El Salvador residency & tax 2026: 90-day rule, territorial tax

How residency in El Salvador works

Immigration status is run by the Dirección General de Migración y Extranjería (DGME) under the Ley Especial de Migración y de Extranjería. Initial applications use numbered DGME forms: F1 is a transitional residence, F7 covers pensioners (pensionados) and F8 the rentista, with F17 onwards used for extensions. Under the law text, a temporary residency is granted for up to two years, renewable, while rentistas and pensionados receive one year with multiple entries and exits. Renewal requests must be filed 30 calendar days before expiry.

General requirements (Art. 110) include a valid passport, a police or criminal-record certificate issued in the last two years and authenticated or apostilled, and proof of economic solvency for those who do not need work authorisation. Foreign documents must also be translated into Spanish. As of September 2026 we have checked the rules below against the decrees, the law text and the DGME pages; the law copy we could read is the 2019 text, so article numbers may have shifted after later reforms.

The 90-day rule (Decreto 531, in force 31 March 2026)

The Legislative Assembly approved Decreto 531 on 17 March 2026, the President sanctioned it on 20 March, and it was published in Diario Oficial No. 57, Tomo 450 on 23 March 2026. It entered into force eight days later, on 31 March 2026. It replaced Art. 49 no. 5 and Art. 119 so that anyone holding temporary residency must be in El Salvador at least 90 calendar days each year, consecutive or accumulated, unless a duly justified caso fortuito or fuerza mayor is shown to the DGME. Failing to do so is now a ground for losing status. The Assembly said the rule is meant to ensure “un vínculo real con el país”.

The Assembly also said the reform lets business people and investors travel more without losing status, because under the old rule some residents returned to find their residency already cancelled. Sources disagree on what the old rule was: the Assembly quoted a DGME manager as saying nine months in the country and no absence over 90 days, while the 2019 law text speaks of six months. Only the new 90-day rule is certain.

From temporary to permanent residency

Under the law text (Art. 152), a temporary resident can apply for permanent residency after three years of temporary status. Shorter paths exist: Spanish and Hispanic-American nationals after one year, a spouse or partner of a Salvadoran after one year of temporary residency, and pensionados or rentistas after one year in that status. Decreto 531 does not touch Art. 152, so the 2019 text stands unless another reform changed it.

A permanent resident may work in any lawful activity on equal terms with Salvadorans and may be abroad up to two years without losing status (Art. 151 and 154). Permanent residency is renewed (refrenda) for one to four years at a time, again with a request 30 calendar days before expiry. Decreto 531 does not address whether the 90-day rule reaches permanent residents.

A separate route was added by an Art. 152 reform approved on 30 April 2025 (56 votes): foreigners who donate or invest in Government-directed programmes or projects can opt for permanent residency. The DGME director said it covers the family group only and that the applicant must still present a criminal-record certificate, an ID document and proof of the programme. We could not find an official page setting out amounts or quotas for this route, so treat any price quoted by a seller as unverified.

Residency routes at a glance

No digital-nomad or teleworker category appears on the DGME list of residency forms. The Rio Times wrote in September 2026 that El Salvador has no dedicated digital-nomad visa, although several commercial sites claim otherwise. Remote workers currently look to the rentista route, which bars paid work in the country. For short stays, Canadian and UK official advice says visa-free stays run up to 180 days, whereas the law text (Art. 84) sets tourist stays at 90 days with a 90-day extension; confirm your nationality's position with the DGME.

Pensionados and rentistas get benefits under Art. 146: income-tax exemption on sums declared as coming from abroad, a one-time customs-duty exemption on household goods up to US$20,000 CIF, and an exemption on one vehicle up to US$25,000 CIF, usable once every five years. These extend to a spouse and dependent children. Changing category within four years means repaying the exempted taxes (Art. 147).

Territorial tax: the foreign-income exclusion

Decreto Legislativo 969 introduced the foreign-income exclusion. Published in Diario Oficial No. 52, Tomo 442 on 14 March 2024 and in force eight days later, it added numeral 4 to Art. 3 of the Ley de Impuesto sobre la Renta. That numeral excludes from taxable income amounts received from any kind of foreign source, for natural persons, legal entities and entities without legal personality, whether domiciled in the country or not. The same decree repealed the earlier taxation of income from foreign securities (Art. 14-A), certain foreign derivative and financing returns (Art. 16) and interest on foreign bank deposits earned by domiciled taxpayers (Art. 27).

Tax residence: the 200-day test

Tax residence (domicilio) is a separate concept from immigration residency. According to PwC, an individual is treated as resident if they live in the country temporarily or permanently for more than 200 consecutive days in a calendar year, or if El Salvador is their main source of income. Consortium Legal cites Código Tributario Art. 53(a) for the 200-day test and says the days must fall in the same calendar year and be proved by migration records such as passports. Note the wording: more than 200, not 200 or more.

Being domiciled brings reporting duties. The tax year runs from 1 January to 31 December, the return is due within four months, and income tax is due no later than 30 April.

