Cooperatives in El Salvador: 15 Members

Cooperative (Asociación Cooperativa de R.L.) in El Salvador

Cooperatives are governed by the General Law on Cooperative Associations (Decree No. 339 of 1986), not the Commercial Code. They need at least 15 members, each with one vote whatever their contribution, and gain legal personality on registration with the Salvadoran Institute for Cooperative Development (INSAFOCOOP). Members' liability is limited, and the name ends in "de R.L.".

Updated November 2026 · Figures checked 8 November 2026

Forming a cooperative

Founding assembly: all interested people meet, approve the statutes and subscribe the capital, paying at least 20%. All founders sign the founding minutes.
Registration: the cooperative applies to the National Register of Cooperatives at INSAFOCOOP with a certified copy of the minutes; the entry is published once in the Diario Oficial.
Name: begins with "Asociación Cooperativa" and ends with "de Responsabilidad Limitada" or "de R.L.".
Capital: variable and unlimited, with a variable number of members and no fixed duration.

Source: General Law on Cooperative Associations, Decree No. 339 of 1986 (Superintendency of the Financial System, in Spanish); Coops4Dev / Cooperatives of the Americas: legal framework analysis, El Salvador (PDF, in Spanish)^1,2

Types and governance

Types: production, housing and service cooperatives.
General Assembly of Members: the highest authority.
Board of Administration (Consejo de Administración): runs the cooperative on behalf of the assembly.
Supervisory Board (Junta de Vigilancia): oversees all activities and audits the other bodies and staff.
Principles: open membership, democratic control, limited interest on capital and surpluses shared in proportion to each member's dealings with the cooperative.

Source: General Law on Cooperative Associations, Decree No. 339 of 1986 (Superintendency of the Financial System, in Spanish)¹

Tax privileges

From formation: exemption from stamp taxes and registration fees on their contracts, and free publication of legal notices in the Diario Oficial.
On request: the Ministry of Economy can grant, after hearing the Ministry of Finance, exemption from income tax and from municipal and other taxes on the cooperative's operations, for five years at a time.

Source: General Law on Cooperative Associations, Decree No. 339 of 1986 (Superintendency of the Financial System, in Spanish)¹

The privileges in the 1986 law have been reformed over time and interact with later tax laws, so confirm what applies today with INSAFOCOOP and a tax adviser.^1,2

For foreign investors

A cooperative is designed for members who work with it, not for outside capital: each member has one vote and returns on capital are limited. Investors who want to work with Salvadoran producers can do so by contract with an existing cooperative, while running their own business through a corporation or simplified joint-stock company.¹

Frequently Asked Questions

How many members does a cooperative need in El Salvador?

At least 15 members, each with one vote whatever the amount contributed.

Where are cooperatives registered?

In the National Register of Cooperatives at the Salvadoran Institute for Cooperative Development (INSAFOCOOP), which gives them legal personality.

Do cooperatives receive tax privileges?

Tax privileges can be granted on request for 5 years, renewable.

Sources

Figures checked 8 November 2026. Prepared by InvestSalvador.com for general information. It is not investment, tax or legal advice; please confirm details with a qualified adviser before acting.