Company formation in El Salvador (2026): S.A.S., tax & Bitcoin

Overview

El Salvador has moved quickly in recent years to make company formation cheaper and to narrow the tax base to income earned inside the country. The Ley de Inversiones gives foreign investors and the companies they take part in the same rights and duties as national investors, with no exceptions other than those in law. In practice the interesting features are the simplified company type (the S.A.S.), the exclusion of foreign-source income from tax, and a set of sector incentives and digital-asset rules.

This guide covers entity types, capital, registration, taxes, employer levies, the digital-asset regime and incentives. As of September 2026 the facts below were checked against government pages, the text of the decrees where available, and PwC's tax summaries. Rules in this area have changed repeatedly since 2024, so confirm the current position with the authorities before you commit.

Who it's for

• Founders who want a low-cost local vehicle and can run it through the S.A.S. (one shareholder is enough)
• Businesses selling exported services to clients abroad that could qualify for the services-law incentives
• Digital-asset businesses prepared for licensing, a registered local entity and compliance staffing
• Not for you if you plan small-scale retail, small industry or small services: these are reserved to Salvadorans by birth and natural-born Central Americans
• Not for you if you expect a tax-free result at home: your own country's residency and controlled-company rules still apply

Types of company and capital

Two vehicles matter for most foreign founders. The S.A.S. (Sociedad por Acciones Simplificada) was created by Decreto Legislativo 905 (6 December 2023). Its capital is set freely by the shareholders from a minimum of USD 1, and a single person can form one. The traditional S.A. de C.V. is heavier: according to Legal 500 (a guide dated 2018 and updated August 2023), it needs at least two shareholders, allows up to 100% foreign ownership, and requires USD 2,000 to be subscribed, with 5% paid at formation and the remaining 95% within the first year. A local director or legal representative is appointed for a renewable seven-year term.

As of 18 November 2025 the Assembly reported 6,065 S.A.S. registered, 63.3% of them single-shareholder, and said the municipal-solvency requirement had been removed for them. The Ley de Inversiones also guarantees foreign investors the right to transfer net profits, dividends and liquidation proceeds abroad, but they cannot invoke it to avoid tax, labour or social-security obligations. Investors above 4,000 monthly minimum wages can claim an investor residence (Residencia de Inversionista), which is also extended to a foreign legal representative of a Salvadoran company or branch.

How to register, step by step

1. S.A.S.: file through the CNR CreaEmpresa platform. No public deed is needed, only the form, signed by hand or with a certified electronic signature. The CNR page lists an initial-balance deposit of USD 17.14 and describes it as optional.
2. S.A. de C.V. or branch: register the company at the CNR Registro de Comercio. The CNR fee is USD 0.57 per hundred of capital up to a maximum of USD 11,428.57 (about USD 11.40 on USD 2,000 of capital), plus the USD 17.14 initial-balance deposit.
3. Foreign individuals need a Salvadoran NIT in order to sign.
4. Register the entity with Hacienda for the NIT (legal entities) and NRC (IVA). For a company registered with a deed, the Hacienda service is free; Hacienda lists about 20 minutes at the counter plus about 15 minutes waiting. You need the registered deed, a list of partners with ID and percentages, and a valid ID (DUI, passport or residence card). A digital NIT can be requested online.
5. Open a bank account. You need the NIT first, and foreign-owned companies face beneficial-owner KYC (see the downsides below).
6. Register as an employer with the social-security institutions if you will hire. We did not find a readable official procedure for this step, so check the eRegulations portal.

Timeline

No official processing time was found, so we do not give a hard number. Legal 500's 2023 update puts the whole process, including the bank account, at 5-7 weeks. A law-firm blog says 3-7 business days for an S.A.S. and 3-5 weeks for an S.A. or S.R.L. Treat all of these as indications from private sources, and expect the bank account to be the slowest element.

Corporate taxes

Corporate income tax is 30% of taxable income, with a reduced 25% rate for companies whose taxable income is USD 150,000 or less in the fiscal year (PwC, reviewed 27 September 2026). A 1.75% tax on gross revenue is paid monthly as an advance credited against annual income tax. The fiscal year is 1 January to 31 December and the annual return is due by 30 April.

The key territorial change is Decreto Legislativo 969, published in Diario Oficial No. 52 on 14 March 2024 and in force from 22 March 2024. It added numeral 4 to article 3 of the income-tax law, excluding amounts obtained abroad from any foreign source from taxable income, for individuals and legal entities, domiciled or not. It also repealed the earlier taxation of foreign securities income, certain foreign financing returns and foreign bank-deposit interest for domiciled taxpayers. Salvadoran-source income remains taxable.

Branch profits are taxed like company profits, and branch remittances bear a 5% withholding. Spain is the only jurisdiction with which we found an income and capital tax treaty (signed in Madrid on 7 July 2008); PwC lists treaty rates of 12% (5% in some cases) on dividends and 10% on interest and royalties. A tax auditor must be appointed if total assets at 31 December of the prior year exceed USD 1,142,857.14 or prior-year income exceeds 4,817 commerce-and-services minimum wages; the appointment window is 1 January to 31 May and must be reported within 10 business days. Audit limitation periods are 3 years for timely returns and 5 years for late or unfiled returns.

Employer costs and staffing rules

A new law known as Quincena 25 (14 January 2026) creates a supplementary payment equal to 50% of monthly salary for employees earning up to USD 1,500, not subject to income tax or social-security contributions (PwC). Who bears the cost and when it is paid were not verified here, so ask your payroll adviser. Separately, the Labour Code requires at least 90% Salvadoran staff (Art. 7) and at least 85% of total wages going to Salvadorans (Art. 8). The Labour Ministry can authorise more foreigners for hard-to-replace roles, and Art. 9 exempts professionals serving foreign or international firms in business direction, control and administration. These are 1972 code texts as mirrored by the ILO; later amendments were not checked.

