Business entities in El Salvador in 2022

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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

  LLC PLC Branch Rep Office
Also known as: SRL SA Sucursal Oficina de representacion
How long to set the company up? 4 weeks 5 weeks 6 weeks 5 weeks
How long to open company bank account? 4 weeks 4 weeks 4 weeks 4 weeks
Legal liability? Limited Limited Unlimited Unlimited
Wholly foreign owned? Yes Yes Yes Yes
Minimum paid-up share capital? US$100 US$11,450 N/A N/A
File annual tax return? Yes Yes Yes Yes
Tax registration certificate required? Yes Yes Yes Yes
Recommended corporate bank account? Banco Promerica Banco de America Central Banco ProCredit Scotiabank
Does our Client need to travel? No No No No
Resident director required (legal representative)? Yes Yes Yes Yes
Resident shareholder required? No No No No
Minimum directors allowed? 1 1 1 1
Minimum shareholders? 2 2 1 1
Tax identification code needed? Yes Yes Yes Yes
Corporate shareholders allowed? Yes Yes Yes Yes
Corporate director(s) allowed? Yes Yes Yes Yes
El Salvador corporate tax rate? 30% 30% 30% N/A
Annual financial statements required? Yes Yes Yes Yes
Statutory audit required? Yes Yes Yes No
Regulated by? Ministry of Commerce, National Registry Center Ministry of Commerce, National Registry Center Ministry of Commerce, National Registry Center Ministry of Commerce, National Registry Center
Allowed to issue sales invoices? Yes Yes Yes No
Allowed to sign contracts? Yes Yes Yes No
Allowed to import and export goods? Yes Yes Yes No
Can rent an office space in El Salvador? Yes Yes Yes Yes
Can buy El Salvador property? Yes Yes Yes No
Total El Salvador business setup costs in yr. 1? US$10,135 US$10,135 US$10,135 US$10,135
Subsequent annual costs (incl. accounting and tax fee)? US$3,425 US$3,425 US$3,425 US$3,425
Sample engagement invoice? View invoice PDF View invoice PDF View invoice PDF View invoice PDF

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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