El Salvador, located in the heart of the Americas between North and South America, is an export-oriented free-market economy. The country extends from a coastal plain to a volcanic upland in the interior.

El Salvador has evolved over the last two decades. Today, it offers its business partners economic stability, openness to global trade and investment & an attractive business climate

El Salvador is a lower middle income country with a rate of extreme poverty in 2012 of around 2.5 percent using the international poverty line of $1.25/day (or around 15 percent using $2.5/day). Using the national poverty lines the rates of extreme and overall poverty stood in 2012 at 11 and 41 respectively. The rate of overall poverty has been persistently high since 2000, when it stood at 45 percent . Moreover, the food, fuel, and global economic crisis of 2008–09 increased poverty temporarily. The reduction has been more pronounced for extreme poverty, which stood at 19 percent in 2000. This has been thanks to a steeper poverty reduction in rural areas, where extreme poverty was concentrated and where the effects of the global economic crises were not felt as strongly as in urban areas.

Reasons to invest

1.Strategic location

In short times (2-5 flight hours) the main cities of North and South America can be accessed from El Salvador International Airport, which is the regional hub of the Avianca airline. Freight transport, for its part, is also favoured by the country’s proximity to the main maritime routes.

2.Law of Industrial and Marketing Free Zones 

Regulates and offers tax incentives to companies that export goods -national or foreign- that use free zones and warehouses for inward processing (DPA).

Free zones are industrial parks in which it is allowed to enter goods that are considered as if they were not in the national customs territory, with respect to import and export taxes. On the other hand, for companies that for technical reasons justify that they cannot be located in free zones, they can request that their establishment be declared a deposit for inward processing (DPA) and enjoy the incentives of this law.

3. Preferential access to international markets

El Salvador is a platform for exporting to large markets thanks to the wide network of trade agreements it has with 42 countries in America, Europe and Asia, which represents a potential market of nearly 1,200 million consumers. The free trade agreements negotiated by El Salvador provide flexible rules of origin, as well as elimination and important reductions in import tariffs.

5. Monetary Stability

One of the most important policies implemented to open the country’s economy to world trade and investment is the adoption of the U.S. dollar as legal tender in 2001. As a result, El Salvador has achieved single-digit inflation rates for over a decade, remaining below the average of the rest of the Latin American countries. Likewise, the elimination of foreign exchange risk has lowered real interest rates and provided greater certainty for investors. Companies that have invested in El Salvador benefit from lower financial and transaction costs

4.Competitive costs

El Salvador is one of the most attractive countries in the region to establish and operate a business. Over the last few years, the Financial Times’ fDi Intelligence magazine has rated El Salvador among the most cost effective countries in the region.

  Criteria evaluated: cost of registering a property, costs for obtaining building permits, tax rate (as a percentage of profits), office costs, minimum wage, room cost in a four-star hotel, and export costs.

6.Productive workforce

El Salvador’s workforce is made up of 3.0 million people, of which 55% are under 40 years of age. This allows us to offer a highly productive workforce capable of developing new skills in a short time, which is qualified as suitable for manufacturing, agribusiness and service provision activities. There is also a growing population with higher education that can meet the challenges of a modern and globalized economy.

Sector opportunities 

1.Specialized textiles and clothing.

Vertically integrated industry with easy access to markets 

The textile and clothing sector is one of the main engines for the development of El Salvador, with a value chain that has been consolidating and integrating towards products with higher added value.

El Salvador is positioned as the most attractive textile and clothing center to invest in Latin America due to its proximity to large consumer markets in North and South America, its integrated value chain, and highly productive, cost-competitive human capital. It thus provides good logistics and infrastructure, speed of response and a dollarized economy.

2. Remote business services

Excellent nearshore outsourcing opportunity  for the United States, Canada   and Latin America.

El Salvador is one of the most profitable platforms in Central America for the provision of quality outsourcing services. El Salvador has a modern and advanced telecommunications infrastructure through which multi-region service solutions can be delivered in multi-delivery models.

3.Tourism El Salvador

The ideal destination for tourism, medical tourism and business El Salvador has a wide hotel offer, excellent gastronomic and shopping offer, as well as outstanding road connectivity and proximity between multiple tourist attractions. The country’s natural wealth and the Tourism Law with its attractive tax incentives, as well as the determined support of the Government of El Salvador, have made the sector one of the most thriving in the country. In the medical tourism niche, El Salvador is the ideal destination for the establishment of specialized hospitals and clinics aimed at treating patients residing in the United States and Canada.

4. Agroindustry. Easy access to large markets

 El Salvador offers an ideal location for food production and processing, as well as serving specific market niches that go beyond traditional agricultural industries.

• Suitable climatic conditions (temperature and altitude) and soils suitable for the development of the cultivation of fruits and ornamental plants

5. Light Manufacturing. Platform to export to large markets

El Salvador offers investment opportunities for companies that manufacture medical devices, footwear, auto parts and electronic components that target the markets of the United States, Canada, Mexico, Central America and the Caribbean.

Advantages offered by El Salvador

• Strategic location in the centre of the Americas to be used as a logistics platform

• Free trade agreements with the main markets.

6. Health services

Investment in health services infrastructure for medical tourism

 El Salvador offers geographic proximity for quality health services at a competitive cost, making it an ideal destination for the establishment of hospitals, specialized clinics, medical spas and resort hospitals for the care of medical tourism.

7. Logistics and infrastructure networks

With a convenient geographic location in the western hemisphere, El Salvador seeks to capitalize on its potential as a regional logistics hub , based on its commercial openness, maritime connectivity, attractive tax incentives system, excellent air and land connectivity, and by being ready to serve large ships with the newest container terminal on the Pacific coast of Central America (Puerto La Unión) with extensive areas available for value-added activities.

Investment opportunities in logistics:

Ports / airports / supply chains in areas of influence

• Logistics areas
• Bulk terminals
• Container terminals (operation)
• Industrial parks
• Airport logistics centre
• Railway transport
• Regional cabotage
• Truck cargo transportation

Value added services / logistics

• Silos
• Tanks
• Wineries
• Distribution centres
• Integration services
• Assemble