The Legislative Assembly of the El Salvador Republic has approved the new Foreign Agents Law, which imposes new regulations on individuals and organizations that receive funding or material support from abroad. The legislation, which is still pending official publication, will particularly affect non-profit associations and foundations operating in the country.

One of the main provisions is the creation of the Foreign Agents Registry (RAEX). Once the law comes into force, obligated parties will have a maximum of 90 days to register. Failure to do so will result in a prohibition on conducting activities or mobilizing financial resources, goods, or assets.

The law also establishes a 30% tax on any type of foreign funding, which will be withheld by banks or other entities at the time of transfer.
In addition, economic penalties are contemplated, ranging from $100,000 to $250,000, as well as restrictions on the use of funds for political or undeclared activities.

The regulation allows for an exemption to be requested either annually or by project, provided it is approved by the RAEX. Given this, organizations will need to review their funding sources and consider the necessary steps to comply with the new legislation or request an exemption, if applicable.

We are available to support and advise you on any related inquiries.

Please contact us at: mcosta@mayora-mayora.com; jrodriguez@mayora-mayora.com

Original: https://mailchi.mp/d3b9a430ca59/boletn-informativo-newsflash