With a global shift towards considering the viability of trade routes and ensuring logistical supply lines, more countries are seeking friendly ports. Nearshoring in El Salvador offers just this especially for North American businesses.
Nearshoring in El Salvador has many benefits for North-American based countries. It is on a similar time-zone, is easily accessible from the West Coast and is linked directly to the Pan-American Highway. With a friendly government firmly in place and cultural similarities, it is not hard to see the appeal.
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Biz Latin Hub can help you with nearshoring in El Salvador or elsewhere in the region. We are experts in Latin America and the Caribbean, so we know the country inside out. We can guide you through the processes of company formation or commercial links with the county. With our range of back office services, we also offer ongoing business support.
Why should you invest in El Salvador?
Despite an often troubled past, El Salvador has started to appear as a more suitable location for business operations. The country has taken great strides in recent years to combat many of the problems that it faced. This means that the country is in a great position for FDI right now.
Combine this with a global situation in which logistics and trade routes are increasingly coming under scrutiny and El Salvador offers an easy way to transport goods and trade through friendly territory. The country is extremely internationally minded, even offering the official use of Bitcoin.
Oversight and control are also key concerns for companies working in foreign countries. By nearshoring in El Salvador you will be able to minimize both those risks as the country is not just physically close to North America but also culturally close.
Nearshoring in El Salvador: 5 key benefits
When considering nearshoring in El Salvador, here are 5 key benefits:
- Time Zone.
- Connections.
- The US dollar.
- Stable government.
- Competitive labor costs.
1. Time zone
El Salvador is situated in UTC-6, which places it roughly in line with CST in the USA and Canada. It also matches up with Mexico. Any business dealings you have with Salvadorian partners should take place at a reasonable time of day. However, it is important to remember that the country does not observe daylight savings.
2. Connections
The country is located on the Pacific coast of the Central American isthmus. This position means it can send and receive shipping to or from the West coast of the USA as well as Asia. On top of that, the country has trade agreements with its neighbors and is on the Pan-American Highway for overland connections to North America. This makes nearshoring in El Salvador excellent for onward travel.
3. The US dollar
As a fully dollarized country, you won’t have any problems with currency conversion or international transactions when nearshoring in El Salvador. Using the dollar also means that the country has stable finances and is blocked from taking unwise monetary policy decisions.
4. Stable government
The current government has been particularly effective in its initiatives to fight crime. This makes El Salvador safe not just on a regional level but on a global scale. Institutions are strong and there is solid protection for commercial interests.
5. Competitive labor costs
Although you might be using the US dollar, you certainly will not be paying American wages. However, that doesn’t mean a loss in quality. Nearshoring in El Salvador involves competent and qualified workers who are often highly educated and professional.
FAQs When Nearshoring in El Salvador
Nearshoring refers to the practice of outsourcing business operations to a nearby country, in this case, El Salvador.
The advantages of nearshoring include less expensive labor costs, avoidance of language barriers, cultural alignment, geographical proximity, and a similar time zone. However, there are also disadvantages. For instance, developing and qualifying a new strategic supplier entails high costs.
To take advantage of nearshoring, businesses can focus on the following aspects:
Selecting the Right Location: Choose a country that offers a skilled workforce, cultural and language similarities, and a favorable business environment.
Building strong relationships: Build strong working relationships with the nearshore team to streamline communication and collaboration.
Leveraging Cost Benefits: Take advantage of the cost-effectiveness of nearshoring by outsourcing operations at a lower cost.
Ensuring Quick Response Time: Utilize the similar time zones to ensure quick communication and problem-solving.
Utilizing Local Expertise: Leverage the skills and expertise of the local workforce to enhance business operations.
Technology.
Customer Services.
Pharmacueticals.
Electronics Manufacturing.
HR.
Yes, El Salvador is situated in UTC-6, placing it in an advantageous position to collaborate with businesses in North America, potentially enabling cross-over collaboration with nearshoring teams for up to eight hours a day.
Biz Latin Hub can assist you with nearshoring in El Salvador
At Biz Latin Hub, we provide integrated market entry and back office support to investors throughout Latin America and the Caribbean, with offices in more than a dozen countries around the region and trusted partners in many more.
That unrivaled reach means we are ideally placed to support multi-jurisdiction market entries and cross-border operations. For example, we are leading experts on nearshoring in El Salvador.
Our portfolio of services includes company formation, accounting & taxation, legal services, bank account opening, and hiring & PEO.
Contact us today to find out more about how we can support you.
If you found this article on nearshoring in El Salvador of interest, check out the rest of our coverage from across the region. Or read about our team and expert authors.
