El Salvador has enacted a special regime offering total tax exemptions for large-scale investment projects. This measure targets capital investments exceeding $2.0$ billion USD, drastically minimizing the fiscal burden for capital of this magnitude. 

The objective is to attract strategic investments that boost productivity, job creation, and the export of goods and services. This initiative positions El Salvador as a highly attractive fiscal destination in Central America. 

The Special Regime: criteria for eligibility 

The 'Special Regime to Encourage and Facilitate High-Value Investments in El Salvador' provides specific tax relief. It applies to new investments or transferred assets valued at $2.0$ billion USD and above, provided they are focused on core economic development activities. 

 Definition of an eligible investment 

An eligible investment is defined as any contribution (by a foreign or Salvadoran natural or legal person) intended for: 

• The creation of a new company. 

• The acquisition of property for economic purposes. 

• The purchase of productive assets (machinery, raw materials, etc.). 

The regime also contemplates scenarios where an existing company moves its operational headquarters to El Salvador. 

Core exemptions: maximizing investor return 

Key benefits for eligible investors include: 

• 100% Corporate Income Tax (CIT) Exemption: No Income Tax due on profits generated by the new high-value investment. 

• Property and Municipal Tax Exemption: Waiver of taxes on property acquisition used for economic activities, and municipal taxes on the value of assets. 

• Customs Exemption: Elimination of duties and taxes on the import of necessary machinery, equipment, and materials. 

Securing your investment strategy in LATAM 

Latin America is a dynamic, reform-driven market that requires a proven methodology and deep local expertise. If your Fund or Multinational is assessing a high-value expansion into El Salvador, detailed structuring and compliance are non-negotiable. 

At Auxadi, we offer comprehensive services in accounting, tax, payroll, transfer pricing and corporate legal services to multinationals and funds. With experience since 1979 and a presence in over 50 countries, including 26 proprietary subsidiaries, our advanced technological platform and proven methodology enable us to guarantee efficient management in compliance with local regulations.