How to start a business in El Salvador as a foreigner (2026)

Legal framework

Ley de Inversiones (Legislative Decree 732, 1999); Código de Comercio; Ley de Sociedad por Acciones Simplificadas (Legislative Decree 905, December 2023); supervised by the Centro Nacional de Registros (CNR) and Ministerio de Hacienda

Key points: starting a business in El Salvador

1. 01Foreign ownership limit

   100% foreign ownership is permitted for standard and large businesses. Foreign investors receive equal treatment with nationals under the Investment Law. The sole carve-out is micro-enterprises (≤10 employees, ≤USD 175,930 annual sales), which are reserved for nationals.

   state.gov investmentpolicy.unctad.org

2. 02Minimum capital

   The Sociedad por Acciones Simplificada (SAS), introduced by Legislative Decree 905 (December 2023), requires as little as USD $1 in capital, payable within two years of registration. Traditional Sociedades Anónimas (S.A.) require a minimum subscribed capital of USD $2,000.

   cnr.gob.sv asamblea.gob.sv

3. 03Registration steps

   Key steps are: (1) Reserve company name with CNR; (2) Draft and notarize articles of incorporation; (3) Register with the CNR Mercantile Registry; (4) Register with Ministerio de Hacienda for NIT and VAT within 15 days; (5) Register with the municipal tax authority. A local legal representative with Salvadoran nationality or valid residency is required.

   investinelsalvador.gob.sv privacyshield.gov

4. 04Typical timeline

   Registration through the Miempresa online portal can be completed in approximately three business days for eligible entities. Full incorporation via notarized deed and CNR filing typically takes 8-10 business days; the entire operational setup (including tax registration) generally takes around four weeks.

   state.gov investinelsalvador.gob.sv

5. 05SAS, simplified entity (2023)

   The SAS (Sociedad por Acciones Simplificada), enacted December 2023 via Legislative Decree 905, can be formed by a single shareholder (natural or legal person), requires only USD $1 capital, and allows digital incorporation, significantly lowering the barrier for startups and foreign entrepreneurs.

   asamblea.gob.sv cnr.gob.sv

6. 06Profit repatriation & investor protections

   The Investment Law guarantees the unconditional right to repatriate profits, dividends, and capital without delay through the banking system. El Salvador uses the US dollar as legal tender, eliminating currency-conversion risk. A constitutional cap limits any single entity from owning more than 245 hectares of land.

   investmentpolicy.unctad.org state.gov

Timeline of decisions

1. 1 Jul 2024Decision · official
   CNR Launches 'Crea Empresa' All-in-One Business Formalization Platform

   The Centro Nacional de Registros launched the Crea Empresa virtual single window, integrating eight agencies (including Ministry of Finance, ISSS, and municipalities) so entrepreneurs can complete incorporation, NIT/NRC issuance, payroll registration, and municipal enrollment in roughly four hours. The platform is accessible globally, eliminating the need for in-person visits.

   Centro Nacional de Registros (CNR)

2. 11 Feb 2024Law · official
   Sociedad por Acciones Simplificada (SAS) Reform Enters Into Force, Decree 905

   Legislative Decree No. 905, approved 6 December 2023 and published 13 December 2023, took effect after its 60-day vacatio legis, introducing a new single-shareholder limited-liability company (SAS) with minimum capital of USD 1, fully online incorporation via CNR electronic forms and certified e-signature, and free registration fees for the first year. This is the most significant change to El Salvador's company law in decades.

   Asamblea Legislativa de El Salvador

3. 4 May 2023Law · official
   Law for Promotion of Innovation and Technological Manufacturing Signed (Decree 722)

   Approved by the Assembly on 18 April 2023 and promulgated on 4 May 2023 (in force 4 August 2023), Decree 722 grants national and foreign tech companies a 15-year blanket exemption from income, capital-gains, municipal, and import taxes for activities including software, AI, big data, cybersecurity, and hardware manufacturing, substantially reducing the cost of establishing or relocating a tech business to El Salvador.

   Asamblea Legislativa de El Salvador

4. 1 Aug 2021Decision · official
   Simple.sv Single-Window Government Portal Launched

   The Secretariat of Innovation of the Presidency launched simple.sv, a unified digital portal cataloguing and enabling online processing of over 2,000 government procedures, including all commercial-registration steps at CNR. The platform collapsed previously fragmented multi-agency queues into a single access point, directly reducing the time and cost burden of starting a business.

   Secretaría de Innovación, Presidencia de El Salvador

5. 4 Jan 2019Law · official
   Ley de Mejora Regulatoria (Decree 202) Enacted

   This landmark regulatory-reform law required all regulations to produce benefits exceeding their costs, mandated a 20% reduction in business compliance costs, established the Oficina de Mejora Regulatoria (OMR), and created a legal obligation to simplify and digitize government procedures. It provided the statutory backbone for subsequent digital-government reforms, including simple.sv, that streamlined business start-up processes.

   Oficina de Mejora Regulatoria (OMR), El Salvador

6. 1 Jan 1999Decision · official
   CNR Granted Administrative and Financial Autonomy Under Ministry of Economy

   Administrative reforms detached the Centro Nacional de Registros from direct ministerial control, granting it operational and financial autonomy as a decentralized public entity with its Executive Director appointed by the President. This restructuring improved the registry's accountability and capacity to invest in modernization initiatives.

   Centro Nacional de Registros (CNR)

7. 5 Mar 1973Law · official
   Ley de Registro de Comercio Enacted (Decree 271)

   Legislative Decree No. 271 (15 February 1973), published in the Official Gazette No. 44, Volume 238 on 5 March 1973, established the formal legal framework for the Commercial Registry, defining mandatory registration requirements for commercial enterprises, corporate incorporation deeds, and commercial acts. It remains the primary statute governing commercial registration in El Salvador and the legal basis for the CNR's Registro de Comercio.

   Registro de Comercio / eRegulations El Salvador

8. 31 Jul 1970Law · official
   Código de Comercio Enacted (Decree 671), Foundational Commercial Law

   Legislative Decree No. 671 (8 May 1970), published in the Official Gazette on 31 July 1970, established El Salvador's comprehensive commercial code governing all business entities, merchants, commercial acts, and company types including Sociedad Anónima (SA) and Sociedad de Responsabilidad Limitada (SRL). It set the durable legal architecture within which all subsequent business-formation reforms have operated.

   Asamblea Legislativa de El Salvador

Sources

1. 1.state.gov/reports/2025-investment-climate-statements/el-salvador
2. 2.state.gov/wp-content/uploads/2025/08/638719_2025-El-Salvador-Investment-Climate
3. 3.investmentpolicy.unctad.org/investment-laws/laws/66/el-salvador-investment-law
4. 4.cnr.gob.sv/sociedades-por-acciones-simplificadas/
5. 5.asamblea.gob.sv/node/13033
6. 6.asamblea.gob.sv/sites/default/files/documents/decretos/BC51E3A9-E704-4D18-B0B3-6D21C0
7. 7.investinelsalvador.gob.sv/establishing-and-operating-a-business-in-el-salvador-2/
8. 8.privacyshield.gov/ps/article?id=El-Salvador-Establishing-an-Office