El Salvador Property Ownership

Property rights are moderately protected in El Salvador. According to the U.S. Department of Commerce, "investors have found that seeking resolution of problems through the slow-moving domestic legal system can be costly and unproductive. The course of some cases has shown that the legal system is subject to manipulation by private interests, and final rulings are sometimes not enforced." The Economist Intelligence Unit reports that two of the "main constraints on growth in foreign investment are high crime levels and an inefficient judiciary…."

Among the rights afforded to U.S. investors are due process protections and the right to receive a fair market value for property in the event of an expropriation. Investor rights will be backed by an effective, impartial procedure for dispute settlement that is fully transparent. Submissions to dispute panels and panel hearings will be open to the public, and interested parties will have the opportunity to submit their views.
There are some restrictions on land ownership; foreign persons may purchase land, up to 245 hectares, only if there is a reciprocal arrangement with their home country.

El Salvador Trade Associations

EL SALVADOR is a member of the international association of realtors, with offices in over 40 countries and two regional European associations.

Camara Salvadorena de Bienes Raices (CSBR).
Edificio Granplaza, Local 504. Blvd. Hipodromo,
Col. San Benito. San Salvador
EL SALVADOR
Tel: 503-245-1133; Fax: 503-245-1130
E-mail: venture@cibercon.com.sv
Website: www.fecepac.org
President: Lic. Carlos Guillermo Ve ntura Similarly, FIABCI has membership offices in El Salvador, which were established in 1995 as part of the Central American Chamber of Commerce or FECEPAC – ACCBR.

El Salvador Land Rights

El Salvador maintains an open foreign investment climate. Under the 1999 Investment Law, foreign investors receive equal treatment. Foreign investment has been a central component of El Salvador's privatization program, according to the U.S. Department of Commerce. "Foreign investors may obtain credit in the local financial market under the same conditions as local investors." The International Monetary Fund reports that the government limits foreign direct investment in commerce, industry, certain services, and fishing; investments in railroads, piers, and canals require government approval. According to El Salvador's 1983 constitution, the government may expropriate private property for reasons of public utility or social interest, and indemnification can take place either before or after the fact. There are no recent cases of expropriation. In 1980, there was a major rural/agricultural land reform that established that no single natural or legal person could own more than 245 hectares (605 acres) of land.

El Salvador Real Estate Info Summary

Property Taxes:

Changes in the taxation system began in 1993 when the former patrimonial tax on personal and business property, including real property, and the 5-percent sales tax were both abolished and replaced by a 13-percent sales tax. These taxes, and an ongoing income tax, are all collected by the central government.