Incentives
The Innovation and Technology Law
The Law for the Promotion of Innovation and the Manufacture of Technologies (Decree 722 of 2023) gives new investments in technology a 15-year exemption from income tax, withholding, municipal taxes, capital gains and import duties. It sets no minimum investment and no minimum number of jobs.
- Years of exemptions, from the qualification agreement
- 151
- Years of exemptions, from the qualification agreement
- Minimum share of the operating budget for research and innovation
- 5%1
- Minimum share of the operating budget for research and innovation
Qualifying activities
- Software and computer systems: programming, maintenance, consulting and analysis.
- Cloud computing, artificial intelligence, big data, distributed ledgers, cybersecurity and quantum computing.
- Manufacturing of hardware, semiconductors, communications technology, robotics, nanotechnology, aircraft and drones.
- Research and development of new technologies, and new energy generation and storage sources.
Source: INVEST: Law for the Promotion of Innovation and the Manufacture of Technologies, English translation1
The exemptions
| Income tax | Total exemption on the incentivised activities |
|---|---|
| Withholding | No withholding on the incentivised activities |
| Municipal taxes | Total exemption on declared net assets |
| Capital gains | Total exemption |
| Import duties | Machinery, equipment, inputs and tools for the activity |
Source: INVEST: Law for the Promotion of Innovation and the Manufacture of Technologies, English translation1
Conditions and obligations
- Only new investments: not existing operations, mergers or restructurings.
- Cannot be combined with free zones or the International Services Law.
- A qualification agreement from the Ministry of Economy and separate accounts for the activity.
- At least 5% of the operating budget for research, development and innovation.
- Benefits are revoked if operations stop for three months in a row.
Source: INVEST: Law for the Promotion of Innovation and the Manufacture of Technologies, English translation1
Sources
Figures checked 9 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.