El Salvador company structures: at a glance

Hawksford

Last updated: 17 September 2026 |

Americas | El Salvador

Options for registering companies in El Salvador

El Salvador is a Central American republic that uses the United States dollar as legal tender. Its corporate framework supports traditional commercial companies, simplified companies and free-zone entities under the commercial, tax and special-regime laws.

Commercial registrations are administered by the Registro de Comercio of the Centro Nacional de Registros (CNR). Company registration, tax registration and employer-related registrations are also integrated through the CreaEmpresa business registration platform.

The entity options differ across legal separation, taxation, capital requirements and control frameworks, affecting how foreign investors structure and operate their presence.

El Salvador offers international investors the following legal structures for establishing a local presence:

Limited liability company (Sociedad de responsabilidad limitada)

A limited liability company is a Salvadoran commercial company with separate legal personality and capital divided into non-share participations.

A limited liability company has separate legal personality after registration with the Registro de Comercio. Unlike a collective partnership, liability is linked to capital participations.
This structure is commonly used for private trading, service and operating businesses in El Salvador. It is governed by the Código de Comercio as a sociedad de personas.
The Código de Comercio states that SRL capital cannot be below US$2,000. Participations must be valued at US$1 or a whole-number multiple of US$1.
An SRL is administered by one or more managers who may be partners or third parties.
Legal persons calculate income tax on taxable income at 25% under the Ley de Impuesto sobre la Renta. Annual tax filing applies through the Ministerio de Hacienda.
The company must register through the Registro de Comercio and maintain statutory records. CreaEmpresa links commercial registration with NIT, VAT and employer registrations.
In contrast to a free zone company, an SRL does not receive special-regime income tax exemption by default. Regulated activities require separate approval from the competent authority.

Partnership (Sociedad en nombre colectivo, S.N.C.)

A general partnership is a Salvadoran personal company formed under a business name where partners bear unlimited and joint liability to third parties.

A partnership is a sociedad de personas formed under a razón social in the Código de Comercio. Unlike an SRL, partners have unlimited and joint liability to third parties.
This structure is commonly used where the personal status of the partners is central to the business. The Código de Comercio treats partner identity as essential for personal companies.
The deed must state the capital amount and each partner’s contribution.
Administration is handled by one or more administrators, who may be partners or third parties.
The partnership is a legal person for commercial purposes and falls under legal-person tax rules. The income tax law states a 25% rate for legal persons on taxable income.
The partnership must register its deed with the Registro de Comercio and keep required merchant records. Commercial registration determines personality and representative powers.
Unlike an SRL, a partnership does not limit partner liability toward third parties. It is unsuitable where investors require liability separation through capital participations.

Simplified joint stock company (Sociedad por acciones simplificada, S.A.S.)

A simplified joint stock company is a flexible Salvadoran share company that can be incorporated by one shareholder through CNR forms.

A SAS is a simplified share company registered through the Registro de Comercio. Unlike an SRL, it can be formed by a single shareholder and uses shares.
This structure is commonly used for formalising micro, small and medium-sized businesses. CNR states the model supports digital incorporation and simplified registration.
CNR states that a SAS can be incorporated with capital from US$1. The Código de Comercio requires shares to be in multiples of US$1.
A SAS has a legal representative who must be a natural person designated in its constitutive document. The law states the representative need not remain at the company domicile.
A SAS is subject to legal-person income tax rules unless a special regime applies. The income tax law states a 25% rate for legal persons on taxable income.
The SAS must use Registro de Comercio forms and provide capital, shareholder and administration details. Financial statements are deposited under the rules in the Código de Comercio.
In contrast to a free zone company, a SAS does not automatically receive special tax exemption. Activities requiring sector licences remain subject to the relevant regulator.

Free zone company

A free zone company is an authorised business operating under El Salvador’s industrial and commercial free-zone regime for approved activities.

A free zone company operates under a special statutory regime after authorisation. Unlike an ordinary SRL or SAS, its tax treatment depends on approved free-zone activity.
This structure is commonly used for authorised industrial, commercial or processing activities in free zones. The law regulates zones and inward-processing deposits.
The law lists fixed-asset investment of at least US$500,000 within two years as one alternative qualification route.
The Ministry of Economy issues the relevant authorisation for free-zone status.
Authorised users receive total income tax exemption on approved activity for the statutory period. Partial exemptions apply after the initial exemption period under the law.
Free zone users remain subject to authorisation conditions and customs and tax controls. Failure to meet the selected qualification requirement can lead to revocation.
Unlike an ordinary commercial company, a free zone company must operate within its authorised activity and regime. Activities outside that scope are not covered by the exemption.

Comparison of the common types of companies in El Salvador

Key information	LLC (Sociedad de Responsabilidad Limitada)	Partnership (Sociedad en Nombre Colectivo - S.N.C.)	Simplified JSC (Sociedad de Acciones Simplificadas)	Free zone company
Commonly used for	All purposes	Professional services	Start ups	Manufacturing / export trading
Minimum capitalisation	US$2,000	US$1	US$1	US$500,000 (within 2 years)
Limited liability	Yes	No	Yes	Yes
Time to incorporate	4 weeks	5 weeks	3 weeks	7 weeks
Tax rate (CIT)	30%	30%	30%	0% if certain conditions are met
Resident management	Yes	Yes	Yes	Yes
Cost indication Includes Hawksford’s Fee	US$6,000	US$6,000	US$6,000	US$10,000

Any estimates published on Hawksford’s website set out indicative fees for entity formation, tax/VAT registration, a registered office address and estimated government filing fees. They do not include fees for additional services that may be required such as resident directors, licences for regulated activities, bank account setup, initial capital or other third-party charges. Actual setup costs can vary widely depending on the entity type, business activities, and structure. Terms and conditions apply. For a detailed, tailored quote, please contact us.

Updated on 17 September 2026

Information verified against Registro de Comercio of the Centro Nacional de Registros (CNR), CreaEmpresa, the Código de Comercio, the Ministerio de Hacienda, the Ley de Impuesto sobre la Renta and the Ley de Zonas Francas Industriales y de Comercialización.