{"id":136686,"date":"2026-04-07T12:07:16","date_gmt":"2026-04-07T12:07:16","guid":{"rendered":"https:\/\/my.legal500.com\/guides\/?post_type=comparative_guide&#038;p=136686"},"modified":"2026-04-07T12:07:16","modified_gmt":"2026-04-07T12:07:16","slug":"el-salvador-doing-business-in","status":"publish","type":"comparative_guide","link":"https:\/\/my.legal500.com\/guides\/chapter\/el-salvador-doing-business-in\/","title":{"rendered":"El Salvador: Doing Business In"},"content":{"rendered":"","protected":false},"template":"","class_list":["post-136686","comparative_guide","type-comparative_guide","status-publish","hentry","guides-doing-business-in","jurisdictions-el-salvador"],"acf":[],"appp":{"post_list":{"below_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Deloitte Legal \u2013 El Salvador\u00a0<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/03\/Deloitte-Legal-logo-UK.jpg\"\/><\/span><\/div>"},"post_detail":{"above_title":"<div class=\"guide-author-details\"><span class=\"guide-author\">Deloitte Legal \u2013 El Salvador\u00a0<\/span><span class=\"guide-author-logo\"><img src=\"https:\/\/my.legal500.com\/guides\/wp-content\/uploads\/sites\/1\/2026\/03\/Deloitte-Legal-logo-UK.jpg\"\/><\/span><\/div>","below_title":"<span class=\"guide-intro\">This country specific Q&amp;A provides an overview of Doing Business In laws and regulations applicable in El Salvador<\/span><div class=\"guide-content\"><div class=\"filter\">\r\n\r\n\t\t\t\t<input type=\"text\" placeholder=\"Search questions and answers...\" class=\"filter-container__search-field\">\r\n\t\t\t<\/div>\r\n\r\n\t\t\t\r\n\r\n\r\n\t\t\t<ol class=\"custom-counter\">\r\n\r\n\t\t\t\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is the system of law in your jurisdiction based on civil law, common law or something else?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>El Salvador operates under a civil law system, complemented by a commercial law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the different types of vehicle \/ legal forms through which people carry on business in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p><strong>1. Corporation (Sociedad Anonima or S.A):<\/strong> It is the type of company most often selected in El Salvador, which may be formed by other entities or individuals or a combination of both.<\/p>\n<p><strong>2. Limited Liability Company (Sociedad de Responsabilidad Limitada or S.R.L):<\/strong> This type of company is similar to a corporation, in that it may be formed by other entities or individuals or a combination of both. However, in this type of company, the capital is not represented by shares, but rather by membership interests.<\/p>\n<p><strong>3. Simplified Stock Corporation S.A.S. (Sociedad por Acciones Simplificadas or S.A.S):<\/strong> These types of companies can be formed with a single natural or legal person (single-member), unlike corporations or other types of companies that require the participation of two or more partners or shareholders. It is only necessary to complete the forms provided by the Registry of Commerce. The process can be done entirely online through CreaEmpresa.gob.sv, and it can be completed with either an autograph or a certified electronic signature.<\/p>\n<p><strong>4. Branches of foreign companies:<\/strong> These are foreign companies that can perform commercial activities in the Salvadorian territory, establishing their residence in the country through a branch. For such purposes, they must register their capital before the National Investment Office of the Ministry of Economy, followed by their registration before the Commercial Registry.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Can non-domestic entities carry on business directly in your jurisdiction, i.e., without having to incorporate or register an entity?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In order to carry out any business in El Salvador, the company must be dullyduly registered or incorporated<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any capital requirements to consider when establishing different entity types?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For Corporations (S.A.) and LLC the minimum capital is US$2,000.00<br \/>\nFor S.A.S. starting from $1.<br \/>\nFor Branch: US$12,000.00<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How are the different types of vehicle established in your jurisdiction? And which is the most common entity \/ branch for investors to utilise?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Corporation (S.A.) remains the most widely used structure for business operations in El Salvador. However, the single\u2011member S.A.S. has recently gained traction among startups and entrepreneurs seeking a more flexible and streamlined structure to formalize their business.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How is the entity operated and managed, i.e., directors, officers or others? And how do they make decisions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In El Salvador, the governance structure of most corporate entities typically includes a Board of Directors and a Legal Representative, although specific requirements vary depending on the entity type.<\/p>\n<p><strong>Corporations (S.A.)<\/strong><\/p>\n<p>An S.A. is managed by a Board of Directors, composed of one or more directors, who are appointed by the shareholders. The Board is responsible for the overall administration and representation of the company. Day to day management is usually delegated to a Legal Representative, who may or may not be a member of the Board. Decisions are made by majority vote unless a higher threshold is required by law or the bylaws.<\/p>\n<p><strong>Limited Liability Companies (S.R.L.)<\/strong><\/p>\n<p>An S.R.L. is typically managed by one or more Managers (Gerentes), appointed by the partners. The governing rules and decision making procedures are determined by the company\u2019s bylaws, offering greater contractual flexibility than an S.A.<\/p>\n<p><strong>Simplified Stock Corporations (S.A.S.)<\/strong><\/p>\n<p>The S.A.S. model allows for a streamlined structure. Management may be vested in a single administrator or a Board, according to the incorporation documents. This flexibility makes it particularly attractive for small businesses and startups.