The incorporation of a company in El Salvador is a formal contract entered into by two or more individuals who agree to pool their assets or industries with the purpose of sharing the profits that arise from the businesses they intend to undertake.

In El Salvador, companies are a legal entity used to operate a business, with a legal personality at the forefront. According to our associate in charge of the Corporate Department at Torres Legal, Rebeca Galdámez, the process of incorporating a company is straightforward with the right guidance.

“The process of establishing a company in El Salvador is really quick and easy to do. You just need to take certain legal considerations into account; for example, there are no sole proprietorships in El Salvador,” she explains.

Our specialist explains that creating a company requires at least 2 shareholders, and the minimum required capital is $2,000.00, with 5% of the capital ($100) to be paid at the time of incorporation through a certified check from a Salvadoran bank in the name of the new company.

“If at the time the partners cannot contribute the $2,000.00, the law allows up to a year to complete that contribution. This allows us to facilitate incorporation without losing the liquidity of our business,” Galdámez adds.

After defining the company’s name, its shareholders, and capital, Galdámez indicates that you must apply for the Tax Identification Number (NIT), define its bylaws, and its social purpose related to its primary activity.

The future company must obtain municipal clearance at the municipality where the company is domiciled. Once these documents are collected, interested parties must seek the services of a notary for the preparation of the Public Deed of Incorporation of the Company.

With the deed prepared, the shareholders will initiate the process of registration and legalization of the company in the Commerce Registry of the National Registry Center (CNR). Shareholders must pay the fees and be vigilant for possible observations.

At the same time, the company has to begin the process of registering in the Commerce Registry. This determines the ownership of the company and its ability to engage in commercial activities.

Galdámez also recommends having a formal accounting system in place to facilitate the filing and payment of taxes. Additionally, you will need to create invoice books to maintain a record and register with the Social Security system and pension fund administrators.

For inquiries, you can contact us through our social media or at our Corporate Department offices.