The President of El Salvador, Nayib Bukele, has just signed the law to abolish all taxes related to technological innovation, including for blockchain companies. The measure aims to strengthen the country’s position as a destination for new businesses while attracting investment in the technology sector and creating local jobs.
El Salvador opens up to technological innovation
On 24 March, El Salvador’s President Nayib Bukele publicly announced his intention to abolish all taxes on technological innovation. Well, he has just officially signed this law, which has now come into force
I’ve just signed into law, the INNOVATION AND TECHNOLOGY MANUFACTURING INCENTIVES ACT, that eliminates all taxes (income, property, capital gains and import tariffs) on technology innovations, software and app programming, AI, computer and communications hardware manufacturing. pic.twitter.com/rZtGzPgVzW
– Nayib Bukele (@nayibbukele) May 4, 2023
As indicated in the Salvadoran President’s tweet, the law is expected to cover, among others, companies operating in the programming, artificial intelligence (AI) and computer and communications equipment manufacturing sectors.
The abolition of taxes on income, property, capital gains and import duties should consolidate El Salvador’s position as a favourable location for new businesses. El Salvador’s Minister of the Economy, María Luisa Hayem, said: “El Salvador is ready to attract new investment in the technology sector, thereby generating more jobs for our people”.
It should be noted that this law will also apply to companies operating in the blockchain sector. This comes as no surprise, given that El Salvador was the first country in the world to adopt Bitcoin (BTC) as legal tender on its territory, with a view to promoting financial inclusion and fostering the country’s economic growth.
Recently, El Salvador made Bitfinex the first crypto company to obtain a digital asset service provider licence via a local branch. The company thus became the first tokeniser of stocks and bonds – apart from other digital investment products – on Salvadoran soil.