<\/p>\n<p><strong>Decision making processes<\/strong><\/p>\n<p>Corporate decisions are generally adopted through:<\/p>\n<ul>\n<li>Board resolutions, recorded in minutes; and<\/li>\n<li>Shareholders\u2019 or partners\u2019 resolutions, as required for matters such as amendments to bylaws, capital changes, or dissolution.<\/li>\n<\/ul>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there general requirements or restrictions relating to the appointment of (a) authorised representatives \/ directors or (b) shareholders, such as a requirement for a certain number, or local residency or nationality?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No, there is no restriction relating to the appointment of representatives\/directors or shareholders for Corporations, Limited Liability Companies, or Simplified Stock Corporations.<\/p>\n<p>However, for branches the legal representative have to be a Salvadoran or a Foreigner with residence in El Salvador.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Apart from the creation of an entity or establishment, what other possibilities are there for expanding business operations in your jurisdiction? Can one work with trade \/commercial agents, resellers and are there any specific rules to be observed?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, there are other possibilities for business operation such as agents, distributor, resellers or independent contractors.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any corporate governance codes or equivalent for privately owned companies or groups of companies? If so, please provide a summary of the main provisions and how they apply.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>El Salvador does not have a specific or mandatory governance code for privately held companies, the governance standards derive primarily from the Commercial Code and the bylaws of each company.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the options available when looking to provide the entity with working capital? i.e., capital injection, loans etc.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The most common funding includes:<\/p>\n<p>i. Equity injection by capital increase or share premium<br \/>\nii. Shareholders loans<br \/>\niii. Third party debts from banks or lenders<br \/>\niv. Intercompany cash-pooling within groups<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the processes for returning proceeds from entities? i.e., dividends, returns of capital, loans etc.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>This will depend on the case, it can be returned by:<\/p>\n<p>i. Dividends: approved by the shareholders<br \/>\nii. Return of capital<br \/>\niii. Payments abroad<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are specific voting requirements \/ percentages required for specific decisions?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>In the case of Ordinary Shareholders Meeting:<\/p>\n<p>First call: must be represented by half of the shares plus one. (50%+1)<br \/>\nSecond call: any number of shares present.<\/p>\n<p>In the case of Extraordinary Shareholders Meeting, it requires the approval of three-quarters of the shares (75% of the shares)<\/p>\n<p>In the case of Simplified Stock Corporation, when the company has a single shareholder, this person may exercise all the powers conferred. If there is more than one shareholder, the rules of corporations mentioned above will apply.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are shareholders authorised to issue binding instructions to the management? Are these rules the same for all entities? What are the consequences and limitations?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Shareholders are the highest authority of the company; therefore they can give instructions to the administration.<\/p>\n<p>The limitations are established either by the company&#8217;s articles of incorporation or by the General Shareholders&#8217; Meeting itself.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the core employment law protection rules in your country (e.g., discrimination, minimum wage, dismissal etc.)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The labor code, considered the following key features:<\/p>\n<p>i. Equal treatment: working conditions must be respected, the salary cannot be less than the established minimum wage, and no person can be excluded because of their race, color, sex, religion, political opinion, national ancestry, or social origin.<\/p>\n<p>ii. Working hours: maximum 44 hours per week and overtime rules<\/p>\n<p>iii. Minimum wage: this varies from the sector, e.g. commerce\/services\/industry US$408.80, maquila US$402.32; agriculture US$272.53 \u2013 305.23.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">On what basis can an employee be dismissed in your country, what process must be followed and what are the associated costs? Does this differ for collective dismissals and if so, how?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The Labor Code establishes the causes for:<\/p>\n<p>a. dismissal with justified cause and releases the employer from liability.<br \/>\nb. dismissals without cause have financial responsibility for the Employer.<\/p>\n<p>According to the Labor Code the Employer has the obligation to compensate the employee with a salary for each year worked or the fraction of the year worked with a maximum of up to four times the current minimum wage.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your jurisdiction have a system of employee representation \/ participation (e.g., works councils, co-determined supervisory boards, trade unions etc.)? Are there entities which are exempt from the corresponding regulations?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, such systems exist; however, no entities are exempt from compliance with labor regulations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a system governing anti-bribery or anti-corruption or similar? Does this system extend to nondomestic constellations, i.e., have extraterritorial reach?