The nearshoring process advances in Latin America with the announcement of the investment of the Korean giant Hansae for the construction of a new sustainable manufacturing textile complex in Michatoya Pacifico, the number one hub in Guatemala.
What are the reasons why the textile sector is choosing Guatemala as the best option for new productive investments?
1. TEXTILE CLUSTER: The clothing and textile industry represents 9.8% of GDP and is the country´s main export item with more than US$1.5 billion annually. The Guatemalan textile sector is recognized for the professionalism and competitiveness of its supply chain, made up of the textile, clothing and accessories sector.
2. SPECIALIZED LABOR: The textile industry contributes to the creation of 180,000 direct and indirect jobs and in which 46% of employees are women. Guatemala offers a large amount of young human talent, assuring new developments of specialized labor at a competitive cost.
3. TAX BENEFITS AND INCENTIVES: Guatemala has the ZDEEP regime (Free Zone) and the 29-89 regime, which is special for the clothing and textiles sector, both with total exemption on income tax for 10 years; Total exemption in VAT, taxes and tariffs on export and import.
4. MACROECONOMIC STABILITY AND LOW INFLATION: Guatemala offers the greatest security for investors with consolidated macroeconomic stability that has been going on for more than a decade and average annual inflation that has been less than 5% in the last 10 years.
5. FTA with the USA and multiple strategic partners: Guatemala has the benefits of the Free Trade Agreement with the United States, but also with trade agreements with El Salvador, Honduras, Nicaragua, Colombia, Mexico, Panama, Costa Rica, the Dominican Republic, Taiwan , Chile, the European Union and recently Israel.
In addition, the OEA/CTPAT MRA between Guatemala and the United States is already in force, which allows improving the conditions of competitiveness for the entry of production into the largest market in the world.
6. STRATEGIC LOCATION: Guatemala is the gateway to the Central American market (37 million inhabitants) and is the only DR-CAFTA (Dominican Republic-Central American Free Trade Agreement) country that has loading and unloading ports for imports and export of products in both the Pacific and Atlantic oceans.
7. LOWEST COST OF ENERGY IN CENTRAL AMERICA: Guatemala has enough energy to supply the domestic market and export to neighboring countries, ensuring the cheapest energy cost in the region.
8. MICHATOYA PACIFICO THE A+ HUB: Guatemala has this world-class logistics, productive and service hub, which has more than 1,200 hectares and has 320 hectares of ZDEEP area (Free Zone) and 250 hectares of industrial park area, which is located in Escuintla, Km 72 of the highway to Puerto Quetzal in the Pacific at an intersection where the highways to El Salvador, Honduras and Mexico leave.
9. FOREIGN INVESTMENT LAW (Decree 9-98): Guarantees national treatment to foreign investors, authorizes their participation in any lawful economic activity in the country and any proportion in the capital stock of a legally constituted company.
10. FREE CURRENCY NEGOTIATION LAW (Decree 94-2000): Stipulates freedom in the provision, possession, remittance, transfer, purchase, sale, collection and payment of and with foreign currency, as well as in the possession and management of deposits and foreign currency accounts. The exchange rate calculated and published daily by the Banco de Guatemala will be used for obligations with the State and conflict resolution.
These are the reasons that Jenny Cho, CEO of Hansae, envisioned when she stated that “Michatoya was chosen because he has the largest scale, a vision to develop and grow in most garments and fashion, and a quick grasp of the information related to nearshoring”.
Internationalization Director of Michatoya Pacífico
Board Member of the World Free Zone Organization
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