El Salvador approves 15-year tax breaks for tech companies

The Salvadoran Legislative Assembly approved a bill granting tax incentives to local tech-sector companies for 15 years. Reuters reports.

The incentives apply to software and application developers, manufacturers of computing and communications equipment, as well as companies in the field of artificial intelligence.

The document calls for the elimination of taxes on profits, property, imports, and capital gains. At the end of March, Salvadoran President Nayib Bukele announced a bill, which he sent to Congress for consideration.

“Tax exemption promotes the development of the country’s technology sector and manufacturing, which will help the emergence of a new industry,” said legislator Rodrigo Ayala.

Earlier, Bukele published a vintage poster calling for people to relocate to El Salvador. It lists the benefits of the country, including a low crime rate, the absence of mass killings and looting, and superb beaches, weather, and coffee.

As reported in September 2021, Salvadoran authorities recognised Bitcoin as legal tender. The International Monetary Fund criticised the decision and recommended stripping the cryptocurrency of that status.

In July 2022, the country’s finance minister Alejandro Zelaya said that the introduction of digital gold expanded access to financial services for a largely unbanked population, attracted tourists and investments.