"LAW FOR THE PROMOTION AND DEVELOPMENT OF EXPORT AND MAQUILA ACTIVITIES"
(DECREE 29-89) OTHER INDUSTRIES

Features

The purpose of this Law is to promote, encourage and develop in the national customs territory, the activities engaged in by individuals or legal entities domiciled in the country, operating within the customs regimes, in accordance with this Law.

Limited to two sectors (which benefit from all incentives):

a) Apparel and textiles 1 Article 8 bis*:
Production activity under the Temporary Admission Regime is understood as the production, transformation, assembly, assembly and processing of industrial goods related to the apparel and textile industry, with the purpose of providing them with other characteristics or uses, different from those of their original materials or components.

b) Of services: the individual or legal entity that provides services related to information and communication technologies, offered by call centers or contact centers, software development, development of digital content, as long as their services are provided to persons not residing in the national territory.

Authorization time: 30 days from the moment the documentation is submitted to MINECO.
Authorizes: Directorate of Trade and Investment Services of the Ministry of Economy (MINECO).
8 avenue 10-43, zone 1
Phone +502 2412-0200
https://www.mineco.gob.gt/node/107

INCENTIVES APPLICABLE TO THE APPAREL AND TEXTILE + SERVICES SECTORS
  1. Temporary suspension (for a period of up to 1 year) of the payment of customs duties and import taxes, including Value Added Tax (VAT) on raw materials, semi-finished products, intermediate products, containers, packaging and labels.
  2. Temporary suspension (up to a period of 1 year) of the payment of customs duties and import taxes, including Value Added Tax (VAT). On samples, engineering samples, instructions, patterns, patterns, models necessary for the production process or for research or demonstration purposes.
  3. Total exoneration of customs duties and import taxes, including Value Added Tax -VAT- on the import of machinery, equipment, parts or components necessary for the production process.
  4. Total income tax exemption for a period of 10 years.
  5. Total exoneration of taxes, customs duties and other charges applicable to the importation and consumption of fuel oil, butane gas, propane or bunker strictly necessary for the generation of energy.
  6. The acquisition of locally produced inputs to be incorporated into the final product and services that are used exclusively in its activity are not subject to Value Added Tax.
  7. Other benefits: Users who qualify under decree 29-89 are not circumscribed to a specific location, i.e. they can be located anywhere in the country.
INCENTIVES FOR OTHER SECTORS

Temporary suspension (for a period of up to 1 year) of the payment of customs duties and import taxes, including Value Added Tax (VAT) on raw materials, semi-finished products, intermediate products, containers, packaging, labels. The acquisition of locally produced inputs to be incorporated in the final product and services that are used exclusively in its activity are not affected by Value Added Tax. Other benefits: Users that qualify under decree 29-89 are not circumscribed to a specific location, i.e. they can be located anywhere in the country.

1. Industrial goods related to the apparel and textile industry are understood to be those included in section XI, relating to textile materials and their manufactures, comprising chapters 50 to 63 of the Harmonized System, as well as those inputs classified in any other item of the Harmonized System, which shall be described by tariff items in the qualification resolution issued and notified by the Ministry of Economy, as well as the services and goods necessary exclusively for the production, transformation, assembly, assembly and processing of industrial goods related to the apparel and textile industry, which shall also be described in the referred resolution.

REQUIREMENTS
  • 1.  Application on letterhead, signed and stamped by the company’s owner or legal representative, addressed to the Director of Trade and Investment Services of the Ministry of Economy. 
  • 2.  Technical economic report of the project to be carried out, signed and stamped by the legal representative or owner of the company.  Instructions https://www.mineco.gob.gt/node/112. 
  • 3.  Photocopy of a duly registered copy of the public deed of incorporation of the company. 
  • 4.  Photocopy of the appointment of the Legal Representative.
  • 5.  Photocopy of the Identification Document -DPI- of the applicant.
  • 6.  Fotocopia de la constancia de inscripción al Registro Tributario Unificado -RTU- del titular.
  • 7.  Photocopy of the Company’s and/or Society’s Commercial Patents. 
  • 8.  Notarized affidavit of the legal representative.
  • 9.  Proof of the last payment of labor and employer’s contributions to the Guatemalan Institute of Social Security -IGSS-.
  • 10.  Proof of lack of fines pending payment to IGSS. 
  • 11. Tax solvency issued by the Superintendence of Tax Administration (SAT) of the individual or legal entity, legal representative, partners and shareholders. 
  • 12. Affidavit before a Notary Public stating that the company has not been sanctioned with revocation of benefits conferred by Decree 29-89, Decree 65-89 or Decree 22-73. 
  • 13. Certification of Registration of Partners and Shareholders. 
  • 14.  Photocopy of the lease contract of the real estate property where the company will be installed.
  • 15. Publication in at least one newspaper of national circulation, the name of the individual or legal entity requesting benefits under decree 29-89.
COMPANIES QUALIFIED ACCORDING TO SECTOR UNDER DECREE 29-89
SEPTEMBER 2020

2. The RTU is the single tax registry and serves as a kind of proof of your registration in the SAT. This is useful for companies to know your taxpayer status.

3. Instituto Guatemalteco de Seguridad Social (Guatemalan Social Security Institute): is a governmental, autonomous institution dedicated to provide health and social security services to the population that is affiliated with the institute, known as “asegurado” or “derechohabiente” (insured or entitled).

4. Law for the Promotion and Development of the Export and Maquila Activity, Decree 29-89; Law of Free Zones, Decree 65-89; and Organic Law of the Free Zone of Industry and Commerce Santo Tomas de Castilla, Decree 22-73; all from the Congress of the Republic of Guatemala.

We invite you to learn more about Decree 29-89