Doing Business in Guam

Do you want to expand your business into Guam or hire employees there? Find out the key things you need to know about Indonesian expansion below.

Guam Economy Overview

Currency

United States Dollar (USD)

Working hours

40 hours/week

Public/bank holidays

12 public holidays

Capital

Hagåtña

Languages

English and Chamorro

Population

170,000

Minimum hourly salary

USD 9.25

Tax year

1st Jan – 31st Dec

Date format

MM/DD/YYYY

Misclassification penalties

Guam follows U.S. federal laws on employee classification, so misclassification can result in penalties, including back taxes, fines, and legal consequences for failure to properly withhold taxes and contributions.

Fun fact

Guam is an unincorporated U.S. territory, known for its strategic military location in the Pacific Ocean and its vibrant mix of Chamorro, Filipino, and American cultures.

Strategically located in the western Pacific Ocean, the U.S territory Guam enjoys access to both the U.S and Asian market. Historically, Guam has been an important base for the U.S military with major establishments such as the Naval Base Guam and Anderson Air Force Base. The island’s large population of military personnel has generated a steady demand for housing and facilities, creating many employment and investment opportunities for businesses in Guam.

Despite COVID-19 significantly impacting Guam’s economic growth, with declines in tourism and private sector work, the island has been able to recover its most crucial sectors and has since implemented reforms to diversify the economy. In 2022, Guam enjoyed a 5.1% growth in real GDP, mainly driven by increases in exports, private fixed investment, and personal consumption. Guam’s labor force has also grown to meet the needs of prominent expanding sectors such as tourism and real estate, increasing from 59,470 in 2022 to 64,680 in 2023. Increasing employment and a growing labor force means that employers in Guam have access to a larger and more diverse talent pool.

As Guam’s economy continues to recover and diversify, profitable investment opportunities are being created for businesses looking to facilitate, enhance, and sustain economic growth.

Table of Contents show

Overview of Guam’s Economy

As a U.S territory, Guam is governed by U.S federal laws and thus limited in its methods of economic expansion. As a result, Guam’s economy is heavily reliant upon tourism, reporting an average of 1.5M visitors to the island each year.

Economic Driver	Description
Tourism	The cornerstone of Guam’s economy, accounting for a substantial portion of GDP with an average of 1.5 million visitors annually. Government initiatives are revitalizing this sector post-pandemic.
Defense and Military Presence	A crucial hub for U.S. military operations in the Asia-Pacific region, driving economic growth through significant investments in construction and infrastructure, totaling $523 million in 2023.
Construction and Infrastructure Development	A booming sector fueled by military spending and civilian projects aimed at enhancing public services, creating immediate job opportunities and supporting long-term economic stability.
Agriculture and Fishing	Plays essential roles in the economy, focusing on sustainability and local production to reduce dependence on imports, with seafood exports contributing to food security and job creation.

Prior to the pandemic, tourism expenditures accounted for the majority of funds flowing into Guam’s economy. However, as a result of people fearing to travel due to COVID and government transport cancellations, Guam’s tourism industry significantly declined between 2020 and 2022. Fortunately, strong government strategies, including reducing travel paperwork and promoting holiday activities such as the MSC Bellissima Cruise Ship, have played an important role in recovering this crucial industry.

Mainly driven by demand from the U.S DOD (Department of Defence), the construction industry in Guam is a significant contributor to economic growth. The importance of the construction sector is reflected in increases in employment and government expenditures where federal DOD constructions totalled $523M in 2023.

As of 2024, the number of DOD construction projects still underway is significant, totalling $2.2 billion. Guam’s large military presence both provides and promises to provide profitable investment opportunities within the construction industry.

Guam also has many civilian projects underway including major public infrastructure developments and plans to improve Guam’s roads, drinking water and internet access. These construction projects are intended to support businesses and ease trade in Guam, thus enhancing economic growth.

