Migration Rules to Be Adjusted Amid an Increase in Foreign Investment in El Salvador

Legislation Pending in El Salvador Will Loosen Temporary Residency Requirements & Streamline Rules for Loss of Naturalization

With the recent increase in foreign investment in El Salvador , the country continues to shift from a historic pattern of attending to Salvadorans living abroad to welcoming new immigrants into the country. Under proposed legislation before Congress, El Salvador could change migration requirements related to physical presence for temporary residents, as well as stipulations on the loss of nationality by Salvadorans who naturalized abroad.

Review of Current Migration Requirements by Legislative Commission

During sessions with the Legislative Commission on Salvadorans Abroad, Legislation, and Government (Comisión Legislativa sobre Salvadoreños en el Extranjero, Legislación y Gobierno), lawmakers were presented with updated information regarding migratory movement in and out of El Salvador by the General Directorate of Migration and Immigration.

Loosening Temporary Residence Requirement

The requirement for temporary residents to continuously reside in the country for nine months could change to allow physical presence for 90 days per year, either consecutively or accumulated.

As it stands under the current law:

• An individual must physically reside in El Salvador for nine months out of the year.

Under the proposed amendment:

• Lawmakers are seeking to require 90 days of physical presence, either consecutive or accumulated within one year.

Why the Change?

Deputy Eleonora de Marroquín, Head of the Foreign Nationals Division, provided greater clarity regarding who would benefit from such a reform:

“This type of reform takes into consideration that today’s society includes people who invest in businesses here while living abroad or who work in multiple countries,” said De Marroquín.

Fewer Restrictions on Losing Days Due to Travel

Individuals who travel frequently but for short periods would not lose their legal status.

Investors would be able to travel to oversee business operations in neighboring countries without jeopardizing their legal status in El Salvador

No longer needing to apply for residency renewal while in the country

Failure to be physically present for 90 total days within one year would still impact an individual’s residency status. However, force majeure reasons for not meeting the physical presence requirements would be taken into consideration should those who are legally established in the country forego the minimum days and apply for an exception with justification to the migration authorities.

“In recent years, El Salvador has not been exempt from the phenomenon of emigration. Now we are experiencing the arrival of foreign residents who are investors,” commented several deputies who spoke during the commission session.

The commission was told El Salvador was built with an emigration mindset. However, due to increased public security and certain government policies, there has been an inverse effect, and foreigners are coming to El Salvador, increasing the foreign investment in El Salvador.

New Foundation for Loss of Nationality

Deputies were also told that the conditions under which Salvadorans by naturalization can lose their nationality needed to be better outlined and defined. The current foundation for losing nationality is if an individual:

• Resides in their country of origin for more than two consecutive years
• Lives abroad for more than five years without authorization from the government
• Is given a definitive sentence for an intentional serious crime

“The typification of serious intentional crimes will have to be reviewed so that there are no legal contradictions within the Migration Law,” added De Marroquín.

Revision of Article 179

Another adjustment made within the proposal was to Article 179 to better align the vocabulary used throughout the Special Law on Migration and Immigration.

Salvadoran Children Born Abroad

Included in the proposed changes was added protection for children born abroad to naturalized or naturalized Salvadorans. Currently, the law states that children under the age of 18 can acquire Salvadoran nationality by way of the parent(s) submitting an application to the migration authorities. What this reform does is provide these children with the same standing as other nationals within the household.

El Salvador recognizes children as rights-holders from birth. This recognition is reinforced through Article 90, Article 94 of the Constitution and Law “Crecer Juntos” which regulates the system for the protection of children, adolescents, and young people.

Articles to be Amended as Part of Immigration Reform

If passed, Article 49, Article 119, Article 164 and Article 279 of the Special Law on Migration and Immigration would be amended.

Commission Approves Increase in Foreign Investment in El Salvador Reform

The commission has given a favorable opinion to the proposal. The issue is now awaiting a plenary session to be placed on the Legislative Assembly’s schedule.

Foreign Investment in El Salvador Driving Desire for Migration Reform

The reform was attributed to a series of reasons driving the desire to welcome more foreign investors into the country. These factors include:

• Public policies that reinforce public security have made the country safer for Salvadorans and newcomers.
• Business-friendly reforms allowing for the increase in foreign investment in El Salvador.
• Progressive measures around cryptocurrency.
• Investment in the country’s infrastructure.

Types of Foreign Investors Coming to El Salvador

Data shared with the commission from immigration authorities indicates there has been a shift in the type of foreigners seeking residency in the country. They include:

• Venture Capital Investors.
• Digital Nomads and Remote Workers.
• Regional Investors.
• High Net Worth Individuals

Flexibility in rules surrounding physical presence and automatic renewal of legal status will provide foreign investors with much-needed legal certainty. In turn, this should help propel the swell of foreign investment in El Salvador.

What the Reform Does and Doesn’t Do

Lawmakers were sure to note that immigration reform alone will not attract investors to the country. However, by providing clear rules and expectations, it will create an environment where entrepreneurs feel welcome.