Although El Salvador is one of the smallest countries in Central America, it has a dynamic and promising economy. The government offers multiple tax incentives for local and foreign companies doing business in the country, reducing administrative burdens when setting up a business. Likewise, current social conditions position El Salvador as one of the best destinations to form an NGO.
El Salvador suffered an armed civil conflict in the 1980s that ended in 1992 after the signing of a peace agreement. Since then, a great effort has been made to rectify the political, economic and social situation in the country. Several humanitarian projects carried out by the local government and foreign organizations have financed NGOs working for social assistance and welfare.
Learn about how to form an NGO in El Salvador.
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What is an NGO?
An NGO is a non-profit organization that does not depend on any government and carries out activities of social interest. An NGO may cover religious topics or the development of cultural, artistic, sports and research purposes, or other projects, as long as the aim of these activities is no profit.
Among the main types of NGOs that can registered in El Salvador are:
- Non-Profit Foundations.
- Savings and Credit Associations.
Requirements to form an NGO in El Salvador
The requirements to form an NGO in El Salvador are mainly legal and accounting. Thus, you will need to seek support from a Notary Public and a trusted public accountant. Some of the requirements to establish an NGO in the country are:
- An established constitution agreed by a notary public is required, upon which the NGO can be formed.
- The founding members of the NGO must be appointed. There is no limit to the number of people who can be appointed as members of an NGO in El Salvador.
- Members must prepare the necessary accounting books to record the organization’s transactions.
While the requirements and procedures for obtaining NGO status in El Salvador are similar to those in local society, incorporating an NGO may pose more difficulties. This is because the legal and accounting areas must demonstrate that they meet all the requirements before the Registry of non-profit foundations and associations.
How to maintain your NGO in El Salvador
The requirements to maintain an NGO in El Salvador vary according to whether it is a church, an association or a foundation. These requirements can also change if the NGO is a local or foreign organization. However, in most cases, the basic compliances are the following:
- Member must submit a financial statement in February of each year before the Registry of non-profit foundations and associations.
- The NGO must hold an annual meeting of members.
- The non-profit organization must submit an updated members list each year before the Registry of non-profit foundations and associations.
- Maintain fiscal address.
- Monthly and annual tax declarations.
Form an NGO in El Salvador with the help of Biz Latin Hub
Forming an NGO in El Salvador is the best way to promote social and other non-profit causes in the country. El Salvador offers the facilities and benefits necessary for your NGO entity to succeed and grow.
However, the establishment of an NGO in El Salvador is a difficult and complicated process, especially for foreign executives. Not having the correct advice can be damaging and hard. At Biz Latin Hub, our team of multilingual legal and financial experts can help you and your NGO to achieve its social and economic goals for development in El Salvador. Get in touch with us today to receive personalizes assistance.
Learn more about our team and expert authors.
The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.