Guatemala

Employer of Record (EOR) in Guatemala

Only 399 EUR per employee per month

Rivermate's Employer of Record (EOR) solution helps companies hire remote employees in Guatemala . We take care of global payroll, taxes, benefits, compliance and HR activities. So you can focus on growing your business. Our Employer of Record (EOR) solution is beneficial to companies that want to hire remote employees in a breeze. On this page you will find employment information for Guatemala.

Employer of Record people
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Currency
Guatemalan Quetzal
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Capital
Guatemala City
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Region
Americas
Megaphone
Language
Spanish
Hire remote employees
Population
17915568
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GDP
$75.62 billion
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GDP growth
0.0276
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Ease of doing business
62.6
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World GDP share
0.0009

1. Grow your team in Guatemala with Rivermate as your Employer of Record (EOR) / PEO

Payroll, benefits, taxes, and compliance can be difficult to manage in Guatemala , particularly if you don't have established local relationships. You can hire employees in Guatemala effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global Employer of Record (EOR) solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

2. Summary

Guatemala, formally the Republic of Guatemala (Spanish: Repblica de Guatemala), is a Central American nation bordered to the north and west by Mexico, to the east by Honduras, to the southeast by El Salvador, and to the south by the Pacific Ocean. It is the most populated nation in Central America and the 11th most populous country in the Americas, with an estimated population of roughly 17.2 million people. Guatemala is a representative democracy, with Nueva Guatemala de la Asunción, popularly known as Guatemala City, as its capital and biggest city.

The heart of the Maya civilization, which spanned Mesoamerica, was traditionally located in modern-day Guatemala. The majority of this territory was acquired by the Spanish in the 16th century and claimed as part of the viceroyalty of New Spain. Guatemala gained independence from Spain and Mexico in 1821. Guatemala joined the Federal Republic of Central America in 1823, which disintegrated in 1841.

Guatemala had chronic instability and civil warfare from the mid-to late-nineteenth century. It was governed by a succession of tyrants supported by the United Fruit Company and the United States government beginning in the early twentieth century. The authoritarian tyrant Jorge Ubico was deposed in 1944 by a pro-democratic military coup, launching a decade-long revolution that resulted in extensive social and economic changes. In 1954, a military coup supported by the United States ended the revolution and established a dictatorship.

Guatemala saw a violent civil war between the US-backed government and leftist rebels from 1960 to 1996, involving genocidal atrocities of the Maya community by the military. Guatemala has experienced both economic development and successful democratic elections since a United Nations–negotiated peace treaty, but continues to suffer from high rates of poverty and crime, drug cartels, and instability. According to the Human Development Index, Guatemala is ranked 31st out of 33 Latin American and Caribbean nations in 2014.

The richness of ecologically important and distinct habitats in Guatemala, which includes numerous endemic species, adds to Mesoamerica's status as a biodiversity hotspot.

Hiring talented employees in a short span is not an easy task. Partnering with an Employer of Record (EOR) like Rivermate in Guatemala is your best option, giving your organization enough time to focus on other aspects of international expansions like project management and inventory management. The EOR takes care of all the compliance and legal issues while helping you speed up hiring using their knowledge of domestic employment practices and virtual onboarding tools. Top EORs also have provisions for the e-signing of documents to enable faster onboarding.

3. Public holidays

4. Types of leave

There is no information about the types of leave for this country.

Paid time off

In their first year of employment, employees are entitled to 15 days of leave.

Public holidays

Guatemala recognizes twelve public holidays.

Sick days

Sick insurance is charged at half the daily pay rate that is paid by either the employer or social security, depending on the cause for the illness.

The duration of sick leave is determined by the period of service:

1 month of paid sick leave after 2–6 months of work

6–9 months of work + 2 months of paid sick leave

3 months of paid sick leave after 9 months of work

If the employee does not return at the end of the sick leave, the work arrangement is permanently terminated (called a "absolute suspension"), and all workplace and employee duties are suspended. In this case, the plaintiff has the right to cancel the work arrangement, but the employer cannot do so unless there is good reason.

