ChainCatcher reported, citing Bitcoin Magazine, that El Salvador is continuing to refine its immigration framework in order to attract high-net-worth foreign talent and capital, including families. The latest focus is a change to temporary residency requirements, paired with a tax framework that is already positioned around territorial taxation, foreign-source income exemptions, and specific treatment for bitcoin-related capital gains.
Decree No. 531 cuts the annual stay requirement to 90 days
Under Decree No. 531, which takes effect on March 31, 2026, the residence requirement for temporary residents has been reduced from a mandatory nine-month stay in the country each year to only 90 days per year, either cumulative or consecutive. This represents a major reduction in the amount of time a qualifying resident must physically remain in El Salvador each year.
The adjustment is aimed primarily at entrepreneurs, investors, and remote workers who need to move across borders frequently. For these groups, a long annual presence requirement can conflict with business travel, investment activity, remote work arrangements, and family mobility. By lowering the threshold to 90 days, El Salvador is giving these applicants more flexibility while still maintaining a formal residency requirement under its legal framework.
Foreign-source income and bitcoin-related gains receive favorable treatment
El Salvador also offers one of the most attractive tax frameworks in Latin America for individuals with foreign-source income. The country applies a territorial tax system, meaning that only income generated within El Salvador is subject to tax there. A major income tax reform in 2024 further clarified that foreign-source income is exempt from income tax regardless of whether the person is a resident or a non-resident.
As a result, freelancers and remote workers, including content creators, developers, and entrepreneurs with income generated abroad, can receive 0% Salvadoran income tax treatment on foreign income, with no amount limit stated in the source information. In addition, under El Salvador’s laws, capital gains related to bitcoin are not taxed. The country also does not impose wealth tax, inheritance tax, or gift tax.
The original report also noted that the real issue lies in 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 tax residency questions are often subject to strict review and follow-up claims. For individuals considering the Salvadoran framework, the interaction between El Salvador’s rules and the tax position of their original country remains the key point described in the source.