For our most recent Sector Expert Q&A, Douwe Westerveld had the enjoyment to join with William Turton Furlan, professional counselor at the Embassy of Guatemala in the Netherlands, who spoke about company and investment decision chances in the Central American region.
For any one taking into consideration doing business in Guatemala, his insights could be of wonderful interest.
William researched Global Relations at the Rafael Landivar University in Guatemala Town and later completed numerous teaching programmes centered on financial diplomacy and trade.
He started off his occupation at the KOTRA – Korea Trade Invesment Advertising Company, based at the Embassy of the Republic of Korea in Guatemala, wherever he labored as a trade consultant.
In 2019, he joined the Guatemalan diplomatic corps and was sent to The Hague in the Netherlands, the place he has been serving as a trade counsellor in the Embassy of Guatemala to The Kingdom of The Netherlands.
SEE ALSO: Business Development in Guatemala: How to Incorporate a Organization
What have been the results of the COVID-19 pandemic on the functionality of the financial system of Guatemala and how is it accomplishing at the moment?
Just like the relaxation of the areas and the globe, the outcomes of the pandemic have been tricky on the nation. We have also been in levels of confinement, but issues are obtaining improved with the vaccination programmes. This is also the scenario in terms of financial recovery. Previous year, 2021, our economic system experienced a progress of 7.5% which is amongst the maximum in the area as perfectly as all over the world.
This is an part that we would like to keep for the region, as sustainable expansion is significant on the agenda of our governing administration and President Giammattei. This is exemplified by the point that sustainable economic advancement has been one of the elementary pillars of the current presidency, which was essential to the establishment of an productive countrywide COVID recovery program.
In a mark of the accomplishment of its pursuit of sustainable financial expansion, the Guatemalan govt proven a intention of reaching USD 1.2 billion in overseas direct expense (FDI) during 2021, but ended up reporting additional than USD 3 billion, a figure triple that observed the previous yr. Consequently, we can state that the nationwide economy, as well as investments and GDP, are carrying out quite perfectly soon after the pandemic.
Prior to the pandemic, how experienced the general performance of the countrywide economic system been?
The economic growth of Guatemala has been great around the previous five decades, exemplified by sustained expansion witnessed through this period of time. For example, in 2020, all through the pandemic, our economic climate seasoned a development of 3.5% according to the Guatemalan Central Lender. Also, all through the around the globe economical disaster, the economic climate nonetheless achieved some growth, whilst quite a few all around the earth endured severely.
The power and resilience of the Guatemalan overall economy are are due in element to the simple fact that Guatemala possesses robust macroeconomic tenets, this kind of as a stable trade price, stable inflation fees, and a stage public credit card debt that is manageable for the Central Lender.
What tends to make Guatemala these types of a very good prospect for company and investment?
The very first component that I would like to emphasize is our macroeconomic stability, which is of great relevance for possible buyers. Also, talking about Guatemala in the light-weight of the rest of Central The usa, now, four out of 10 products and solutions coming out of the region are produced in Guatemala, and the country represents 38.9% of the sub-region’s approximated financial participation. This signifies that we have a well-recognized and productive industrial sector in comparison to the relaxation of the nations. This also exemplifies the have confidence in that our economy enjoys.
In addition, Guatemala serves as a logistical system for the area, because of to the geography of the region, which compares favourably to other nations around the world in the location in a range of means. We are pretty shut to the US market, which is the major sector in the environment. Moreover, we are subsequent to the Mexican market place, which, right after the Brazilian industry, is the next-greatest economic climate in Latin America. The European Union is also inside of arrive at, as a result of the European Union- Central American Affiliation Arrangement (EU-CAAA).
This immediate access to a numerous variety of important marketplaces would make Guatemala a particularly appealing prospect for buyers. However, it is also value mentioning that Guatemala is recognized for its relieve of undertaking organization, with company formation in Guatemala usually concluded in amongst just one and 3 weeks, and the system commonly costing in between USD 500 and USD 700 — which is fairly priced by any regular.
