Investor guides
Investment Legislation
What each of the main laws covers, in a few lines, with a link to the current official text. Start here, then check the details with a lawyer or accountant.
Laws of El Salvador are published in Spanish in the Diario Oficial. Any English wording here is a summary, not a translation: check the Spanish text and take legal advice before you rely on a provision.
Investment and companies
Investment Law
Legislative Decree No. 732 of 14 October 1999. It gives foreign and national investors equal treatment, guarantees the free transfer abroad of profits and capital, and sets up the National Investment Office (ONI) of the Ministry of Economy, where foreign investors register their investment and receive a credential. The money must come in through the Salvadoran financial system, and the ONI has 30 business days to register it.
Official text
- Investment Law, English translation (INVEST, PDF)
- Regulations of the Investment Law (eRegulations El Salvador, PDF, in Spanish)
Checked November 2026.
Law Creating INVEST, the Investment and Export Promotion Agency
Legislative Decree No. 753 creates INVEST, the government agency that promotes investment in El Salvador and the export of Salvadoran goods and services. INVEST publishes English translations of the main investment laws and supports investors with information and procedures. InvestSalvador.com is an independent site, not connected with INVEST.
Official text
Checked November 2026.
Commercial Code
Sets out the company forms (the S.A., the S. de R.L., partnerships and, since a reform in force from February 2024, the S.A.S.), how they are formed, run and wound up, the duties of traders and the Registry of Commerce kept by the National Registry Centre (CNR). Any company can adopt variable capital (“de C.V.”). Decree No. 905 of 6 December 2023 added the S.A.S., which one shareholder can form with a registry form and capital from $1.
Official text
- Commercial Code, consolidated text (Legislative Assembly, PDF, in Spanish)
- Decree No. 905 of 6 December 2023 adding the S.A.S. (Legislative Assembly, PDF, in Spanish)
Checked November 2026.
General Law on Cooperative Associations
Decree No. 339 of 1986. Cooperatives are governed by this law rather than the Commercial Code. They need at least 15 members, each with one vote, and gain legal personality on registration with the Salvadoran Institute for Cooperative Development (INSAFOCOOP).
Official text
Checked November 2026.
Competition Law
Decree No. 528. It prohibits agreements between competitors and other practices that limit competition or block access to a market, and the abuse of a dominant position. It applies to all economic agents, including state and municipal companies, and is enforced by the Superintendency of Competition, which must also authorise mergers and acquisitions above the thresholds set in the law before they close.
Official text
Checked November 2026.
Consumer Protection Law
Legislative Decree No. 776, published in the Diario Oficial on 8 September 2005. It sets the rights of consumers and the duties of anyone who sells goods or services to them, including clear prices and information, guarantees and fair contract terms, and is enforced by the Defensoría del Consumidor, which can fine businesses that break it.
Official text
Checked November 2026.
Special Law against Money Laundering
Decree No. 426 of 7 October 2025. Banks, notaries, lawyers, accountants, real estate agents and other obliged firms must identify their clients and the beneficial owners who hold 25% or more, keep records and report suspicious transactions. El Salvador has no central public register of beneficial owners; the information sits with these obliged firms.
Official text
Checked November 2026.
Special Law for Municipal Restructuring
Decree No. 762 merged the 262 former municipalities into 44 from 1 May 2024; the old municipalities became districts. Businesses register and pay municipal taxes with the new municipality, and old place names are still used for addresses.
Official text
Checked November 2026.
Incentive laws
Industrial and Commercial Free Zones Law
Law No. 405 of 3 September 1998. Companies in a free zone, or in their own premises approved as an inward processing warehouse (DPA), pay no income tax and no municipal taxes for 15 years in the San Salvador metropolitan area or 20 years outside it, and bring in machinery and inputs free of duties and VAT. Decree No. 493 of 23 December 2025 added a further 10-year income tax period for companies that reinvest.
Official text
Checked November 2026.
International Services Law
Law No. 431 of 11 October 2007. Companies that export services, such as business process outsourcing, software, logistics or medical services, receive the same benefits as the Free Zones Law when they work in a service park or in their own premises approved as a service centre. Decree No. 497 of 14 January 2026 lets one company carry out several incentivised activities and sets new minimum investments.
Official text
Checked November 2026.
Law for the Promotion of Innovation and the Manufacture of Technologies
Legislative Decree No. 722, published in the Diario Oficial on 4 May 2023. New investments in technology activities, from software and artificial intelligence to semiconductors and drones, can receive a 15-year exemption from income tax, withholding, municipal taxes on net assets, capital gains and import duties. The Ministry of Economy qualifies each beneficiary.
Official text
Checked November 2026.
Law for the Promotion of the Expansion of Investments
Legislative Decree No. 498 of 14 January 2026, in force since 24 January 2026. Established companies that invest USD 1 million or more in an expansion can claim an income tax credit of 10%, 20% or 30% of the investment. A reform approved on 9 September 2026 lowered the operating history required from 10 to 5 years and opened the regime to business groups.
