BlockBeats reported on June 13 that El Salvador is continuing to refine its immigration system in an effort to attract high-net-worth foreign talent and capital, including families. The latest adjustments focus on temporary residency requirements and the country’s tax treatment for individuals with income generated outside El Salvador.
Decree No. 531 cuts the stay requirement to 90 days
Under Decree No. 531, which takes effect on March 31, 2026, the residency requirement for temporary residents has been reduced significantly. Instead of being required to remain in the country for nine months each year, temporary residents will only need to spend 90 days in El Salvador, either consecutively or cumulatively, during the year.
The change is mainly designed for people who need to move across borders frequently. The groups identified in the report include entrepreneurs, investors and remote workers, whose work and business arrangements often require a more flexible residency framework.
Foreign-sourced income and Bitcoin capital gains receive 0% local tax treatment
On taxation, El Salvador offers one of the more attractive systems in Latin America for individuals with foreign-sourced income. The country applies a territorial tax regime, meaning that only income generated within El Salvador is subject to local taxation. A major income tax reform in 2024 further clarified that foreign-sourced income is exempt from income tax for both residents and non-residents.
As a result, freelancers, remote workers such as content creators and developers, and entrepreneurs earning income abroad can receive a 0% El Salvador income tax rate on their foreign income, with no cap on the amount. In addition, under the country’s laws, Bitcoin-related capital gains are not taxed. El Salvador also does not impose wealth tax, inheritance tax or gift tax.
The main issue lies in whether an individual’s country of origin recognizes this arrangement. According to the report, most countries do not easily give up the right to tax their tax residents, and they often conduct strict reviews and pursue claims related to tax residency. Therefore, while El Salvador’s domestic rules provide a clear exemption framework, the individual’s tax status in their original country remains the central point in practice.