From a statement issued by the Financial Supervisory Authority:

Recently, the Legislature approved a decree amending art. 158 of the Tax Code in order to decrease from 20% to 3% withholding tax to foreign persons or entities charged on income from investments in securities traded on the Stock Exchange in the Republic of El Salvador.

The reduction of tax for this type of operation, has been promoted by the Superintendency of the Financial System, which is leading and supporting the integration process of the securities markets at the regional level in order to stimulate operations performed through the Stock Exchange.

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El Salvador: Stock Market Trading Down

April 2016

The reduction from 20% to 3% in the tax on stock profits was not enough to prevent trading on the secondary market in the first quarter of the year falling by 94%.

In the first quarter transactions in the four markets operated by the Stock Exchange of El Salvador recorded a drop of 3% compared to the same period in 2015.

El Salvador: Less Taxes, More Stock Exchange Transactions

January 2016

Lowering the tax on transactions for non-domiciled investors from 20% to 3% had a positive effect on the performance of the stock market in 2015, which grew by 6% compared to 2014.

The forecast made by Rolando Duarte, president of the Stock Exchange of El Salvador (BVES), is that this type of investment will continue to grow, thanks to the incentive which was first implemented in 2015.

Guatemala: Stock Market is Growing

December 2015

Debt securities issued by private companies in the Guatemalan stock market increased by 20% in the last twelve months.

The sale of securities up to December 2014 increased from $239 million to $287 million, an increase of 20%, after a slight decline due to the withdrawal of 5 issues by one of the participating companies was registered in 2014.

Disincentive for Stock Market Investment in El Salvador

January 2015

It has been stated that the tax on returns generated from stock market operations has discouraged investment in the country and constitutes a disadvantage compared to neighboring markets.

This 20% tax on returns from each operation has become a competitive disadvantage for the country, as investors prefer tax free markets where they are fewer barriers to investment.