Page 169 - Caribbean-Central America Profile 2018

EL SALVADOR

CARIBBEAN-CENTRAL AMERICA PROFILE 2018

Official Name: Republic of El Salvador
Capital: San Salvador
Nationality: Salvadoran(s)
Official Language: Spanish
Population Total (millions): 6.34 (2016 est.)
Size: 8,083 square miles
EL SALVADOR Currency: U.S. Dollar (USD)
Internet Domain: .sv
International Dialling Code: +503
Electricity: 110 volts / 60 cycle

COUNTRY OVERVIEW INVESTMENT INCENTIVES
q El Salvador is the smallest country The Government has an objective for El Salvador to become a logistics/shipping hub for Central
geographically in Central America. America, and it recognises that doing so will require significant foreign investment. There are
q Situated on the Pacific coast of seven reasons that make El Salvador an attractive destination for investment:
Central America, El Salvador has 1. Strategic location
Guatemala to the west and Honduras 2. Preferential access to international markets
to the north and east. 3. Attractive tax incentives
q There are volcanoes, lovely beaches, 4. Competitive infrastructure
Mayan and Pre-Columbian ruins 5. Competitive costs
q The Capital is San Salvador. 6. Productive labour
Over the past 25 years, El Salvador 7. Monetary stability
governments have implemented reforms
to modernised and open the economy El Salvador has a set of laws that promote and protect investment, which are part of the country’s
to trade and investment; among them legal system and provide attractive benefits to local and foreign investors.
are the signing of free trade agreements
to preferentially access large markets, THE FOREIGN INVESTMENT AND GUARANTEE LAW
economic and trade integration in the This is one of the most liberal investment laws in Latin America and provides investors who
region, and the adoption of the US dollar register with the Ministry of Economy with the following benefits:
as legal tender. • 100% foreign capital allowed.
• Unrestricted remittance of net profits for investors in industrial activities.
According to the Economic Freedom
Index published by the Wall Street • Remittance of net profits of up to 50% per year for investors in commercial and service
Journal and the Heritage Foundation in activities. In practice, however, there is free convertibility of capital.
2016, El Salvador’s economy is among • Unrestricted remittance of funds obtained from the liquidation, interest and capital of properly
the freest in Latin America and Central registered external obligations and sale of foreign shares.
America as it ranks No. 2 in the Central • Unrestricted remittance of royalties and fees for use of foreign patents, trademarks, technical
American region and number 63 out of assistance and other similar services.
178 countries. This index highlights El • No restrictions on foreign capital transactions.
Salvador’s strength to maintain free
market policies that promote trade The government has set up a one-stop office for foreign investment in the Ministry of Economy,
and investment. The textile sector is
the one that receives most of the FDI where investors now register their investments. The registration process is nondiscriminatory and
into the country. Other key sectors are not considered an impediment to investment. El Salvador’s investment legislation does not require
electricity production, tourism and investors to export specific amounts, transfer technology, incorporate set levels of local content,
telecommunications. The main investing or fulfill other performance criteria. Foreign citizens and private companies can freely establish
countries are the United States (one-third most businesses in El Salvador however foreigners are prohibited from operating small businesses
of the total volume of FDI), Mexico and with start-up capital of less than the equivalent of US$25,000.
Guatemala.

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