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El Salvador 2019

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El Salvador 2019 El Salvador 2019 1 Table of Contents Doing Business in El Salvador __________________________________________ 5 Market Overview ______________________________________________________________ 5 Market Challenges ____________________________________________________________ 6 Market Opportunities __________________________________________________________ 7 Market Entry Strategy _________________________________________________________ 7 Franchising __________________________________________________________________ 8 Opening an Office ____________________________________________________________ 8 Political Environment __________________________________________________ 9 Selling US Products & Services ________________________________________ 10 Using an Agent to Sell US Products and Services _________________________________ 10 Establishing an Office ________________________________________________________ 10 Franchising _________________________________________________________________ 11 Direct Marketing _____________________________________________________________ 12 Joint Ventures/Licensing _____________________________________________________ 12 Selling to the Government ____________________________________________________ 12 Distribution & Sales Channels _________________________________________________ 13 Express Delivery ____________________________________________________________ 13 Selling Factors & Techniques __________________________________________________ 13 eCommerce _________________________________________________________________ 14 Trade Promotion & Advertising ________________________________________________ 14 Pricing _____________________________________________________________________ 15 Sales Service/Customer Support _______________________________________________ 15 Protecting Intellectual Property ________________________________________________ 16 IP Resources _______________________________________________________________ 17 Due Diligence _______________________________________________________________ 18 Local Professional Services ___________________________________________________ 18 Principal Business Associations _______________________________________________ 18 Limitations on Selling US Products and Services _________________________________ 19 Web Resources _____________________________________________________________ 19 Leading Sectors for US Exports & Investments ___________________________ 20 Agricultural Sector ___________________________________________________________ 20 Automotive Parts and Service Equipment (APS) __________________________________ 24 Energy _____________________________________________________________________ 28 2 Medical Equipment __________________________________________________________ 31 Packaging Equipment ________________________________________________________ 35 Plastics ____________________________________________________________________ 39 Safety and Security Equipment ________________________________________________ 40 Travel and Tourism __________________________________________________________ 43 U.S. Commercial Service Contact Information ______________________________________ 45 Customs, Regulations & Standards _____________________________________ 45 Trade Barriers _______________________________________________________________ 45 Import Tariff ________________________________________________________________ 46 Import Requirements & Documentation _________________________________________ 47 Labeling/Marking Requirements _______________________________________________ 48 U.S. Export Controls _________________________________________________________ 49 Temporary Entry ____________________________________________________________ 49 Prohibited & Restricted Imports ________________________________________________ 51 Customs Regulations ________________________________________________________ 52 Standards for Trade __________________________________________________________ 53 Trade Agreements ___________________________________________________________ 56 Licensing Requirements for Professional Services ________________________________ 58 Web Resources _____________________________________________________________ 58 Investment Climate Statement _________________________________________ 59 Executive Summary __________________________________________________________ 59 Openness To, and Restrictions Upon, Foreign Investment _________________________ 60 Bilateral Investment Agreements and Taxation Treaties ____________________________ 63 Legal Regime _______________________________________________________________ 64 Industrial Policies ___________________________________________________________ 67 Protection of Property Rights __________________________________________________ 69 Intellectual Property Rights ___________________________________________________ 70 Financial Sector _____________________________________________________________ 72 State-Owned Enterprises _____________________________________________________ 73 Responsible Business Conduct ________________________________________________ 74 Corruption __________________________________________________________________ 75 Political and Security Environment _____________________________________________ 77 Labor Policies and Practices __________________________________________________ 77 OPIC and Other Investment Insurance Program __________________________________ 78 Foreign Direct Investment and Foreign Portfolio Investment Statistics _______________ 78 3 Contact for More Information __________________________________________________ 80 Trade & Project Financing _____________________________________________ 81 Methods of Payment _________________________________________________________ 81 Banking Systems ____________________________________________________________ 81 Foreign Exchange Controls ___________________________________________________ 82 US Banks & Local Correspondent Banks ________________________________________ 82 Project Financing ____________________________________________________________ 84 Financing Web Resources ____________________________________________________ 85 Business Travel _____________________________________________________ 87 Business Customs ___________________________________________________________ 87 Travel Advisory _____________________________________________________________ 87 Safety and Security Information ________________________________________________ 87 Visa Requirements ___________________________________________________________ 88 Currency ___________________________________________________________________ 89 Telecommunications/Electronics _______________________________________________ 90 Transportation ______________________________________________________________ 91 Language __________________________________________________________________ 91 Health _____________________________________________________________________ 91 Local Time, Business Hours and Holidays _______________________________________ 92 Temporary Entry of Materials or Personal Belongings _____________________________ 93 Travel Related Web Resources ________________________________________________ 93 INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2019. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES. Legal Disclaimer: The US&FCS makes every reasonable effort to ensure the accuracy and completeness of the information in this Guide, a resource for U.S. businesses to use in the exercise of their business judgment. U.S. businesses should conduct their own due diligence before relying on this information. When utilizing the information provided, the U.S. business is responsible for complying with all applicable laws and regulations of the United States, including the U.S. Foreign Corrupt Practices Act (FCPA). References and links to third-parties and their content are provided for the convenience of readers, and are not exhaustive lists of such resources. The US&FCS is not responsible for the availability of any third-party or its content whether found on an external site or otherwise; nor does US&FCS endorse the third-parties or endorse, warrant, or guarantee the products, services, or information described or offered in any third-party content. Please be aware that when following a link to an external site, you are then subject to the privacy and security policies and protections of the new site. 4 Doing Business in El Salvador Market Overview The United States is El Salvador’s main trading partner. In 2018, U.S. exports to El Salvador reached $3.4 billion, $400 million more than 2017. El Salvador’s exports to the United States were $2.5 billion, in 2018, unchanged since 2016. Services trade to El Salvador also remained consistent at $1.1 billion. A partial list of U.S. companies with market presence includes: Abbott Laboratories, AES Corp, American Airlines, AT&T Inc., AVX Corporation Caterpillar, Citibank, Hanesbrands, Cisco, Delta, FedEx, General Electric, General Motors, John Deer, Kimberly Clark, Microsoft, PriceSmart, SBA Communications, United, Walmart, Xerox, 3M, and many others as well as dozens of U.S franchises. There are more than 345 companies in El Salvador with a presence, most as subsidiaries of U.S. based companies. U.S. companies exporting to El Salvador benefit from the Central America-Dominican Republic Free Trade Agreement (CAFTA-DR) with zero percent duties on U.S. consumer and industrial goods. CAFTA-DR entered into force 12
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