2025 Bureaucracy Index Exposes Guatemala’s Administrative Burden

Starting a business in Guatemala continues to be a lengthy process. According to the 2025 Bureaucracy Index, published by the Adam Smith Center for Economic Freedom, entrepreneurs need an average of 2,283 hours, or about 95 days, to complete all the procedures required by 12 government institutions.

The study, presented on October 31, 2025, by the Centro de Investigaciones Económicas Nacionales (Cien), measures the amount of time medium-sized companies in Guatemala must dedicate annually to comply with bureaucratic requirements across various state entities.

Over 2,000 Hours to Start a Business

Out of the total time, 1,337 hours correspond to general procedures—those mandatory regardless of the industry, while 1,070 hours are spent on activity-specific requirements.

“This means that, on average, a medium-sized company in Guatemala devotes more than a thousand hours a year to bureaucracy. That equals 42 continuous days or 127 working days of eight hours each,” explained Sigfrido Lee, associate researcher at Cien and author of the study.

Why Progress Has Stalled

Guatemala approved the Law for the Simplification of Administrative Requirements and Procedures in 2021, seeking to streamline and digitalize formal registration processes. However, despite these reforms, the country ranks 15th out of 21 nations in the latest index.

According to Lee, three main issues hinder real progress:

1. Lack of continuity: “Some procedures improve temporarily, but later efforts fade, causing stagnation or regression,” said Lee.
2. Limited scope: Enhancing one procedure is insufficient if others remain inefficient. “The process is only as fast as its slowest step,” he added.
3. Incomplete digital transformation: Many institutions have merely uploaded PDF forms online instead of truly simplifying or removing redundant steps. “That’s not digital transformation,” emphasized the researcher.

Lee stated that addressing these three factors could significantly reduce processing times, provided there is leadership and an integrated vision across public institutions.

How Different Sectors Are Affected

The 2025 index focused on medium-sized companies across three major sectors:

• Primary sector: Agriculture, livestock, hunting, and forestry.
• Secondary sector: Manufacturing industry.
• Tertiary sector: Wholesale and retail trade, and repair of vehicles and motorcycles.

The primary sector faces the greatest bureaucratic burden, requiring 2,687 hours to open a business. The manufacturing sector follows with 2,337 hours, while the service sector requires 2,407 hours.

In the first two sectors, the longest delays come from activity-specific procedures, while in the tertiary sector, national registration consumes the most time, 1,222 hours, according to Lee.

Paths Toward Improvement

To make real progress, Lee emphasized that the first step is measurement:

“You can’t solve what you don’t measure,” he said.

He also urged Guatemala to recover a comprehensive competitiveness strategy, coordinated across all government agencies.

From a regional perspective, Jady Valladares, Director of Trade Facilitation at the Secretaría de Integración Económica Centroamericana (Sieca), highlighted the need for regional harmonization of procedures.

“When each country imposes its own requirements, it becomes a barrier,” Valladares explained.

She added that aligning trade requirements under the Central American Digital Trade Platform could save the region over US$200 million annually in logistics costs, directly benefiting more than 1.5 million micro, small, and medium-sized enterprises (MSMEs).

Comparison With Previous Years

In the 2024 index, Guatemala required 4,872 hours to comply with bureaucratic processes, ranking above only Venezuela (7,108 hours) and Spain (13,837 hours).

However, Lee clarified that this year’s data are not directly comparable due to methodological changes. For instance, the construction permit process was excluded in 2025, which typically inflates total times for smaller companies.

Even so, the study reinforces a familiar message: while Guatemala has made some progress in reducing bureaucratic time, real transformation will depend on sustained political will, cross-agency coordination, and genuine digital reform.