El Salvador is one of the most crypto-friendly countries on earth, being the first country to adopt Bitcoin as legal tender. It is therefore an ideal place to incorporate an online crypto exchange, wallet or payment processor.
- Fast incorporation of company – approximately 1 week
- Fast registration with the regulator – approximately 1 month to be listed on the official Central Bank website as a regulated crypto entity
- No tax on income earned outside El Salvador. No capital gains tax on Bitcoin.
- Can do business and open bank accounts worldwide. El Salvador is a well-recognized jurisdiction in the crypto community so banks and liquidity providers are familiar with the structure.
- Access to the government-owned Chivo wallet for buying and selling Bitcoin free of charge
- No physical office required in the country
Note: El Salvador regulated crypto companies have been onboarded by banks in USA and Bahamas. The Bahamas option includes a bolt-on access to C2B SEPA transactions in Europe. All bank accounts are subject to approval depending on the business model.
Permitted Activities for El Salvador Crypto Companies
A company may choose to register under only one of the following activities, or all of them.
- Custody services
- Digital Wallet
- Payment Processors
- Other activities (to be fully described and must be Bitcoin-related)
Tip: There is no charge to select as many additional business areas as you wish, so some clients are tempted to select as many business areas as possible. However, a business and compliance plan will be required at a later stage that specifically covers the risks associated with each activity. Therefore the more activities you choose, the more complex and costly your compliance requirements will be.
Requirements and Process
Register an El Salvador Company (5-10 days)
Requirements: Registered office address and local lawyer as resident agent. Passport copies and regular KYC on directors or shareholders. Minimum 2 shareholders required – may be companies or individuals, resident anywhere in the world.
Directors of the company can be resident anywhere in the world, but for practical purposes we highly recommend at least one local director (El Salvador resident) who will be able to represent the company before the El Salvador regulators. Alternatively this could be accomplished via Power of Attorney.
Note: each shareholder in an El Salvador company must have a local tax number. We will need the shareholders to sign powers of attorney so we can request this tax number on their behalf. In the case of corporate shareholders, certified and apostilled copies of the corporate documents are required. All documents that are not in Spanish will need to be translated. We can arrange this process for you in El Salvador.
Our fee for stage 1: USD 4,800 for incorporation including:
- obtaining tax numbers for the shareholders and the new company
- Initial audited balance sheet showing share capital
Professional Director or Shareholder: on request
Translations: at cost
Includes first year Registered Office service and an El Salvador telephone number renewable at USD 2,000 per year.
Registration with Central Reserve Bank (up to 1 month)
At this stage we need to present an outline or executive summary type business plan in Spanish. We will assist you with this based on a call that can be completed during Stage 1. The main focus of the plan is:
- Detailed description of services to be provided
- Target market: ie B2B or B2C, local or international, etc
- Description of the technology to be used for delivering services
The plan does not need to be extremely detailed at this stage – 1-2 pages are enough – but the more detailed your plan the better of course.
Note: It is not necessary to register as a regulated entity (and therefore registration of your company will be refused) if there is not a Bitcoin financial services element in your business plan. This is because Bitcoin is the national currency of El Salvador and is directly within the remit of the Central Reserve Bank. Simply paying or being paid for other goods or services in Bitcoin is not a regulated activity.
At the end of this stage you will be listed on the Central Bank’s website as a registered Bitcoin provider.
Our fee for Stage 2: USD 9,000
Detailed Compliance Plans (3-6 weeks)
The Superintendence is the government entity that acts as the “hands on” regulator for the El Salvador Financial System. They take over only after Stage 2 is Completed. Depending on the complexity of your business, you can be given a certain amount of time to develop procedures, policies etc but of course this must be done before you can start operating your crypto business.
The requirements are:
- Detailed operating and compliance procedures in line with international standards
- A suitably-qualified compliance officer who will also serve as the liaison between the company and the regulators, therefore must be Spanish speaking and resident in El Salvador. This service can be outsourced.
The Superintendence will scrutinise your business in much greater detail than the Central Bank. You will require detailed, written policies covering all aspects of compliance such as AML/CFT, security policies, disaster recovery policies etc. You will also need to present a manual for your accounting system.
The requirements generally follow international norms so if you already have a crypto or regulated financial business in another country it might be sufficient to translate to Spanish and “tropicalize” the policies to reference El Salvador’s legislation.
Another option is to adopt boilerplate templates if your business model is very standard and straightforward. Your compliance officer will review and tailor templates to your needs.
The slowest, most complicated and expensive route will be to design a custom compliance policy from scratch. This will be necessary for most businesses where the parent company doesn’t already have such policies in place.
Note: We have both local and international compliance teams who can assist you in preparing the perfect compliance policy for your international crypto business as well as providing an outsourced compliance officer service if required. The fees involved will vary depending on the work involved. This should be discussed in a detailed online meeting.
Bank Account Opening (3-6 weeks)
Of course, you should initiate discussions with banks at the earliest possible opportunity to discuss your business model and banking requirements, but it will not be possible to finalise and formalise a bank account application package for your El Salvador crypto company until you have the full package of documents.
Some banks or payment processors may be willing to onboard you after Stage 2 is completed, but most banks will also insist on reviewing all your policies and procedures. This also depends on your banking requirements.
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non-resident corporate accounts.
with seasoned professionals on international banking and where it is best to open non-resident corporate accounts.
Banking for El Salvador Crypto Companies
Most, but not all, El Salvador crypto companies will need fiat on and off ramps, or the ability to receive payments from their customers who wish to buy crypto or deposit fiat funds into custody or wallets.
El Salvador has established itself as a well-known crypto friendly jurisdiction, therefore it is possible to open accounts in well-known international banks and liquidity providers that handle crypto exchange business.
Some clients do not even need bank accounts as they do all business in crypto. Others may find a Chivo Wallet sufficient. A Chivo Wallet can be opened by any El Salvador company. It is the government owned and backed wallet that allows you to hold both BTC and USD and conduct free unlimited exchanges between the two official currencies. You can also make payments to other Chivo Wallets and to any Bitcoin address via the Bitcoin blockchain, and you can withdraw small amounts of USD cash via Chivo ATMs located in El Salvador and the USA. Larger USD withdrawals can be made only to local El Salvador bank accounts. However the possibility to withdraw unlimited funds in Bitcoin makes this a suitable option for some businesses to avoid the need for a bank account.
The banking need of every business is different, and banking for crypto companies is a highly specialised niche. We are pleased to discuss your requirements in more detail.
Our fees for opening a Chivo Wallet are USD 2,000. Fees for opening local and international bank accounts for El Salvador crypto companies start from USD 10,000.
Please feel free to contact us for additional information.