Below is a high-level overview of the procedures involved in registering a company in El Salvador.
The steps required
The following are the necessary steps required in order to register a business:
Choose a legal framework for your business
The first thing to do when registering a company here is to settle on a legal framework for your enterprise. Sole proprietorships, partnerships, and corporations are the most frequent types of legal entities for conducting business.
Select a company name
Step two is to come up with a name for your firm that isn’t being used by any other companies in El Salvador. To register a business here, you must first obtain a taxpayer identification number, or Numero de Identificación Tributaria (NIT). The El Salvadorian Internal Revenue Agency (Servicio de Impuestos Internos) is where you may get this information.
Register with the commercial registry
In the next step, you’ll need to register your business with the Registro de Comercio (Commercial Registry). Your NIT, articles of incorporation, and other relevant legal documents will need to be submitted.
Depending on the specifics of your firm, you may need to contact additional El Salvadorian government organizations for extra licenses and permits. If you want to start a food business, for instance, you’ll need a license from the Ministry of Health.
Open a bank account
Get a corporate bank account set up as soon as possible after incorporating your firm. This will allow you to deal with money and pay bills.
Register with the social security agency
Next, you need to register your business with the Instituto Salvadoreo del Seguro Social (ISSS), El Salvador’s social security agency. As a result, you’ll be able to give your workers access to social security benefits.
While registering a corporation here, keep in mind that specific requirements and procedures may differ depending on the type of business and other considerations. To make sure you’re in accordance with all local laws and regulations, it’s smart to go to a lawyer or business expert.
El Salvador’s corporation registration fee
Company formation in El Salvador can vary in price depending on a number of criteria such as the company’s size, the complexity of the services needed, and the business structure selected. Costs associated with setting up shop in this country are roughly estimated to run between $500 and $1,500. Though the final tally could be more or less depending on a number of factors.
While establishing a business here, you could have to pay for things like:
- Costs associated with hiring a lawyer to create and file the required paperwork.
- Costs associated with registering a business with the government.
- The cost of getting a tax ID (NIT).
- Expenses incurred for licenses and permissions.
- Opening fees for a bank account.
- Unpredictable costs like notary or translation fees.
Please note that the above costs are only an estimate and may change based on your individual specifications and chosen services. Consult a local attorney or business counselor to acquire a more precise estimate of the cost of registering a company here.
Benefits of setting up a business in El Salvador
Among the many benefits of registering a company in this country are:
- It is simple and may be accomplished in a short amount of time.
- It has a friendly climate and a secure political situation to attract foreign investment.
- Its prime location in Central America facilitates its exports to neighboring countries.
- The educated and trained workforce is a major draw for international businesses.
- The cheap cost of doing business makes the country an attractive option for companies.
- The economy has been booming giving the country a prime location for attracting foreign direct investment.
- El Salvador’s enterprises benefit from privileged access to the markets of the United States and Mexico.
In brief, companies intending to grow in Central America may find it advantageous to register in this country.
