New laws being thrusted to increase foreign investment

By Mayora IP

Guatemala’s finance minister Álvaro Ricci called for the Congress to pass bills that provide legal security for new investors. “Everything I’ve been talking about needs a legislative agenda,” said Ricci at a webinar on competitiveness, according to BNamericas. “One that has to promote Guatemala so that investors come to this country,” he added. Tax collection, the fiscal deficit and the country’s stable outlook were some of the issues Ricci called for strengthening.

A public–private partnership (PPP) law is among the most pressing for Guatemala as a bill is set to be presented to Congress to accelerate PPP infrastructure projects and modify the agencies in charge of the matter. Guatemala ’s PPP Law was established in 2010 but investment in PPP projects are still in development. The country has some projects under review.

Guatemala has the largest economy in Central America, with a USD 76.7 billion gross domestic product (GDP). Foreign direct investment (FDI) stock was USD 17.3billion in 2019, a 5.7 percent increase over 2018. Some of the activities that attracted most of the FDI flows in the last three years were manufacturing, commerce and vehicle repair, financial and insurance activities, and water, electricity, and sanitation services.

The government continues to make efforts to enhance competitiveness, promote investment opportunities, and work on legislative reforms aimed at supporting economic growth, as international companies choosing to invest in Guatemala face significant challenges. Complex laws and regulations, inconsistent judicial decisions and bureaucratic impediments constitute barriers to investment.