Establishing and operating a business in El Salvador
in El Salvador
El Salvador has been ranked by the FDI Intelligence of the Financial Times as the most competitive country to establish and operate a business in the region.
In El Salvador, we are taking historic steps to boost economic development and create a competitive and attractive business ecosystem for investors. We provide support to those who are considering starting and operating a business in our country, as well as to those who are already established, by increasingly simplifying procedures. Currently, we have reduced response times by up to 60%
We offer investors a guide map to establish businesses or investments in El Salvador. Although each case is particular, this tool is extremely valuable because it specifies step-by-step the legal and logistical process that a company must consider to establish operations in the country.
Tourism infrastructure
*The construction and environmental permits only apply to those who develop infrastructure
*Some procedures can be carried out in parallel
Software development and digital content
*The construction and environmental permits only apply to those who develop infrastructure
*Some procedures can be carried out in parallel
Aeronautic
*The construction and environmental permits only apply to those who develop infrastructure
*Some procedures can be carried out in parallel
BTC and digital assets
*The construction and environmental permits only apply to those who develop infrastructure
*Some procedures can be carried out in parallel
Electronic equipment and auto parts
*The construction and environmental permits only apply to those who develop infrastructure
*Some procedures can be carried out in parallel
Pharmaceuticals and medical devices
*The construction and environmental permits only apply to those who develop infrastructure
*Some procedures can be carried out in parallel
Agribusiness
*The construction and environmental permits only apply to those who develop infrastructure
*Some procedures can be carried out in parallel
To facilitate the business climate in El Salvador so that micro, small, and medium enterprises (MSMEs) can formalize their businesses, the Simplified Joint Stock Companies (SAS) arise.
Learn about the advantages of SAS:
1. Incorporation of sole proprietorships, as opposed to Variable Capital Corporations that require the participation of two or more partners.
2. The capital stock for the incorporation of a SAS is only US $1.
3. Entrepreneurs do not need a public deed, they only fill out forms online and complete the process on the official website of the National Registration Center (CNR), which sends the resolution electronically.
4. Salvadorans Resident Abroad (SALEX) can also incorporate companies within the national territory, through the electronic signature.
For more information on the incorporation of the SAS, requirements, steps to follow to do the procedure online, and benefits, please consult the official site of the National Registration Center (CNR) https://www.cnr.gob.sv/sociedades-por-acciones-simplificadas/.
Through https://simple.sv/, a single channel for incorporating companies and obtaining business registrations, El Salvador has become one of the 28 countries in the world that have a single window for the management of business procedures online.
Some of the main services that you can perform from https://simple.sv/
El Salvador offers investors free trade zones designed for companies engaged in the production and export of goods or services. These industrial parks allow for efficient operations and offer attractive tax incentives, for example, raw materials or goods needed by companies are imported duty and tax-free.
Industrial parks are strategically located near the capital city, major cities, with access to major highways, airports, and world-class ports.
Investors can also benefit from Service Parks, limited zones considered outside the national customs territory, where service exporters are installed and operate under the benefits of the International Services Law.
To learn more, download the Industrial and Commercialization Free Trade Zones Law and see all the available zones in the Free Trade Zones Catalog 2023
El Salvador offers investors free trade zones designed for companies engaged in the production and export of goods or services. These industrial parks allow for efficient operations and offer attractive tax incentives, for example, raw materials or goods needed by companies are imported duty and tax-free.
Industrial parks are strategically located near the capital city, major cities, with access to major highways, airports, and world-class ports.
Investors can also benefit from Service Parks, limited zones considered outside the national customs territory, where service exporters are installed and operate under the benefits of the International Services Law.
To learn more, download the Industrial and Commercialization Free Trade Zones Law and see all the available zones in the Free Trade Zones Catalog 2023.
The Salvadoran tax system promotes competitiveness, here you can download the guide of incentives offered by the legal framework of El Salvador.
For more information on the payment of taxes and tariffs, you can consult them at simple.sv
One of the main attractions of El Salvador for investors is the cost-quality of Salvadoran human talent.
El Salvador is currently the third cheapest in the region and the country with the lowest percentage of labor liabilities (31%) in Central America.
The legislation that regulates the relationship between employers and workers is El Salvador’s Labor Code, which establishes that wages are freely determined, but cannot be lower than the minimum wage established by the National Minimum Wage Council (CNSM), which is reviewed at least every three years.
Average minimum salary
- Costa Rica: US$920
- Panamá: US$712
- Honduras: US$538
- Guatemala: US$399
- El Salvador: US$293
- Nicaragua: US$232
According to El Salvador’s Labor Code, companies are required to employ at least 90% Salvadoran workers. In special circumstances, companies may be authorized by the Ministry of Labor to employ more than 10% foreign workers.
In this legislation, Central Americans are considered Salvadorans. It also establishes that foreigners holding positions as directors, managers, administrators, or any managerial position in the company will not be considered, up to several four.
Also, foreign workers with regional management responsibilities in international companies will not be considered as part of the 10% limit.