We present a comprehensive summary of the main tax incentives that El Salvador offers to newly established businesses or companies looking to expand in the country. These incentives promote growth and investment, making El Salvador an attractive destination for entrepreneurs.
Free trade zones in El Salvador:
- Full tax exemption on import duties, tariffs, and fees for machinery and equipment used in Free Trade Zones.
- Income tax exemption for 15 years in metropolitan areas and 20 years outside them, with the possibility of an extension period.
Tourism sector incentives in El Salvador:
The primary goal of these incentives is to boost tourism development, expand the industry, and create new jobs to improve the population’s quality of life.
- Income tax exemption for 10 years.
- Exemption from real estate transfer taxes.
- Duty-free import of goods and materials for construction and infrastructure projects.
International services in El Salvador:
These incentives apply to call centers, international logistics operations, research and development, and other global service industries.:
- Tax-free import of goods during the company’s operational period.
- Income tax exemption.
- Municipal tax exemption on company assets in El Salvador.
Renewable energy sector in El Salvador:
- Municipal tax exemption on company assets in El Salvador.
- Income tax exemption for five years.
- Full exemption on all taxes derived from Certified Emission Reductions (CERs) under the Clean Development Mechanism (CDM) and similar carbon markets.
- Capital gains tax exemption, as Bitcoin is legal tender in El Salvador.
- Encouragement of technological innovation and fintech development.
Innovation & tech manufacturing incentives in El Salvador
- Full exemption from:
- Income tax
- All types of withholding taxes
- Municipal taxes
- Capital gains tax
- Import duties and tariffs
In addition to tax benefits, two additional advantages make El Salvador an even more attractive business destination:
- Enhances decentralized transactions, making payments faster and more inclusive for unbanked populations.
Electronic Invoicing in El Salvador
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- Reduces costs, improves financial control, automates processes, and boosts productivity.
