In February 2019, El Salvador held its presidential elections, with Nayib Bukele emerging as the country’s victor. In June, Nayib Bukele took office as the new President of El Salvador, a position he will hold for the next 5 years.
This was a historic moment for El Salvador, as in the last 30 years the country had only been governed by its largest political parties, Nationalist Republican Alliance (ARENA) and Farabundo Front Marti for National Liberation (FMLN). Bukele’s victory as the ‘candidate of change’ went against all speculative outcomes.
But what kind of change does this new arrival bring to the country’s commercial environment? We explore President Bukele’s intentions for business over his 5-year term.
Historical electoral victory
Nayib Bukele’s election broke 30 consecutive years of bipartisanship in El Salvador. He created his own political party, Grand Alliance for National Unity (GANA) and won 53.8% of El Salvadorans’ support – an outstanding victory over the traditional ruling political parties.
The political career of Nayib Bukele began approximately 6 years ago, first as mayor of the city of Nuevo Cuscatlán. At the end of his term he was reappointed as mayor, but this time for the capital city of San Salvador. At the end of this mayoral term, he founded the GANA political party and began his election campaign for President of El Salvador.
Bukele’s particular way of governing, thinking and making decisions, demonstrated a high degree of competence in his public official roles. This in turn gave him a high level of acceptance by the population as a Salvadoran politician.
The new President-Elect’s achievements and political prowess were picked up by Consulta Mitofsky, a Mexican company dedicated to the investigation of public opinion. In one of its most recent surveys related to public opinion of governments and the performance of presidents in countries of America and the rest of the world, Nayib Bukele was acknowledged with outstanding qualifications both in regional and world ranking. He obtained first place in both evaluations.
Bukele’s competence and high regard, along with his agenda to promote El Salvador’s economic strengths, give a positive outlook for increased business confidence and investment.
Foreign capital investment in El Salvador
In the short time that Nayib Bukele has been on the political radar, he has stated a clear intention to improve the economy of the country. He will be focused on the development of aspects such as infrastructure, connectivity through the improvement of roads, seaports and the international airport of El Salvador, and also innovation and productive efficiency. With the development of these economic components, the country’s improved conditions will facilitate a more fertile nation for investment.
In the plan to improve the economy of the country with the conditions expressed above, Bukele intends to curry favor with both local and foreign investors. On drawing new business into the country, he said (translated from Spanish): “To international investors looking where to invest in the region: this is the best country in the region to invest. We have set the table; we have everything necessary for our country to grow.” Bukele will work to ensure that there is qualified local labor in the country to serve new business opportunities, developing national capability to work and learn efficiently.
First Competitive Advantage Forum of Nations
In the ‘First Competitive Advantage Forum of Nations’ meeting held in June 2019, Bukele engaged with the Mexican businessman Carlos Slim and a group of Salvadoran entrepreneurs. In this Forum, various topics of general and commercial interest were addressed both for business groups and for the Salvadoran population. The topics included national security, and the development of investment projects focused on improving access to resources such as water and energy.
Several proposals were also put forward with a direct focus on improving the national economic landscape. Among those proposals, the following were included:
- reducing procedural requirements in government processes that seriously delay national and foreign investments. The objective is that everything can and should be more expeditious without delaying the procedures and processes of interested investors
- technology should be more integrated in business, since it is a fundamental tool in these times for the economic development of any country.
Business opportunities in El Salvador
Bukele’s business acumen and public service experience are expected to serve him and the business community well during his Presidency. This newly-minted President is now at the helm of an economy focussed on improving its ease of doing business.
Recent reforms to several systems and regulations aim to boost business activity through:
- improving access to credit for movable property assets
- automated, electronic systems for filing and paying taxes
- bolstering customs capabilities to ease the flow of imports and exports
- implementing new software programs to manage electricity planning and outages
- reducing requirements to obtain construction permits
- greater cooperation and information sharing between public institutions for commercial activities.
El Salvador’s diverse sectors and commercial incentives offer myriad opportunities for business. The economy is driven by powerful clothing, coffee, sugar cane, and electrical equipment industries. The country welcomes progress to improve productivity in these areas, and also seeks entrepreneurs with creative solutions to use technology to support these and other emerging industries.
No better time to invest than the present
Presidential election outcomes always forthcoming represent changes in political, social and economic spheres of a country. Nayib Bukele’s surprise victory undoubtedly holds change in store of El Salvadorans and their business environment. Bukele is considered someone who sees an innovative future, and shows promise for the economy of the country. Therefore, it’s an advantageous time to invest in El Salvador and capitalize on favorable changes that are coming under the new Presidency.
We can help
At Biz Latin Hub, we can enable your move into El Salvador. Our group of professional experts offer a range of legal, accounting and back-office services to guide your through the necessary market entry, company formation and corporate compliance processes.
Reach out to us for personalized advice: contact Diego Ciudad Real, our Country Coordinator and Senior Lawyer in El Salvador through [email protected]. Let us help set your business up for success.