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Hiring Employees & Recruitment Requirements in El Salvador


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El Salvador is unfairly overlooked when it comes to doing business. The region has a steadily growing economy and a diverse range of unexplored sectors/industries ripe for the picking. Before jumping into commercial operations in the region and employing staff, it is crucial to have an understanding of employer requirements/obligations. Additionally, one should be aware of the best method to engage potential employees.

Stay informed about the employment requirements in El Salvador and check out the presentation made by our legal team in San Salvador.

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Hiring Employees & Recruitment Requirements in El Salvador

  1. 1. Hiring Employees + Recruitment Requirements in El Salvador
  2. 2. Key Considerations: Employment Find below, some of the key considerations that should be taken into account before contracting staff in El Salvador Yes – 1 months Is there an employee probation period? Yes Do staff need a local employment contract? Yes Can expatriate staff be hired? 15 days per annum Vacation entitlement Max employer contribution is 25.5% Total cost of employment Employers Who manages withholding tax? • Christmas Bonus • Social Insurance • Savings fund Employee benefits
  3. 3. Pathways to Hiring Staff Through a local legal entity Through a PEO solution: Professional Employer Organization
  4. 4. Forming a Legal Entity in El Salvador In El Salvador, there are (3) main types of legal entities: Public Limited Companies (S.A.), Limited Liability Companies (LTDA) and Branch Office Companies Advantages: • Greater control of your employees • Better knowledge of local market, laws and regulation • Viewed more positively than a PEO solution Disadvantages: • High set-up/ongoing costs • Administration involved in managing a local company • Accounting and tax obligations
  5. 5. Professional Employer Organization Advantages: • You can operate without forming and maintaining a local entity • Limited legal responsibility • Cost-effective way to convert international contractors into employees Disadvantages: • The PEO becomes a co-employer • Loss of control • Costs involved with PEO services • Compromised company culture International PEO is a method to employ staff without having your own company
  6. 6. Are you looking to hire staff? As you are now aware, you have two options to hire staff: a) Through a Local Legal Entity or b) Through a PEO solution Need assistance hiring employees? Partner with Biz Latin Hub to learn how we can support you and your business in Latin America
  7. 7. Doing Business in El Salvador? Learn More Here! Requirements to Incorporate a Company/Corporation in El Salvador How to Register/Create a Company in El Salvador? Latin American Expansion Continues – Biz Latin Hub opens new offices in Brazil, Costa Rica and El Salvador