By: Paola Lambert
On June 5, 2023, the Law for the Promotion of Innovation and Technological Manufacturing entered into force, being issued in Decree No. 25 of June 2, 2023, its respective Regulations effective as of June 10, 2023. This law It is added to the regulatory repertoire that the Government of El Salvador has been approving and promoting related to technology and investment facilitation in the country, providing, among others, tax benefits of up to 15 years to natural and legal persons in the manufacturing industry. technological and related
Said law brings with it a series of important benefits to the country, promoting new and innovative investments in the technological field, not only for investments by national companies, but also covers foreign companies that develop a new investment in innovation projects or manufacturing within the national territory. thus promoting economic diversification through the creation of new projects, creating an increasingly important demand for specialized talent in the field and, therefore, the creation of new specialized jobs and advisors who are up to date with new trends and businesses. technological.
The tax incentives, together with the regulatory environment related to technology that has come into force in recent years, generate legal certainty and will encourage investment in areas that El Salvador could not compete before. This regulatory package is expected to attract global companies, local and regional investors with capacity and experience in innovation and technological improvement, generating products and services that can be offered globally from its headquarters in El Salvador.
An important characteristic of the law is that it is of a special nature, prevailing over any other legal instrument that contradicts it, assuming to provide security and transparency in investments. The above, combined with the set of laws such as the Law to Facilitate Financial Inclusion, Bitcoin Law, Electronic Signature Law, Electronic Commerce Law and the Law on the Issuance of Digital Assets, among others, gives a competitive advantage to El Salvador in attracting of specialized foreign investment, positioning the country as a technological Hub in the Central American region.