Official text
- Decree No. 498 of 14 January 2026 (Judicial Documentation Centre, PDF, in Spanish)
- Legislative Assembly: approval of the law (in Spanish)
Checked November 2026.
Legal Stability Law for Investments
Legislative Decree No. 905 of 18 December 2014. Investors in strategic sectors can sign a legal stability contract with the Ministry of Economy that freezes the tax, customs and migration rules applying to the investment for 5, 10 or 20 years, depending on its size. It creates no new exemptions.
Official text
- Legal Stability Law for Investments, English translation (INVEST, PDF)
- Decree No. 905 of 18 December 2014 (Judicial Documentation Centre, PDF, in Spanish)
Checked November 2026.
Tourism Law
Legislative Decree No. 899 of 10 December 2005. Under article 36, a new tourism investment of USD 25,000 or more that the Ministry of Tourism (MITUR) qualifies as a Project of National Tourist Interest can receive a 10-year income tax exemption and other tax relief. The window to apply is transitional and has been extended by separate decrees.
Official text
Checked November 2026.
Renewable Energy Incentive Laws
Two laws. The Law of Tax Incentives for the Promotion of Renewable Energy in Electricity Generation (Legislative Decree No. 462 of 8 November 2007, reformed in 2015) gives power plants up to 10 years of import duty exemption and 5 or 10 years of income tax exemption. The Law for the Promotion of the Use of Renewable Energy (Legislative Decree No. 436 of 21 October 2025) covers suppliers and installers of systems for end users, such as rooftop solar.
Official text
- Decree No. 462 of 8 November 2007, original text (OAS, PDF, in Spanish)
- Reform of the 2007 law, current wording of articles 1 and 3 (Legislative Assembly, PDF, in Spanish)
- Decree No. 436 of 21 October 2025 (Judicial Documentation Centre, PDF, in Spanish)
Checked November 2026.
Special Provisions for High-Rise Buildings
Approved by the Legislative Assembly on 23 September 2024. New investments in buildings of 35 storeys or more are exempt from income tax for 15 years. The exemption covers the developer, its shareholders on dividends from the project and the construction companies, but not buyers or tenants.
Official text
Checked November 2026.
Tax
Income Tax Law
Companies pay 30% on taxable income, or 25% when it is USD 150,000 or less; resident individuals pay progressive rates up to 30%, with the first USD 6,600 a year exempt since the April 2025 reform. Net capital gains pay 10% and dividends carry 5% withholding. Decree No. 969 of 12 March 2024 took income from any foreign source out of the tax.
Official text
- Income Tax Law, consolidated to the Diario Oficial of 30 April 2025 (General Directorate of Customs, PDF, in Spanish)
- Decree No. 969 of 12 March 2024 on foreign-source income (Legislative Assembly, PDF, in Spanish)
Checked November 2026.
VAT Law (IVA)
The Law on the Tax on the Transfer of Movable Goods and the Provision of Services charges 13% on sales of goods and services and on imports. Exports are taxed at 0%. Companies register for IVA and receive an NRC, and file a monthly return.
Official text
Checked November 2026.
Tax Code
The procedural rules for all internal taxes administered by the Ministry of Finance: registration, returns, invoices and electronic documents, withholding agents, audits, penalties and appeals. Article 62-A requires related-party transactions to be priced at market value (transfer pricing).
Official text
Checked November 2026.
General Municipal Tax Law
The common framework for the taxes and fees of the municipalities. Every business registers in the tax register of the municipality where it operates and reports the start of activities within 30 days; each municipality sets its own tariff, usually on the assets located there and paid monthly.
Official text
Checked November 2026.
Real Estate Transfer Tax Law
Taxes transfers of real estate between living persons at 3% on the part of the price above $28,571.43. The buyer pays it before the deed is registered at the CNR. El Salvador has no general annual property tax.
Official text
Checked November 2026.
Employment and social security
Labour Code
Governs employment contracts, working hours (44 hours a week for day work), rest days, paid holidays with a 30% holiday bonus, the year-end aguinaldo of 15 to 21 days’ salary, dismissal and severance, and trade unions. It applies to foreign-owned companies in the same way as to local ones.
Official text
Checked November 2026.
Minimum Wage Decree 2025
Executive Decree No. 11 of 2025 set the minimum wages in force from 1 June 2025. For commerce, services and industry the rate is USD 408.80 a month; other sectors, such as farm work and textiles in free zones, have their own rates in the decree.
Official text
Checked November 2026.
Comprehensive Pension System Law
Legislative Decree No. 614 of 20 December 2022. It covers private, public and municipal employees, whose contributions are managed by the pension fund administrators (AFP). Employers pay 8.75% and employees 7.25% of salary.
Official text
Checked November 2026.
Law of the Training Institute INCAF
Decree No. 893 of 2023. Under article 19, employers with 10 or more workers pay 1% of their total payroll to fund vocational training, with no salary cap.
Official text
Checked November 2026.
Special Quincena 25 Law
An extra payment of half a month’s salary in January for workers earning up to USD 1,500 a month. In 2026 it was voluntary for private employers, who could deduct 100% of it as a tax credit; from January 2027 it is mandatory.
