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Guatemala National Strategy to Attract Foreign Direct Investment 2024

by | Jun 29, 2024

On June 13, 2024, the Government of Guatemala launched the Guatemala National Strategy to Attract Foreign Direct Investment. This document is an instrument to boost economic activity and promote new opportunities during the current administration’s four years in office. At the event, the Guatemalan president, Bernardo Arévalo, specified the reconstruction and expansion of infrastructure and the promotion of institutional reforms such as the Competition Law.

Guatemala’s Competition Law

Guatemala’s competition law, established by the “Ley de Competencia,” enacted in 2016, is a testament to the country’s commitment to promoting and ensuring fair competition within the market. This law, designed to be fair and just, should instill confidence in Guatemala’s commitment to fair business practices. The law prohibits anti-competitive agreements like price-fixing, market-sharing, and bid-rigging to prevent collusion. It also addresses the abuse of dominance by prohibiting predatory pricing and exclusive dealing. Additionally, the law regulates mergers and acquisitions to avoid substantially lessening competition. Furthermore, it tackles various forms of unfair competition, including misleading advertising, defamation of competitors, and exploitation of another’s business reputation. Enforcement of the competition law is overseen by the Superintendencia de Competencia (Superintendency of Competition), which has the authority to investigate suspected anti-competitive practices, impose fines, and take other necessary actions to ensure compliance. Sanctions for violations can include substantial fines and orders to cease anti-competitive behavior. The law also features a leniency program, offering reduced penalties for companies that voluntarily report their involvement in anti-competitive practices and cooperate with authorities. Legal procedures outlined in the law ensure due process during investigations, hearings, and appeals. Guatemala’s competition law strives to create a competitive market environment that benefits consumers, businesses, and the economy by preventing anti-competitive practices and promoting fair competition.

Presidential Commitment to Economic Growth

However, the president stated, “We are aware that there is much that can be done from the Executive, from the Ministry of Economy specifically, to open more opportunities for growth and development.” The Guatemala National Strategy to Attract Foreign Direct Investment document reflects our commitment to creating a different future for the nation, with the generation of quality employment and environmentally responsible investment,” the head of state stressed. Arévalo expanded, “The strategy is a shared vision for the well-being and prosperity of Guatemalans and reflects the conviction that we can and must create an environment where investment becomes an engine for inclusive and equitable development.”

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Focus on Innovation and Competitiveness

“We will seek to attract innovation, knowledge, technologies, and management systems that will improve work and companies by making them more productive and competitive,” the 65-year-old president highlighted in front of different invited actors. Previously, the head of the Economy, Gabriela García, expressed that Guatemala regained investors’ trust thanks to the current government’s transparency policy.

Establishment of the Investment Promotion Agency

As part of the Guatemala National Strategy to Attract Foreign Direct Investment, the creation of the National and Foreign Investment Attraction Agency was advanced. This agency will be actively dedicated to promoting investments. The National Strategy to Attract Foreign Direct Investment prioritizes traditional sectors with a successful investment history and already existing commercial dynamics. These sectors include processed foods and beverages, clothing, textiles, business services, contact centers, and the BPO (business process outsourcing) sector.

Infrastructure and Human Capital Development

At the same time, she added, “The government continues working to modernize the country’s infrastructure and strengthen human capital formation processes.” She highlighted these efforts to improve Guatemalan competitiveness so that companies representing more sophisticated sectors, such as electrical-electronics, health services, biotechnology, medical devices and equipment, and tourism, will invest in the medium term. The Minister said the strategy also focuses on markets with which Guatemala already has a commercial relationship, supported by 19 investment agreements and 14 free trade agreements. She mentioned the United States, Mexico, Colombia, Spain, South Korea, Japan, Taiwan, India, Germany, the Netherlands, and the United Kingdom.

In conclusion, the Guatemala National Strategy to Attract Foreign Direct Investment marks a significant step towards strengthening the country’s economic framework and fostering a more conducive environment for foreign investments. By focusing on both traditional and emerging sectors and leveraging existing trade agreements, Guatemala aims to position itself as a competitive destination for global investors. This strategic approach and ongoing infrastructure improvements and institutional reforms underscores the government’s commitment to sustainable and inclusive economic growth.

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