How to Register a Sole Proprietorship (Comerciante Individual) in Guatemala

Setting up as an independent contractor in Guatemala offers a practical path to self-employment, especially for professionals who want full control over their work and income. Compared to forming a company, registering as a comerciante individual is straightforward and cost-effective, making it a popular choice among freelancers, consultants, and small business owners.

That said, the process does involve several administrative steps. The main challenges lie in managing paperwork, keeping up with tax filings, and ensuring compliance with Guatemala’s invoicing rules.

The advantages are clear: minimal setup costs, simple management, and complete independence. For many, it’s the ideal way to start doing business legally in Guatemala while maintaining flexibility and access to international clients.

Disclaimer: This article is for informational purposes only and is not a substitute for legal advice. Please always check official sources or seek professional guidance before taking action.

What is a sole proprietorship in Guatemala?

In Guatemala, a sole proprietorship is commonly called comerciante individual (also referred to as “empresa individual”). Depending on context, it may also be called:

• Sole trader
• Self-employed worker
• Independent contractor

These terms all refer to a business owned and run by one person, with no legal distinction between the business and the owner.

How does a sole proprietorship (comerciante individual) work in Guatemala?

Comerciante individual vs. other business structures in Guatemala

There are alternatives to operating as a sole proprietorship, such as forming a limited company or other corporate entity. Below is a comparative overview to help you decide which structure makes more sense for your plans.

Step-by-step guide: How to register a sole proprietorship in Guatemala

Step 1: Check your eligibility

Guatemalan citizens, permanent residents, and legally authorized foreign nationals can qualify to register as sole proprietors, provided they are natural persons with legal capacity in Guatemala and hold valid immigration or work permits when required.

Step 2: Choose your business name

You can operate under your own name or select a nombre comercial (trade name). If you pick a trade name, ensure it is unique by consulting the Registro Mercantil’s records in your jurisdiction.

Step 3: Gather required documents

You will typically need:

• Official identification (e.g., DPI or passport)
• Proof of address (utility bill, municipal certificate)
• Registro Mercantil form for Inscripción de Comerciante Individual / Empresa Individual
• Proof of registration or application with the SAT
• Payment receipts for registration fees

Step 4: Register with the Registro Mercantil

You can register online on the government website. Within a few business days, you will receive your registration certificate.

Step 5: Register with SAT

After registering your business at the Registro Mercantil, you must enroll in the Registro Tributario Unificado (RTU) under SAT. Use RTU Digital to apply for or update your Número de Identificación Tributaria (NIT) registration. You provide proof of address, ID, and other documentation required. Once approved, you will receive the Constancia de Inscripción y Actualización de Datos. Because of recent reforms, your DPI may automatically double as an NIT in many cases.

Step 6: Post-registration obligations

Once registered, you must comply with ongoing obligations. This includes issuing legally valid invoices (especially under the FEL electronic invoicing regime), maintaining detailed accounting records, filing periodic tax returns (for income tax and VAT if applicable), and updating your registration data (e.g., address or business name changes) when needed. You also must preserve your documentation in case of an audit and maintain compliance with municipal licensing or permits as required by your locale.

Financial and tax obligations for sole proprietors in Guatemala

You are responsible for:

• Income tax (ISR / impuesto sobre la renta): As a sole proprietor, you file with SAT annually. The tax structure is progressive, with 5 % up to GTQ 300,000 and 7% above that.
• VAT (IVA): The standard VAT rate is 12% in Guatemala. If your activity is VAT-applicable, registration with SAT is required, and you must file VAT returns.
• Social security contributions: If you hire employees, you must register with Instituto Guatemalteco de Seguridad Social (IGSS) as an employer, withhold employee contributions, and pay employer portions. If you operate solo, your own IGSS contributions are not mandatory, though voluntary options may exist.
• Record-keeping: You must keep complete, accurate records of invoices, receipts, accounting journals, and other relevant business documents. These records should be preserved for potential audits, per Guatemala’s tax law.
• Invoicing: Under the Factura Electrónica en Línea (FEL) regime, every invoice must include your NIT, business and client details, date, description of goods or services, sequential numbering, and VAT details if applicable. All invoices must conform to SAT’s rules and be properly archived.

Launch your contracting career and stay compliant with Deel

Registering as a sole proprietor gives you independence, but it also means handling taxes, invoices, and records on your own. Deel’s all-in-one platform helps you manage obligations without the stress. With Deel, you can:

• Automate invoicing and expense tracking with essential Bookkeeping tools
• Create, send, and sign localised work agreements
• Keep accurate records for tax season
• Access expert tax advice and compliance support
• Get paid through multiple payment and withdrawal methods
• Spend your earnings in USD with the Deel Card
• Access funds early with Deel Advance
• Enjoy contractor perks from 150+ partners

Stay independent, without the admin overload. Sign up to Deel for free today.

FAQs

What is the minimum capital required to start a comerciante individual in Guatemala?
There is no minimum capital requirement.

Do comerciantes individuales need to register for VAT?
Only if your business is engaged in VAT-applicable activities and exceeds the VAT threshold; otherwise, you may be exempt or subject to simplified regimes.

How much are the standard monthly or annual contributions?
The registry cost is about Q 100 initially, plus Q 50 in additional tax. Ongoing social security (IGSS) contributions depend on payroll if you have employees.

Can a comerciante individual hire employees?
Yes. If you hire employees, you must comply with labor law, contribute to IGSS and occupational risk schemes, and withhold employee taxes.

How long does it take to register as a comerciante individual in Guatemala?
Typically, 1 to 3 business days under normal conditions.

Can foreign nationals register as comerciante individual in Guatemala?
Yes, subject to immigration and work-permit rules. You must have legal authorization to reside and work in the country.

Do comerciantes individuales need a separate business bank account?
It’s not legally mandatory, but strongly recommended to keep your business finances separate for accounting clarity.

What happens if I stop working as a comerciante individual?
You must file a cessation of activities via RTU Digital and inform SAT of your closure.

Are there any government incentives or reduced rates for new comerciantes individuales?
There are no nationwide incentive programs specifically for comerciantes individuales, although Guatemala offers certain tax benefits for exporters and maquila operations.

Can I use Deel as a comerciante individual to get paid by international clients?
Yes. Deel allows comerciantes individuales and freelancers to receive payments from global clients in multiple currencies, with transparent exchange rates and low fees.

Does Deel generate compliant invoices for comerciantes individuales?
Yes. Deel automatically generates invoices that meet Guatemalan legal and tax requirements, including NIT and VAT details.

Can Deel help me with taxes as a sole proprietor in Guatemala?
Deel provides downloadable tax reports and payment records you can use when filing returns. While Deel doesn’t replace your accountant, it simplifies compliance and record-keeping.

Does Deel offer contracts for freelancers and comerciantes individuales?
Yes. Deel provides locally compliant contract templates so you can work with clients safely and professionally.

Can I access benefits through Deel as a comerciante individual?
Yes. Deel offers optional perks such as health insurance, retirement savings plans, and other benefits that help independent workers enjoy more security and flexibility.