A comprehensive new study by professional services firm EY highlights El Salvador’s rising dominance in regional trade, ranking the country second in Latin America for free trade zone (FTZ) contribution to Gross Domestic Product (GDP). Far from being limited to simple textile assembly, El Salvador’s 18 industrial parks have evolved into sophisticated hubs manufacturing electronics, medical devices, and chemicals. This strategic shift has turned the nation’s tax-incentivized zones into crucial pillars of macroeconomic stability.

According to the report, these specialized zones contribute a staggering 10.6% to El Salvador’s GDP, trailing only Costa Rica’s 15.1%. The efficiency of this fiscal model is exceptionally high: for every dollar of tax expenditure associated with this regime in El Salvador, $6 of value added are generated. This high-yielding return is fueled by $5,600 million in annual exports, representing 80% of the country’s total outbound trade.

The social and employment impact of these zones is equally profound, sustaining 81,405 direct and indirect jobs across 170 operating companies. Notably, women have consistently represented 53% of this industrial workforce over the past 18 years, showcasing how these ecosystems foster inclusive economic development alongside high-tech manufacturing.

Despite being one of the youngest FTZ frameworks in Central America—established in 1998—El Salvador’s model has proven remarkably resilient, bouncing back sharply after the disruptions of 2020. Though larger nations host more physical parks, EY’s findings solidify El Salvador’s standing as a highly competitive nearshoring destination where industrial parks act as “true engines of local economies.”