Business entities in El Salvador in 2023

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Healy Consultants will assist our Clients with forming the optimal corporate structure for their business needs. There are several ways of doing business in El Salvador. Most foreigners running small and medium businesses choose to setup a Salvadorian limited liability company. Foreign corporations may also register a branch office in El Salvador, or a representative office if they do not plan to run any commercial operations in the country.

The El Salvador limited liability company (Sociedad de responsabilidad limitada – SRL)

  • The El Salvador LLC is commonly used by entrepreneurs to setup an SME. Forming a Salvadorian private company can be done by two shareholders, appointing at least 1 director. The three of them can be foreigners by at least one director (locally known as the legal representative) who must be ordinarily residing in El Salvador. The minimum issued share capital is US$2,000. 5% must be paid up at incorporation, while the remaining amount can be injected up to one year after El Salvador company setup;
  • All Salvadorian LLCs must appoint an auditor and submit audited financial reports annually. Companies in El Salvador are subject to local corporate income tax at a standard rate of 30%, but only income sourced from El Salvador is taxable.

The El Salvador public limited company (Sociedad Anonima – S.A.)

This business entity requires a minimum capital of US$11,450, 25% of which must be paid into a corporate bank account before Salvador business setup. The balance of 75% can be paid into the account within 5 years of incorporation, Furthermore, at least two shareholders and one director must be appointed, whom can be of any nationality. Like a LLC, all Salvadorian PLCs must appoint one director ordinarily residing in the country, as well as an auditor.

The El Salvador branch (Sucursal)

An El Salvador branch office can be established by a foreign company. The parent company will be responsible for this entity and all its operations. A legal representative who is a resident of El Salvador must be appointed by this entity.

The El Salvador representative office (Oficina de representacion)

While the El Salvador representative office can be 100% foreign owned, it is not allowed to make direct sales with El Salvador. Consequently, this entity can only engage in i) market research and ii) promoting the business of the parent company.

Table of comparison between El Salvador entities

LLCPLCBranchRep Office
Also known as:SRLSASucursalOficina de representacion
How long to set the company up?4 weeks5 weeks6 weeks5 weeks
How long to open company bank account?4 weeks4 weeks4 weeks4 weeks
Legal liability?LimitedLimitedUnlimitedUnlimited
Wholly foreign owned?YesYesYesYes
Minimum paid-up share capital?US$100US$11,450N/AN/A
File annual tax return?YesYesYesYes
Tax registration certificate required?YesYesYesYes
Recommended corporate bank account?Banco PromericaBanco de America CentralBanco ProCreditScotiabank
Does our Client need to travel?NoNoNoNo
Resident director required (legal representative)?YesYesYesYes
Resident shareholder required?NoNoNoNo
Minimum directors allowed?1111
Minimum shareholders?2211
Tax identification code needed?YesYesYesYes
Corporate shareholders allowed?YesYesYesYes
Corporate director(s) allowed?YesYesYesYes
El Salvador corporate tax rate?30%30%30%N/A
Annual financial statements required?YesYesYesYes
Statutory audit required?YesYesYesNo
Regulated by?Ministry of Commerce, National Registry CenterMinistry of Commerce, National Registry CenterMinistry of Commerce, National Registry CenterMinistry of Commerce, National Registry Center
Allowed to issue sales invoices?YesYesYesNo
Allowed to sign contracts?YesYesYesNo
Allowed to import and export goods?YesYesYesNo
Can rent an office space in El Salvador?YesYesYesYes
Can buy El Salvador property?YesYesYesNo
Total El Salvador business setup costs in yr. 1?US$10,135US$10,135US$10,135US$10,135
Subsequent annual costs (incl. accounting and tax fee)?US$3,425US$3,425US$3,425US$3,425
Sample engagement invoice?View invoice PDFView invoice PDFView invoice PDFView invoice PDF

Contact us

For additional information on our business setup services in El Salvador, please contact our in-house country expert, Ms. Chrissi Zamora, directly:
client relationship officer - Chrissi
El Salvador central reserve bank El Salvador PROESA El Salvador ministry of foreign affairs El Salvador ministry of finance El Salvador ministry of economy