The Central American Group: Hello. Welcome to another installation of the Central American Group’s series of podcasts. In these conversations, with people both inside and outside of the Central American Group, we discuss things that are relevant in terms of doing business in the region. Today Jacques Couwels is with us. Jacques is with a company called Gold Service, which is headquartered in San Salvador, El Salvador. Today we will have a conversation on opening a business in El Salvador. How are you doing today Jacques?
Jacques Couwels: Everything is fine. Thank you very much for inviting me to be here.
The Central American Group: We are very pleased that you decided to join us to lend some information about opening a business in El Salvador. Could you tell us first a little bit about yourself and a little bit about the company that you represent?
Jacques Couwels: With pleasure. I am a business administrator with a master’s degree in finance. I have ten years of experience advising foreign investors that have an interest in opening a business in El Salvador. I deal mostly with regulatory matters.
Gold Service is a law firm that specializes in company incorporation, intellectual property services, and corporate and legal advice. It has more than twenty-three years of experience in the market.
The Central American Group: So, you know everything that a foreigner needs to do when opening a business in El Salvador. To start with the first question, is it possible for a foreigner to open a company in El Salvador?
Jacques Couwels: Yes. It is possible for a foreigner to in El Salvador. There is no restriction for either a natural person or entities.
The Central American Group: Are there any industries that are restricted or is everything open to foreign capital?
Jacques Couwels: Everything is open to foreign capital.
The Central American Group: When opening a business in El Salvador, is it necessary to reside in the country?
Jacques Couwels: No. It is not necessary to reside in El Salvador. A foreign shareholder will require only to request a Salvadoran taxpayer ID.
The Central American Group: Ok. That seems fairly cut and dry. Is it necessary to travel to the country when opening a business in El Salvador? Do you need to have a physical presence there?
Jacques Couwels: It is not necessary. If the shareholders cannot come to El Salvador to sign the articles of incorporation, then they can grant a power of attorney to do it. Also, it is possible to incorporate a company and then transfer the share certificates.
The Central American Group: What is the minimum registered capital that is required to incorporate a Limited Liability Company (LLC) in El Salvador?
Jacques Couwels: Currently, when opening a business in El Salvador, the minimum capital requirement to establish an LLC is US $2,000.00. (The US Dollar is the currency used in El Salvador).
The Central American Group: OK. I have always had this question in my mind. Could you clear it up for me? What is a SA and an SRL, and what is the difference between them?
Jacques Couwels: Well, when opening a business in El Salvador, we have SA and also a variable which is SA de CV which means “Sociedad Anonima de Capital Variable.” This is the equivalent of a limited liability company in the United States. It is a capital company and has the option of varying capital during the life of the company.
The Central American Group: When customers of your and investors are opening a business in El Salvador, is it necessary to pay the registered capital amount at the moment of incorporation?
Jacques Couwels: No. They must pay at least five percent of the capital and the rest within one year.
The Central American Group: How many shareholders are required when opening a business in El Salvador?
Jacques Couwels: In El Salvador, it is mandatory to have at least two shareholders.
The Central American Group: OK. What is the process to incorporate an LLC in terms of the time that it takes? How long does it take when one is opening a business in El Salvador?
Jacques Couwels: To register the articles of incorporation and to register at the Registry of Commerce takes approximately five working days.
The Central American Group: OK. You’ve spent the last ten years working with foreigners that are opening a business in El Salvador. If someone were to ask you today what would be the most prominent areas of the Salvadoran economy to invest in? What would be your advice?
Jacques Couwels: Well, El Salvador has many sectors that promise good opportunities for foreign investors. We have the textile and apparel industry, the offshore business services sector, tourism, aeronautics, agroindustry, and light manufacturing. One of the most prominent sectors for me is that of tourism. I think that it has good potential that we need to develop and there is a good opportunity for investors here.
The Central American Group: Well, I know that you have beautiful beaches there. I’ve had the pleasure of visiting one of them. I saw those nice waves that you have down in El Salvador for the surfers.
Jacques Couwels: Yes, we have nice beaches with warm water that we have to develop.
The Central American Group: I know that there are probably further questions that come to the mind of the listeners of this podcast about opening a business in El Salvador. If they want to contact you, is there an email address that they can use to be able to ask you questions directly?
Jacques Couwels: Of course, the email that they can send any questions that they have about opening a business in El Salvador is email@example.com.
The Central American Group: Could you please share the URL of your company’s website with the listeners? That will be appreciated as well.
Jacques Couwels: Yes. The website is www.goldservice.com.sv.
The Central American Group: Well, it has been a pleasure to talk to you, Jacques. I wish you good luck and, hopefully, you will see a lot of people from outside of El Salvador that are interested in opening a business in El Salvador. Also, hopefully, they will bring more investments to your country.
Jacques Couwels: Again, thank you very much for inviting me to be here. It has been a pleasure.
The Central American Group: Thank you and have a great day.
Jacques Couwels: You too.
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