The Importance of Avoiding a Trial

The conflict between the Salvadoran government and the Italian company Enel has deteriorated the business climate and the country's image as an investment destination.

Tuesday, January 27, 2015

"The unwillingness of the government to enforce arbitration awards," breach of these and "the politicization of the conflict Between El Salvador and the investor" are some factors that the Salvadoran Foundation for Economic and Social Development (Fusades) identifies as a major cause of the loss of confidence of foreign investors in El Salvador.

According to a report by Fusades "... It is a more difficult challenge to try to rebuild trust than to maintain it. Breaching the Shareholders Agreement and refusing to abide by the arbitration award caused the government 'close the doors' regarding invites to new partners for strategic projects: such as geothermal power generation. "

El reports "... The Foundation recommends that 'they must establish an investment promotion policy that guarantees a stable business climate and safe one to invest in. They also believe that what is needed is a "firm conviction and awareness in the country that every action taken will always have a consequence . That is why it is important that the State provide legal certainty-through actions, laws, rulings and policies."

More on this topic

El Salvador: Increasing Insecurity and Decaying Business Climate

February 2016

Warnings have been given over increased insecurity, stagnation in the fight against corruption, and little capacity for Government dialogue in the second half of 2015.

The adoption of higher taxes without a dialogue, the consequences for the country of the increase in homicides from 10 to 18 a day in 2015, and stagnation in the fight against corruption, were highlighted in the evaluation made by the Salvadoran Foundation for Economic and Social Development ( Fusades) regarding the legal and institutional framework of the country during the second half of 2015.

Without Private Investment There Are No Jobs

May 2015

The lack of a clear political course charted by the government of El Salvador is preventing the business sector from getting involved in large investment projects, affecting job creation, which in the first months of the year grew by only 1.1%.

The low levels of domestic and foreign investment in recent years in El Salvador is taking a toll on the economic level, given the limited possibilities for the business sector to create more and better jobs.

Warning of Upcoming Crisis in El Salvador

April 2015

The sum of growing state debt, increasing insecurity and lack of government actions aimed at recovering real production, is creating a perfect storm.

"... The Salvadoran Foundation for Economic and Social Development (FUSADES) said the country could be entering into a severe financial political and social crisis, if a stop is not put to the uncontrollable debt levels, and if the engines of economic growth keep being smothered.

Costa Rica Enacts Law on International Arbitration

May 2011

The law enhances competitiveness and promotes a business climate in the country, says the government.

In order to strengthen legal certainty in the country and provide greater choices for enterprises to resolve trade disputes, the Government has approved the Law on International Arbitration, which shall take effect upon publication in the official newspaper La Gaceta.

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Aguilar Castillo Love is a leading international law firm with offices in Central America and Ecuador.
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