Rates and other taxes

The US$6,600 exempt threshold replaced an earlier US$4,064 base under a reform to Art. 37 of the income-tax law approved on 30 April 2025, and Hacienda's Decreto Ejecutivo No. 10 issued new withholding tables effective May 2025. We have not confirmed the exact annual ceiling of the 10% band from the law text: PwC shows US$9,142.86 for the second bracket boundary but part of its formula still uses the older base, while press reports of Hacienda figures differ. Check Art. 37 as amended before running calculations.

Inheritances and donations between ascendants, descendants (to the second degree) and spouses are not treated as income under Art. 3 of the income-tax law, according to an older Hacienda-hosted consolidation. A 2026 reform (Decreto Legislativo 544, Diario Oficial No. 66, 13 April 2026) also removed the previous 3% final withholding on income and gains of non-domiciled investors in securities traded on the Salvadoran exchange; other payments to non-domiciled persons remain at the general 20%, and brokerages must report non-resident investors to the tax administration.

Bitcoin and digital assets

The 2021 Ley Bitcoin (Decreto 57) made Bitcoin “moneda de curso legal”, obliged businesses to accept it and exempted Bitcoin exchanges from capital-gains tax. Decreto 199, approved on 29 January 2025 and published on 30 January (in force 90 days later), rewrote much of that. Acceptance is now voluntary and limited to private persons and entities, prices are “converted”, state obligations are paid in the contracted currency, and Arts. 4, 8 and 9 were repealed. Art. 5 keeps the capital-gains exemption for Bitcoin exchanges. Media often say Bitcoin is “no longer legal tender”; the decree itself keeps the “curso legal” wording but with voluntary private acceptance only, so we use the decree's language.

The IMF Board approved a 40-month Extended Fund Facility of about US$1.4 billion on 26 February 2025. According to the IMF, under the programme taxes are paid only in US dollars, government purchases of Bitcoin are prohibited and public participation in the Chivo wallet is to be unwound. At the time of the report the government's Bitcoin Management Agency held roughly US$600 million, about 6,000 to 6,100 coins. Press coverage of a September 2026 IMF staff-level agreement (secondary sources only) says later additions came from private donations and Chivo passed to a private operator; treat that as reported, not verified.

The 2023 Ley de Emisión de Activos Digitales (Decreto 643) exempts digital-asset returns and the capital gain or ordinary income on their sale from taxation under Art. 36(b), but not swaps for goods or services outside those listed in Art. 19 (Art. 36(e)). Art. 36 was amended in October 2024 and we could not retrieve the current wording, so verify it before relying on it.

Treaties and home-country rules

Spain is the only jurisdiction we found with an income and capital double-taxation treaty with El Salvador (signed in Madrid on 7 July 2008, published in Spain on 5 June 2009). PwC lists treaty rates of 12% on dividends (5% in some cases) and 10% on interest and royalties. We found no treaty with the United States or other major countries. US citizens remain taxable on worldwide income wherever they live, according to the IRS, and your country of origin may have its own exit or residency rules.

Challenges and downsides

• Presence rules cut both ways. Temporary residency can be cancelled for fewer than 90 days a year in the country, except for justified force majeure. Rules changed in May 2025 and again in March 2026, and there is no single official fee or requirements schedule.
• The tax exclusion is narrow. Salvadoran-source income is taxed at up to 30% for individuals and companies, and non-domiciled payees face 20% withholding (25% for tax havens).
• Work restrictions. Pensionados and rentistas may not take paid work except for the State, specialised matters or teaching (Art. 144-145); breach means cancellation (Art. 150). Employed work needs a Ministry of Labour opinion and DGME authorisation (Art. 122), and unauthorised work is a serious infraction (Art. 225 no. 2).
• Category changes cost money. Leaving the pensionado or rentista category within four years means repaying the exempted taxes.
• Few treaties. Only Spain has an income-tax treaty, and US citizens stay taxed on worldwide income.
• Bitcoin is not a tax-payment tool. Taxes must be paid in US dollars, and the IMF flagged limited Bitcoin use and supervision and anti-money-laundering gaps.
• Fast-moving law. Decrees in March 2024, January 2025, April 2025, January 2026 and April 2026 changed tax or immigration rules; several digital-asset provisions were amended in October 2024.
• Costs that apply regardless. 13% VAT, the 3% real-estate transfer tax above US$28,571.43 and municipal taxes.
• Naturalised nationality can be lost after more than two consecutive years living in the country of origin, absence of more than five consecutive years, or a serious conviction (Art. 279 as amended).

Official steps and where to verify

1. Check the DGME residency-category page and FAQ for the form matching your situation, and ask about the 90-day rule for your category.
2. Obtain a criminal-record certificate issued within the last two years, apostilled or authenticated and translated into Spanish, plus proof of income or pension.
3. File with the DGME and request any renewal 30 calendar days before expiry. El Mundo (November 2025) reported temporary-residency fees of US$70 to US$260 and a usual maximum response time of 45 business days; this is press reporting, not an official schedule.
4. Confirm your tax position with the Ministerio de Hacienda or a Salvadoran tax adviser before you count days or restructure income.