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Business climate in El Salvador
The factors an investor should consider: currency, trade, taxes and incentives.
Advantages for investors
Dollarized economy
The US dollar has been legal tender since 2001, removing currency risk against the USD and simplifying pricing and contracts.
Market access
Member of CAFTA-DR, with preferential access to the United States and Central America, and a central geographic position.
Incentive regimes
Regimes such as free trade zones and international services exist, along with laws promoting specific sectors.
Electronic invoicing
The DTE system eases tax compliance and transaction traceability.
Tax overview (indicative)
| Item | Description |
|---|---|
| VAT | Tax on transfer of goods and provision of services; general rate of 13%. |
| Income tax | Legal entities are taxed on net income; the general rate is 30%, with a reduced rate for companies below a certain income threshold. |
| Withholdings | Withholdings and advance payments apply to specific transactions and payments, including payments abroad. |
| Municipal | Municipal taxes and fees depending on the municipality and activity. |
Rates, thresholds and benefits change with legal reforms. We confirm current values in every advisory.
Incentives and legal frameworks to evaluate
Each regime has its own requirements. We assess whether your project qualifies and how to structure it to benefit.
- Free Trade Zones and Fiscal Precincts Law
- International Services Law
- Investment Law and its promotion regime
- Incentives for sectors such as renewable energy, tourism and others under current regulations
Ready to take the first step?
Tell us about your project and we will prepare a roadmap with documents, costs and timelines.
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