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Doing Business in El Salvador: 2016 Country Commercial Guide for U.S

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Doing Business in El Salvador: 2016 Country Commercial Guide for U.S Doing Business in El Salvador: 2016 Country Commercial Guide for U.S. Companies INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2016. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES. Table of Contents Doing Business in El Salvador ______________________________________________________________ 4 Market Overview________________________________________________________________________ 4 Market Challenges_______________________________________________________________________ 4 Market Opportunities ____________________________________________________________________ 5 Market Entry Strategy ____________________________________________________________________ 5 Political Environment _____________________________________________________________________ 6 Political Environment ____________________________________________________________________ 6 Selling US Products & Services _____________________________________________________________ 6 Using an Agent to Sell US Products and Services _______________________________________________ 6 Establishing an Office ____________________________________________________________________ 6 Franchising_____________________________________________________________________________ 7 Direct Marketing ________________________________________________________________________ 8 Joint Ventures/Licensing __________________________________________________________________ 8 Selling to the Government ________________________________________________________________ 8 Distribution & Sales Channels ______________________________________________________________ 9 Express Delivery_________________________________________________________________________ 9 Selling Factors & Techniques______________________________________________________________ 10 eCommerce ___________________________________________________________________________ 10 Trade Promotion & Advertising ___________________________________________________________ 10 Pricing _______________________________________________________________________________ 11 Sales Service/Customer Support ___________________________________________________________ 12 Due Diligence __________________________________________________________________________ 12 Local Professional Services _______________________________________________________________ 12 Principle Business Associatio ns ____________________________________________________________ 12 Limitations on Selling US Products and Services_______________________________________________ 13 Selling U.S. Products and Services Web Resources_____________________________________________ 14 Trade Regulations, Customs, & Standards __________________________________________________ 14 Import Tariff __________________________________________________________________________ 14 Trade Barriers _________________________________________________________________________ 15 Import Requirements & Documentation ____________________________________________________ 16 Labeling/Marking Requirements___________________________________________________________ 17 U.S. Export Controls_____________________________________________________________________ 18 Temporary Entry _______________________________________________________________________ 18 Prohibited & Restricted Imports ___________________________________________________________ 19 Customs Regulations ____________________________________________________________________ 20 Trade Standards________________________________________________________________________ 21 Trade Agreements ______________________________________________________________________ 25 Trade Regulation Web Resources __________________________________________________________ 26 Investment Climate Statement ____________________________________________________________ 26 Executive Summary _____________________________________________________________________ 26 Openness to and Restrictions upon Foreign Investment ________________________________________ 28 Conversion and Transfer Policies __________________________________________________________ 32 Expropriation and Compensation __________________________________________________________ 33 Dispute Settlement _____________________________________________________________________ 33 Performance Requirements and Investment Incentives ________________________________________ 35 Protection of Property Rights _____________________________________________________________ 38 Transparency of the Regulatory System _____________________________________________________ 42 Efficient Capital Markets and Portfolio Investment ____________________________________________ 43 Competition from State-Owned Enterprises _________________________________________________ 44 Corporate Social Responsibility____________________________________________________________ 45 Political Violence _______________________________________________________________________ 46 Corruption ____________________________________________________________________________ 46 Bilateral Investment Agreements __________________________________________________________ 50 OPIC and Other Investment Insurance Programs ______________________________________________ 51 Labor ________________________________________________________________________________ 52 Foreign Trade Zones/Free Ports/Trade Facilitation ____________________________________________ 52 Foreign Direct Investment and Foreign Portfolio Investment Statistics ____________________________ 52 Contact for More Information on the Investment Climate Statement _____________________________ 54 Trade & Project Financing ________________________________________________________________ 54 Methods of Payment ____________________________________________________________________ 54 Banking Systems _______________________________________________________________________ 55 Foreign Exchange Controls _______________________________________________________________ 55 US Banks & Local Correspondent Banks _____________________________________________________ 55 Project Financing _______________________________________________________________________ 57 Financing Web Resources ________________________________________________________________ 59 Business Travel _________________________________________________________________________ 59 Business Customs ______________________________________________________________________ 59 Travel Advisory ________________________________________________________________________ 60 Visa Requirements______________________________________________________________________ 60 Currency______________________________________________________________________________ 61 Telecommunications/Electric _____________________________________________________________ 62 Transportation _________________________________________________________________________ 63 Language _____________________________________________________________________________ 63 Health _______________________________________________________________________________ 63 Local Time, Business Hours and Holidays ____________________________________________________ 64 Temporary Entry of Materials or Personal Belongings __________________________________________ 65 Travel Related Web Resources ____________________________________________________________ 65 Leading Sectors for US Exports & Investments_______________________________________________ 66 Best Prospect Overview _________________________________________________________________ 66 Agricultural Sector _________________________________________________________________________________ 66 W hea t _________________________________________________________________________________________ 68 Rice ___________________________________________________________________________________________ 68 Corn __________________________________________________________________________________________ 69 Soybeans ______________________________________________________________________________________ 70 Medical Equipment ________________________________________________________________________________ 70 Travel and Tourism ________________________________________________________________________________ 72 Automotive Parts and Service Equipment (APS) _________________________________________________________ 75 Packaging Equipment ______________________________________________________________________________ 77 Safety and Security Equipment_______________________________________________________________________ 81 Doing Business in El Salvador Market Overview The United States is El Salvador’s main trading partner. In 2015, U.S. exports to El Salvador were $3.3 billion, unchanged from 2014. El Salvador’s exports to the United States were $2.5 billion, up 4.1% from 2014. A partial list of U.S. companies with market presence includes: AES Corp, American Airlines, Arrow Electronics, Caterpillar, Citi, Colite, Cisco, Coca-Cola, Crowley, Delta, FedEx, General Electric, General Motors, John Deer, Kimberly Clark, Kraft, Microsoft, PriceSmart, United, Walmart, Xerox, 3M, as well as dozens of U.S franchises. U.S. companies exporting to El Salvador benefit from the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) with zero percent duty on U.S. consumer and industrial goods. CAFTA-DR entered into force ten years ago and has contributed to the dramatic increases in the United States’ bilateral trade with El Salvador and trade throughout the region.
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