Could This Country be the Next Singapore?
You may be wondering why anyone would want to get residency in El Salvador. The country had a reputation as one of the most dangerous in the world until recently. But El Salvador is changing. For the better.
It was the first country in the world to have Bitcoin as legal tender alongside the US dollar. El Salvador replaced its own currency with the US dollar in 2001. Now it has eliminated all taxes on technology companies to attract businesses and entrepreneurs to the country.
El Salvador Has Clamped Down on Crime
Previously known as the murder capital of the world, the government of Nayib Bukele has clamped down on gang members who were responsible for most of the violence in the country. El Salvador is now one of the safest countries in the region.
High-profile Bitcoin investor Max Keiser has moved to the country. He is encouraging 10,000 people to move there too. There was some talk of El Salvador introducing a citizenship-by-investment scheme where you could buy a passport for Bitcoin, but so far, nothing has been announced.
Location and Climate
El Salvador is located in Central America, south of Guatemala and west of Honduras. It has a long coastline along the Pacific Ocean. It’s home to some great beaches for surfing. The country has a population of 6,300,000. The capital city is San Salvador.
El Salvador will be Tax-Free for Most Foreigners.
For crypto investors who want to get residency in El Salvador, there’s no tax on crypto profits. For everyone else, you’ll only pay tax on any income generated in the country. Overseas income is tax-free. There’s no capital gains tax or inheritance tax.
How to Get Residency in El Salvador
There are several ways to get residency in El Salvador. There are ways to get residency by family connections and by employment in the country. Most ex-pats, though, will want to go down either the pensionado or rentista route to get residency in El Salvador.
The Pensionista or pensioner category is available to anyone who has regular income from a pension. The amount you need is based on the minimum wage in El Salvador. In order to get residency in El Salvador using your pension, you’ll need to be earning three times the minimum wage. This amounts to just over $1,000 per month. You can get a temporary residence for either one or two years in this category. It can be renewed indefinitely. You’ll also need to show a clean criminal record from your home country.
The Rentista category for residency in El Salvador is similar to the pensionado category. Rentista residents are not allowed to work in the country, so they must prove they have regular income to sustain themselves. You’ll have to prove you have income of 4 times the minimum wage to qualify in this category. That can be from any legitimate source. The amount you need will be just under $1,500 per month. There’s a small application fee for both categories of residency.
There’s also a residency by investment option. Under this category, you can set up a business in El Salvador. Provided you inject a small amount of capital, this will also qualify you for residency in El Salvador.
Residency in El Salvador can be processed more quickly than in some other Central American countries. It’s usually possible to get everything completed in a few weeks.
All residence permits are classed as temporary residence permits for the first three years. After three years, you can apply for a permanent residence permit. After you’ve lived in the country for five years, you can become a citizen of El Salvador.
El Salvador can offer a low cost of living and a great lifestyle. It has friendly people, magnificent beaches, and good food. It’s probably still for the more adventurous, but things are changing quickly. Property is being developed for foreigners, and crypto enthusiasts are moving there due to the country’s enthusiastic adoption of Bitcoin. Recently, President, Nayib Bukele abolished all taxes on technology, saying:
“Next week, I’ll be sending a bill to Congress to eliminate all taxes (income, property, capital gains, and import tariffs) on technology innovations, such as software programming, coding, apps, and AI development, as well as computing and communications hardware manufacturing.”
If things continue to go in this direction the future for El Salvador looks bright. Anyone moving to El Salvador now may be getting in on the ground floor.