With the amendments to the Commercial Code, it is now possible to register a limited company on the Mercantile Registry site and registration of individual merchants will soon be available.
The changes to the regulations becameeffective at the end of January, and among the most important modifications were the reduction of initial capital for the creation of a company, going down from Q5 thousand ($681) to Q200 ($28).
With the entry into force of the reform of the Guatemalan Commercial Code, from today a company can be incorporated with $28.
The modifications that already apply were published in the Diario de Centroamérica on October 31, 2017. Among the most important changes is the reduction of initial capital for the creation of a company, going down from Q5 thousand ($681) to Q200 ($28).
Payment schedule for obligations corresponding to October 2017 and Tax Memorandum on amendments to the Commercial Code.
From a Memorandum sent by Tezó and Associates:
In the newspaper Diario de Centro América dated October 31, 2017, Decree number 18-2017 was published containing reforms to Decree number 2-70 of the Congress of the Republic, Guatemalan Commercial Code, valid for ninety (90) days after its publication.
With the reform of the Commerce Code approved by Congress the process has been simplified and costs reduced for inscribing a corporation, among other changes.
Main changes in the new Commercial Code:
- A business may be incorporated with ($28) Q200.Each shareholder must pay, at least, 25 percent of the nominal value of each share subscribed.
In the view of the WTO the Guatemalan economy has improved considerably, maintaining a focus on opening markets and conditions that facilitate trade.
From the summary of the report Trade Policy Review of Guatemala by the World Trade Organization:
1. During the period under review, Guatemala has deepened its process of trade liberalization and economic reform. A major change in this respect was the elimination, in early 2016, of the export performance requirements for production in free zones regimes and for maquilas.In addition, Guatemala has updated its legislation on public procurement, in the interests of greater transparency and efficiency, as well as that concerning some aspects of the protection of intellectual property rights, and has taken steps to facilitate trade.However, some challenges remain, particularly in the area of competition policy, for which legislation has not yet been implemented.
Guatemala has presented a bill to reform the Code of Commerce to reduce the time to it takes for registering a business from 20 to 3 days.
From a statement issued from the Congress of Guatemala:
Deputy Felipe Alejos from the legislative bloc Todos, said in a press conference that an Initiative Act has been presented to the Legislative Management which aims to accelerate the Mercantile Register of Entities, which contains 44 Amendments to the Decree 2-70, of the Code of Commerce.
In Guatemala "there are still ways to start a business with due secrecy for its owners."
Specialists in corporate and tax law in Guatemala say the Forfeiture Act, Decree 55-2010, leaves the gate open for owners of shares of companies to withhold their identity.
Alvaro Castellanos Howell, a lawyer at the law office Consortium, cited as an example the establishment of a company in countries "where bearer shares are allowed, and then an investment is made in Guatemala with shares, buying moveable goods as an off-shore entity".
Dissolution of a company will be described as a form of corporate reorganization and provides for the recovery of companies whose dissolution was voluntary.
A statement from the National Assembly reads:
Corporate reorganization introduced and figure of commercial companies reactivated
In order to establish dissolution as a form of corporate reorganization and reactivate companies whose dissolution was voluntary, the plenary of deputies of the National Assembly approved on its third reading bill 393 which adds items to the Commercial Code.
The Extinction of Ownership Law includes approved amendments to the Commercial Code, so from now on company shares can only be nominal.
The Law aims to attack drug trafficking and regulates "the obligations of legal entities or individuals engaged in a profession or activity that could be used for the transfer, use, concealment and movement of goods from criminal or illegal acts.”
If successful, the initiative presented by the Executive branch to the National Assembly, would eliminate bearer shares in corporations.
The reform modifies three articles of the Commercial Code by removing references to bearer shares and replacing them registered shares.
"The Superintendence of Tax Administration (SAT) asked Congress yesterday to approve the amendments to the Tax Code, the Commercial Code and the Banks and Financial Entities Law in order to remove bearer shares in anonymous companies and to allow tax and fiscal information to be exchanged," writes the article in Elperiodico.com.gt.
A congress and expo covering electronic commerce will be held on February 10 and 11 at the Costa Rica Marriott Hotel.
25 companies will participate in the event, showcasing their technology and solutions for Bar Codes, RFID, EPC (Electronic Product Code), Storage, Electronic Invoicing and EDI - Electronic Commerce.
The event will feature conferences, product showcases and demonstrations.
PANAMA’S lawyers are celebrating the upgrade of the Commercial Code, legislation that has been due a face-lift for more than half a century.
Morgan & Morgan partner Enrique de Alba said that the Code, which was first drawn up in 1916 shortly after the Panama Canal came into operation, has been badly in need of revision for some time, to underline Panama’s maritime credentials.