The Legal 500

Share this page

Editorial

Legal market overview

Undoubtedly one of the most important markets in the Central American region, Guatemala in 2014 saw GDP rise by 4.2%, marking the highest rate of growth since 2011. The Central Bank has predicted growth of 3.8% for 2015, the year of the country’s general election.

The banking and finance sector has been particularly active. Citibank announced in 2014 that it is to close its commercial banking operations in six Latin American markets, including Guatemala, and this has created an opportunity that Colombian groups such as Grupo Aval and Davivienda, which have been aggressively entering the Central American region, appear eager to take up.

Law firms report an increased level of involvement by local banks in project finance, an area in which they have traditionally been reluctant to participate. In the energy sector, local and international banks and other financial institutions have increasingly been collaborating. The country’s first wind farm, in the San Antonio region, was financed by a syndicated loan from foreign, private and local banks, and the market has also seen a solar-energy project financed by Guatemalan-lender Banco G&T Continental.

In the corporate and M&A arena, Colombian interest in acquiring local companies become increasingly relevant alongside more traditional Mexican and US investment; the global economic conditions are such that there are greater opportunities for local and regional corporations to gain a foothold in the market as major foreign players turn their attentions elsewhere.

Mining plays an increasing role in the country’s economic development, although the development and exploitation of the energy and natural resources sectors has brought a wave of environmental opposition and significant social protest. On the hydrocarbons side, despite new oil exploration agreements having been signed, most projects remain on hold due to the severe drop in global oil prices. While Guatemala is the only oil-producing country in Central America, the electricity sub-sector is the region’s most mature and developed; however, with high capacity exceeding current demand, prices are being depressed.

The diversification of the country’s energy matrix is leading to significant activity in areas such as infrastructure and renewables. The development of the first local utility-scale solar power plant in 2014 was closely followed by the establishment of the largest solar plant in Central America, with a capacity of 58MW. The government is also pushing for natural gas, and has signed an agreement with Mexico for a 600km gas pipeline to cover the regional market and enable fuel distribution throughout Central America; Honduras recently joined the project. The regional summit on energy investment in Central America, held in Guatemala City at the end of 2014, raised hopes for further steady investment in the sector.

Using international and regional regulations in addition to local ones, Guatemala has been trying to reform its tax laws, which have historically been weak and open to avoidance. Income tax and transfer pricing are two areas attracting particular attention and generating a high volume of work for lawyers; rules on transfer pricing were enacted in 2012, but were suspended a year later and only came back into force at the beginning of 2015. Law firms are also predicting an increase in tax litigation.

Navigating the waters of dispute resolution remains challenging for law firms and international business, with the judicial system riddled with longstanding problems. While reform is under way and it is sought to have this in place by the end of the decade, fraud and corruption remain major concerns. Criminal cases are on the rise, and firms also report an increase in IP litigation.

The most notable developments in the legal market have been the merger of local full-service outfit QIL Abogados with boutique firm 4abogados, to form QIL+4 Abogados; and the arrival of (the originally Costa Rican) specialist labour law firm BDS Asesores, which now has offices in five regional jurisdictions. The trend towards regionalisation was also followed by Arenales & Skinner-Klée – LatamLex, one of seven firms which created the LatamLex Abogados partnership at the end of 2014.

Interview with...

Law firm managing partners and practice heads explain how their firms are adapting to clients' changing needs

Press releases

The latest news direct from law firms. If you would like to submit press releases for your firm, send an email request to

Legal Developments worldwide

Legal Developments and updates from the leading lawyers in each jurisdiction. To contribute, send an email request to
  • Enforcement of Arbitration Awards in Cyprus – recent developments

    The global financial crisis of 2008 has generated a substantive amount of financial disputes between multinational and international entities. A much favoured method of resolving such disputes is through Arbitration proceedings. The merits of Arbitration are not going to be explored in this article. Suffice it to mention that cost, speed and privacy are the main reasons why parties opt for arbitration as a preferable mode of dispute resolution.
  • TRANSACTION TYPES AND APPROVAL PROCEDURE

    This article provides general overview about transaction types and their approval procedure. As a result, the Company has to determine the transaction types and applicable statutory requirements in regard to its conclusion.
  • Court Holds Royalties for Foreign-Registered Patents are Not Subject to Withholding Tax in Korea

    Court adhered to the existing position on the determination of royalty payment
  • New tax measures announced

    The Luxembourg Government presented on 29 February 2016 a new set of tax measures to be implemented by 2017, known as the 2017 tax reform package. The new measures concern both corporate and individual taxation, with a particular focus on social justice and international competitiveness. The amendments may be summarised as follows:
  • UCITS V level 2 measures published in the Official Journal of the EU

    On 24 March 2016, the European Commission Delegated Regulation EU 2016/438 supplementing the UCITS V Directive with regard to obligations of depositaries was published in the Official Journal of the European Union. The Delegated Regulation will apply from 13 October 2016.
  • ESMA publishes discussion paper on UCITS share classes

    ​On 6 April 2016 ESMA published a second discussion paper on UCITS share classes. The discussion paper builds on the feedback received in relation to ESMA’s first discussion paper on this issue which was published in December 2014. In analysing the responses to the first discussion paper, ESMA has identified diverging national practices as to the types of share class that are permitted, ranging from very simple to much more sophisticated share classes. ESMA is now seeking stakeholders’ views on common principles which could form the basis for a regulatory framework that all UCITS share classes should comply with. These common principles are as follows:
  • Level 2 measures for UCITS V: an overview

    ​On 24 March 2016, the European Commission Delegated Regulation EU 2016/438 (the “Delegated Regulation”) supplementing the UCITS V Directive with regard to obligations of depositaries was published in the Official Journal of the European Union. The long-awaited so-called level 2 measures for Directive 2014/91/EU of 23 July 2014 as regards depositary functions, remuneration policies and sanctions (“Directive UCITS V”) provide for the following:
  • Rejection of a candidate because of his age - Tribunal finds direct discrimination

    In a recent judgment of the Labour Tribunal of Ghent, division Roeselare of 2 May 2016, the court found that rejecting a candidate because of his age constitutes direct discrimination.
  • Adoption of the EU General Data Protection Regulation

    ​After more than 4 years of negotiation and roughly 4,000 amendments, the General Data Protection Regulation has finally been adopted yesterday by the European Parliament.
  • Luxembourg implements UCITS V

    ​Today, the Luxembourg Parliament (Chambre des Députés) adopted bill of law no. 6845 implementing Directive 2014/91/EU of 23 July 2014 on UCITS as regards depositary functions, remuneration policies and sanctions (“UCITS V Directive”) by way of amending the Luxembourg law of 17 December 2010 on undertakings for collective investment (the “UCI Law”).

Press Releases worldwide

The latest news direct from law firms. If you would like to submit press releases for your firm, send an email request to