Identifies common practices to be aware of when selling in this market, e.g., whether all sales material need to be in the local language.
New consumer products are often introduced at a reception in an upscale hotel in conjunction with a newspaper and billboard ad campaign. As promotional competition increases, creative sales promotions, such as contests, drawings, and raffles, become more relevant. Samples of products are often handed out at supermarkets and department stores. Participation in local exhibits and sponsorship of local events and conferences is a common practice for brand positioning. A shared budget for promotional campaigns and advertising is highly appreciated by the local importer/distributor. The availability of brochures and other promotional materials in Spanish are preferred for marketing products.
U.S. companies interested in finding representatives or distributors should look for ways of adding value to the relationship, such as supporting local marketing efforts in order to increase potential sales and providing training to the sales force or technical staff. U.S. products are highly accepted in the Salvadoran market. The key purchasing factors are price, quality, and post-sale service. However, each sector has its unique characteristics and techniques. For more information or to request a meeting to discuss specific strategies, contact the U.S. Commercial Service El Salvador Office.SanSalvador@trade.gov.
Use of e-mail, internet and social media has made great advances in recent years. The Chamber of Commerce and Industry reported that 90% of its 2,300 members use e-mail, and about half now use the internet to promote their businesses. The American Chamber of Commerce has about 312 members and reports that all of its members have e-mail and 100% use the internet and social media to promote their business. Facebook is the market leader for social media and widely used by companies.
Advertising in El Salvador is conducted through TV, radio, and newspapers, and it is estimated that 20% of advertising is dedicated to outdoor media. Depending on the target market, nature of product, purpose of the message or marketing plan, advertising agencies will recommend the most appropriate media mix.
El Salvador has 47 television channels, which include commercial, educational, and religious channels with nationwide or specific territorial coverage. The main VHF nationwide channels are 2, 4, 6, 8, 10 and 12. The first three are part of the same business group, Telecorporación Salvadoreña. There are 28 Ultra High Frequency (UHF) channels in lower bands with limited broadcasting range, some with national coverage links, such as channel 19, Channel 21, and Channel 33. The main television channels are now transmitting their programming through the internet, targeting the audience of Salvadorans living abroad.
There are 196 FM and 71 AM radio stations in El Salvador. Statistics indicate that 70% of FM stations are primarily music, and 30% broadcast news programs, commentary, religious, sports and/or educational programs.
In terms of print media, there are six newspapers with a total daily circulation estimated at over
the total circulation, followed by Diario El Mundo and CoLatino. Both El Diario de Hoy and
La Prensa Grafica have sister publications aimed at a more visual audience with stories which feature
larger photos and shorter texts. El Diario de Hoy has sensationalist Más!, and La Prensa Gráfica has both El
Gráfico (sports), and Mi Chero (daily news). Additionally, El Heraldo de Oriente and El Pais are smaller
publications reporting news from the eastern and western part of the country.
organizations circulate monthly magazines with paid advertising. Magazines with regional reach such as Estrategia y Negocios, El Economista Regional, SUMMA and Central America Today are preferred advertising vehicles for economic and business groups.
The Construction Chamber, CASALCO, holds an exhibit every two years. The Salvadoran Agriculture Chamber (CAMAGRO) organizes the main agricultural products/and machinery trade show. In addition, The Salvadoran Association of Industry (ASI) organizes a local trade show to promote different industry sectors: a regional energy congress, providing space for exhibitors, technical briefings and business to business meetings.
Salvadoran companies travel frequently to trade shows in the United States to seek new products and business partners. For a list of U.S. trade shows supported by the U.S. Commercial Service in El Salvador visit U.S. trade shows in El Salvador.
The U.S. Commercial Service offers customized solutions to help U.S. exporters, particularly small and medium sized businesses, successfully expand exports to new markets. Our global network of trade specialists will work one-on-one with U.S. exporters through every step of the exporting process. To learn more about U.S. government trade promotion resources for new and experienced exporters, please visit: U.S. trade promotion.
