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Skuad’s Employer of Record Guatemala (EOR) solutions make business expansion to Guatemala easy and hassle-free. Our unique HR platform allows companies to hire exceptionally talented employees in Guatemala, without having to set up a separate legal entity. It streamlines the process of hiring and onboarding a remote team by handling payroll management, taxation, and other legal compliances. To learn more about Skuad, book a demo today.
Population: 18.4 million
Currency: Quetzal (GTQ)
Capital: Guatemala City
Languages spoken: Twenty-five languages are spoken in Guatemala; however, the official and the most spoken language is Spanish. Further, there are 22 Mayan and two native languages, Garifuna and Xinca.
Gross Domestic Product (GDP): USD 95.00 billion
Expand your business into Guatemala by partnering with Skuad.
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Talk to an expertThe primary employment law in Guatemala is the Guatemala labor law. It is crucial to understand the details of this law if a business wants to expand into the country. The labor code explains the process of issuing employment contracts. To know more about the process of expansion in Guatemala, let’s begin by discussing a few points related to Guatemala’s employment laws.
To ensure your expansion endeavors are in compliance with the Guatemalan employment laws, contact Skuad today.
Guatemala has made progress in the past few years. The country’s promising economic trajectory attracts foreign investors who are looking to expand their business. However, to hire employees in Guatemala, one must know the labor laws of the country and those governing part-time and full-time employees.
Contractors can be of two types: fixed-term or temporary workers and part-time workers. Fixed-term or temporary contracts are considered exceptions. There are no fixed working hours for such workers and the employer is liable to pay the employees the statutory payment once the contract expires.
Part-time workers have the same rights as all other workers. Employers can have a greater number of workers by employing part-time workers and paying for the time worked. A higher rate of productivity can be incurred if the company hires part-time workers. Students get a chance to earn while working for four to six hours. The main debate about part-time workers concerns the minimum wage that is paid to them irrespective of the duration of time they work, still an unresolved issue in the country.
On the other hand, full-time employees enjoy all the benefits prescribed by the employment laws of the country. Employers will have to pay a fixed salary for full-time workers and will have a definite term for paid holidays and days off that does not apply to part-time workers. Hiring companies in Guatemala can incorporate flexible working modes such as working from home, shift work, and part-time work, but there is no provision for part-time or contract-based employees to ask for these working arrangements.
Talk to Skuad experts to decide whether to hire full-time employees and or contractors in Guatemala for your expansion efforts.
To hire employees in Guatemala, employers need to comply with Guatemala's employment laws. The most spoken language in Guatemala is Spanish; if the employer is not familiar with the language, they should hire a translator as most of the candidates who may apply for the company’s open position will most likely speak Spanish.
In case the employer wants to publish an advertisement about recruitment, the document must be translated into Spanish for a wider reach. Local newspapers, social media platforms, job search engines, and classifieds are the most appropriate places to post the advertisement. Some general job posting boards are,
For background checks, the employer can inquire on their own. However, according to Guatemalan law, an employer cannot use police records to restrict anyone from working. Guatemala’s labor laws also prohibit any discrimination based on gender, race, ethnicity, language, age, religion, political belief, economic situation, place of education, illness including HIV/AIDS, and disability.
To hire employees, employers need to create fixed- or indefinite-term employment contracts. Three copies of the contract should be made in writing and provided to the employee, employer, and Directorate General of Labor within 15 days of hire. The contract should be written in the official language, Spanish, and should contain terms such as the workplace, responsibilities of the worker, date, compensation, benefits, termination rules, entitlement, and other related elements. The employers can hire the employees after all the paperwork and should make sure that they follow all rules related to HR in compliance with the local laws in the country.
With Skuad’s EOR solution, you can expand your business without worrying about HR compliance in the country.
The standard probation period in Guatemala is two months. During the probationary period, both parties can end the contract with no consequences.
The termination of employment in Guatemala must be fair, and the employer must provide just cause for doing so. The termination action letter must be given in writing and the employer must provide a notice period to the employee
The notice period given in the contract should be followed. In case there is no mention of the same, the notice period should be allotted based on the period served by the employee.
Apart from providing a just cause for termination in writing, no other approval is required. However, there are a few special cases when the employer will require judicial permission. Some of these are listed below.
The employer must have just cause to terminate any employee. According to the labor law, the just causes on which an employer can dismiss the employee include the following.
If the employer contravenes any of the requirements and fulfills one of the causes given above, the dismissal comes into effect as soon as it receives a written termination letter. At the time of termination, the employer needs to provide the following to the employee.
In case the employer does not provide just cause for the employee’s dismissal, according to the law, they must pay a severance amount equivalent to the employee’s one-month salary for each year of service. The Guatemala labor law known as “economic advantages” states that for the additional benefits given to the employee, such as a car, mobile bill, life or health insurance, or food services, the employer has to pay a severance amount equivalent to an additional 30% of the employee’s salary.
Skuad’s high-tech, centralized EOR solutions for Guatemala can ensure your business’s expansion endeavors fall within the ambit of the local laws for probation and termination. To learn more, get in touch with a Skuad expert today.
