Law Firm Directory

Browse all firms with extended profiles for Guatemala

Overview

The largest economy and most populous country in Central America, Guatemala has seen the steadiest rates of economic growth in Latin America over the last three decades. While the Covid-19 pandemic and the devastating impact of hurricanes Eta and Iota took their toll in 2020, the country experienced one of the smallest contractions in GDP in the region (of only -1.5%) and the economy has since rebounded; World Bank figures show growth of 4% in 2022 and forecast a similar increase of 3.2% in 2023.

Guatemala’s economy remains heavily dependent on traditional agricultural exports, particularly coffee, bananas and sugar – leaving it vulnerable to natural disasters and the effects of climate change – but it has diversified significantly, with a growing focus on the textiles and light manufacturing industries. Continuing increases in remittances from Guatemalan citizens living in the US, which reached a record high of around $18bn in 2022 (representing 20.9% of GDP), have also contributed to the ongoing economic stability.

However, in recent years concerns have arisen about the increasingly repressive political climate in the country. In 2019, the UN-backed anti-corruption body CICIG was forced to close, after it began investigating the campaign financing of then-president Jimmy Morales. Under President Alejandro Giammattei, who came to power in January 2020, the situation has only worsened, with journalists, judges, prosecutors, human rights defenders and political opponents all targeted for criminal prosecution by the Attorney General’s Office.

In June 2023, the International Federation for Human Rights (FIDH) reported that at least 53 judicial officials (including 23 from the Special Prosecutor’s Office against Impunity (FECI)) had been dismissed, prosecuted or forced into exile. The money laundering conviction of renowned journalist José Rubén Zamora, whose El Periódico newspaper investigated several high-profile corruption cases, including those linked to Giammattei, also drew international condemnation.

Yet the tide may be beginning to turn in Guatemala. In August 2023, anti-corruption campaigner Bernardo Arévalo (of the progressive Movimiento Semilla party) was elected president, with a landslide victory in the second round of voting. Although Arévalo’s victory was certified by the Supreme Electoral Tribunal, prosecutor Rafael Curruchiche (who was controversially appointed as the head of FECI in 2021 and has himself been sanctioned for corruption by the US) announced the suspension of Movimiento Semilla and Congress, which is still controlled by the current ruling party, refused to recognise its lawmakers, suggesting the tumultuous political situation is likely to continue.

Despite the continuing political uncertainty – and the volatile situation worldwide – Guatemala’s M&A market has remained active, and firms have continued to advise on both domestic and regional transactions. Thanks to its strategic location, with access to Mexico and the US, and programmes of fiscal incentives for investors, Guatemala receives a steady flow of foreign direct investment. Most recently, firms have seen an uptick in the acquisitions of local targets by global and Latin American companies, as well as the establishment of subsidiaries of international corporations.

In the banking and finance sphere, there has been a growing trend of foreign financial institutions (particularly multilateral development agencies) granting loans to domestic companies. Local and international clients have also shown greater interest in using capital markets structures for financing; while Guatemala’s capital markets law is fairly outdated, new legislation is currently being drafted.

The worldwide emphasis on ESG has also been reflected in firms’ activities in Guatemala, including a rise in mandates relating to corporate governance and to sustainability-linked financing and green bond issuances. In addition, Guatemala is home to a booming fintech industry – according to data from the Fintech Association of Guatemala, the sector has experienced a growth of 51.1% since 2021 – with start-ups and foreign platforms requiring complex financial and regulatory advice.

While Guatemala is rich in natural resources and investment in the energy and infrastructure sectors is a priority of the government, developments in this area have been affected by the lack of clarity on the law relating to consultations with the affected indigenous populations (mandated by ILO Convention 169). In some cases, opposition by indigenous communities and environmental activists has led to the suspension of the activities of mining and hydroelectric projects. For example, disputes have arisen over the reactivation of the Cerro Blanco gold mine.

As a result, work relating to the financing and development of energy projects has slowed, but several Guatemalan firms have played a prominent role in high-profile litigation and arbitration surrounding this situation.

In the infrastructure space, the government has invested around 2.5bn quetzales in the repair and rebuilding of Guatemala’s roads, and firms are hopeful that the approval of the country’s first PPP – for the development of the Escuintla-Puerto Quetzal toll highway – in November 2021 will open up a pipeline of future work.

Guatemala’s real estate market has slowed down over the last few years as a result of the Covid-19 pandemic, but more recently there has been a significant increase in construction activity, particularly in the residential and commercial sectors. Advising on the construction of high-rise developments in Guatemala City and the application of the horizontal property regime are still core areas of work.

The pandemic has also had continuing repercussions in the labour practice area, as more companies restart M&A projects that were put on hold, leading to the need for advice on the transfer and relocation of employees (as well as collective dismissals in situations where companies have restructured or downsized). Employers are also continuing to seek advice on remote and hybrid working policies, as the lack of regulations on this area in Guatemala has led to some uncertainty.

On the tax front, the Guatemalan Tax Authority (SAT) has continued to take a more targeted approach, leading to fewer disputes with taxpayers challenging the outcomes of audits. However, firms have seen an uptick in work relating to tax planning and compliance as a result of new measures brought in by the SAT to make tax collection more efficient, including most recently expanding the scope of the electronic invoicing regime to cover small businesses.

The legal market in Guatemala remained largely stable in 2022 and 2023 and is home to regional outfits and domestic firms, both full-service and boutiques. Among the Central American firms, Arias, Consortium Legal, BLP, Aguilar Castillo Love (which has continued its expansion beyond the region), Mayora & Mayora, S.C. and Alta QIL+4 Abogados are the major players, although other key names include Lexincorp, CENTRAL LAW and Sfera Legal.

Global firms including Dentons, ECIJA INTEGRUM, EY Law Central America and Deloitte Legal Guatemala (which has boosted its corporate offering following the arrival of Ruby Asturias from EY Law Central America in 2021) also have a presence in the country.

Full-service firms Legalsa and Carrillo & Asociados are among the most prominent domestic practices, which also include A. D. Sosa & Soto, Alegalis, BUFELCO Bufete López Cordero, Palomo Abogados, established family firms Bermejo & Bermejo and Novales Abogados, IP boutiques Viteri & Viteri and Palacios & Asociados/Sercomi, litigation-focused García-Merlos & Asociados, labour specialist Valenzuela Herrera & Asociados, and a number of up-and-coming names such as Clarity Law, Mollerlaw, LegalPlus and GT Legal.

Among the new entrants to the ranking are boutique firm Estudio Chávez Bosque S.A. (where the key names include well-regarded former Carrillo & Asociados partners Francisco Chávez Bosque and Rodolfo Alegría), Lex Atlas (which was established in October 2022 by Ignacio Andrade Aycinena, the former managing partner of Sfera Legal‘s Guatemala office) and IP specialist Ideas Trademarks & Patents (whose Guatemala branch is led by Gustavo Noyola and Gonzalo Menéndez González, previously partners at CENTRAL LAW and Lexincorp, respectively).

Another significant development in the market was BLP‘s hire in June 2023 of Jorge Luis Arenales, the founding partner of Arias‘ Guatemala office and a high-profile name for both corporate and finance matters.


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