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Legal 500 Doing Business in El Salvador

Contributed by EY Law Central America

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Between 2010 and 216, the economic growth average of El Salvador was 1.9% In 2017, this growth was 2.15% due to a greater dynamism in the livestock, agriculture, forestry and mining sectors, among others.   The growth is expected to be 1.8% for 2018. The country has significantly progressed in human development, specially through public utilities expansion. It has even managed to reduce social inequality by approximately 5 percentage points between 2007 and 2017. However, the country is challenged to boost economic growth, stabilize public debt and reduce violence, among others.

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With the legislative and municipal elections of March 2018, El Salvador entered into a period of transition. President Salvador Sánchez Cerén’s FMLN party suffered a historic defeat by the right-wing Nationalist Republican Alliance in an election affected by a significant drop in voter turnout and a massive rise in spoiled ballot papers.

Since taking power in 2009, the FMLN had sought to tackle the country’s poor economic situation, characterised by persistent low growth-levels and a heavy debt burden, with unprecedented advances in social investment, infrastructure projects and public schools, as well as measures ranging from attempts to increase transparency to the protection of minorities. The party’s ambitious agenda was hindered by an increasing oppositional obstructionism and a challenging domestic security scenario (and associated policy issues), generally referred to in terms of ‘gang violence’, that saw homicide rates peak.

Despite this volatile socio-political environment, the Salvadoran business market remains stable and the legal market highly competitive. A handful of large, regional firms, principally Arias, Consortium Legal and BLP, but also García & Bodán and Central Law El Salvador dominate the legal landscape, providing strength in depth across the full range of practice areas, including banking and finance, corporate and M&A, as well as dispute resolution. In the IP sphere domestic firms such as Espino Nieto & Asociados and Romero Pineda prevail; and highly specialised boutiques such as De La Gasca & Cía. and Portal & Asociados have also increased their market share. Significant recent arrivals in the market include local firm Benjamín Valdez & Asociados Abogados/Notarios, founded in 2016 and specialising in corporate and financial legal services; and Guatemalan firm Mayora & Mayora, S.C. which established a local office via its 2017 merger with Salvadoran firm Telles & Asociados.

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