El Salvador wants to lure companies from the technology sector to the Central American country with tax advantages. Companies in the fields of artificial intelligence, software, cyber security, semiconductors, robotics and hardware should be exempt from taxes for 15 years, as Parliament decided on Wednesday night (local time).
The new law to promote innovation and technological production is intended to make the country of 6.5 million people a pioneer in tech development in Latin America, the adopted text said. Among other things, income tax and import duties are to be abolished for new investors.
Conservative President Nayib Bukele wants to position El Salvador as an innovative location for tech companies. In 2021, he introduced the digital currency Bitcoin in El Salvador as the first country in the world as legal tender – but with little response from the population.
In an interview with US television channel Fox News in November, Bukele spoke of his work on a new image for El Salvador, which used to be known as the most dangerous country in the world. With a controversial heavy-handed policy against the notorious youth gangs, Bukele has managed to reduce the murder rate to an all-time low. However, activists criticize serious human rights violations.