Building a Life and a Business in Guatemala

By edelhaus

Tom Lingenfelter, and expatriate entrepreneur originally from the Bay Area in California now lives in Quetzaltenago, Guatemala… a.k.a. Xela. He is a local legend among the city folk for helping market and promote indigenous businesses with his own businesses, Xela Pages.com and Xela Host.com.


I caught up with him after he and his family were winding down from a whirlwind weekend of celebrating Guatemala’s Independence Day.

Anne:
I am a bit confused... is the name of the city you live in Xela or Quetzaltenago?

Tom Lingenfelter:
Both. Xela, which is actually pronounce "Shay-la," is the shortened Mayan name for the town which is Xelaju. Quetzaltenango is the Spanish name meaning land of the Quetzal. The Quetzal is the national bird and is very hard to find.

Anne:
What kind of a city is Xela and why did you choose it?

Tom Lingenfelter:
Xela is the 2nd largest city in Guatemala and is the commercial center of the Western Highlands. We landed here mainly because my wife's family is from here and we had a place to live. Xela is a town of about 120,000 and the surrounding area has another quarter million people with 60% of them being Indigenous Ladino, which are people of Spanish decent and about 40% Mestisos which are Indian/Spanish.

Anne:
Wait… do you mean Ladino or Latino?

Tom Lingenfelter:
Actually it is Ladino - Which comes from the word Ladron So they tell me, which means Thief!!

Anne:
Are there many expats there as well?

Tom Lingenfelter:
In Guatemala there are only about 10,000 US expats, I don’t have figures on the rest. In Xela there are maybe 500 to 700.

Anne:
Since you are doing most of your business online...How are the internet connections?

Tom Lingenfelter:
I have a 128k cable connection that cost $75.00US/month. There is only one company in town offering this service. We can use a dialup account but it costs us about $4.00US/hour.
There are also about 12 or 15 Internet cafes in town that provide service to the locals for about 50 cents an hour.

Anne:
In an article you wrote, you said that “many of the simple things we take for granted are not even being tried in Guatemala…" Like What?

Tom Lingenfelter:
Well, have you ever been to a restaurant and seen a placemat on the table with advertising on it? That was my first business here. I now do to-go menus for 3 restaurants in town. It provides us local currency, but not a great deal of it! Our Xelapages website is our main source of income.

Anne:
Yes... How did that come about?

Tom Lingenfelter:
I traded a website to a Spanish school for 2 weeks of classes. I then promoted their site and they got so many students from that site I decided to sell websites to other businesses in town. I was already doing web design work in the states before I came here so it was a good fit.

Anne:
You sound very resourceful.

Tom Lingenfelter:
Well I have a wife and 2 kids that I must support, so I am always on the look out for new ideas.

Anne:
How do you go about getting other contracts for your business?

Tom Lingenfelter:
Most of our business is generated locally. Xelapages and the name Tom Lingenfelter are relatively famous around here. So I get a lot of business from word of mouth. I also have a rep in Antigua Guatemala and 3 sales people here in Xela.

Anne:
How difficult was it to start a business in Guatemala?

Tom Lingenfelter:
Actually it is quite easy for anyone to start a business. You just need to register the name and get a Tax Id. There are a ton of small businesses here. It seems like everyone has one.

Anne:
Do you need to show proof that you can support yourself while you are getting your business up and running?

Tom Lingenfelter:
No, you do need to show proof of support. But I am not legally able to work in Guatemala because I am just a tourist.

Anne:
Even with a Guatemalan wife?

Tom Lingenfelter:
I am working on residency but it is a long process. I leave the country every 90 days for a few hours and then return to get a new 90 day stamp. The Mexican border is about 2 1/2 hours from here so we drive there and go shopping.

Anne:
How about your children, are they dual citizens?

Tom Lingenfelter:
Yes, USA/Guatemala they have 2 passports and are very lucky I think. I would love to have a Guatemalan passport but it will never happen Guatemala does not have a naturalization process at this time.

Anne:
Were you allowed to register the business in your name even on a tourist's visa?

Tom Lingenfelter:
No, the business is in the wife’s name. There are others here that have businesses but I am not sure how they do it. No one has ever asked me for working papers or even questioned us.

Anne:
It’s good for the economy, so why not? They probably give a nod and a wink and then look the other way.

Tom Lingenfelter:
Yes, that happens a lot here. The 3rd world is full of low paid government workers who will do just about anything for a small "tip."

Anne:
You mentioned in one of your articles that you and your family had to go back to the States in order to really get Xelapages off the ground... Why was this?

Tom Lingenfelter:
Well, our clients are mainly from the US and Europe. So we returned to the states to promote the site and I needed to work a full time job so we could save more money. By clients I mean the people who come to Guatemala to study Spanish. We work with 20 Spanish schools online and we collect a $30 registration fee from each student who registers with us.

Anne:
How did you promote it in the States? Couldn't you have just accomplished the same thing from Guatemala using the internet?

Tom Lingenfelter:
Yes, maybe but we were not making enough money at the time to stay here. Plus we returned to the San Francisco bay area and began canvassing the local universities with flyers and advertising this proved to be one of the best things we could have done. 85% of our Spanish school students are young people in College. We now use a couple online services to place ads in university newspapers.

Anne:
Where would you like to see Xelapages in the next couple of years?

Tom Lingenfelter:
I would like to expand Xelapages to a few other cities in Guatemala. Antigua is the largest Spanish school location in the country but I would prefer to focus on the smaller cities like Huehuetenango, Coatepeque and maybe a couple beach communities. Our newest project is Xelahost.net which is a web hosting company. I really think my focus will slowly shift to this.

