Financial Crime World

Guatemala’s Banking Compliance Procedures: A Guide for Businesses

Introduction

Located at the crossroads of North and Central America, Guatemala is an attractive destination for investors seeking to tap into the region’s growing markets. With a GDP of USD$76.71 billion in 2019, Guatemala is the largest economy in Central America, driven by a robust services sector that accounts for approximately 63% of its economic output.

However, navigating the complex web of financial regulatory compliance in Guatemala can be daunting, especially for foreign investors who are not familiar with the local business environment. Failure to comply with these regulations can result in severe penalties, reputational damage, and even business closure.

Key Responsibilities for Businesses in Guatemala

While financial regulatory compliance in Guatemala varies depending on the type of company, several key responsibilities apply to all businesses:

Annual General Meeting (AGM)

  • An AGM must be held at least once a year.
  • Most companies are required to stage it within four months of the close of the financial year on December 31.

Filing and Payment of Value-Added Tax (VAT)

  • VAT must be filed on a monthly basis.
  • The current rate is 12% on the value of most goods and services.

Withholding Tax

  • Withholding tax must be paid on a monthly basis.

Additional Salary Bonuses

  • Many employees are eligible for two annual bonuses, each equal to one full month of pay.

Statutory Contributions

  • Companies must pay all health, pension, occupational risk, and unemployment contributions to the relevant government agencies within 20 days of the salary payment.

Transfer Pricing Studies

In Guatemala, transfer pricing studies must be conducted in compliance with the country’s tax regulations and international standards. The Guatemalan tax authorities require multinational companies with related-party transactions to follow the arm’s length principle, which means that the prices charged in intercompany transactions should be consistent with what unrelated entities would charge each other for similar transactions.

Biz Latin Hub: Your Partner for Financial Regulatory Compliance in Guatemala

At Biz Latin Hub, our local team of corporate legal and accounting experts is dedicated to helping businesses navigate the complexities of financial regulatory compliance in Guatemala. We offer a range of back-office services, including:

  • Company formation
  • Accounting & taxation
  • Legal services
  • Hiring & PEO
  • Visa processing

Contact us now to learn more about how we can help you with financial regulatory compliance in Guatemala or any of the other 17 markets around Latin America and the Caribbean where we have teams in place.