EL SALVADOR Law and Practice Contributed by: Héctor Torres, Annette Herrera, Daniel Leiva and Raquel Santos, Torres Legal
7.3 Restrictions on Foreign Investments In El Salvador, there are no major restrictions on for- eign investment. Currently, foreign direct investment is encouraged, and there are various incentives to attract investors. However, certain sectors, such as telecommunications and energy, have specific regula- tions that may limit foreign investment in these areas. Regarding investment filings, a formal filing is not typically mandatory, so the filing is not suspensory. However, a notification to the Ministry of Economy is sometimes advised, where the investment can pro- ceed while the notification is processed. It is manda- tory to register formally to obtain a tax identification number. 7.4 National Security Review/Export Control In El Salvador, there is no formal or legal national security review process specifically for acquisitions, as seen in some other jurisdictions. Although there are some AML processes and guidelines to follow regard- ing transactions, they are not specifically related to national security concerns, instead relating more to internal money laundering agreements. Nevertheless, certain sectors may be subject to additional scrutiny, particularly those involving critical infrastructure or national security concerns. As for restrictions or considerations based on the investor’s geographic origin, there are generally no specific prohibitions. However, political relations and international agreements may limit certain commercial relations. 7.5 Antitrust Regulations In El Salvador, the basic antitrust filing requirements for takeover offers and business combinations are regulated by competition law. The legal framework has established thresholds for transactions based on the size of the companies involved, which is in turn related to their total assets or annual sales. A notification to the Superintendency of Competition is required prior to the merger or acquisition, including detailed information about the companies involved, the nature of the transaction and potential impacts on market competition; the Superintendency will review the transaction to assess its effects on competition before finally approving or denying the transaction.
encompassing various aspects of technology, finance and banking, as well as consumer and data protec- tion. Key regulatory bodies involved in this process include the Superintendency of the Financial System, the Central Reserve Bank ( Banco Central de Reserva de El Salvador BCR) and the National Commission of Digital Assets of El Salvador, among others. The entire pro- cess of obtaining the necessary permits and approv- als usually takes around four to six weeks, assuming all requirements are met. For companies looking to operate on the stock exchange of El Salvador, there are also specific regu- lations that must be followed. In August 2025 El Sal- vador enacted the Law on Investment Banks, creat- ing a specific regime for institutions providing asset management, corporate-finance M&A advisory and project-finance services, and expressly permitting operations involving digital assets. The law defines “sophisticated investors” as persons or entities with at least USD250,000 in liquid assets. In October 2025, the PAIF Law was passed, enabling private investment vehicles for sophisticated investors, supervised by the SSF and the BCR but outside traditional banking rules. PAIF vehicles may invest in technology, infra- structure, renewables and digital assets, expanding local capital formation options relevant to tech M&A. These frameworks align with El Salvador’s broader efforts to attract foreign investors and enhance capital market depth in the technology sector. These frameworks create new local funding sources and potential buyers in tech transactions, allowing sophisticated investors to co-invest or acquire tech- nology companies through regulated vehicles. As a result, transaction structuring and investor-eligibility checks have become part of standard M&A due dili- gence. 7.2 Primary Securities Market Regulators The primary securities market regulator for M&A trans- actions in El Salvador is the Superintendency of the Securities Market. For investment bank activities and PAIF vehicles, supervision primarily involves the SSF and the BCR.
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