Doing Business in El Salvador

Syllabus of the Subject: Doing Business in El Salvador.

1. Introduction to the Republic of El Salvador (Central America)
2. Salvadoran Economy
3. International Trade of El Salvador
4. Foreign Direct Investment (FDI) in El Salvador
5. Doing Business in San Salvador
6. Case Study: Business Opportunities in El Salvador
   1. Services
   2. Textiles
   3. Agribusiness
   4. Tourism
   5. Electronics
   6. Medical Devices
7. Case Study: Salvadoran Companies
   1. SYKES
   2. Pettenati
   3. Calvo Group
   4. Aeroman
   5. Decameron
8. Access to the Salvadoran Market
9. Business Plan for Salvador

The objectives of the subject “Foreign Trade and Doing Business in the Republic of El Salvador” are the following:

1. To analyse the Salvadoran economy and foreign trade
2. To evaluate the business opportunities in El Salvador
3. To explore Salvadoran trade relations with the country of the student
4. To know Salvadoran Free Trade Agreements (FTAs)
5. To examine the profile of Salvadoran Companies
6. To develop a business plan for the Salvadoran Market

Sample of the subject - Doing Business in El Salvador:

Description of the Subject (Online Learning): Foreign Trade and Business in El Salvador

The Republic of El Salvador.

1. The Republic of El Salvador occupies an area of 21,041 square kilometres in North of Central America
2. The Salvadoran population is 6.3 million people, the highest population density in Latin America
3. The borders of El Salvador are Guatemala, Honduras, and Nicaragua
4. Salvadoran Capital: San Salvador
5. The official language is Spanish and the Mayan languages
6. El Salvador gained the independence from Spain in 1821
7. Abolition of Slavery in El Salvador: 1824

Main religion in El Salvador is Christianity (6.7 million people).

1. Catholics: 5.3 million people

El Salvador belongs to the Christian Civilisation - Latin American area

Economy of El Salvador.

1. El Salvador is situated in a strategic position in Central America, which gives it advantaged access to the largest Latin American and the United States markets
2. Main sectors contributing to the economic growth were the agriculture and services (telecommunications, transport, and banking)
3. Salvadoran gross domestic product: 22,114 million dollars
4. The recent global economic crisis has led to slower growth in the Salvadoran economy, but the impact has been less than in other Central American Countries
5. The Salvadoran currency is the US Dollar (USD)
6. Since 2001, the Republic of El Salvador is a dollarised economy (absence of currency risk), the economy of El Salvador presented the lowest rates of inflation and interest rate in Latin America
7. The Republic of El Salvador ranks as the fourth most transparent country in Latin America (Transparency International)
8. The rating agency Moody has been giving “investment grade” to El Salvador since 1997.
9. The Macroeconomics stability in El Salvador allowed closing with a 4.7% economic growth rate of the gross domestic product, higher than the 4.2% of the previous year
10. The inflation in El Salvador has decreased since the 90 until reaching a rate of 4.9%, the lowest rate at the regional level
11. This is a result of the reforms that the Government of El Salvador implemented in 1989, with the goal of stabilising an economy to attract the foreign direct investment: deregulation of fuels, fiscal reforms, elimination of international trade barriers, strengthening of public finances, reforms to the financial system and reforms to monetary integration policy, which stipulates that the United States dollar is the official currency of El Salvador since the law came into effect
12. The aforementioned has led El Salvador to obtain the recognition from prestigious international entities that have distinguished El Salvador for its economic stability, ease of doing business, and competitiveness, among other aspects

Case Study: Salvadoran Companies.

1. In 2001, after establishing an excellent business relationship with the Investment Promotion Agency, the Spanish Calvo Group, with a presence in the five continents, decided to install its largest tuna processing factory in El Salvador. The new plant, built on the Pacific coast of the department of La Unión, in the eastern zone of El Salvador, provides jobs to 3,000 employees
2. Pettenati is one of the largest textile companies in Brazil. Pettenati started operations in El Salvador in November 2008 like easiness to reach the United States Market taking advantage of the different Free Trade Agreements
3. SYKES is a global leader in providing customer contact management solutions and services in the business process outsourcing (BPO) arena. In 2001 the company research Latin America and the Caribbean looking for a destination to install the contact centre. They found many of these factors in El Salvador and started operations in 2003. SYKES El Salvador has 1,400 employees

International Trade of El Salvador.

1. The Foreign Trade of the Republic of El Salvador experienced a severe recession in 2009 (global economic crisis) affecting external demand.
2. Salvadoran imports: 7,254 million dollars (decrease of 25.6% compared to 2008)
3. Main export and import markets of the Republic of El Salvador: the foreign trade with the largest trading partners, which are the markets with which El Salvador has signed Free Trade Agreements and the Central American Common Market accounted for 90% of the Salvadoran exports and 70% of its imports
4. Main Salvadoran export markets are Taiwan (86%), Mexico (17%) and the Dominican Republic (7%)
5. Top twenty-five Salvadorans export products account for 54% of total exports: textiles (26%), agribusiness (11%), food, and beverages (4%), machinery (3%), paper products and cardboard (3%) and chemical industries (2%)
6. Among the top twenty-five imported products are mining, textiles, agribusiness, chemical, food and beverages, machinery, mechanical and electrical equipment, plastic, and rubber manufacturing

PROESA, the Investment Promotion Agency of El Salvador, is the Government agency responsible for promoting foreign direct investment (FDI) in El Salvador.

El Salvador's Free Trade Agreements and Market Access

1. Central American Integration System (SICA)
2. Central American Common Market (MCCA) - Integrated with the SICA -
3. El Salvador Free Trade Agreements (FTA): Mexico-Northern Triangle, the Dominican Republic, Chile, Panama, Taiwan, the United States, European Union, and Colombia
4. Association of Caribbean States (ACS)
5. Mesoamerica Project

❮ Samples - Business in El Salvador ❯

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