(Originally published on 27/Nov/2025)
Guatemala's accession to the Central America-South Korea Free Trade Agreement, ratified by Congress in November
Central America and South Korea, ratified by Congress in November, opens up a more competitive scenario for the country and redefines its strategy of insertion in the world market.
more competitive scenario for the country and redefines its strategy for insertion in Asia.
Asia. With this decision, Guatemala corrects a gap of several years in which it operated at a disadvantage vis-à-vis its neighbors.
years in which it operated at a disadvantage vis-à-vis its neighbors, facing higher tariffs and limited trade opportunities in one of the most important
limited trade opportunities in one of the world's most dynamic markets.
world.
South Korea is an industrial and technological economy with a high demand for agricultural
high demand for agricultural products, manufactures, auto parts, electronics and specialized services.
specialized services. For Guatemala, the agreement represents opportunities
on three strategic fronts: trade expansion through tariff reductions, greater attraction of Asian
tariff relief, greater attraction of Asian investment, and legal stability to develop value-added production chains.
value-added production chains.
Currently, some 150 Korean companies operate in Guatemala, generating some 180,000 jobs.
and generate close to 180,000 jobs. Preferential access to the South Korean
market and the gradual reduction of tariffs may encourage the arrival of new investments and the expansion of existing operations.
new investments and the expansion of existing operations. In this context,
the Santo Tomás de Castilla Free Trade and Industry Zone (ZOLIC) regime
(ZOLIC) and the Special Public Economic Development Zones (ZDEEP) are positioned as strategic
position themselves as strategic platforms to maximize the benefits of the treaty.
treaty.
ZOLICs and EPZs: boosting trade and investment to Asia
ZDEEPs, overseen by ZOLIC, operate as extra-customs areas designed to attract industries, services and logistics activities.
designed to attract export-oriented industries, services and logistics activities.
export-oriented industries, services and logistics activities. The fiscal and operational incentives they offer
strengthen the country's capacity to integrate into global supply chains.
supply chains:
- Exemption
100% income tax exemption for the first 10 years,
allowing reinvestment of profits and accelerated growth.
- Liberation
of VAT, IAD and other import charges, reducing operating costs from the start of
from the beginning of the activities.
- Exemption
VAT exemption on transactions carried out within the zone, which facilitates internal
internal processes and improves liquidity.
- Exemption
of tax stamps on contracts linked to the operation, reducing administrative burdens.
administrative burdens.
- Certainty
legal and logistical certainty: goods do not cause abandonment as long as a contract is in place, ensuring
contract in force, guaranteeing continuity and operational security.
Added to this is a set of key logistical advantages:
strategic access to Atlantic and Pacific ports, internal customs delegations, modern infrastructure and perimeter security
modern infrastructure and perimeter security schemes. These
These elements make the ZDEEPs ideal platforms for export, assembly, light manufacturing, logistics, agro-industry, and
light manufacturing, logistics, agribusiness and nearshoring operations.
nearshoring.
Guatemala enters a new foreign trade scenario trade scenario with its accession to the FTA with South Korea, aligning itself with the rest of Central America and opening a strategic route to Asia. with the rest of Central America and opening a strategic route to Asia. In a competitive In a competitive global environment, diversifying markets is key, and the country now has the now has the opportunity to strengthen its export base by raising standards and taking full advantage of fiscal and logistical taking full advantage of the fiscal and logistical benefits of the ZDEEP regime.