The reality that setting up a organization in Guatemala is so uncomplicated and rather affordable is a primary instance of how our authorities is fully commited to producing a local climate of accessibility and lodging for investment and businesses.
What are the greatest untapped investment options in Guatemala correct now?
We have a vast selection of sectors that show wonderful possible. To start with, I can refer to the textile marketplace, with strong fiscal incentives schemes. On the other hand, the proficient labor pressure, optimum mastering curve and an integrated cluster of more than 270 different suppliers make the clothing and textile sector interesting for new investors.
Further than that, proper now our state is turning out to be more and more set up in much more advanced sectors. They incorporate the pharmaceutical sector, with specific emphasis on the generation of clinical gadgets. Some others incorporate small business process outsourcing and contact facilities (BPO) and info technologies outsourcing (ITO) similar to the program sector. Guatemala is a feasible spot for international businesses targeted on these industries, thanks in element to excellent infrastructure, superior English proficiency concentrations, and the availability of highly-qualified employees.
But there are also several alternatives to be seized in sectors that have been much more regular places for financial investment in Guatemala, these as the agricultural sector, primarily those people connected to espresso, contemporary fruits and vegetables. Also, the manufacturing of plastics, rubber, and electronics are properly proven industries with home for considerable development.
Being based in the Netherlands, I would insert that agriculture, flowers, foliage and ornamentals, as properly as software program acquiring and outsourcing actions are also of distinct desire to Dutch buyers, provided that the Netherlands is the second-most significant agricultural exporter in the globe, a referent in the flowers and decorative field, and is one of the most significant tech hubs and builders globally.
What would you say to businesses considering nearshoring to Latin America to stimulate them to look at Guatemala?
I would say that Guatemala is a perfect place for nearshoring. Thanks to our proven and really proficient workforce in, for example, the software field, Guatemala possesses the correct people and services to fulfill the wants of virtually any enterprise searching for to relocate its operations to the area.
When you incorporate to that our strategic site, with the US and Mexico so close, and the infrastructure in put to effortlessly get there to people and other marketplaces, Guatemala gets to be an even more exciting prospect to traders.
Also, presented that nearshoring generates foreign direct financial investment (FDI), which is of appreciable relevance to our financial state, the Guatemalan authorities attempts to generate an natural environment that accommodates this follow, and will continue on to offer as a lot help to these sorts of new traders as possible for the foreseeable potential. This means that when you decide on Guatemala, you choose a place that is open up for organization and keen to do what it can to aid these who decide on us.
Intercontinental trade is often an crucial factor of executing business enterprise, so what does Guatemala offer you in this respect?
Guatemala has far more than 20 bilateral expense treaties all over the world, and also has agreements with large Latin American economies this kind of as Mexico and Colombia. During the period 2008 to 2020, those people two nations around the world jointly accounted for additional than 10% of Guatemala’s GDP, demonstrating how significant these treaties are for my nation.
For the reason that we have so lots of FTAs in put, Guatemala is very properly connected and offers a vast range of economic advantages to investors and organizations centered in our country and carrying out small business with any of those markets.
Additionally, thanks to the challenging work we have been element of in creating the Central American Association Settlement, doing small business all-around this sub-region, which has witnessed major development this century, also provides a assortment of benefits when it arrives to undertaking enterprise, together with simplicity of movement among and entry to the other markets in Central America.
Biz Latin Hub can assist you undertaking small business in Guatemala
At Biz Latin Hub, we present built-in marketplace entry and again office companies during Latin The united states and the Caribbean, with places of work in 17 key towns all around the area, which includes Guatemala Metropolis. Our unmatched regional existence signifies we are excellent associates to support multi-jurisdiction sector entries and cross-border functions.
Our detailed portfolio contains accounting & taxation, hiring & PEO, authorized companies, and company formation, between others.
Get hold of us now to uncover out much more about how we can help you.
Or study about our crew and specialist authors.