Essential Guide To Incorporate A Company In El Salvador

Law FirmBiz Latin Hub Group
Subject MatterCorporate/Commercial Law, Wealth Management, International Law, Corporate and Company Law, Offshore Company Formation, International Trade & Investment, Shareholders
AuthorBiz Latin Hub Group
Published date07 August 2023

Apart from the excellent coffee bean that the nation is famous for, the Salvadoran economy is dependent on exports of sugar, gold, and textiles, while having a well-developed pharmaceutical industry thanks to an increased participation of Indian investors in the Central American country. This has driven an influx of investors looking to incorporate a company in El Salvador, pertaining to these successful industries.

In total, exports and imports make up 64% of the GDP and are, therefore, the most important economic driver of the country. Even though the government under president S'nchez Cerén, who has left office in 2019, has impeded some parts of the private sector, policies that support international trade are active and still very attractive for foreign investors trying to incorporate a company in El Salvador.

Significant to the international trade sector in El Salvador is the multilateral agreement CACM between Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, and the Free Trade Agreements (FTA) with the European Union, México, Colombia, Taiwan, and the United States.

El Salvador is an overlooked yet attractive commercial jurisdiction that offers some valuable opportunities for international investors, keeping the annual GDP growth at 2.3% (2017). El Salvador, the first nation to recognize Bitcoin as legal currency, has made the decision to do away with all taxes on technological advancements. The Salvadoran president, Nayib Bukele, regarded the technology as a way to fight hyperinflation when he legalized Bitcoin on September 7, 2021. El Salvador has reorganized its Bitcoin investments over the last 18 months and has used capital profits on several occasions to rebuild the country. This move has contributed significantly to foreign investment in the country, as well as many deciding to incorporate a company in El Salvador.

Bukele's continued initiatives to remake El Salvador also include promoting tourism, fighting terrorism, and creating regional commercial hubs in addition to his attempt at a financial comeback. If you decide to incorporate a company in El Salvador, it is crucial that we provide you with an overview of the most important requirements to comply with during the company incorporation process, we have compiled an article to exemplify the key steps.

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