In El Salvador, the government regulates prices for liquefied propane gas, public transportation, energy, and medicines. The government regulatory agency, the General Superintendence of Electricity and Telecommunications (SIGET) regulates electricity and telecommunications. Government ministries directly subsidize water services and establish the distribution service tariff. The Ministry of Economy and the Consumer Protection Office closely monitor retail gasoline and diesel, as well as basic food products prices.
El Salvador assesses a value-added tax (VAT) of 13 percent on most goods. Excise taxes also apply to certain goods, such as alcohol, firearms, cigarettes, and new automobiles. Imported products may be subject to duties. Import tariffs for non-CAFTA-DR goods can vary. For example, raw materials import duties typically range from 0 to 5%, intermediate goods typically range from 5 to 10%, and finished goods are charged a maximum of 30%. Textiles, agricultural products, vehicles, and a few other non-essential products are subject to higher tariffs that range from 15 to 164%. The tariffs only apply to products manufactured outside of the Central American Common Market and non-U.S. products. A comparative chart of Central American import duties can be found at the Central American Economic Integration Secretariat website.
CAFTA-DR reduced tariff and non-tariff barriers for U.S. exports into the region. Duties for U.S. made products to El Salvador can be found in the CAFTA-DR Tariff Schedule
On services, a 20% withholding tax is applied to payments for services that have been provided to private or public institutions in El Salvador by foreigners, even if the service was performed entirely outside of El Salvador.
With an estimated 2.6 million Salvadorans residing in the United States, Salvadorans are familiar with U.S. products and like to receive U.S. level customer service. Sellers can gain an edge by offering good service and customer support. Consumers’ and/or end users’ purchasing decisions respond differently depending on the product or sector. However, in general they are price-oriented and tied to credit conditions and to after-sales service. A consumer protection initiative in El Salvador has raised consumer awareness of consumer products’ quality and safety standards, becoming a preferential and differential purchasing factor.
The Consumer Protection Law was reformed in January 2013 to expand basic consumer rights. It provides the consumer with broader authority to terminate contracts and stipulates that expressed guarantees for goods or services made by the producer are legally binding. The new version of the Law also empowers the Consumer Defense Court to order monetary compensation to the consumer.
The U.S. Commercial Service often can provide contact information for professional services such as legal counsel, transportation, hotels, translators and other. For more information, visit the Business Service Providers (BSP)
There are several business associations in El Salvador that play an active role in advocating for rule of law, transparency, economic growth, trade, competitiveness, and corporate social responsibility. Following is a partial list of the leading associations in El Salvador:
Distributors’ Association of El Salvador
National Association for Private Enterprise
Salvadoran Industrial Association
Asociación Salvadoreña de Importadores de Repuestos Automotrices (ASIRA)
Auto-Parts Importers Association
Salvadoran Chamber of Commerce and Industry
Salvadoran Chamber of the Construction Industry
Chamber of Textile and Apparel Industry
There are no limitations on selling U.S. products and services in El Salvador. There are restrictions on land ownership. No single natural or legal person (Salvadoran or foreign) can own more than 245 hectares. Rural land cannot be owned by foreigners from countries where Salvadorans do not enjoy the same right. Land for industrial plants can be owned by foreign persons, if minority or partners are foreign and enterprise is organized under Salvadoran law. Foreign citizens and private companies can freely establish businesses in El Salvador.
Foreign-owned duty-free commercial centers or establishments in El Salvador’s seaports can operate as long as the majority of its capital is owned by Salvadorans and the enterprise is organized under Salvadoran law.
CAFTA-DR, Annex 1, Schedule of El Salvador contains obligations and measures related to cross-border services and investment in the following sectors: cooperative productions societies, air services, communication services – advertising and promotional series for radio and television, television and radio broadcasting services, performing arts, circuses, construction and related engineering services, public account and public auditing, health services, legal services (notary public), teachers, customs agents, energy, road transportation services and land transport. More information: CAFTA-DR