and widened the list of activities barred from free zones.

7. Neither the maquila regime nor the free zone regime is available to: owners of companies whose benefits under those laws or the Santo Tomás de Castilla free zone law (Decreto 22-73) were revoked for infringements; persons, partners or shareholders with final unpaid customs or tax obligations; persons with final administrative rulings on tax or customs breaches not challenged in time; past or present users of the Santo Tomás de Castilla free zone; persons enjoying tax incentives under other laws; persons owing IGSS contributions or fines; persons with unfulfilled labor court judgments (maquila) or labor rights complaints reported by the labor inspectorate (free zones); and anyone who misleads the Ministerio de Economía or SAT, including by registering a new company to replace one that already used the benefits. The Ministerio de Economía must see a SAT tax solvency certificate for the applicant, its legal representative, partners and shareholders before qualifying it. Under the maquila law, benefits are suspended for two, four or six months for social security breaches, doubled for repeat breaches and revoked permanently after repeated suspensions.Decreto Nº 29-89 art. 4 bis and 43 bis and Decreto Nº 65-89 art. 5 bis, as added by Decreto Nº 19-2016 del Congreso, Decreto 19-2016 art. 3, 17 and 22, 2016-03-30 official text · verified 2026-10-28

8. Public private partnership contracts for economic infrastructure are awarded by public international tender, open without exception to national and foreign persons that meet the tender rules; bidders and the contracting private party may be national or foreign. Under the 2010 text every contract must state a maximum term which, including extensions, may not exceed 30 years, failing which the contract is void. Disputes under a PPP contract go to conciliation or arbitration before the Ad hoc Arbitral Commission in Guatemala or, if the private party waives local arbitration in time, to international conciliation and arbitration; a private party with foreign investment that chooses international jurisdiction must go to ICSID, and awards are subject to the New York Convention. The law is administered by the Agencia Nacional de Alianzas para el Desarrollo de Infraestructura Económica (ANADIE).
Cost to do it: No bidding fee is set in the law; tender rules for each project set bid bonds and other costs.Decreto Nº 16-2010 del Congreso, Ley de Alianzas para el Desarrollo de Infraestructura Económica, as reformed by Decreto Nº 21-2025, Art. 2, art. 4 letter j), art. 42 and art. 95, 2010-04-13 official text · verified 2026-10-28 · changed: Decreto Nº 21-2025, which ANADIE publicly backed after its approval in November 2025, reformed the law. According to ANADIE's official summary of the reform, the private sector may now submit unsolicited proposals, sectors were widened to health, education, water and sanitation, a private capital fund with pre investment, contingency and guarantee accounts was created, project phases were ordered from identification to reversion, public debt for a PPP must be approved by Congress before tender, and only contracts that provide public services still need approval by Congress, while others are approved by the Agency's Council. The consolidated reformed text was not available from an official source on the verification date, so the 30 year term cited above is from the 2010 text.

Regime	Who qualifies	Income tax	Duties and VAT	Norm
Foreign Investment Law	Any foreign investor	General rules (25 percent on profits)	General rules	Decreto 9-98 art. 2 to 8
Maquila, producer under temporary admission	Apparel and textile producers (HS chapters 50 to 63)	Exempt for 10 years on qualified income	Suspension on inputs up to 1 year; machinery exempt; local inputs VAT free	Decreto 29-89 art. 8 bis, 12 bis (Decreto 19-2016)
Maquila, service provider	ICT services to nonresidents (call and contact centers; software and digital content per art. 8 bis)	Exempt for 10 years on qualified income	Same as above	Decreto 29-89 art. 8 bis, 12 bis (Decreto 19-2016)
Maquila, other export regimes	Exporters under temporary admission, drawback, duty free replacement, national component	No exemption	Suspension for 1 year or drawback within 6 months	Decreto 29-89 art. 6, 12, 13 (Decreto 19-2016)
Free zone user	Industrial producers and international trade service users	Exempt for 10 years; not on sales into the national territory	Import exemption into the zone; intra zone transfers VAT free	Decreto 65-89 art. 4, 22 (Decreto 19-2016)
PPP contract	National or foreign bidders in public international tender	General rules	General rules	Decreto 16-2010 art. 42

Investment incentive and access regimes compared (as verified 28 October 2026).

