El Salvador has updated its guidelines for opening investment accounts, for both foreign and Salvadoran investors. The Government aims to facilitate transactions for companies to encourage foreign direct investment (FDI) and enhance financial stability.
FDI in El Salvador is recovering pre-pandemic levels, approaching the highest value in the last decade: $889 million in 2017, according to SECMCA data. However, foreign investment was $759.73 million (2.23% of GDP) in 2023.
What do the guidelines include?
The new guidelines issued by the Attorney General’s Office outline the requirements for different customer categories (A, B, or C). Depending on the category assigned, specific documents are required to open investment accounts. Categories B and C must provide tax returns, proof of income, and financial statements. Meanwhile, legal entities in category A (low risk) must submit the articles of incorporation and the beneficial owners, among other documents.
Additionaly, to improve a bank customer’s category, a government-issued certificate of assistance is required. This certificate can be obtained through INVEST, the Secretariat of Trade and Investment of the Presidency, or the Ministry of Economy. Private entities can also qualify by establishing a resident representative in El Salvador or registering with the Financial Investigation Unit (FIU).
These measures aim to ensure more transparent and secure access to financial services, establishing clearer guidelines to protect investments.
Government oversight
Risk analysis for individuals and legal entities focuses on three key aspects: the country of origin, the economic activity to be developed, and the volume of projected transactions.
In conclusion, authorities assessed the country’s legal framework, and the effectiveness of the anti-money laundering and counter-terrorism financing system to ensure the availability of adequate tools to combat these practices.
Treasury management in El Salvador is gaining importance due to the numerous measures taken regarding banks and bank accounts. Auxadi is a trusted provider of accounting, payroll and tax services, operating in more than 50 countries with 22 subsidiaries and extensive expertise in Latin America.
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