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An additional resource for Guatemala is the "Real Estate Prognosis for 2002 in View of Recent Economic Indicators". This document was written by Sara Lois Siegel Bergenfeld, attorney, consultant, and president
of the Guatemalan Real Estate and Appraisers Association in January 2002. It has been posted at this
website with permission.
The tendency towards free commerce and the privatization of state industries has added impetus to
the Guatemala eonomy. The abundance of natural resources and the fiscal administration keeps the
monetary rate stable. Inflation is low and lines of credit have stimulated the opportunities for both
national and foreign investors. Tourism occupied second place in revenue for the country since 1986.
Guatemala's real estate industry, largely centered in Guatemala City with a population of about 2 million
is relatively sophisticated. The real estate services profession is relatively professional and technically
keen.
There is no licensing requirement in Guatemala though a decree licensing persons who earn
"commissions" exits. One of the biggest challenges facing the real estate industry in Guatemala
is the lack of recognition as an organized trade by the maretplace. The real estate market is
challenging due to the fact that mortgage financing is not available or extremely expensive, up
to 20%.
| Guatemala has a serious problem with the inequality of land distribution, an issue that was a significant motivating factor in its recently ended 30-odd year civil war. The only other countries in the world with such inequality in land ownership are Brazil and Pakistan. Land has been the source of political conflict for generations, since the colonial and then republican governments divided up the land of Guatemala's indigenous people to reward and maintain the loyalty of their supporters.1 According to Consuelo Cabrera, from the National Co-ordination of Small and Medium Producers (Conampro) of Guatemala, 2% of the population of Guatemala own large tracts of land, while 98% own no arable farmland at all. Due to this disparity, Guatemalan rural worker's organizations have been seizing unused estates with the intent of making the government purchase the land and distribute it in small farm-holdings. As of 1996, however, 300 estates had been occupied, but the government had agreed to the purchase and redistribution of only six.2 |
| Under Guatemalan law, foreigners can acquire, maintain, and dispose of real property with very few restrictions. What foreigners cannot do is own land directly next to rivers, oceans or international borders. Foreign firms developing projects in designated tourism zones are eligible for income tax exemption on revenue from their investments, and duty-free importation of any needed goods or materials not made in Central America. The foreign investment laws of Guatemala also allow foreign investors to repatriate profits and capital without restriction.3 Like El Salvador, Guatemala recently passed a law to ease the bureaucratic burdens associated with foreign investment in the country. However, administrative procedures remain a burden to the investor. All firms must register with the Ministry of Economy, formally incorporate there, publish their intent and agree to Guatemalan jurisdiction. Foreign firms must complete further registration tasks than domestic firms, and thus are subject to much greater delays in completing the registration process. Foreign investors must realize that corruption is a fact of life in Guatemala and be prepared to encounter it at all levels. Political violence has abated, but crime is high. Foreign investors should also use local legal counsel to obtain fair treatment in the court system.4 |
- Founded in 1997, CCBRG (Camara de Corredores de Bienes Raices de Guatemala/The Guatemala Chamber of Real Estate Agents) is the leading national association of Guatemala representing over 25 major companies throughout the nation.
- CCBRG is headquartered in Guatemala City and they are affiliated with the Central America Real Estate Network (FECEPAC).
www.fecepac.org
Endnotes
1 - "Land issues in Central America," Land Policy Network document, World Bank web site, last listed document update November 1998.
2 - Sequeira, Maricel, "Central America: Rural workers say land is returning to the rich," Inter Press Service, April 9, 1997.
3 - U.S. Department of State, Country Commercial Guide, Fiscal Year 2000: Guatemala.
4 - See endnote 4.
5 - Sara Lois Siegel Bergenfeld, President of the Guatemalan Real Estate and Appraisers Association -AGBRV "Real Estate Prognosis for 2002 in View of Recent Economic Indicators", January 9,2002
Updated Jan. 2002
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