Quick Information on What You Must Know Regarding How to Create a Branch Office in El Salvador
El Salvador is fast developing in Central America socially, politically and economically which is thus attracting foreign investments. El Salvador is developing quiet faster after the Salvadoran Civil War has ended. To create a branch office in El Salvador, the foreign investors have two options:
1. Establishment of a local company with the right legal entity
2. Create a branch office in El Salvador
Creating a branch office in El Salvador for the foreign investors can be complicated if they do not hire a right local agent. However, setting up a new company in El Salvador is easier than creating a branch office here.
The following is the list of steps involved in setting up a branch office in El Salvador:
Appointing a legal representative for the branch office
The foremost step in creating a branch office requires a legal representative for the branch office. This legal representative must have a permanent residence in El Salvador or should be a citizen of Salvador. The role of the legal representative appointed for the branch office is described as below:
- A legal representative shall present itself before all the local authorities
- Registering the company’s capital investment amount in the Ministry of Economy
- Provide proper guidance to the directors about the country’s law and regulations
- It should assist the company properly for the renewals of all the registrations and other certificates
- Signatory authority for the branch company.
Selection of the legal representative is done by the board of directors of the company and the selection process of the legal representative is done from the head office who is interested in setting up a branch office in El Salvador. The appointed legal representative is given the power of attorney and he is responsible for all the documents to legalize and present before the ministry of the commerce.
Registering the capital investment
The next step in setting a branch office is registering a capital investment- for this the company must transfer the capital to the local bank based out in El Salvador. The minimum amount required for registration of the capital investment is USD 12,000 and the transfer of this capital amount should be made by the head office. The ministry of commerce of El Salvador suggests that the amount of investment should be higher than this as there is fees involved during registration of capital investment, certification of the same and towards bank commission. The legal representative is responsible to complete all the important procedures at the bank. Next step is appointing the financial accountant to begin with the accounting system of the company.
Registering the foreign investment
The third step while creating a branch office is registering the foreign investment made in the Ministry of Economy. Once the foreign investment made has been approved by this ministry, a certificate or document is provided which contains the information about the approval of the investing capital.
Registering the branch office
The final step of creating a branch office is registering the branch office in the Registry of Commerce. For successful registration of the branch office, the documents achieved from the above steps and the deed from the head quarters must be attached too. The Registration of Commerce will provide you with the details:
- Documents that certifies the company for approval of the Branch Office.
- Documents that certifies about the foreign capital
- Certificate that allows you to conduct the commercial activities.
With the proper documentation required for registering a branch office in El Salvador, one can complete the process of creating a branch office there with the right guidance of the right legal representative.