Taxes

Employer tax: 7.65%

Social Security (FICA)

6.2%

Medicare

1.45%

Employee tax: 7.65%

Social Security (FICA)

6.2%

Medicare

1.45%

Income tax

Guam follows a progressive income tax system similar to the federal U.S. system. The federal income tax rates apply as follows:

Taxable Income (USD)

0 – 11,000
11,001 – 44,725
44,726 – 95,375
95,376 – 182,100
182,101 – 231,250
231,251 – 578,125
578,126 and above

Federal Tax Rate

Overview of Guam Business Regulations

Companies looking to incorporate a business in Guam will need to register with the Guam Department of Revenue and Taxation. Companies can choose to register as one of the following legal entities: LLC, partnership, joint venture, or branch office. Businesses operating in Guam will also need to obtain a license from either the Business Licence and Permit Center or the General Licensing Registration Branch at the Department of Revenue and Taxation. The nature of the license obtained will differ depending on the type of business activity.

As a U.S territory, employer obligations and working conditions are governed by the Fair Labor Standards Act (FLSA). This legal framework protects employees from discrimination and exploitation in the workplace.

The standard working hours in Guam is set at 40 hours per week and eight hours per day. Time exceeding this is classed as overtime and under the FLSA should be compensated at a rate no less than 1.5 times the employee’s normal wage.

Businesses operating in Guam will be required to pay a corporate tax of 21% and VAT levied at a rate of 2.0%. Employers and employees are also required to contribute 6.2% of an employee’s gross wages to the U.S Social Security Administration. All employee contributions must be withheld from the employee’s salary and remitted to the Guam tax authorities.

Benefits of Doing Business in Guam

Guam offers many exciting investment opportunities in the construction, tourism, and real estate industry. Government efforts to increase sustainability in these sectors have also produced new opportunities for businesses involved in energy distribution and environmental management. Tax incentives implemented by the government are additionally a strong motivation for businesses looking to expand into Guam.

As a major hub for the U.S. military, Guam must provide housing and facilities for the thousands of troops stationed on the island. As a result, Guam’s real estate industry continues to produce profitable investment opportunities for businesses in the sector. Following COVID-19 and the rise in inflation caused by Russia’s invasion of Ukraine, Guam’s real estate industry declined by 12.9% in the third quarter of 2021. However, Guam’s steadily growing population, increasing by 0.8% between 2022 and 2023, military demand, and increasing tourism all position this sector as a leader for Guam in terms of economic growth.

Situated in the western Pacific Ocean, Guam’s beautiful beaches and rich cultural heritage attract a range of tourists and homebuyers. As a U.S. territory, Guam provides a blend of tropical living and American convenience, making it an extremely favorable location for business expansion. The island’s famous Tumon Bay is a particularly prominent sight for tourists and home to many hotels and beachside resorts, generating exciting investment opportunities in the tourism industry.

In an effort to preserve the island’s biodiversity, Guam is promoting a new sector within the tourism industry: ecotourism. The government has introduced several initiatives to encourage and facilitate ecotourism. Hotels can now earn green certifications and participate in sustainability programs. In addition to providing several lucrative investment opportunities in the green tourism sector, sustainability initiatives are crucial to protecting Guam’s environment and the future of businesses operating on the island.

Understanding the importance of foreign investment in developing Guam’s economy, the government has introduced several economic incentives, including the Qualifying Certificate Program (QCP). The QCP allows businesses involved in certain economic activities, such as green technology, manufacturing, export trade, and insurance, to claim certain tax benefits. Businesses in the aforementioned fields and others are now eligible for tax deductions and incentives, including a 20-year income tax rebate between 75% and 100% and a 10-year 100% real property tax abatement.

International Expansion into Guam

When incorporating a business in Guam, companies will need to choose a business structure that best facilitates their long-term goals. The most common types of businesses incorporated in Guam include subsidiaries and branch offices.

