Guatemala: Free Zones Situation Gets More Complicated
- Friday, May 27, 2016
Prensalibre.com reports that Rene Castañeda, president of the Association of Free Zones, said that the free zone operating on Boulevard El Naranjo, in Zone 4 of Mixco, has taken steps to close and that out of the 19 companies operating there, "... have completely closed and laid off 150 employees."
"... The Guatemalan Chamber of Commerce (AmCham) also said more than 20 companies in the sectors of footwear, plastics, pharmaceuticals and cosmetics, have started preparing to leave the country. "
"... Castaneda said companies do not want to stay there just because there are tax breaks, but because they have already invested in the country and already have a logistics scheme. "
Now we have to wait for the result of the action on unconstitutionality against the law filed on May 17, which aims to get an annulment of the Ar ticle that removes benefits from companies that previously had them before the implementation of the new legislation.
Source: prensalibre.com
Source: prensalibre.com
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Guatemala: Exports from Processing Zones Down 4% February 2017
In 2016 exports from the free zone regime fell by 4% compared to 2015, and those from companies covered under the maquila incentive law, fell by 6%.
The negative results in foreign sales of companies operating under one of the two incentive schemes is due in part to the departure of several companies from the free zone regime, having been affected by the Emergent Employment Act. -
Guatemala: Appeal Against Employment Act May 2016
By filing of a lawsuit arguing unconstitutionality the union of free zones aims to once again include the 25 sectors which were excluded from receiving tax benefits under the new law.
The regulations of the controversial Emergent Act for the Conservation of Employment are still under review by the Attorney General's Office and authorities at the Ministry of Economy stated they would evaluate the possibility of modifying it, since the law is already in force and can only be revised by Congress. -
Guatemala: Complaints From Free Zones Continue April 2016
Free zone companies denounce lack of legal certainty in the implementation of a new law (Ley Emergente de Empleo), which established a list of activities and goods that they can no longer make or sell.
The Association of Free Zones of Guatemala expects jobs and foreign investment to be lost if there are no modifications to the Agreement 65-89 "Ley Emergente de Conservación de Empleo", a law which came into effect in March. -
El Salvador: Free Zones Law Generates Controversy October 2011
If a reform of the law is approved, tax exemptions enjoyed by members of the scheme would be limited.
Although the purpose of the law reform is to modernize the free zones scheme and meet the requirements established by the World Trade Organization, companies currently operating under the scheme would be affected.