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Yes, there is a law to prevent money laundering. The law applies to all entities domiciled in the country.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What, if any, are the laws relating to economic crime? If such laws exist, is there an obligation to report economic crimes to the relevant authorities?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Economic crimes are addressed in the Criminal Code and special statutes. Reporting obligations arise under the AML\/CFT framework.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">How is money laundering and terrorist financing regulated in your jurisdiction?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The 1998 AML Law (as administered by the SSF\/UIF) was superseded in October 2025 by a new law that creates a national coordination system, updates the list of obligated subjects, and introduces revised reporting\/oversight mechanics. Commentary notes both modernization and debate over the degree of risk based narrowing of obligated sectors.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there rules regulating compliance in the supply chain (for example comparable to the UK Modern Slavery Act, the Dutch wet kinderarbeid, the French loi de vigilance)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no comprehensive, cross\u2011sector supply\u2011chain due\u2011diligence statute comparable to the UK Modern Slavery Act or the French vigilance law.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please describe the requirements to prepare, audit, approve and disclose annual accounts \/ annual financial statements in your jurisdiction.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For all companies, the Commercial Code establishes that oversight must be entrusted to an external auditor. Such auditor shall be appointed at a General Shareholders\u2019 or Partners\u2019 Meeting.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please detail any corporate \/ company secretarial annual compliance requirements?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>I. Renewal of business license<\/p>\n<p>II. Appointing external auditor<\/p>\n<p>III. Appoint fiscal\/tax auditor (if applicable according to the asset of the company)<\/p>\n<p>IV. Approve and file the Financial Statements<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a requirement for annual meetings of shareholders, or other stakeholders, to be held? If so, what matters need to be considered and approved at the annual shareholder meeting?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Annual shareholders meeting should be held within the first 5 months of the year.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any reporting \/ notification \/ disclosure requirements on beneficial ownership \/ ultimate beneficial owners (UBO) of entities? If yes, please briefly describe these requirements.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>This information is provided only if it is requested. However, obligated subjects under AML rules must identify and document the UBO(s) of customers\/counterparties, with the UIF\u2019s 2021 Instructions (effective July 7, 2023) generally using a \u226510% ownership\/control benchmark in KYC<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What main taxes are businesses subject to in your jurisdiction, and on what are they levied (usually profits), and at what rate?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>a.The Income Tax and related taxes<\/p>\n<p>b. The Tax on the Transfer of Movable Goods and the Rendering of Services (VAT) (13%)<\/p>\n<p>c. Specific and ad-valorem taxes<\/p>\n<p>d. Other taxes, such as special contributions.<\/p>\n<p>e. Municipal Taxes<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any particular incentive regimes that make your jurisdiction attractive to businesses from a tax perspective (e.g. tax holidays, incentive regimes, employee schemes, or other?)<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>To promote foreign investment, certain laws have been created that grant benefits to different sectors and facilitate the registration and execution of these investments. These laws are as follows:<\/p>\n<p>a) Investment Law: One of the main advantages of this law is that it facilitates the registration, and especially the repatriation, of foreign investments by investors. It guarantees foreign investors the right to transfer funds abroad related to their investments, provided that they comply with the tax, labor and social security obligations, in addition to the obligations generated by law.<\/p>\n<p>b) Law of Industrial and Commercial Free Trade Zones: It regulates the operation of free trade zones and inward processing warehouses, as well as the benefits and responsibilities of the owners of companies that develop, manage or use them.<\/p>\n<p>c) International Services Law This law has the objective of regulating the establishment and operation of industrial parks and service centers engaged in, among other activities, international distribution, logistics, call centers, repair and maintenance of aircraft, business processes and BPOs.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any impediments \/ tax charges that typically apply to the inflow or outflow of capital to and from your jurisdiction (e.g., withholding taxes, exchange controls, capital controls, etc.)?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p><strong>a) Capital gains:<\/strong><br \/>\nThe gains resulting from the sale of fixed assets, personal property and real property, so long as they constitute non-habitual transactions, considered to be income subject to the determination of capital gains or losses, at a rate of 10%. When the asset is realized within the twelve months following the acquisition date, the net capital gain should be calculated as ordinary income.<\/p>\n<p><strong>b) Distribution of dividends or payments of profits:<\/strong><br \/>\nThe payment or crediting of profits to shareholders, be they residents or non-residents of El Salvador, is subject to a definitive income tax withholding at a rate of 5%, which can increase to 25% if the company receiving the dividends is domiciled in a territory of low or zero taxation or a tax haven.