By: Alexandra Haeussler
Despite the health and financial crisis, we experienced because of the COVID 19 pandemic, there was a positive impact, as the number of ventures increased considerably during this period. Many people lost their jobs or suffered a decrease in wages and income, which encouraged many to start their own business.
Entrepreneurship requires adequate legal and tax advice that allows and ensures the entrepreneur that his business will develop without risks of such nature. It requires a well-founded study and advice.
Many young entrepreneurs or businessmen ask themselves nowadays:
a. Should I create an entrepreneurial company or a corporation?
b. Which will be the most convenient tax regimes?
c. What contracts should I enter to protect my interests with customers and suppliers?
d. How do I protect my image, brand or distinctive?
e. Who should do my accounting?
These and many other questions have arisen because of this trend, so this tendency deserves our attention and promotion, since entrepreneurs are the engine of the national economy and promote formal commerce.
Legislation and procedures
Since July 2019 the Commercial Registry and the Superintendence of Tax Administration processed the registration of the Entrepreneurship Companies, which are included within Decree number 20-2018 of the Congress of the Republic (Law for the Strengthening of Entrepreneurship).
On October 29, 2018, by means of Decree number 20-2018 of the Congress of the Republic, the Entrepreneurship Strengthening Law was approved, which entered into force in 2019, and its Regulations were approved on March 29 of the same year.
This law established as a specific objective to create a new type of corporation for the incorporation of an entrepreneurial company, which may be integrated by one or more shareholders in an expeditious manner.
This law establishes guidelines that allow the proper functioning of the Venture Corporations, as a tool for the formal implementation of the ventures. In addition, it provides the necessary powers to the Commercial Registry, to be the governing body of the Venture Corporations in terms of authorization and registration.
Once the process of registration of the Entrepreneurship Company before the Commercial Registry is completed, the entrepreneurs will enjoy all the advantages provided by the existing electronic tools to facilitate the payment of their taxes and the operation of their companies through the platforms: Declaraguate, Virtual Agency, Online Electronic Invoice FEL, and the Virtual Assistant RITA, available from the web page of the Superintendence of Tax Administration, an institution that is ready with its operating systems and processes to register the Entrepreneurial Companies, according to the guidelines established by the Ministry of Economy.
Characteristics of the Venture Corporations:
– For the registration of Venture Corporations, it will not be necessary to carry out a public deed, so the process may be carried out through the online platform of the Commercial Registry.
– The Venture Companies may be formed with one or more partners, thus becoming sole proprietorships for their operation.
– The Venture Companies may receive monetary contributions of up to Q500,000.00 tax deductible for their growth and development.
– Every Venture Corporation must transform itself into another type of corporation if its total income exceeds Q5,000,000.00 per year.
– Every Venture Corporation will have shares that will have a limit of up to two years to be paid.
– The administrator of the Venture Corporation must be a shareholder to be able to act as such.
Let’s foster in our new generations the spirit of work and self-improvement and encourage them with assertive legal advice to undertake. LatinAlliance offers this service to contribute to the country’s economic growth.