El Salvador

The Republic of El Salvador has spent nearly three decades designing and implementing reforms that contribute to the modernization and opening of its economy to international trade and investment. For this reason, it has established free trade agreements with the aim of accessing the world's large markets, has promoted economic and commercial integration in the region and implemented the adoption of the dollar as the national currency.



Description of the country's economic outlook


According to the Export and Investment Promotion Agency of El Salvador, the nation, through its robust network of trade agreements, has established relations with Central America, Chile, Colombia, South Korea, the United States, the United Kingdom, and the European Union, Ecuador, Panama and the Dominican Republic. In this way you can access a market close to 1.2 billion consumers located in 42 countries around the world.

Another interesting aspect of the nation is its modern port, airport and road infrastructure, which makes it easier for the nation's companies to execute their logistics operations efficiently, in fact, the World Economic Forum highlights them among the most competitive in the South and Central America.

On the other hand, every day there are more businessmen who arrive in the country attracted by Salvadoran human talent, characterized by its great capacity for performance, efficiency and work ethic, which is also capable of easily adapting to new market needs, qualities that highly appreciated by companies incorporated in the nation. The country's labor force is made up of 3.1 million people, of which 54.3% are under 40 years of age, which shows a young population with high production standards and that is efficient in manufacturing activities, agribusiness and the provision of services.

Through the dollarization of its economy in 2001, El Salvador created a reliable scenario for investors, who also benefit from incentive schemes that offer exemptions on income tax, municipal, real estate transfer, as well as rights Tariffs and other taxes on the importation of machinery, equipment and articles used in the production processes of goods and services.

The nation's strategic location also plays an important role in its logistics segment that makes it easy for them to receive and ship goods to North and South America. In addition to having the same time zone as the central zone of the United States (CST), it allows them to offer a bi-oceanic corridor, proximity to the Trans-Pacific route and the Panama Canal.


Why invest in El Salvador


Strategic logistics point

Being located in Central America, El Salvador borders Guatemala, Honduras, the Gulf of Fonseca and the Pacific Ocean, and this strategic position makes it an important regional distribution center, ideal for companies that need to distribute their products in the Central American market.

This is how the country, in addition to having an excellent and up-to-date legal framework, has a modern port and airport infrastructure that makes it easier for companies to carry out their logistics procedures efficiently, so that its Service Parks and Regional Logistics Operators are key players in the activities of the national and regional logistics sector.

Currently, the Government is advancing initiatives contemplated in the Cuscatlán Plan to improve and consolidate its nation as a regional logistics center, where both national and foreign organizations generate jobs for the salvadoran population and in turn contribute to the growth of your economy.

For example, the Government is now working on the modernization and expansion of its Port of Acajutla, with which it wants to quadruple its total scope and enhance its cargo and logistics capacity. This year, through the structure, about 3,215,721 metric tons of imports and exports were mobilized and attention to ships increased by 8.97%.

El Salvador has a robust road and maritime infrastructure, which is essential for its logistics corridors, since the country's ports, highways and airports move cargo from North America to Honduras, Nicaragua, and Costa Rica and Panama.

On the other hand, in the segment of international services (offshoring and outsourcing), it benefits from the location of El Salvador because they share the same time zone as the central zone of the United States (CST, GMT -6) and this makes them a ideal point for the provision of remote business services and the maintenance of commercial aircraft.

Economic stability

El Salvador has managed to consolidate one of the most stable economies in Latin America and specialized in exports. It has a dynamic business environment structured with solid macroeconomic foundations and strong government institutions, which have fostered healthy competition and international integration, which has allowed both improving the quality of life of salvadorans, as well as promoting the economic development of the country.

According to the Central Reserve Bank (BCR), this nation is a safe destination to invest, in fact, in the first half of 2021 the country reached $135 million in direct investment, that is, an increase of 84.9%, compared to previous year, which evidenced an interesting process of Salvadoran economic recovery. Among the benefited sectors are manufacturing, finance and insurance, commerce and information and communications.

In this way, both investors and businessmen who come to the country are an important source of technological development and job creation, a vital aspect for strengthening the nation.

Since the dollarization of the economy of El Salvador in 2001, the country offers investors a scenario of great monetary stability, thanks to the elimination of exchange risk, as well as its low inflation.

Strategic Alliances

According to the Ministry of Economy of El Salvador, the nation has established several free trade agreements to access important foreign markets and take advantage of its robust logistics sector, appreciated by nations interested in increasing trade and investment flows.

The free trade agreements signed by El Salvador with various countries facilitate access to a potential market of 1,200 million customers around the world, thus the nation has the following treaties in force:

  • EU-Central America Association Agreement
  • FTA with Mexico
  • FTA with the Dominican Republic
  • FTA with Chile
  • General Treaty of Central American Economic Integration
  • FTA with Colombia
  • FTA with Taiwan
  • FTA with Panama
  • SPA with Cuba
  • PSA with Ecuador
  • FTA with South Korea

Productive workforce

The Salvadoran labor market is characterized by constant evolution and training of its population of productive age. According to the Household and Multiple Purpose Survey (EHPM) last year, the Working Age Population (PET) in El Salvador represented 74.5%, that is, about 4,995.74 people.

It can be seen that this population of active age, located in the range of 16 to 39 years old, represents 52.7%, while people between 40 to 59 years old reach 29.0%. Regarding the location of the PET, 63.4% reside in the urban area and 36.6% in the rural area.

