El Salvador

Starting a Business in

El Salvador

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in El Salvador. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 185 economies. The most recent round of data collection was completed in June 2012.

Compare El Salvador to 184 other economies.

YearNew business densityNumber of new limited liability companies
2011 0.461,754

  • Standardized Company

  • Legal Form: Private Limited Liability Company
  • Paid in Minimum Capital Requirement: USD 100
  • City: San Salvador

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No. Procedure Time to Complete Associated Costs
1 Deposit the legally required initial capital in a Salvadoran bank and obtain deposit evidence or certified check.

At least 5% of the initial start-up capital has to be shown and evidenced to a Salvadoran public notary. This capital has to be shown through a certified check payable to the name of the company, for the amount for which the company will initiate its operations. The check will be deposited in the company’s new account once the deed is duly registered at the Registry of Commerce (that is, the company has been established). The bank that opens the account in name of the new corporation will require a certified copy of the articles of association and documents of the company’s legal representative.
1 day (less than an hour) nominal fee
2 Check the uniqueness of the company name in the Registry of Commerce

According to Article 101 of the Code of Commerce, to select the company name, a company representative must go to the Registry of Commerce and verify that the name chosen has not been taken by another company. Since April, 2008, entrepreneurs can check the uniqueness of the company name at the Registry of Commerce online. Further information.
1 day no charge
3 Notarize the articles of association

To establish a corporation, Article 22 and Article 194 of the Code of Commerce require fulfillment of the following requirements: - Name and personal data of company shareholders (two shareholders minimum).- Commercial name.- Term, domicile, and company social purpose. - Capital stock.- Corporate administration shall be delegated either to a board of directors or a sole administrator. (In El Salvador no mercantile or labor limitations exist regarding the administrators of a capital stock company.)- External and fiscal auditors. The cost to notarize the articles of incorporation ranges between USD 500 to USD 1,000.
2 days Between $500 and $1000
4 Register with the Registry of Commerce and publication and legalization of books

The Registry of Commerce Act establishes fees for the registration of companies. Article 63 establishes different fees for the company's business licence according to the company's initial capital, from $2,000 to $57,150 the fee is $91.43; from $57,151 to $114,286 the fee is $137.14; from $114,287 to $228,572 the fee is $228.57; and, if the company´s initial capital exceeds $228,572, the company has to pay $11.43 for every $100,000 or fraction of it, but cannot exceed $11,428.57. In the same Act, Article 66 establishes the fees for the registration of the incorporated company, which is $0.57 for every $100.00 USD, up to a maximum of $11,428.57 USD. Article 71 of the same Act establishes the fee for the Deposit of the Initial Balance Sheet; and Article 70 establishes the fee for the Legalization of Books.
3 days $0.57 for every $114.28 + US$ 2.3 (for copies) + 17.14 (Balance Deposit) + US$ 137.14 (business license) + 0.1$*100*3 ( legalization of books) + 34.29 (local registration)
5 Accounting system

The external auditor of the company authorizes the accounting procedures and the internal books, which include the general shareholders meeting book, the board of directors book, the registry of shareholders book, and the increase or decrease of capital stock book. Article 40 of the Code of Commerce states that the books can be legalized either by the external auditor or by the Register of Commerce.
10 days USD450
* 6 Register employees with one of the pension administrator funds (Administradora de Fondos de Pensiones).


3 days (simultaneous with previous procedure) no charge
* 7 Register the company for tax at the Mayor’s Office

Upon registering at the Registry of Commerce, each founder must pay a tax (Vialidad A) of about USD 10.
1 day (simultaneous with previous procedure) USD 10
* 8 Make a company seal

Because no authorization is required, it is customary for companies to make a seal. A company seal can be made in 1 or 2 days at a cost of about USD 15–USD 30, depending on the size and design selected by the client.
2 days (simultaneous with previous procedure) USD 15
* Takes place simultaneously with another procedure.
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