How to open a fintech company in El Salvador

How to open a fintech company in El Salvador

If you are planning to open an international fintech company, pay attention to El Salvador. The local financial technology market is just beginning to develop, so the competition is minimal. The country needs advanced neobanks, payment systems, virtual crypto wallets, exchangers, etc. The government welcomes businesses that choose to open a fintech company in El Salvador, making registration as easy as possible.

El Salvador and financial technology

IT technology is not very popular in El Salvador, as many residents do not have access to the Internet. But the country is ideal for international businesses.

The authorities understand that digital services are the future and are actively implementing the latest developments in life. For example, in 2021 bitcoin became the official means of payment and now it's as widely accepted as the U.S. dollar. This opens up great opportunities for crypto companies engaged in the crypto exchange and offers services for its storage in virtual wallets.

There is a huge demand in El Salvador for services that make it easy to recharge a cell phone account. El Salvador's first successful project was YoVendoRecarga, and this innovative application is helping to sell recharges from all mobile operators, quickly and easily. In addition to working in the local market, the company has introduced a web platform that allows Salvadorans to top up their cell phone accounts, while they are abroad.

Another requested service is the neo banking and payment systems. The number of international transfers in El Salvador is increasing every year, and using the services of traditional banks is not very convenient because of the need to go to a branch. Payment systems solve this problem.

Advantages of El Salvador for fintech business 

The government is welcoming fintech companies, and they ensure:

  • Fast registration and licensing.
  • No restrictions on transactions in foreign currencies.
  • No need to pay income tax on bitcoin transactions.
  • No need to have a physical office.
  • Registration and licensing requirements for a financial company are not as strict as in more reputable jurisdictions.

El Salvador is not listed on blacklists, so the markets of Europe, Asia, and the United States are available. There is a big demand in the country for electronic transfers and payments, at the business and individual levels.

Fintech and laws 

There is almost no legal regulation for fintech companies. On the one hand, it allows business people to get rid of numerous bureaucratic procedures. On the other hand, it can prevent business development. However, the authorities are actively working, in an attempt to find the balance. A law on electronic commerce has already been adopted, and the activities of financial intermediaries are strictly regulated. 

Now the government is working on the creation of a legal and regulatory framework, paying particular attention to security and user data protection. Accordingly, El Salvador's fintech market will attract investors who will not be afraid to enter into remote contracts.

How to open a fintech company in El Salvador

Registration of a fintech company in El Salvador consists of the following steps:

  • Company registration - you have to act through a local lawyer, and our company can help you get one. The regulator needs to get the data of the owners and directors. There must be at least  two shareholders, and each of them must have a local tax number. No physical office is needed, but a legal address and a phone number in El Salvador are necessary.
  • Registration with Central Reserve Bank - you must provide a business plan explaining services and target market in detail. You also need to describe the technology you will use in your work.
  • Getting permission from Superintendence, the financial system regulator. It checks documents more thoroughly than the Central Bank, requiring additional security guarantees and compliance with international standards, so you need to be well prepared.
  • Opening an account at a local bank.

How to open a financial company in El Salvador

Contact IT-OFFSHORE experts to register a fintech business in El Salvador in 2023.

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