This shows that its workforce is highly productive and capable of developing new skills in a short time, which is ideal for manufacturing, agribusiness, and service activities.

Salvadoran professionals are ready to join the productive sectors of the country, where annually nearly 200,000 new technicians and professionals will enter the labor market. El Salvador has 40 technical and higher education institutions: universities, specialized and technical institutes.

Support for foreign investment

The Government of El Salvador has understood the importance of investment in development, the strengthening of its economy and the modernization of the country, for this reason it has established a series of government policies that, through an interesting system of incentives, encourage foreign investment. and among which are: the Investment Law, the Industrial and Trade Law Free Zones, the International Services Law, Fiscal Incentives for the Promotion of the Renewable Energy Law, the Law for the Reactivation of Exports, the Special Law on Public-Private Associations and the Investment Funds Law, the Law on Legal Stability for Investments and the Tourism Law.

This regulatory framework seeks to encourage investment, especially foreign investment, to contribute to the economic and social development of the country, increasing its productivity, generating employment, promoting the export of goods and services, and promoting the diversification of national production.

The Government is working to continue guaranteeing a favorable business climate for investment, advancing in the implementation of public policies in the areas of security, economy, technology and innovation, as well as in the development of infrastructure for the development of productive activities in a sustainable way successful.

Main taxes

Below you can find some of the main taxes in El Salvador, if you want to know in detail the country's tax information you can download our Global Taxes App.



Corporate Tax


Tax on capital gains and dividends


Inheritance and gift taxes


Value Added Tax / VAT


Employment taxes

10 al 30%

Personal taxes


Transfer tax

Sectors of interest and market opportunities

These are the sectors that offer the most investment opportunities in the country and that have the support of the government for their development.


Internationally renowned industrial sector

The textile industry in El Salvador is one of the main engines of its development, in fact, according to the report of the Salvadoran Association of Industrialists (ASI), this segment contributed $2,167.1 million dollars to its Gross Domestic Product (GDP), which shows a growth of 27.4%, compared to the previous year.

This good positioning is largely due to the integration process of the industry where all the productive activities of the textile and clothing chain were incorporated, from the production of fibers, the manufacture and finishing of yarns and fabrics, the design, cutting and processing garments and logistics.

For its part, the Chamber of the Textile, Clothing and Free Trade Zones of El Salvador (CAMTEX), emphasizes the importance of the textile industry within the salvadoran economy, already in recent years it has achieved a participation between 40 and 46%. Likewise, this segment is an important generator of jobs, in fact, so far this year the industry generated 21.3% of jobs, that is 186,110 jobs.

Similarly, the ASI emphasized through its report this year that of the $4,358.9 million dollars that entered El Salvador for exports, 96.3% correspond to the textile industry. He also highlighted that the United States is their main trading partner, from which they obtained a 40.4% share of their exports.

Given that El Salvador exports textiles and clothing to more than 50 countries, it is positioned as one of the most attractive and profitable textile and clothing centers to invest in Latin America, thanks to its proximity to the large consumers of North and South America, its profitable production costs and highly qualified labor.


Service outsourcing service

For several years, the remote business services industry (SED) in El Salvador has achieved significant growth to the point of positioning itself as one of the most profitable platforms in Central America for the provision of quality outsourcing services. Currently, the country is home to a large number of companies with international prestige, which generate more than 16,000 direct jobs, 11,000 workstations and represent more than 55 local and foreign companies.

El Salvador has an innovative telecommunications infrastructure through which they can deliver service solutions in various regions and delivery models. Currently, the Government is working to create a technological ecosystem with an offer in corporate offices, BPOs, call centers, data centers, software development and programming businesses. This complex, which will be called Altius Tech Park, is a technology park that will be inaugurated at the end of 2022, in Ciudad Arce, La Libertad, and will have an initial investment of $30 million dollars.

In this nation there is an international services law that provides tax incentives to companies dedicated to providing services to foreign clients. The companies that establish themselves in parks or service centers will benefit from exemptions in municipal and income taxes, exemption from customs duties and other taxes on the importation of equipment, machinery, spare parts, accessories and other goods necessary for the execution of the activity encouraged.


Tourism potential

El Salvador has a promising hotel, gastronomic and shopping offer, including outstanding road connectivity and proximity between multiple tourist attractions. Thanks to its total area of 21,000 km2 and a coastline of 307 km, the tourism sector offers the possibility of practicing activities such as surfing, hiking, diving or visiting archaeological parks or museums.

Additionally, the medical tourism segment seeks to be recognized as an ideal destination for the establishment of hospitals and specialized clinics, in order to serve patients residing in the United States and Canada.

Salvadoran legislation determines that a company with a minimum investment of USD 25,000 can be declared a tourism project of national interest and opt for benefits such as total exemptions from the real estate transfer tax for the acquisition of real estate that will be used for the project, income tax, partial exemption from municipal taxes, among others.

The Government is currently carrying out an emblematic project called "Surf City", with which it seeks to turn El Salvador into a tourist destination specialized in surfing and promote its beaches in Ahuachapán, Sonsonate, La Libertad, La Paz, San Miguel and Usulutan. With this it also seeks to strengthen the road infrastructure, pedestrian paths, markets and medical centers.

Our advisors in El Salvador


Consorcio Honles Manzano

Consorcio Honles Manzano is a firm with over 10 years of experience, committed to provide specialized accounting and consulting services.