Starting a new business can be a challenging experience, especially when doing it in a foreign country. The clash of cultures can become an obstacle if you don’t understand how people of different nationalities do business. Therefore, when incorporating a company in El Salvador, it is vital to understand and embrace the local way of doing things. El Salvador’s business etiquette is similar to its neighbors, but also involves a details-focused element.
Key takeaways on El Salvador’s business etiquette
| Build relationships | A great deal of importance is placed on building personal relationships and knowing who you are doing business with, although details are important too. |
| Punctuality | Ignore the stereotypes and make sure you do things on time to make a good impression, especially at high levels. |
| Stay formal | Use honorifics and remain formal, at least in the opening stages of business negotiations. Also, dress for the occasion and don’t be casual. |
| Communication | Clear communication in English and Spanish will help both with business matters and with building those personal relationships. |
Understanding El Salvador’s business etiquette is key to effective communication
Effective communication is a key to understand El Salvador’s business etiquette. When approaching Salvadoran people, don’t be surprised if they talk about their friends, family and food as much as they talk about business. However, note that Salvadorans will openly express their interests and business objectives, so you must be clear and specific with your business goals, processes and requirements.
Furthermore, you must keep constant communication. Salvadorans will want to talk about specific dates and details, once they have a general idea of the project they want to undertake. There are other effective ways in which you should communicate with a Salvadoran, including:
- While shaking hands, use the appropriate greeting for the time of day: “Buenos días“(Good morning), “Buenas tardes” (Good afternoon), or “Buenas noches” (Good evening).
- El Salvador is a formal culture where only close friends and family use first names.
- It is important to refer to people by the appropriate honorific title (Señor or Señora) and their surname until invited to move to a first-name basis.
Punctuality is key for El Salvador’s business etiquette
Punctuality is crucial in El Salvador’s business etiquette. Although punctuality for a Salvadoran has never been one of their key attributes, it is not something to concern yourself with if it is a casual meet up. However, when it comes to business and financial meetings, punctuality is high up on the list.
Before having a meeting with a Salvadoran, you must check the type of meeting you are going to have. If it is a business meeting, formality and seriousness should be upheld. Nevertheless, if the meeting you are going to have lacks of seriousness or formality, then this is a positive sign.
Language
The official language of El Salvador is Spanish. However, professionals in El Salvador are mostly bilingual. In most cases, language should not create grater inconvenience when coming to do business in the country.
We strongly recommend learning some Spanish to surprise your future business partners. This will impress a Salvadoran not only professionally but also in a personal capacity.
Despite the warm climate of the country, when you are about to have a business meeting with a Salvadoran, you must wear formal clothing. however, depending on where the meeting will take place you might be able to vary your clothing.
If the meeting is in an office, you must wear a suit with a formal shirt and a tie. On the other hand, if the meeting takes place in a more informal place, you could be more flexible with your clothing.
FAQs on El Salvador’s business etiquette
These are some of the most common questions we receive from international investors interested in business etiquette in El Salvador.
1. Can a foreigner own a business in El Salvador?
Yes, by either legal persons (legal entities) or natural persons (individuals).
2. Why do business in El Salvador?
In total, exports make up 64% of Salvador’s GDP, making them the country’s most important driver of economic growth. Policies that support international trade are active, and it remains an attractive idea to incorporate a company in El Salvador. It is the first nation to recognize Bitcoin as a legal currency. This move has contributed significantly to increasing foreign investment and incentivizing investors to incorporate companies in El Salvador.
The international trade sector in El Salvador is strong because the country is part of the multilateral agreement CACM between Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua, and the Free Trade Agreements (FTA) with the European Union, México, Colombia, Taiwan, and the United States.
3. How long does it take to register a company in El Salvador?
It takes 4 weeks to register an operating company in El Salvador.
4. What does an S.R.L company name mean in El Salvador?
In El Salvador, SRL means Sociedad de Responsabilidad Limitada, which is similar to a Limited Liability Company in English. This distinct legal construct operates independently of its shareholders, providing them with valuable limited liability protection. The prominence of SRL companies can be attributed to their simplified requirements, establishing them as a highly sought-after preference for structuring businesses.
5. What does an S.A. de C.V company name mean in El Salvador?
In El Salvador, an S.A. de C.V is known as Sociedad Anónima de Capital Variable (S.A. de C.V.). It is a type of business entity where the liability of its members (shareholders) is limited to their contributions to the company’s capital. This means that the personal assets of the members are protected from the company’s debts and liabilities.
6. What entity types offer Limited Liability in El Salvador?
In El Salvador, both Sociedad Anónima de Capital Variable (S.A. de C.V.) and Sociedad de Responsabilidad Limitada) (S.R.L) are limited liability entity types.
Embrace El Salvador’s business etiquette with the help of Biz Latin Hub
Understanding El Salvador’s business etiquette can become an imperative part of the long-term success of your business operations. However, you must engage with a local trusted expert to professionalize your business operations according to El Salvador’s business etiquette standards.
When entering the Salvadoran, foreign companies must seek bilingual support to get set up and incorporate into the business and social environment. At Biz Latin Hub, our international and multilingual team, operating in more than 16 countries in Latin America and the South Pacific is ready to guide you through El Salvador’s business culture.
Get in touch with us today to find out more about business etiquette in Latin America and receive personalized assistance.
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