According to ChainCatcher, citing Bitcoin Magazine, El Salvador is continuing to optimize its immigration system in order to attract high-net-worth foreign talent and capital, including family arrangements. The disclosed measures focus on temporary residency requirements, tax treatment for foreign-source income, and the handling of capital gains related to Bitcoin.
Temporary residents need only 90 days per year
Under Decree No. 531, which takes effect on March 31, 2026, the residency requirement for temporary residents in El Salvador has been reduced. The previous rule required temporary residents to remain inside the country for nine months each year. The revised requirement allows them to qualify by residing in the country for only 90 days per year, either cumulatively or consecutively.
The adjustment is mainly designed for entrepreneurs, investors and remote workers who need to move frequently across borders. For these groups, a shorter physical presence requirement gives more flexibility when applying for or maintaining temporary residency. It also links El Salvador’s immigration framework more closely with the movement patterns of international capital, business operators and digital workers.
Foreign-source income and Bitcoin-related gains
On taxation, El Salvador offers one of the more attractive frameworks in Latin America for individuals with income sourced abroad. The country applies a territorial tax system, which means that only income generated within El Salvador is subject to local taxation. A major income tax reform in 2024 further clarified that foreign-source income is exempt from income tax for both residents and non-residents.
As a result, freelancers and remote workers, including content creators and developers, as well as entrepreneurs earning income from overseas, can apply a 0% Salvadoran income tax rate to their foreign-source income, with no stated cap on the amount. In addition, under the country’s laws, capital gains related to Bitcoin are not taxed. El Salvador also does not impose a wealth tax, inheritance tax or gift tax.
The report also notes that the real issue is whether an individual’s original country recognizes this arrangement. Most countries generally do not easily give up the right to tax their tax residents, and they often conduct strict reviews and pursue claims over tax residency matters. For individuals considering such arrangements, the rules in El Salvador are only one part of the issue; how their original country defines tax residency and tax obligations also remains central.