You can get a passport in El Salvador quickly and without investments. The country is attracting more and more attention, and not in a negative way. Before Bukele’s presidency, it was one of the most dangerous countries in the world, ruled by gangs. Today we will talk about El Salvador.
Nayib Bukele’s presidency has transformed security in El Salvador. Since 2019, he has implemented the Territorial Control Plan, massively deploying security forces and building a mega-prison for gang leaders. Additionally, he used advanced technology to monitor and cut off gang financing sources.
The results are striking. In 2018, the homicide rate was 50 per 100,000 inhabitants. By 2023, this figure had dropped to 7.8 per 100,000 inhabitants. Although his approach has been criticized for its toughness, the data show a significant decrease in gang power and a notable improvement in the country’s security.
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El Salvador: An Attractive Investment Destination; Discover why having a passport in this country is essential.
El Salvador now not only boasts a low crime rate but is also becoming increasingly attractive to investors. Most people who don’t follow Latin American developments closely began paying attention to El Salvador when it did something revolutionary: in 2021, Bukele made bitcoin an official currency. While there are crypto-friendly countries, none had gone as far as making bitcoin a national currency.
Moreover, Bukele is so confident in cutting-edge technologies that the country adopted a bitcoin investment strategy for its national treasury. By 2024, El Salvador had accumulated over 400 million dollars in bitcoin.
From being an extremely dangerous place, El Salvador is slowly transforming into a rapidly developing country, and rumors suggest it could be the next Panama.
What Does a Passport in El Salvador Offer?
Due to these rumors and the country’s strategic direction, many believe in El Salvador’s bright future. Currently, the Salvadoran passport is well positioned at rank 37, granting visa-free access to 137 countries.
This rank is slightly lower than the Paraguayan passport, which holds the 32nd position. However, while we often recommend people move to Paraguay, we never suggest it to those interested in obtaining a second passport in the short term. Getting a Paraguayan passport is difficult, even for Spanish citizens, and can usually take years.
El Salvador is quite the opposite. Obtaining a second passport here is quite feasible. The standard procedure for obtaining citizenship through naturalization involves legally residing in the country for at least five years.
Furthermore, just as Spain offers preferential treatment for acquiring citizenship, El Salvador has also established a rule allowing any citizen of Spain or Latin American countries to obtain a passport by legally residing for just one year.
Obtaining a passport in El Salvador by investment
In addition to this possibility of naturalization, in 2023 El Salvador announced a golden passport program as well. Although officially called the “Freedom Visa”. And like everything in El Salvador, they did not request a standard investment, but announced that a thousand people per year who make a contribution of 1 million bitcoins.
An applicant must first pay 999 dollars, go through a verification process (KYC) and only if approved will be required to pay in bitcoins or tether worth one million dollars. Those funds will be used for the development of the country.
Although quite revolutionary, however, this program can hardly be considered attractive to most. Donating 1 million dollars is not a competitive price in the market compared to other countries. There are no official statements on whether there are candidates willing to make such a generous donation.
Nevertheless, it shows the country’s intention to develop and attract new investments. The changes adopted by El Salvador in 2024 are much more attractive and, in my opinion, have more chances of success. Believing in a bright future for the country is one thing, but benefiting from it is even better.
Get your passport in El Salvador and you will pay few taxes
El Salvador is not a low-tax country in its classic understanding. For example, personal income tax is charged on scales and has a progressive system with rates ranging from 0% to 30%. Corporate income tax is also 30%.
However, in March 2024, the Congress of El Salvador decided to abolish the taxation of investments from abroad. Before the reform, a company with income of $150,000 or more had to pay a 30% tax when entering the country.
Now this taxation on remittances is abolished. So they expect this to attract new foreign investments and wealthy foreigners to boost the national economy.
What this practically means is that after these changes, if you go to El Salvador and transfer some income from abroad, then it will be absolutely tax-free.
So, if your tax residence is in El Salvador, any income you generate outside of El Salvador will be tax-exempt.
And what about cryptocurrencies? Technically speaking, cryptocurrencies are not located in the country. Therefore, if you have cryptocurrencies, sell them and make a profit, they will not be taxed.
Even if you end up not paying taxes, you will not be labeled as a tax resident in a tax haven. They still have high tax rates. The only thing they abolished in March 2024 is taxation on foreign income.
So instead of being labeled as a tax haven, they simply switched to a territorial tax system. The change was made very smoothly, without attracting any extra attention from the global community that could cause external pressure on the country. Therefore, we believe that this is just the beginning and that they will announce even more tax initiatives to encourage people to start businesses within the country.
could be the next Panama
Obtaining a Passport in El Salvador for Free
And the best part, if you’re considering moving there, in April of this year Bukele announced a new free program on the X platform (formerly Twitter) on how to obtain citizenship for free. The program is open to 5000 scientists, engineers, doctors, artists, and philosophers from abroad. Additionally, he stated that the government will guarantee “0% taxes and tariffs for families and assets that move…”.
For now, there are no details on how exactly this program will work or what the criteria are for selection, but we anticipate it will certainly attract foreign talents interested in obtaining a second passport.
