How To Incorporate Company In El Salvador

How To Incorporate Company In El Salvador – All You Need To Know

The Details, Benefits, and Procedure To Incorporate Company in El Salvador

El Salvador is a small country located between South and North America. Its strategic position is now slowly attracting the attention of foreign investors. Though not the first choice of many, investors are beginning to recognize the stability and reputation of the country. Many investors nowadays, wish to incorporate company in El Salvador.
Over the last couple of years, El Salvador has shown tremendous economic growth by opening the gates for global investment and foreign company incorporations. It is also one of the most politically stable countries in the world.

Benefits of An Incorporate Company in El Salvador

If you are a foreign investor looking to incorporate company in El Salvador, you can avail many benefits that the government offers to offshore corporations.

Ease of Incorporation – You need only two shareholders, one of them a director of the company to incorporate company in El Salvador. If there are more shareholders, the director should be an individual who is a resident of El Salvador.
Free Trade – Free Trade zones are enabled by the government to help manufacturing and Impex companies from paying taxes on their corporate income. Also, there is no VAT on products sold exported and sold overseas. There are absolutely no restrictions on foreign trade or foreign currency transactions in the country.
Access to Ports – Corporations are allowed free access to El Salvador’s ports which are connected to the Pacific Ocean and the Atlantic ocean.
Local Currency – El Salvador uses the US dollar as the legal tender. This makes it easy for investors to carry on their business transactions.
Steady Growth – El Salvadorian economy has shown steady growth over the years. The market has a high demand for US products. Due to the Free Trade agreements, US-based companies can expand their business in all of Central America via El Salvador.
Strong Business Relationship – El Salvador has achieved strong commercial business ties with the United States. So the US is El Salvador’s leading trade partner. This makes El Salvador a great choice for investors looking to gain good profits.
Minimum Base Capital – El Salvador requires a minimum capital for an investor to start a business. The base capital required is only $100 USD.
Territorial Tax System – El Salvador has a territorial tax system which means that the company has to pay tax only for the income generated in the country. The standard corporate tax rate is 30%.

How to Incorporate Company in El Salvador

There are two main types of corporations in El Salvador – the Limited Liability Company and the Public Limited Company. The LLC is the most popular form of corporations.

Before you start the procedure to incorporate company in El Salvador, you must decide the name of the company. It has to be unique. You can go through the Commercial Registry to check whether the name has been repeated. We usually recommend you to select at least three names before you proceed.

You should submit copies of details of shareholders and company capital. You must have at least two shareholders. These shareholders can be individuals or corporations and can be of any nationality.

You must present the following documents of shareholders:

Identification documents
• In case of a corporation, the status of the company and its legal certifications
All documents must be notarized.

Once these are submitted, you will receive the company’s Tax Identification Number (RUC). You can now begin the commercial operations of the company.

You need not be present during the process of incorporation. However, you must give a Power of Attorney to a legal agent, who will operate on your behalf.

The company should have a corporate purpose. A company usually has one to three purposes. You can add any number of purposes, given that they are related to the principal purpose of the company.

The company will then be issued with a Commercial license. No company in El Salvador can operate without this license. This license is proof that the company is owned by shareholders and can run commercial operations. This license must be renewed every year.

You must submit the annual financial statements at the end of every financial year in addition to the financial statements at the time of registration. A public accountant should legally sign it before it is passed on.

For more information and guidance to Incorporate Company in El Salvador, contact 3E Accounting, China. We will help you with all aspects of registration whether LLC or PLC.
You can contact us by sending an email to request a no-obligation quotation or get more information about how to Incorporate Company in El Salvador.