Are you interested in registering a company in El Salvador? El Salvador is one of the most attractive and interesting countries in Central America for foreign investors and entrepreneurs from all around the world, but especially Americans, since it has many free trade agreements and its national currency is the USD $.
El Salvador is one of the smallest countries in Central America, but also the one with the highest population density, with around 6 million people. This makes it the perfect destination for lots of new and growing industries. As well as businesses looking for qualified, young, and skilled professionals and technicians.
Tourism is one of the most important sources of income in the country, its amazing waterfalls, mountains, beaches, and volcanoes attract European and American tourists, who want to escape the routine and enjoy nature.
What are the steps to incorporating a business in El Salvador? Would you like to open a company in 2022? At Easyco, we give you a step-by-step guide on how you can successfully register a company in El Salvador.
Decide which type of company suits your business needs the best
Selecting the right type of company in El Salvador is the first and one of the most important steps in order to open a business. There are some advantages and disadvantages to each type. To choose one, it is necessary to think about the objectives and goals of the company, as well as the requirements.
It is also important to keep in mind what is the type of business the company is pursuing.
These are some of the most common types of companies in El Salvador:
Limited Liability Company or Sociedad de Responsabilidad Limitada (SRL): In an SRL, the partners can also be the legal representatives of the company. They have limited liability over the company’s capital or Social Participation.
Public Limited Company or Sociedad Anónima (SA): The SA is the most common type of company in El Salvador since it can be incorporated with only one shareholder, or with a Board of Directors.
Check for the company’s name availability at the Mercantile Registry
Check the availability of the desired name for your company at the online platform ‘Mi Empresa’ of the Mercantile Registry. It is important to remember that the name of the company is not required to be the same as the name of the brand, product, or service offered to the market.
However, you must choose a unique name and abbreviation.
Obtain a tax ID number or NIT for each of the shareholders
Before registering a company in El Salvador, it is important that all of the shareholders or partners have a tax ID number or NIT. This step is mandatory, is important because it must be included in the company’s bylaws. NIT stands for ‘Número de Identificación Tributaria’ in Spanish, which is a Tax Identification Number.
Draft the company’s bylaws
The bylaws are an important document required for the company incorporation process in El Salvador. In El Salvador, the company’s bylaws must be written and legalized by a public notary.
The company’s bylaws must include this information:
In order to be able to proceed with the registration process, you must pay the incorporation fees at the bank or the online platform ‘Pagadito’. The fees depend on the type of company you choose and also on the initial capital.
Submit the registration document to the Mercantile Registry
Once you’ve paid all the incorporation fees required, you can finally submit the incorporation documents to the Mercantile Registry offices in San Salvador. Once the registration is completed, the company will receive a ‘Testimonio de Escritura de Constitución Inscrita en el Registro de Comercio’, ‘Constancia de Matrícula de Empresa Inscrita’, and ‘Constancia de Registro de Locales’.
All these documents are proof of the successful registration of the company and are necessary to complete the following steps.
Obtain the company’s NIT and RNC
Within 15 days after the registration at the Mercantile Registry, the company has to be registered at the Ministry of Finance (Ministerio de Hacienda) to obtain an NIT (Número de Identificación Tributaria) and RNC (Número de Registro del Contribuyente). In order to do so, the company must submit the documentation of the shareholders, their personal information, personal NIT, as well as proof of registration at the Mercantile Registry.
Register your company books
A crucial step to complete once your company is registered in El Salvador is to register your company statutory books. This step must be done by a registered accountant and can take from 1 to 2 business days. The accounting system the company is going to use must be legalized and registered in the corresponding local agency.
Open a corporate bank account
Once the company’s books are registered, it’s time time to open a corporate bank account in El Salvador. It is important to choose the right bank according to the company’s needs. Each bank offers different types of accounts with many benefits depending on the agreement and goals of the company. It is recommended that the bank offers good pricing structures for international transactions.
Also, it is important to consider that some banks may have foreign transaction restrictions for companies that have foreign shareholders. It is crucial to take this into account as part of your company establishment strategy, as identifying a bank that has flexible policies will determine when your new company can start its operations.
Register the company at the Municipality
Register the company with the local Municipality to obtain all the licenses and permits needed in order to start operations. The documents required depend on the nature of the business but in general, you should provide information about the company, NIT and RNC numbers, and office and business address.
Get Assistance from Easyco Experts!
El Salvador is an interesting country in Central America in constant growth and a very popular destination for investors from all around the world. However, registering a company in a Latin American country can still be very challenging and may take some time. To make sure you register your company in the right way, you can get in touch with us, and our team of experts is going to make sure it complies with all Salvatorian laws.
At Easyco, we make company formation in El Salvador easy; our team of corporate experts has vast experience helping companies and individuals register their business in El Salvador, with a proven track record of success across all of our services. Easyco aims to tackle the complex company formation processes across LATAM. We make business registration easy by providing a hassle-free online company registration experience. Start your company in El Salvador today!
Easyco also provides additional services to guarantee your company’s compliance, which include: