Institutional advances for business development in Guatemala

Alegalis - During 2025, the State of Guatemala has undertaken various efforts to promote and strengthen the growth of micro, small and medium-sized enterprises. Two specific actions highlight these efforts. The first is the new Policy for the Development of Micro, Small and Medium-sized Enterprises in Guatemala. The second was undoubtedly the approval of Decree 32-2024, better known as the Competition Law, which, although published in the Diario de Centroamérica on 9 December 2024, has been the subject of much discussion during 2025. 
The Ministry of Economy presented the aforementioned policy on 5 March 2025. It is intended as a strategic framework for promoting the sustained, competitive and innovative growth of this type of enterprise in Guatemala. Its main objectives include the following: 

1.    Encourage the formalisation of micro and small enterprises in order to improve their access to financing and the business development services that these normally offer, so that they can integrate into the country’s formal economy. 

2.    Promote the social and solidarity economy, which seeks greater equity and sustainable development for the country’s communities, thereby promoting their inclusion in the business sector.

3.    Strengthen the productive capacity and services of small and medium-sized enterprises, with the aim of increasing their productivity and efficiency in the performance of their daily tasks. 

The Deputy Minister of Development emphasised that the policy seeks to increase and improve the training and continuing education programmes that the country currently offers to this type of entrepreneur. This is because around 70% of jobs in Guatemala come from this type of enterprise. Likewise, 40% of the country’s Gross Domestic Product is generated by small and medium-sized enterprises. 

Consequently, and in order to promote innovation, the implementation of this policy is being sought, accompanied by the creation of an Innovation and Transformation Fund financed with a sum of around 50,000,000 quetzals. This fund will support access to modern technologies and the improvement of sustainable practices. Finally, with the support of the International Labour Organisation, a study of the country’s social and solidarity economy was carried out, and its conclusions established that these strategies will serve to implement better policies in the coming years.

Decree 32-2024 is a specific initiative by the Congress of the Republic of Guatemala, which promoted the inclusion of around 121 articles and the creation of the Superintendency of Competition, which will be the body responsible for supervising and sanctioning practices considered anti-competitive. This law distinguishes between relative practices such as price manipulation, market division, production restrictions, or bid rigging, among others; and absolute practices, which include certain scenarios such as selling products below cost to exclude competitors, price fixing, and restricting access to essential inputs for new competitors. 

Engaging in any of these practices could result in extremely severe penalties, as fines can reach millions of pounds. The aim is to ensure a fair competitive environment within the country, to protect both consumers and small and medium-sized enterprises, and even to attract more investment. Its implementation will play an important role in the inclusion of small businesses, as it puts them on an equal footing with established companies, thus preventing monopolies that could damage the market. Notwithstanding the above, we are still awaiting the actual implementation of this law, as many of its provisions will come into force in a few years’ time. Even though the law has robust regulations, poor implementation could eradicate any possibility of positive results or even generate counterproductive results for both entrepreneurs and established companies.

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