The Legislative Assembly of El Salvador approved a new law yesterday with 78 votes in favor: the Special Temporary Law of Incentives and Preferential Treatments Aimed at Promoting the Repatriation of Salvadorans. The purpose of this legislation is to provide fiscal benefits to compatriots returning to the country as part of the reverse migration process.
This initiative was proposed by members of the New Ideas party, and it aims to allow Salvadorans living abroad to repatriate up to $70,000 worth of personal belongings, including their vehicles.
Under this law, Salvadorans will be able to bring household items acquired during their time abroad without any commercial intent, but to reestablish their homes in their homeland.
Ernesto Castro, President of the Legislative Assembly, explained, “Everyone who wants to return to the country, and there are many who do, will be exempt from the Value Added Tax (VAT) and Import Duties (DAI) for up to $70,000. They can bring their beds, TVs, furniture, and all the items inside their homes.” Additionally, each family can repatriate up to two vehicles without incurring any taxes.
Furthermore, returning Salvadorans will have the opportunity to open bank accounts in the country, and their credit history from abroad will be recognized and integrated into their national bank accounts.
Importantly, these benefits are not contingent on the duration of their absence, immigration status, or the specific foreign country they resided in.
Luz María de Portillo, the Executive Director of the Salvadoran Banking Association (Abansa), expressed during discussions in the finance committee that this law will be advantageous both for the diaspora and for various private sector banking institutions. These institutions have been actively expanding their services to the diaspora, offering credit, deposit, and payment services, which will further enhance the financial inclusion of returning Salvadorans.