Why Buy Real Estate in Antigua Guatemala Through A Corporation?
Potential buyers of real estate in Antigua Guatemala often ask me so often ask me just this question. So I thought that an article on this very subject would make a huge amount of sense. After writing an excellent article entitled ‘A Guide for Foreigners Thinking of Buying Real Estate in Antigua Guatemala,’ I asked Manuela Rosales, to write an article. I hope you find it like I did, very informative.
A property can be bought in the name of individuals, but it is also possible that it is in the name of legal entities. A Corporation “Sociedad anónima” (known as an “S.A.”) is frequently used in Guatemala for safeguarding real-estate assets. It has a limited liability to the value of the SA’s assets, and although the names of the founding members are public, the Registry of Commerce only records how much stock has been issued. The names of the stockholders or any transfers of stock are not in the public domain; this information only appears in the private records of the corporation. A Foreigner does not need to be a Guatemalan resident to form an S.A, to own stock or to be the legal representative.
In Guatemala, when a property is co-owned by individuals, the share of one of the owners does not pass automatically to the other co-owner when one of the co-owners passes away. The S.A is a way to facilitate the inheritance transfer, especially for foreigners, as the probate process in Guatemala can be long and costly.
This is also a good option when a property is bought as an investment, with the plan of selling it in the short and medium term when considering the tax benefits that the transfer of the shares can have, instead of the transfer of the asset itself. Of course, this is not absolute because it cannot be taken for granted that every buyer will want to acquire the company and not just the property.
An S.A is an entity with Guatemalan nationality; it has its own tax identification number, assets, and is responsible exclusively for civil liability (so it protects the name and assets of the shareholders). It pays taxes in Guatemala for the income that it receives and must have its own bookkeeping; having an experienced accountant is advisable.
In estate planning, there is not one right answer for every situation. Each one has its own particularities according to the family, tax, and personal context of every person or family group, so it is indispensable that, before deciding on having a corporation or not, a notary gives the right advice.
From the Print Edition 139 of Qué Pasa. January 2024
Written by Manuela Rosales
English speaking lawyer and notary
Address: 1a Calle Poniente #1, Antigua Guatemala
Tel: +502 7832-1802
E Mail: [email protected]
Real estate antigua guatemala