Guam Employer of Record (EOR)

Businesses expanding internationally can benefit significantly from engaging an Employer of Record (EOR). An EOR serves as the legal employer, assuming full responsibility for compliance, payroll, and workforce management. This means companies can hire talent in Guam without needing to establish a local legal entity, streamlining the expansion process.

EORs ensure compliance with both local and federal laws, minimizing legal risks for the parent company. By handling hiring, payroll, and administrative tasks, EORs allow businesses to focus on strategic objectives while the EOR takes on all employment-related liabilities.

Learn more about EOR in Guam

Recruitment Agencies

Recruitment agencies in Guam help businesses expand by connecting them with skilled local talent across various industries.

Remote People provides recruitment solutions that simplify hiring and ensure compliance with Chamorros labor laws.

For businesses looking to grow in Guam, Remote People offers the expertise and resources needed to build a local workforce quickly and effectively, making it a practical solution for market expansion.

Learn more about Recruitment Agencies in Guam

Guam Professional Employment Organization (PEO)

A PEO shares liability with the parent company and manages critical HR functions such as payroll, benefits administration, and compliance. PEOs are ideal for small to medium-sized businesses that require HR support while maintaining some control over their workforce.

Unlike an EOR, a PEO does not eliminate the need for a legal entity in Guam but helps navigate local regulations and manage employee relations more effectively. This partnership allows companies to focus on growth while the PEO handles day-to-day HR operations.

Subsidiary Incorporation

Subsidiaries, such as LLCs allow companies to establish entities in Guam that are independent from their parent company. This means that subsidiaries have full control over their operations and can align their policies and practices to suit that of Guamanian culture. As an independent entity, the subsidiary will be liable for any debts incurred. In order to incorporate a subsidiary, businesses will need to make a name reservation, designate a registered agent, submit their articles of incorporation, obtain an EIN, and open a corporate bank account.

Branch Registration

Alternatively, businesses in Guam can choose to incorporate a branch office. The branch office will be viewed as an extension of the parent company, and therefore, all liability will be assumed by the parent company. Branch offices must conduct their operations according to the policies and systems of the larger organization, thus limiting their ability to structure their practices around Guamanian culture.

Business Opportunities in Guam

Guam’s scenic beaches, strong military presence, and strategic location make it a favorable location for foreign investment and international expansion. Expanding U.S DOD activities promise future demand in Guam’s already strong real estate industry, and government initiatives to increase sustainable tourism have generated new investment opportunities in the tourism industry. Guam’s identification as a U.S territory also affords businesses operating on the island crucial legal security and strategic access to both the U.S and Asian Market.

Moreover, as Guam seeks to diversify its economy, opportunities in agriculture, particularly sustainable farming and aquaculture, are emerging to meet local demand and reduce reliance on imports.

Business Opportunity	Reason for Opportunity
Tourism and Hospitality	Recovery of the tourism sector creates demand for hotels, restaurants, and entertainment services.
Construction and Engineering	Significant military and civilian infrastructure projects provide numerous contracts and job opportunities.
Logistics and Supply Chain	Increased military presence and tourism drive demand for logistics and supply chain services.
Agriculture and Aquaculture	Growing interest in local and sustainable food production to reduce imports and meet local demand.
Eco-Tourism and Adventure Activities	Rising consumer preference for sustainable travel experiences aligns with Guam’s natural beauty and cultural heritage.

These business opportunities are bolstered by Guam’s access to U.S. markets and federal support, making it an attractive destination for both local and foreign investors. By capitalizing on these sectors, entrepreneurs can contribute to Guam’s economic growth while establishing successful ventures in a vibrant and evolving market.

Whether assisted by an EOR or PEO, companies interested in supporting national sustainability efforts, contributing to major construction projects or profiting off Guam’s already strong tourism sector may find expanding in Guam to be both a cost-effective and rewarding venture.

Ready to explore opportunities in Guam? Gain insights on doing business in this unique U.S. territory, from compliance requirements to local market strategies.