Xelahost is something we started because many of my Xelapages clients wanted their own domain names. Many of them were paying big bucks and had no idea what they were getting. So I stated Xelahost and charge them a reasonable price. Domains $15/year-- hosting $10/month. I like designing websites but the competition here is starting to grow. However, there are very few local hosting companies so it seemed like I should move in that directions.

Anne:
How would you describe your life?

Tom Lingenfelter:
Tranquillo!! Which in Spanish means tranquil. I have what I consider a good life. I do not make a ton of money and I will never be "rich" but I enjoy everyday and I have time for my family. That is something you do not get in the USA. Both parents HAVE to work in the U.S. just to get by. Here we both work but we work together and I am here everyday when my kids come home from school!

There are 4 of us, Me, my wife, 7 year old boy and our 2 year old girl, plus we have a full time housekeeper/nanny. We budget and live on about $1000US/month and that includes all of our travel, gas, food, electric, water... etc.

Anne:
Wow! that is quite inexpensive… So, you are paid in dollars through your website?

Tom Lingenfelter:
Yes, my site pays us in Dollars and yes, we live well. We go places on the weekend we do not worry about spending money.

Anne:
How do taxes work for you?

Tom Lingenfelter:
Well, the company is Guatemalan so we pay VAT - value added tax of 12% here on our sales.
The system is a bit different here you only pay taxes on sales that include a factura a factura is an official receipt that you give a client. If the client does not want the factura you do not collect the tax. It is a VAT so the client pays it we just collect it.

Anne:
So, basically you live tax free?

Tom Lingenfelter:
Yes, for the most part. That is one of the reasons the company is in my wife’s name she is a Guatemalan citizen, not a US Citizen.

Anne:
Do you own your home?

Tom Lingenfelter:
Yes, we have a condo that we live in right now which is located on the outskirts of town. It is a 3 bedroom 1 bath with a VERY small play area for the kids. We bought it several years ago for about $23,0000. It is one a one story building but we could build a second level on top very easily. I have thought about building an entire 3 bedroom apartment on top and renting it out for extra money but we shall see.

I have several friends who have wonderful houses here in Xela. I watched a good friend build a beautiful house near to the condo we own. He had an architect who designed it and built it. The house is located outside the main city but in an area that is developing fast. It is 180mts sq in construction and made of solid concrete and block, as all houses are. The land is roughly 400mts sq and the house is surrounded by a nice lawn. The view is wonderful, he has a large deck on the front of the house which overlooks the volcano Santa Maria . The community where the house is located is relatively exclusive with 24/7 guarded gates and the other houses are even more spectacular than his !!


Anne:
What does a house like that run, in terms of price?

Tom Lingenfelter:
Price wise it cost about $50,000 to build it. That included the land. A skilled construction worker makes about $1.00/hour.

Anne:
So, how difficult is it for a non-Ladino without a Guatemalan spouse to buy property in Guatemala?

Tom Lingenfelter:
EASY!!! Anyone can own land in Guatemala. The only restrictions are on waterfront land. No one owns waterfront land. You only own the maintenance rights to it-- Guatemalan or otherwise.

Anne:
I am really surprised that more gringos aren't living there.

Tom Lingenfelter:
Mainly people are afraid of Guatemala. There are all kinds of horror stories out there and some are true. But we are seeing more and more gringos inquiring about living here… Especially retirees.

Anne:
Yes, well with the Social Security System about to go bust, a lot of people will need to stretch the dollars they DO have as far as they will go. Your son just started school, right? Is he going to a bi-lingual school?

Tom Lingenfelter:
He is in 2nd grade and goes to an all English Christian school that was started about 25 years ago by missionaries. The teachers are mostly from the US and Canada and they only teach in English.

Anne:
How do you feel about his education? In as much as you can tell from the second grade…

Tom Lingenfelter:
The school runs the same curriculum as the US schools but with a Christian focus. The graduates of this school can go to college in the USA without problems. I think he is getting a good education so far.


Anne:
Is there anything you wish you would have done differently?

Tom Lingenfelter:
Well, when I first came to Xela there was only one or two small Internet cafés. I had the chance to open a large Internet café with one of my wife's cousins. He was very interested in the idea and was willing to finance it. I thought at the time that it was a good idea but I was afraid to go for it. As it turns out Internet cafés are a booming business here and all over Latin America. If I had to do it again I would have opened the Internet Café!!

Other than that I have been pretty happy with my choices so far...but I have a lot more of them to make!


Anne:
What would have made your transition easier?

Tom Lingenfelter:
I have been VERY lucky because I have a Guatemalan wife. Not only because she is a wonderful woman and mother but because she understands the ins and outs of Guatemalan business and culture. People in Guatemala are very respectful. Everyone here is your "Tio or Tia" (Uncle or Aunt) even though they are really not related. When you address someone you often times say "Don or Doña" which is sort of like Mr. or Mrs., but it is term of respect. These types of thing are not so easy to learn unless you have someone who helps you.

My advice to anyone considering living in Guatemala is to come down here and try it out first. You can rent a nice apartment for $200/month and in a few months you will have a much better idea of the lifestyle and culture. It is DIFFERENT but at that same time it is WONDERFUL.

In parting I would just like to invite any of your readers to contact me with any question they might have regarding Guatemala. We help 1000s of people each year make their way to Guatemala either for Spanish School classes or just to see the site. There is a reason they call this country "The Land of Eternal Spring" so come on down and see what it is all about!!!