Guatemala: Appeal Against Employment Act

By filing of a lawsuit arguing unconstitutionality the union of free zones aims to once again include the 25 sectors which were excluded from receiving tax benefits under the new law.

Tuesday, May 17, 2016

The regulations of the controversial Emergent Act for the Conservation of Employment are still under review by the Attorney General's Office and authorities at the Ministry of Economy stated they would evaluate the possibility of modifying it, since the law is already in force and can only be revised by Congress.

See: "Guatemala: Complaints From Free Zones Continue"

According to Rene Castañeda, president of the Association of Free Zones, "... they want an annulment of that article because it leaves companies who had previously received benefits with none. This situation leaves them without legal certainty and it is not known whether they will be able to keep operating. In addition, the suit is trying to prevent the law from being applied retroactively, he added. "

See also "Guatemala: Employment Act Traps Goods in Free Zones" adds that "...the Minister of Economy, Ruben Morales, said that re- including the sectors is the responsibility of Congress alone, because they have been excluded from the law. When asked if these problems could be fixed by regulation, he said it is being analyzed, since the law is not clear on some issues. "

More on this topic

Guatemala: Exports from Processing Zones Down 4%

February 2017

In 2016 exports from the free zone regime fell by 4% compared to 2015, and those from companies covered under the maquila incentive law, fell by 6%.

The negative results in foreign sales of companies operating under one of the two incentive schemes is due in part to the departure of several companies from the free zone regime, having been affected by the Emergent Employment Act.

Guatemala: Free Zones Situation Gets More Complicated

May 2016

It has been reported that one of the 17 free zones operating in the country has started the process of closing its operations entirely due to the legal uncertainty generated by the emergent employment law.

Companies operating in free zones have spent several months denouncing the serious situation they have faced since the Emergent Act for the Conservation of Employment was implemented, instead of encouraging investment and job creation, it has become a good example of how to discourage investment in a country.

Guatemala: Complaints From Free Zones Continue

April 2016

Free zone companies denounce lack of legal certainty in the implementation of a new law (Ley Emergente de Empleo), which established a list of activities and goods that they can no longer make or sell.

The Association of Free Zones of Guatemala expects jobs and foreign investment to be lost if there are no modifications to the Agreement 65-89 "Ley Emergente de Conservación de Empleo", a law which came into effect in March.

Guatemala: Changes to Incentives Bill

November 2015

Among the changes to be made to the draft of the Emerging Law for the Conservation of Employment is the limitation of activities developed in free zones.

The bill which aims to uphold a series of incentives for the productive sector, while the Law on Investment and Employment is being analysed in Congress, will undergo a series of amendments at the request of the tax administration and the Ministry of Finance.

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