Checked November 2026. See also: Deloitte: scope of the Special Quincena 25 Law (in Spanish); Consortium Legal: Special Law Quincena 25 in El Salvador.
Currency, finance and digital assets
Monetary Integration Law
Legislative Decree No. 201, approved on 30 November 2000. It made the US dollar legal tender from 1 January 2001, at a fixed rate of 8.75 colones per dollar. The Central Reserve Bank (BCR) stopped issuing money and now concentrates on financial regulation, payments and statistics.
Official text
Checked November 2026.
Bitcoin Law
Legislative Decree No. 57 of 8 June 2021, in force since 7 September 2021, made accepting Bitcoin compulsory. Decree No. 199 of 29 January 2025, passed under the IMF programme, made acceptance voluntary for private parties and ended tax payments in Bitcoin. Sources disagree on whether the reformed text still gives Bitcoin legal tender status; the US dollar remains the currency under the Monetary Integration Law.
Official text
Checked November 2026. See also: Reuters: Lawmakers in El Salvador rush new bitcoin reform after IMF deal (30 January 2025).
Digital Assets Issuance Law
Legislative Decree No. 643 of 11 January 2023. It regulates public offerings of digital assets other than Bitcoin, including stablecoins, and the companies that issue, certify and trade them, under the National Digital Assets Commission (CNAD). Its article 36 exempts income and capital gains from regulated digital assets from all taxes.
Official text
- Digital Assets Issuance Law, English translation (INVEST, PDF)
- Decree No. 781 of 27 June 2023 reforming the law (Legislative Assembly, PDF, in Spanish)
Checked November 2026.
Banks Law
Legislative Decree No. 697 of 2 September 1999. It governs the authorisation, capital, governance and operations of banks and the branches of foreign banks, which are supervised by the Superintendency of the Financial System (SSF) under technical rules issued by the BCR.
Official text
- Banks Law (Central Reserve Bank, PDF, in Spanish)
- Current financial laws (Superintendency of the Financial System, in Spanish)
Checked November 2026.
Securities Market Law
Decree No. 809 of 16 February 1994. It regulates public offerings of securities, the stock exchange, brokers and issuers, and creates the public securities register kept by the SSF. The Bolsa de Valores de El Salvador operates under it.
Official text
Checked November 2026.
Investment Funds Law
Legislative Decree No. 776 of 21 August 2014. Open and closed investment funds, including venture capital funds, are run by authorised fund managers and supervised by the SSF.
Official text
Checked November 2026.
Law on the Stability of the Financial System and Deposit Guarantee
Sets the tools for handling banks in difficulty and the deposit guarantee run by the Deposit Guarantee Institute (IGD), which protects deposits at member banks up to the limit set in the law.
Official text
Checked November 2026.
Property, residency and permits
Constitution of the Republic
Protects private property and the freedom to do business. Article 109 applies a reciprocity rule to rural land: nationals of a country that does not let Salvadorans buy rural land cannot buy it in El Salvador, except land for industrial establishments. Article 105 caps the rural land one person may own at 245 hectares. Houses, flats, offices and urban land have no such limits.
Official text
Checked November 2026.
Civil Code
Sets the general rules on property, contracts, mortgages and inheritance. A property sale is made by public deed before a notary and takes effect against third parties once registered at the CNR. The beaches are national public property.
Official text
Checked November 2026.
Special Migration and Aliens Law
Decree No. 286 of 2019. It sets the categories of temporary and permanent residence, including investors, rentistas and pensionados, and the procedures before the General Directorate of Migration and Aliens (DGME). It has been reformed several times since, most recently in 2026.
Official text
- Special Migration and Aliens Law, Decree 286 of 2019 (Legislative Assembly, PDF, in Spanish)
- Regulations of the law, Executive Decree 35 of 2019 (Judicial Documentation Centre, PDF, in Spanish)
- Decree 531 of 2026 amending the law (Judicial Documentation Centre, in Spanish)
Checked November 2026.
Environment Law
Projects that may affect the environment, such as factories, building developments and energy plants, need an environmental permit from the Ministry of Environment and Natural Resources (MARN) before work starts, usually after an environmental impact assessment.
Official text
Checked November 2026.
Sanitary Regulation Law
Decree No. 891, in force since 7 August 2024. It gave the Sanitary Regulation Superintendency (SRS) control of food and drink products and premises. Businesses apply online and receive a provisional permit for three months; after an inspection, the SRS grants an authorisation valid for five years.
Official text
Checked November 2026.
About these texts
Laws in El Salvador are amended often, so this guide gives a short summary of each and links to the current text kept by the issuing authority rather than copying it. Each summary was read against that text in the month shown. For the business side, see Business & Tax, and for help, find a lawyer or accountant in the business directory.
This guide is a general summary for orientation, not legal or tax advice.
Social Security Law
Creates the compulsory social security scheme run by the Salvadoran Social Security Institute (ISSS), which covers illness, maternity and work accidents. Employers pay 7.5% and employees 3% of salary, on salary up to USD 1,000 a month.
Read the full guide
Official text
Checked November 2026.