Furthermore, the contractor may seek to fill the employee's responsibilities on a contractual basis, and may be dismissed until the employee returns.

Maternity leave

Beginning 30 days before the scheduled due date, mothers are entitled to 84 days of maternity leave.


The mother is entitled to 42 days of paid leave in the case of a miscarriage or stillbirth.

Paternity leave

Guatemala currently has no provisions in the law regarding paternity leave.

Parental leave

Guatemala currently has no provisions in the law regarding parental leave.

Other leave

In the case of the loss of a partner or infant, bereavement leave is a three-day paid leave.

Employee wedding – 5 days paid time for the employee's wedding.

A member of a labor union's executive committee can take up to six days of paid leave to perform union duties. A individual in this situation may be entitled to extra unpaid leave.

A judicial summons entails a half-day paid leave.

5. Employment termination

There is no information about employment information for this country.

Termination process

Except for giving written notice and for reasonable cause, Guatemala lacks a standardized termination procedure. However, there are few instances in which an employer must request permission to terminate an employee: if the person is pregnant or nursing; if the employee is active in the creation of a union; and if the employee is involved in “collective conflict” under collective bargaining.

Notice period

The duration of the notice period is determined by the length of employment. The notice period is one week for jobs lasting less than six months. The notice period is at least 10 days for jobs lasting six months to one year. The notice period is at least two weeks for employees who have been with the company for one to five years. There will be a month's notice period for employees who have worked for more than 5 years.

Probation period

The probationary period in Guatemala usually lasts for two months.

Severance pay

Severance payments are only made when a court rules that an employee was terminated without cause. The employee may be reinstated, and will receive back pay from the date of termination, or he or she may receive severance pay equal to one month's salary for each year worked. Additionally, if an employee receives non-cash benefits such as use of an employee vehicle, a mobile phone, or meals, they are entitled to 30% of their income for each year of service.

6. Working hours

There is no information about the working hours for this country.

General working schedule

The standard work week is 44 hours long and includes eight hours of sleep. This can be increased to a maximum of 48 hours per week by adding two hours per day. Managers and supervisors are permitted to work a maximum of 12 hours per week. Employees are entitled to 30 minutes of rest per day and one day of rest after five days, but the law makes no reference to a specific day.

Nighttime work is limited to 36 hours per week, divided into six six-hour shifts between 6 p.m. and 6 a.m. If the shift includes daytime work, the cap is increased to 42 hours.

Employees under the age of 14 are not permitted to work nights or overtime. Their workweek is limited to 38 hours, with a maximum of seven hours per day.

Overtime

Overtime is defined as hours worked in excess of 44 in a workweek and is compensated at 150 percent of the standard rate. Employees in hazardous environments are not permitted to work overtime. Overtime pay is paid to employees who work on a rest day or a public holiday.

7. Minimum wage

There is no information about the minimum wage for this country.

The minimum wage in Guatemala varies by sector, according to the country's compensation laws. Non-agricultural employees, for example, earn 92.88 Guatemalan quetzals per day as of January 2021. Employees in export-sector factories should be paid 84.88 quetzals per day. Employees earning the minimum wage should be required to receive a monthly bonus of 250 quetzals. Salaried employees should also receive two mandatory yearly bonuses, each equal to one month's salary.

8. Employee benefits

There is no information about the employee benefits for this country.

Probationary period, annual leave, public holidays, sick leave, maternity leave, paternity leave, overtime pay, severance pay, and 13th month pay are among the mandatory benefits stipulated by Guatemalan labor law.

Social security benefits are also included in statutory benefits.

9. Taxes

There is no information about the taxes for this country.

Corporate tax

Companies in Guatemala are imposed a corporate tax rate of 25 percent.

Individual income tax

Individuals in Guatemala are subject to an income tax rate between 5 percent and 7 percent. The actual percentage depends on the income bracket the individual belongs to.

VAT, GST and sales tax

The value-added tax (VAT) or goods and sales tax (GST) in Guatemala is currently set at 12 percent.

10. VISA and work permits

There is no information about VISA and work permits for this country.

