Libro I · Título I Capítulo IX. De las sociedades constituidas en el extranjero

Companies legally incorporated abroad that have in the territory of the Republic the seat of their administration or the principal object of the enterprise are subject, including as regards the requirements of validity of the articles of incorporation, to all the provisions of this Code. The form of the incorporation document shall be governed by the laws of their country of origin.

The operation of foreign companies engaged in the provision of professional services, for the practice of which a legally recognized university degree, title or diploma is required, is prohibited.

Companies legally incorporated abroad that wish to establish themselves or operate in any form in the country or wish to have one or several branches or agencies are subject to the provisions of this Code and of the other laws of the Republic, and must permanently have in the country at least one agent, in accordance with the provisions of the following article.

For a company legally incorporated in accordance with foreign laws to be able to establish itself in the country or to have branches or agencies therein, it must:

1ºProve that it is duly incorporated in accordance with the laws of the country in which it was organized.

2ºSubmit a certified copy of its articles of incorporation and of its bylaws, if it has any, as well as of any amendments.

3ºProve that a resolution has been duly adopted by its competent organ for these purposes.

4ºAppoint in the Republic an agent with representation, with ample powers to carry out all the acts and legal transactions of its line of business and to represent the company legally, in court and out of court, with all the pertinent special powers established by the Judicial Branch Law. If the agent does not have those powers, he or she shall be considered invested with them by operation of law.

5º.Allocate capital assigned for its operations in the Republic and provide a surety in favor of third parties for an amount not less than the equivalent in quetzales of fifty thousand United States of America dollars, (US$ 50,000.00), to be fixed by the Mercantile Registry, which must remain in force during all the time that the said company operates in the country, as well as expressly undertake to be liable, not only with the property it possesses in the territory of the Republic, but also with the property it holds abroad, for all the acts and transactions it carries out in the country.

6º.a) Submit to the jurisdiction of the courts of the country, as well as to the laws of the Republic, for the acts and transactions of private law that it carries out in the territory or that are to take effect therein; and

b)Submit a declaration that neither the company nor its representatives or employees may invoke foreign-status rights, since they shall only enjoy the rights, and the means of exercising them, that the laws of the country grant to Guatemalans.

7ºDeclare that before withdrawing from the country it will fulfill the legal requirements.

8ºSubmit a certified copy of its latest general balance sheet and profit and loss statement.

The documents necessary to prove those matters must be submitted to the Mercantile Registry for the purposes of obtaining the government authorization, in accordance with the provisions of the Judicial Branch Law. The documentation must bear a Q0.10 stamp per page as the sole tax.

Foreign companies, whatever their form, are obliged to publish a general balance sheet of their operations in the country, in accordance with the provisions applicable to Guatemalan public limited companies.

The representatives or agents of companies incorporated abroad that habitually operate in the Republic without having complied with the requirements of this law shall be jointly and unlimitedly liable with those companies for the obligations undertaken.

Before withdrawing from the country or suspending their operations in Guatemala, authorized foreign companies must obtain authorization to do so, which shall be issued to them by the Mercantile Registry after submitting: a) Financial statements certified by a Public Accountant or Auditor who is an active member of the professional association, together with a sworn declaration in a notarial record in which the legal representative states that the company he or she represents has complied with all its tax obligations up to the date of its withdrawal, except in the case of prescribed tax obligations; and b) Proof that the obligations and transactions undertaken in the Republic have been fulfilled or are secured.

In any of those cases, the assets that the company has in the country, as well as the surety established in accordance with the provisions of Article 215, shall be liquidated subject to the provisions of this Code.

The dissolution, insolvency proceedings or bankruptcy of companies in their country of origin must be immediately brought to the knowledge of the Mercantile Registry, and the latter must take the necessary measures to secure national interests and those of the public, including requesting the Executive Branch and the courts to take the precautionary measures of the case. The dissolution, insolvency proceedings or bankruptcy referred to in this article must be published in the Official Gazette and in another of the largest circulation in the country, three times during a term of one month.

A company legally incorporated abroad is not obliged to obtain authorization or to register in the country when it only:

1.Is a party to any proceeding or lawsuit being heard in the courts of the Republic or in the administrative venue.

2.Opens or maintains bank accounts in its name in any of the authorized banks.

3.Makes sales or purchases solely to an independent commercial agent legally established in the country.

4.Handles orders through agents legally established in the country, provided that the orders remain subject to confirmation or acceptance outside the territory of the Republic.

5.Grants loans or opens credits in favor of entrepreneurs established in the Republic.

6.Draws, endorses or protests in the Republic negotiable instruments or is the holder thereof.

7.Acquires movable property, rights in rem or immovable property, provided that these do not form part of an enterprise and it does not habitually trade with them.

Notwithstanding the foregoing, all the acts, contracts and transactions related to those activities shall be subject to and governed by the laws of the Republic.

Foreign companies that have the purpose of operating temporarily in the country for a term not greater than two years must previously obtain Special Authorization from the Mercantile Registry. To grant such authorization, they must previously satisfy the requirements contained in subparagraphs 1º.) and 4º.) of Article 215 and provide a surety in favor of the State of the Republic of Guatemala, for the amount that the Mercantile Registry fixes within the third day of the request, which shall not be less than the equivalent in quetzales of fifty thousand United States of America dollars (US$ 50,000.00). The silence of the Mercantile Registry implies the fixing of the minimum amount.