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any significant transfer taxes, stamp duties, etc. to be taken into consideration?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p><strong>Payments made to foreign parties<\/strong><\/p>\n<p>As a general rule, individuals or legal entities that pay or credit to non-resident parties sums of money resulting from any type of income obtained in the country, be they payments for services provided from abroad and used in the national territory, or amounts paid and credited due to the transfer of intangible assets under any title whatsoever, even if they refer to advance payments, are obligated to make an income tax withholding of 20% on these amounts as definitive payment of the tax. Notwithstanding the above, different rates will apply to payments or credits to non-resident parties residing in countries classified as tax havens by the Tax Administration. In these cases, a withholding rate of 25% applies.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Are there any public takeover rules?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>Public M&amp;A is governed by securities law and the oversight of financial regulators\/stock exchange rules<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there a merger control regime and is it mandatory \/ how does it broadly work?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>For a Non- Regulated Company, there isn\u2019t any specific control. The rules are provided by the Commercial Code; therefore, any company is allowed to merge as long as this is not against the Competition Law and antitrust practices.<\/p>\n<p>Specific types of companies (e.g. banks, insurers among others) are subject to supervision by the Financial System Superintendency (SFF) and the Superintendence of Competition (SC) and the applicable rules are established by specific laws.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Is there an obligation to negotiate in good faith?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>El Salvador is a civil\u2011law jurisdiction; the principle of good faith underpins contractual relations and informs pre\u2011contractual dealings and interpretation under the Civil Code, together with general rules on abuse of rights and liability for fault. Parties typically document negotiation frameworks (e.g., NDAs, LOIs) to allocate risk.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What protections do employees benefit from when their employer is being acquired, for example, are there employee and \/ or employee representatives\u2019 information and consultation or co-determination obligations, and what process must be followed? Do these obligations differ depending on whether an asset or share deal is undertaken?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>There is no co\u2011determination regime. In a share deal, employment relationships continue unchanged. In an asset\/business transfer, the Labor Code recognizes \u201csustituci\u00f3n patronal\u201d (substitution of employer): the employment contracts do not terminate; seniority and accrued rights carry over; and the incoming employer assumes obligations.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Please detail any foreign direct investment restrictions, controls or requirements? For example, please detail any limitations, notifications and \/ or approvals required for corporate acquisitions.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>El Salvador welcomes Foreign Direct Investments under the Investment Law, administered by the National Investment Office, including capital registration process that facilitate investor protection.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">Does your jurisdiction have any exchange control requirements?<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>No, does not have any exchange control requirements.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\t\t\t\t\t<li class=\"question-block filter-container__element\">\r\n\t\t\t\t\t\t<h3 class=\"filter-container__match-html\">What are the most common ways to wind up \/ liquidate \/ dissolve an entity in your jurisdiction? Please provide a brief explanation of the process.<\/h3>\r\n\t\t\t\t\t\t<button id=\"show-me\">+<\/button>\r\n\t\t\t\t\t\t<div class=\"question_answer filter-container__match-html\" style=\"display:none;\"><p>The most common way to dissolve any entity is by the liquidation of the company. The process of dissolution and liquidation for commercial companies takes approximately 18 to 24 months.<\/p>\n<p>Since the process begins with the agreement of the partners or shareholders to liquidate the company, this agreement must subsequently be published and registered in the Commercial Registry. Once registered, the liquidation balance sheet is issued and subsequently the deed of liquidation of the entity.<\/p>\n<p>It is important to mention that the liquidation process of the company is delayed by the fact that tax administration begins a process of inspection of the company, this inspection process can take approximately between 12 to 18 months.<\/p>\n<p>In the case of Simplified Stock Corporation, a simplified procedure is established for the dissolution of these, provided there are no outstanding accounts payable or obligations to fulfill. The liquidators must distribute the social assets within a period of thirty business days.<\/p>\n<\/div>\r\n\r\n\r\n\t\t\t\t\t<\/li>\r\n\r\n\t\t\t\t\r\n<div class=\"word-count-hidden\" style=\"display:none;\">Estimated word count: <span class=\"word-count\">2942<\/span><\/div>\r\n\r\n\t\t\t<\/ol>\r\n\r\n<script type=\"text\/javascript\" src=\"\/wp-content\/themes\/twentyseventeen\/src\/jquery\/components\/filter-guides.js\" async><\/script><\/div>"}},"_links":{"self":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide\/136686","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/comparative_guide"}],"about":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/types\/comparative_guide"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/guides\/wp-json\/wp\/v2\/media?parent=136686"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}