Page 170 - Caribbean-Central America Profile 2018

EL SALVADOR

CARIBBEAN-CENTRAL AMERICA PROFILE 2018

EXPORT PROMOTION AND FREE • Exemptions from taxes for fuels and vehicles, aircraft or vessels for cabotage
ZONE LAWS lubricants used for producing exports if and construction materials for the buildings
The laws established rules for export processing these are not domestically produced. until completion of project rights.
zones (free zones) and bonded areas. The • Exemption from income tax, municipal • Total exemption from income tax for a
free zones are outside the nation’s customs taxes on company assets and property. period of 10 years.
jurisdiction while the bonded areas are within • Exemption from taxes on real estate • Partial exemption from municipal taxes
its jurisdiction but subject to special treatment. transfers that are related to export activity. (up 50%) for a period of 5 years from the
Local and foreign companies can establish fiscal year in which the business begins
themselves in a free zone to produce goods or TOURISM LAW operations.
services for export or to provide services linked This legislation states that, with a minimum
to international trade. The regulations for the investment of $ 25,000, a company can qualify FISCAL INCENTIVES ACT FOR
bonded areas are very similar. to be declared a tourism project of national THE PROMOTION OF RENEWABLE
interest and opt for the following benefits: ENERGIES IN ELECTRICITY
Firms located in the free zones and the bonded • Total exemption from tax on transfer of real GENERATION
areas enjoy the following benefits: estate to acquire property which will be This Act aims to promote investment through
• Exemption from all duties and taxes on allocated to the project. the use of hydraulic, geothermal, wind and
imports of raw materials and the machinery • Exemption from tariff import of goods, solar resources and biomass, which promotes
and equipment needed to produce for export. equipment and accessories, machinery, research, exploration and development projects.

Starting a Business - Registration Requirements:
No. Procedure Time to complete Costs
Deposit the legally required initial capital
1 in a Salvadoran bank and obtain deposit 1 day no charge
evidence or certified check.
Check the uniqueness of the company Less than one day
2 no charge
name in the Registry of Commerce (online procedure)
3 Notarize the articles of association 1 day Between USD 500 and USD 1,000

4 Register with the Registry of Commerce and 3 days The Registry of Commerce Act establishes fees for the registration
publication and legalization of books of companies. Article 63 establishes different fees for the company’s
business license according to the company’s initial capital, from
USD 2,000 to USD 57,150 the fee is USD 91.43; from USD 57,151
to USD 114,286 the fee is USD 137.14; from USD 114,287 to
USD 228,572 the fee is USD 228.57; and, if the company’s initial
capital exceeds USD 228,572, the company has to pay USD 11.43
for every USD 100,000 or fraction of it, but cannot exceed USD
11,428.57.
The registration fees are the following: USD 0.57 for every USD
114.28 + USD 2.3 (for copies) + USD 17.14 (Balance Deposit) +
USD 137.14 (business license) + USD 0.1 per page (legalization of
books, assuming 3 books, 100 pages per book) + USD 34.29 (local
registration).
5 Legalize company books by an auditor 10 days USD 450

Register employees with either of 3 days (simultaneous
6* the two Pension Fund Administrators with previous no charge
(Administradora de Fondos de Pensiones) procedure)
1 day (simultaneous
Register the company for tax at the Mayor’s
7* with previous USD 50
Office
procedure)
2 days (simultaneous
8* Make a company seal with previous USD 15
procedure)
* Takes place simultaneously with another procedure Source: The World Bank Group

C-12 Caribbean-Central American Action