According to BlockBeats on June 13, El Salvador is continuing to refine its immigration framework in an effort to attract high-net-worth foreign talent and capital, including families. The latest adjustment focuses on making temporary residency easier to maintain, while the country’s tax system continues to offer a clearly defined treatment for foreign-sourced income and Bitcoin-related capital gains.
Decree No. 531 reduces the stay requirement for temporary residents
Under Decree No. 531, which took effect on March 31, 2026, the residency requirement for temporary residents has been reduced from a mandatory nine-month stay inside El Salvador each year to only 90 days per year, whether accumulated over time or completed consecutively. This marks a substantial reduction in the amount of time temporary residents must physically spend in the country.
The adjustment is mainly aimed at entrepreneurs, investors and remote workers who need to move frequently across borders. For these groups, remaining in one jurisdiction for most of the year can be impractical. By lowering the stay requirement, El Salvador’s temporary residency system is better aligned with cross-border business activity, remote work arrangements and family relocation needs.
Foreign income and Bitcoin gains under El Salvador’s tax rules
On the tax side, 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 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 and remote workers, including content creators, developers and entrepreneurs with overseas income, can receive 0% Salvadoran income tax treatment on income earned outside the country, with no stated cap on the amount. In addition, under El Salvador’s laws, Bitcoin-related capital gains are not taxed. The country also does not levy wealth tax, inheritance tax or gift tax.
The central issue is whether an individual’s original country recognizes this arrangement. Most countries do not readily give up the right to tax their own tax residents and generally apply strict review and enforcement when questions of tax residency arise.