Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.
Last Published: 8/26/2019

The political situation in Guatemala is marked by continuing corruption scandals and widespread calls for reform. On June 16, Guatemala held general elections for president, congress, and all 340 mayors. President Jimmy Morales was constitutionally barred from seeking re-election. 

The Morales administration officially transitions authority to the next administration on January 14, 2020, and mayors officially transition authority on January 15, 2020.   The initial results of the first round revealed that the candidate Sandra Torres and Alejandro Giammatei will compete in a second round on August A second round of presidential elections on August 11 to determine the new president.
On the commercial side, there have also been a growing number of complaints from U.S. stakeholders and companies regarding corruption and transparency issues within the country. In 2018, companies brought cases alleging corruption with Guatemalan procurement and court proceedings. These cases of unfair treatment against U.S. companies continue to reflect significant negative impact on Guatemala’s investment climate. The U.S. government advocates for U.S. companies on the whole and for the use of open, fair, and transparent tenders in government procurement and in accordance with CAFTA-DR obligations allowing open participation by U.S. companies.

Other concerns such as violent crime and weak judicial institutions remain serious challenges. Issues related to the Certificate of Origin continuously represent an obstacle to access preferential tariffs by Guatemalan importers. Additionally, widespread corruption, impunity, labor rights abuses, protection of intellectual property, food insecurity, poor education, and deep socio-economic divisions continue to be key challenges for the government.

A significant reform to the Guatemalan Government Procurement Law was approved in 2015 by Congress. The bill should improve procurement transparency and efficiency by barring government contracts for financers of political campaigns/parties, congressmen, other elected officials, government workers, and their family members. It also will expand the scope of procurement oversight to include public trust funds and all institutions (including NGOs) executing public funds. To improve transparency, the bill will make the governments’ electronic procurement system, Guatecompras, the only method of bidding on government projects. The law will also tighten bidding requirements to promote increased competition, and create an electronic auction modality that requires awarding the lowest bidder for certain contracts. 

The U.S. commercial relationship with the region has additional challenges, and one of the newer more significant involves China’s growing presence in the region.  Mainland China has begun to make significant inroads in Central America with respect to investment – and consequently influence. Chinese trade with Central America has increased by 70 percent in the past five years. It has recently emerged as the second largest trading partner for much of Central America.  China is now moving past exports of simple household electronics and motorbikes and is now engaging in major infrastructure projects in the region such as energy plants, seaports, and telecommunications.  This often aggressive and anti-competitive investment is placing some U.S. investors at a significant disadvantage. In addition to harming U.S. investors, growing Chinese investment in regional infrastructure could potentially have significant negative repercussions for U.S. national security.

To counter growing Chinese competition in infrastructure projects in Central America, Commerce initiated a program to help spur investment into key regional projects and ensure fair competition and access.  The program, the U.S. – Central America Deal Team, aims to capitalize on increased collaboration between U.S. agencies to respond more rapidly to new investment opportunities, provide better access to and knowledge of financing options, and more effective advocacy for U.S. firms.

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.