EL SALVADOR Law and Practice Contributed by: Héctor Torres, Annette Herrera, Daniel Leiva and Raquel Santos, Torres Legal
7.2 Primary Securities Market Regulators The primary securities market regulator for M&A transactions in El Salvador is the Superintend- ency of the Securities Market. 7.3 Restrictions on Foreign Investments In El Salvador, there are no major restrictions on foreign investment. Currently, foreign direct investment is encouraged, and there are vari- ous incentives to attract investors. However, cer- tain sectors, such as telecommunications and energy, have specific regulations that may limit foreign investment in these areas. Regarding investment filings, a formal filing is not typically mandatory, so the filing is not sus- pensory. However, a notification to the Ministry of Economy is sometimes advised, where the investment can proceed while the notification is processed. It is mandatory 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 acqui- sitions, as seen in some other jurisdictions. Although there are some AML processes and guidelines to follow regarding transactions, they are not specifically related to national security concerns, instead relating more to internal mon- ey laundering agreements. Nevertheless, certain sectors may be subject to additional scrutiny, particularly those involving critical infrastructure or national security con- cerns. As for restrictions or considerations based on the investor’s geographic origin, there are gener- ally 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 require- ments for takeover offers and business combi- nations are regulated by competition law. The legal framework has established thresholds for transactions based on the size of the compa- nies 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. Reasons for denying a transac- tion may vary; however, they tend to be related to the impact that the merger or acquisition may have on the market. 7.6 Labour Law Regulations In El Salvador, labour regulations largely adhere to international standards and are based on employee rights, job stability and contract conti- nuity. Currently, there is no specific legal require- ment for the formation of a works council in the context of acquisitions; therefore, there is no binding obligation for boards of directors. 7.7 Currency Control/Central Bank Approval El Salvador does not have currency control reg- ulations, as it uses the US dollar as its official currency. This dollarisation means that there are no restrictions on currency exchange or capital flows related to M&A transactions. Also, El Sal- vador has recently adopted Bitcoin as another official currency.
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