Worked example

A foreign software group sets up a Guatemalan sociedad anónima to run a contact center serving only US clients. No foreign investment filing is needed (Decreto 9-98 art. 3 and 4). It applies to the Ministerio de Economía for qualification as a service provider under Decreto 29-89, with SAT solvency certificates for the company, its legal representative and shareholders (art. 4 bis). Once notified, its income from the qualified activity is exempt from income tax for 10 years: on Q7,644,270 (US$1,000,000) of annual profit that is Q1,911,067.50 (about US$250,000) a year that would otherwise be due at 25 percent (Decreto 10-2012 art. 36). Computers and equipment listed in the qualification enter free of duties and import VAT, and local services used only in the activity are not subject to VAT. If the investor operated instead through a branch of a parent whose home country credits Guatemalan income tax, the exemption would not apply (art. 12 bis letter d).

Step by step

1. Check the sector: outside the laws preserved by Decreto 9-98 art. 21 (banking, insurance, financial companies, forestry, foreign company rules in the Código de Comercio and others listed), no screening applies and foreign ownership can be 100 percent.
2. Choose the vehicle (sociedad anónima or registered branch) and register it at the Registro Mercantil and SAT; see the entities pages.
3. If you export apparel or textiles or ICT services, or will operate in a free zone, obtain SAT tax solvency certificates for the company, representative and shareholders and apply to the Ministerio de Economía for qualification; benefits run from notice of the qualification resolution.
4. Before importing under suspension, post the guarantee for duties and VAT (cash, bonded warehouse, surety insurance, mortgage or a combination) and set up perpetual inventory records.
5. Keep benefits alive: file monthly sworn declarations to SAT within 20 days, attach the last three months of IGSS payroll filings, file monthly transformation reports, and send the full payroll to the Ministerio de Trabajo yearly.
6. For infrastructure, follow ANADIE's project portfolio and public international tenders, and decide early whether to keep the ICSID route open by waiving local arbitration in time.
7. Check whether your home country has one of the 19 bilateral investment treaties listed by the Ministerio de Economía; treaty protection is what opens international arbitration under Decreto 9-98 art. 11.

Common traps

The income tax holiday is no longer a general export incentive: since 31 March 2016 maquila exemptions cover only apparel and textile producers and ICT service providers, and the closing paragraph of art. 12 bis mentions call and contact centers only, so software and digital content companies should confirm their qualification resolution expressly grants the exemption.
Branches of foreign companies lose the maquila and free zone income tax exemption if their home country gives a credit for Guatemalan income tax; check the parent's tax system before choosing a branch.
Free zone service users lose the income tax exemption on sales or services into Guatemala's national customs territory.
Unpaid IGSS contributions, final tax debts or unfulfilled labor judgments of the company, its partners or shareholders block qualification, and social security breaches suspend benefits for two to six months, doubled on repeat.
Benefits under the maquila law cannot be transferred, and replacing a company that already used the benefits with a new one is treated as deceit that bars access.
Decreto 9-98 lets you own any share of a company, but a sector law preserved by art. 21 can still require licences or local capital; check the sector law first.
The PPP law was reformed by Decreto 21-2025; confirm approval routes and term limits against the current consolidated text before relying on the 2010 provisions.

Sources

← Guatemala macro at a glance: the rules behind the quetzal, inflation, the policy rate and the budgetChoosing a legal entity in Guatemala: sociedad anónima, sociedad de emprendimiento, branch or limited liability company, with capital, registry, cost and ownership reporting rules →

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