Published On: Tue, Oct 9th, 2018

El Salvador is Open for Business

As the world becomes more globalized, countries across Latin America are seeing growth and investment from overseas businesses. Indeed, brands from McDonald’s to Apple to Amazon are spending more investing in factories, marketing campaigns, and growth across the Americas, and El Salvador is one country that is benefitting from such expansions and investments.

Whether you’re local to the country or you’re in the United Kingdom, United States, Australia or indeed anywhere else in the world, you should consider El Salvador as a key market for your company. Below, we’ve put together just some of the reasons why El Salvador is open for business, and why you should take note as soon as you can to capitalize on the opportunities.

photo/ StartupStockPhotos

An introduction to El Salvador

Officially the smallest and most densely populated country in Central America, El Salvador is on the rise. Bordered by countries such as Honduras and Guatemala, it’s home to more than 6.3 million people. With an economy dominated by agriculture, El Salvador has been hard at work on diversifying its economy to rely less on the exporting of goods such as coffee and instead has turned its attention to the manufacturing sector. The country is currently ranked twelfth on the Human Development Index but struggles with poverty and high levels of crime.

The country’s economy is growing, reaching GDP growth of more than 2 percent last year, which is, in part, thanks to its agriculture and manufacturing industries. The GDP growth is significantly higher than it was between 2010 and 2016 when it was then ranked as the slowest growing region in Central America, a sign that things are changing for business and citizens.

Despite its size, El Salvador has the fourth largest economy in Central America and offers an exciting opportunity for businesses wanting to expand into a new territory. As is the case in all aspects of business, being first and getting ahead of the competition is key to success, so if you are considering an expansion into El Salvador, then you should act fast and make moves today.

Why El Salvador is so attractive to entrenepenurs

Although the country has struggled to grow and continues to fight poverty and inequality, it is still an attractive option for entrepreneurs both within the territory, and for overseas businesses that are ready to expand and enter new markets. Indeed, the country is home to millions of workers, and despite having a relatively low unemployment rate, you’ll be able to find staffers to suit the needs of your business, whether you’re looking for factory workers or university-educated talent.

Salaries within the country are relatively low, and GDP per capita stands at just $4,776. Great strides have been made to reduce exploitation within the country, but its minimum wage laws mean that the country is still the perfect option for manufacturing and agricultural businesses that require employees to do manual labor. And because the country’s average salary is so low, you can enter the territory and pay slightly above the going rate to find new talent overnight.

Businesses in the United States also benefit from the fact that the country is part of the Central America Dominican Republic Free Trade Agreement. This means that there are no duties to pay on US consumer and industrial goods, making it easy and affordable to expand and invest.

A rise in Latin American expansions

In the past couple of years, there has been a huge rise in the number of businesses expanding in the country, in part thanks to organizations and experts offering help to those looking for company incorporation El Salvador based. Back-end support firms are available across Latin America, offering assistance with everything from recruitment to legalities to human resources for business expansion, which makes it easy for businesses to expand in the territory without having to spend months getting to grips with the market, its economy and its people.

Rather than having to invest thousands of dollars into a new business entity, companies can now effectively hand over responsibilities to other businesses, and enjoy the benefits such as high-quality candidates, localized marketing campaigns and more, but finding the right talent to help in your expansion is critical. Settling for the first company or employee on your list simply won’t cut it, so do your research and understand the market before you get started.

El Salvador success stories

Whilst there has been a significant rise in the number of overseas investors choosing El Salvador to take their businesses to the next level, there has also been an increase in entrepreneurship and commerce within the country thanks, in part, to the internet, more affordable technology and the increase in accessible banking within the territory. SimplerTourist, for example, is a platform that’s focused on boosting local tourism, encouraging people from across Latin America and indeed other parts of the world to visit the country and spend money.

Other popular startups include IMANRG, a clean energy technology firm that has a patented methodology and a device capable of transforming magnetic energy into mechanical energy, Café Internacional, on the other hand, is an initiative encouraging people to form relationships with coffee farmers, where buyers can order samples and make offers on lots, as well as pay farmers and request imports and exports from one simple hub. Vertex Studio is another success story within the territory, with offices in both El Salvador and now San Francisco, employing a team of people and using real-time engines to create stunning 3D games and VR experiences.

As more businesses move into the region and bring with them top talent, we’ll no doubt see a huge rise in the number of homegrown businesses. Figures of self-employment within the country are as high as 52% for women and 36% for men but it’s important to note that citizens that fall into this category do not necessarily run their own businesses within the country.

Whether you’re native to El Salvador or you’re simply considering the country as an option as part of your global expansion plans, don’t delay. The country is enjoying growth and changes to its economy and consumer behaviors, so act fast if you want to grab a slice of the action.

Author: Oliver Houlcroft is an Australian Marketing and Content Production leader who has been living in Latin America for 3+ years. After finishing his studies in Sydney, Australia in 2014, he decided to leave his country and travel. While passing through Latin America as a tourist, he decided to stay on a more permanent basis. Oliver has spent time working, travelling and living in Mexico, Argentina, Peru, Bolivia, Guatemala and Colombia, giving him a great insight into the Latin America region as a whole. Oliver has a particular interest in the Latin American business environment, specifically relating to regional trade agreements, attractive investment opportunities for foreigners, immigration and visas, regional relationships, thriving business sectors and local/national elections and politics. Oliver is currently based in Bogota, Colombia where he spends his time working, travelling and improving his Spanish skills.

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