If a foreign citizen comes to Guatemala for paid labor in a paid activity, he or she enters into a relationship with a Guatemalan employer that involves dependency on and control by the Guatemalan employer. In such instance, the foreign national must apply for a residence and work permit as a migrant worker.

Following the abolition of the Business Visa, business travelers may now visit Guatemala as Tourists or Travellers to execute consultancy and advising activities. Visa nations must get the necessary entry visa in order to enter Guatemala, but they are no longer needed to apply for a Business Visa once there. As a business traveler, you may remain for up to 90 days in a row, with the option of extending your stay for another 90 days.

After obtaining a migrant worker's residence permit (or filing the related migrant worker's residence application with the Guatemalan Institute of Immigration (Instituto Guatemalteco de Migración), the foreign national must apply for a work permit with the Labour Ministry.

The Temporary Residence and Work Permit is the most common kind of work authorization. The Temporary Residence Permit is valid for up to five years and is renewed for the same period. The associated work permit is valid for one year and is renewed on an annual basis.

11. Employer Of Record service terms

There is no information about the Employer of Record (EoR) service terms for this country.

Employment contracts

Employers may utilize indefinite employment contracts that have no end date or length. There must be a period for fixed-term contracts, and the duties for the work must be indicated for contracts for a particular project.

There is no legislation that governs the limitations on employee background checks. Employers, on the other hand, are not permitted to discriminate against applicants based on their criminal background or marital status. Employers cannot also include gender or other discriminatory considerations while advertising a position.

With Rivermate being your Employer of Record (EoR) in Guatemala, you do not have to worry about the employment contracts, as we take care of that.

Minimum assignment length

There is no set length for assignments. This is usually indicated in the employment contract for fixed-term employments.

Payment currency

Guatemalan Quetzal (GTQ)

United States Dollar (USD)

13.Opening a subsidiary in Guatemala

There is no information about the working hours for this country.

How to set up a subsidiary

The procedure of establishing a Guatemala subsidiary will be determined by a number of business and geography considerations. First, decide on a physical site for your workplace and explore the surrounding neighborhood. Some areas or localities in Guatemala may have different or extra subsidiary laws that affect incorporation.

You should also consider how you want to run your firm. Guatemala allows you to organize as a limited liability company (LLC), a public limited company, a branch, or a representative office. Each choice will either promote or restrict your activities, so selecting the appropriate organization for your company objectives is critical.

Because of the restricted liability between the parent and subsidiary, many businesses opt to establish as an LLC. The following actions are required to establish a Guatemala subsidiary as an LLC:

1. Selecting two persons to stand in front of a lawyer and sign the articles of incorporation

2. Depositing a minimum initial investment of Q5,000 in a local bank that is connected to the national financial system

3. Making certain that each shareholder holds at least one share of equity

4. Registering the corporation with the General Mercantile Registry of the Republic (National Mercantile Registry)

5. Obtaining business credentials as well as a tax ID number (NIT)

6. Issuing and legalizing the company's records for accounting and legal purposes, as well as shareholder meetings

7. Submitting books for assessment and authorization to the Superintendencia de Administración Tributaria (SAT)

Subsidiary laws

The Guatemala subsidiary laws that you must follow are determined by the company you choose. LLCs need two owners who must each provide Q2,000 to the company's paid-up capital. You will also need one director to assist in the management of the organization. These persons may all be foreigners, however if your director does not live in Guatemala, you must choose a local legal representative.

LLCs must also submit audited financial accounts to the Register of Commercial Entities on a yearly basis. To be compliant, you must pay a corporation tax rate of 25%. Finally, as soon as your business begins operations, you must register with the local tax administration and the Social Security Administration.

13. Why choose Rivermate as your Employer of Record / PEO in Guatemala

Establishing an entity in Guatemala to hire a team takes time, money, and effort. The labor law in Guatemala has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into Guatemala simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record (EOR) solutions in Guatemala give you peace of mind so you can focus on running your business. Please contact us if you'd like to learn more about how Rivermate can help you hire employees in Guatemala via our Employer of Record (EOR) / PEO solution.

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