Digital assets and Bitcoin for businesses

Ley Bitcoin (Decreto 57, June 2021) originally made Bitcoin legal tender, obliged businesses to accept it and let taxes be paid in it. Decreto 199 (approved 29 January 2025) reformed it: acceptance is voluntary and limited to private persons and entities, prices are "converted", state obligations are paid in the contracted currency, and articles 4, 8 and 9 were repealed. The capital-gains exemption on Bitcoin exchanges in article 5 was kept. Media often say Bitcoin is "no longer legal tender", while the decree keeps "curso legal" wording; we follow the decree text. Decreto 199 says it takes effect 90 days after its 30 January 2025 publication, while some press reports give 1 April 2025.

The IMF Board approved a 40-month arrangement of about USD 1.4 billion on 26 February 2025. Under the programme, taxes are paid only in US dollars, government Bitcoin purchases are prohibited, and public participation in the Chivo wallet is to be unwound. The IMF report cited holdings of roughly 6,000-6,100 Bitcoin at the time.

For businesses in the sector, the Ley de Emisión de Activos Digitales (Decreto 643, January 2023) requires digital-asset service providers to be registered with CNAD. A foreign legal entity must form a Salvadoran sociedad anónima or a branch registered at the CNR (Art. 18 d). CNAD says it reviews an application within a maximum of 20 business days, with 10 business days to cure omissions, in two phases (pre-registration, then definitive filing). The initial registration fee is USD 5,475, due within 10 days of a favourable resolution; the annual renewal is paid in the first quarter, and we did not find the amount. Infobae, citing the government, reported more than 60 registered providers in February 2026. In the original text, registered providers are exempt from IVA, income tax and municipal taxes on the digital-asset activity, passed on to shareholders, but not on swaps for goods or services outside Art. 19.

Incentives (with conditions)

Incentives exist, but each comes with entry tests. Only the ones below were verified.

• Ley de Servicios Internacionales (Decreto 431, updated by D.L. 497 of 14 January 2026): eligible services include IT services to legal entities domiciled abroad, BPO, call centres, R&D, telemedicine and logistics. Services must be used exclusively abroad by a client domiciled abroad, and beneficiaries operate in a services park or centre with Ministry of Economy authorisation. Benefits are an income-tax exemption solely on the incentivised income, a municipal asset-tax exemption and duty-free equipment imports; exempt companies still file the annual return.
• Entry thresholds: in services parks, BPO direct users need at least USD 150,000 of new assets within six months and at least 10 permanent jobs from year 1. In service centres, BPO, IT and cinema need at least USD 250,000 within six months and at least 20 permanent jobs from year 1. Missing them means no benefits for that fiscal year. The IT threshold in parks is not separately shown in the text we read.
• Domestic sales: part of IT, call-centre, R&D and BPO services may be sold locally, but those sales attract income tax, IVA and municipal taxes, and the local client must withhold 1.5% (income-tax advance) and 1% (IVA advance).
• Ley de Fomento a la Innovación y Manufactura Tecnológica (in force 5 June 2023): up to 15 years of exemption from income tax, income-tax withholdings, municipal net-asset tax, capital-gains tax and equipment import duties. It needs a Ministry of Economy agreement; no minimum investment is stated, but pre-law investments and holders of other special regimes are excluded.
• Free zones: the Zonas Francas law reform (20 October 2025, published 23 December 2025) lets users request up to 10 more years of exemption if they show a 100% increase over their initial investment and raise jobs. Free-zone users in authorised service parks are treated as inside a free zone.
• Ley para el Fomento de la Expansión de las Inversiones (January 2026): tax credits of 10%, 20% or 30% for firms with at least 10 years of provable operation in listed manufacturing sectors. It is not for start-ups.

Challenges and downsides

• The foreign-income exclusion covers foreign-source income only. Salvadoran-source income is taxed at up to 30%, and payments to non-residents face 20% withholding (25% for tax havens).
• Small-scale commerce, industry and services are reserved to Salvadorans by birth and natural Central Americans (Constitution Art. 115; Ley de Inversiones Art. 7).
• The 90% local-staff and 85% payroll rules apply, with limited exceptions.
• Services-law incentives require authorisation, minimum investment and jobs, a park or centre, and export-only delivery. The benefit is lost for any year the thresholds are missed.
• Foreign-owned companies face beneficial-owner KYC and client risk categorisation under Attorney General's Office (FGR) guidelines of 14 February 2025, described by a law firm; the guidelines also create a "Resident Representative Agent" under a service contract.
• The 1.75% advance is due on gross revenue even when the business is unprofitable.
• Digital-asset providers need CNAD registration, a registered local entity, compliance capacity and adequate financial resources set by CNAD. The IMF flagged limited Bitcoin use and supervision and AML gaps.
• Only one income-tax treaty (Spain) was found. US citizens remain taxed on worldwide income according to the IRS, and home-country rules still apply.
• The rules change fast. Decrees in March 2024, January 2025, April 2025, January 2026 and April 2026, plus several between November 2025 and May 2026 (D.L. 468, 497, 544, 568), affected companies or incentives.

Official steps and where to verify

Start with the CNR for registration and fees, Hacienda for the NIT and tax questions, CNAD for digital assets, and the Ministry of Economy for incentive authorisations. The eRegulations portal for El Salvador lists procedures step by step. Most private cost figures (notary, licence, certificate fees) are not on official pages, so ask for a written quote and check it against the CNR and Hacienda schedules. For related topics see our El Salvador tax residency guide and banking guide.