Why Should Investors Setup Business in El Salvador?
Any investor will be keen to know why they should setup a business in El Salvador, and this is a primary question any investor will be sure to ask beforehand. Why choose El Salvador over other countries located in the same region? What benefits does El Salvador offer investors?
Low Minimum Paid-Up Capital
In El Salvador, the minimum paid-up capital required for an investor to start a business is only the equivalent of US$100. As long as you already have two shareholders and one director in place who can be of any nationality, you’re all set to start the incorporation process and setup a business in El Salvador.
The Country’s Free Zones
El Salvador has free zones setup which allow foreign investors to setup manufacturing companies that will be free from being taxed on their corporate income. They also will not be imposed with VAT tax on the products which are being sold overseas.
Investors who are operating a business in El Salvador will also no have to worry, as there are no restrictions being imposed on foreign-trade operations or on foreign currency transactions in the country.
El Salvador uses US dollar as the local currency, which makes it easy for investors to conduct trade and business. Having the security and sense of stability that comes with using a strong, established currency like the US dollar provides El Salvador with a competitive advantage when it comes to convincing investors why they should consider setting up a business in the country.
Ideal Environment for Manufacturing Companies
El Salvador is the prime location for investors who want to setup a manufacturing company in the country because of the low operational costs and minimum wage levels in the manufacturing industry.
Aside from that, El Salvador is also a member of the DR-CAFTA, which is the free trade agreement between several Central American countries, the Dominican Republic and the US. What this agreement does it help to eliminate the customs duties which are imposed on trade among the countries who are members of this agreement for any goods and services which are produced locally in the country.
Access to Ports
The Acajutla and La Union ports are the two ports of El Salvador which are accessible via the Pacific Ocean. Additionally, there is also the Cortes Port in Honduras and the Santo Tomas de Castilla port in Guatemala, both of which are accessible via the Atlantic Ocean.
Why are these ports so important? Because they help to move millions of tons of cargo from the Asian region all the way to the US. For investors, especially the ones in the export and the import business, this means only one thing – business advantage.