Business expansion is a long-drawn process that calls for extensive planning, especially when expanding to a foreign country. It is complicated and can take up to several months to complete but by choosing the EOR route for hiring employees in Guatemala, you can fast-track the expansion process. Employer of Record Guatemala (EOR) solutions by Skuad can make expansion to Guatemala much simpler and a lot quicker for business. Our global outreach and a tech-enriched HR platform ensure compliance with local labor laws by managing employment responsibilities such as monthly payroll, work permits, employment contracts as well as taxation for your employees in Guatemala. To learn more, book a demo with Skuad today.
Many students study in Guatemala, people need a work visa to work in Guatemala, and others who just want to explore the beauty of the country obtain tourist visas. The different types of visas required for various purposes include the following.
For work and employment for foreign nationals who would like to work in Guatemala, there are two types of work visas. The permits are for,
The Guatemala work visa requirements for these two cases differ from each other. In the first case, the visa has to be applied for on its own, and in the second category, a work visa is applied for by the company.
Foreign nationals must provide all the above documents to obtain a temporary residence permit. The applicant should provide the documents to the general directorate of migration and wait for approval. After approval, the applicant must submit the application and related documents to the Ministry of Labor of Guatemala. The applicant will have to wait for another 10 to 15 days for the final approval. Once the applicant obtains a temporary residence permit and work permit, they can travel to Guatemala.
Talk to us and get more information and guidance related to types of visas and work visa requirements in Guatemala. Skuad can handle all your visa requirements and ensure the expansion process is not delayed.
As mentioned above, a work permit in Guatemala enables a foreign national to stay and work there. However, the worker needs to have a temporary residence visa and a work permit visa. The employer should employ a team of workers that comprises 90% of Guatemalans. Note that this is not applicable in the case of high-level employees such as directors, administrators, and managers. The types of visas and Guatemala’s work visa requirements are already given in the previous section.
To obtain a work permit upon securing a work visa, the following must be kept in mind.
A foreign national who has arrived with a job offer letter and has obtained a residence visa may apply for a work permit from the Labor Ministry of Guatemala. The documents that the applicant will require are as follows.
To know more about work permits in Guatemala and how you can avail of our EOR services to secure them for your employees, talk to a Skuad expert today.
Both employers and employees in Guatemala have to contribute a certain amount as tax. For instance, both have to pay for social security but the rate of taxation differs. Employers need to contribute 10.67% of their salary, while employees have to give 4.83% of their wages. Employers have to pay corporate income tax too. Employers can pay taxes on either revenue from income or profit from their income. Business companies do not need to set up their payroll, they can choose to avail of payroll outsourcing in Guatemala through Skuad, and stay compliant with all the key legislations under the local laws.
Learn more about payroll and taxation policies in Guatemala by booking a demo with Skuad.
To avail of the benefits of business expansion, it is essential to be aware of the process of incorporating a holding company in Guatemala. This takes place in several steps.
You can set up your business in the most uncomplicated way through Skuad’s Guatemala EOR solution. By partnering with Skuad and consulting our team of experts, your process of business expansion into Guatemala will be carried out without a hitch. We can ensure your business entity complies with all the local laws and requirements for incorporation!
A professional employer organization (PEO) in Guatemala can handle all HR-related functions such as payroll, HR compliance, employee benefits, risk management, and taxes. A PEO is like a co-employment organization while an EOR firm acts as the legal employer.
Another point of distinction is that a PEO works for organizations that have already registered for every country and state where the company’s employees exist. However, as the legal employer, an EOR service takes up responsibility and liability for the company. It enables companies to expand their business globally without a legal entity.
Organizations planning to expand into new territories are better suited with a global EOR which becomes the legal employer on behalf of the organization. Instead of associating with a PEO, a co-employment partner, organizations have more to gain by utilizing the services of an EOR solution. The EOR solution safeguards organizations from unexpected policy changes, loss of control, and potential risks as the EOR bears every legal liability for the organization. In addition to these, the EOR handles payroll, tax, and employment law compliances. To know more about Skuad's EOR solution, Contact Skuad today.
The complexities of business expansion can be simplified with an effective EOR solution. As you decide to expand your business into Guatemala, talk to Skuad experts and learn how our self-serve, high-tech HR solutions platform can help your business thrive in the long run. Our extensive expertise in the laws and regulations associated with the Guatemalan labor code can help you save additional effort, time, and money!
In Guatemala, an Employer of Record (EOR) is a service provider that legally employs staff on behalf of another company, handling all HR responsibilities such as payroll, taxes, benefits management, and compliance with local employment laws. An EOR, like Skuad, allows companies to operate in Guatemala without the need to establish a local corporate entity.
The cost of using an EOR in Guatemala typically ranges from 10% to 20% of the employee's salary, depending on the scope of services provided. This fee covers comprehensive HR management, including payroll administration, tax compliance, and regulatory adherence. For more insights, try Skuad’s cost calculator now.
The difference between an Employer of Record and payroll services lies in the scope of responsibility. An EOR becomes the legal employer, handling all employment-related compliance and HR tasks, whereas payroll services are strictly limited to processing employee wages and taxes without assuming legal employer responsibilities.
Labor laws in Guatemala are governed by the Labor Code, which establishes rights and protections for workers including minimum wage requirements, working hours, overtime compensation, and health and safety regulations. Additionally, it outlines procedures for handling labor disputes, termination of employment, and other employment-related matters to ensure fair treatment of workers.
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