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Industry and Trade
MAQUILAS
Maquila of textile products and manufacturing is the
second main source of income for the country but
it is confronting competition from countries such as
China and the dislodging temptation of neighboring
countries. Facing this risk, the industrial park is being
renovated.
In numbers, the textile industry and manufacturing
industry represent 45% of the total exports of El
Salvador, 50% of the workforce in the manufacturing
industry, 18% of the Industrial Product and 4.1% of
the national Gross Domestic Product (GDP). This
chain encompasses the four links: fiber, thread,
textiles and garment manufacturing.
The textile Industry is one of the sectors that has
most benefited from the Incentive Law of the Free
Zones where the great majority of the maquilas of El
Salvador are located.
For 20 years El Salvador has been attracting foreign
investment such as garment manufacturing, one of
the most important ones. In order for El Salvador
to have more competitiveness as an investment
destination, the Free Zone Law was created, which
grants fiscal benefits to operations at the Free
Zones, as well as the companies operating within it.
Among those are:
• Incentive to industrial activities
• Permanent exemption of all local taxes (VAC,
income tax, municipal taxes) and rates on imports of
raw material and equipment.
• Tax exemption of real estate taxes.
There are numerous Free Zones in the country
such as:
- American Industrial Park,
- Exporsalva Free Zone,
- Concordia Industrial Park,
- Lido Free Zone,
- Miramar Free Zone,
- San Bartolo Free Zone,
- Santa Lucía Free Zone,
- El Pedregal Free Export Zone,
- International Free Zone,
- San Marcos Free Zone,
- Free Zone 10.
Industrial facilities are equipped with the latest machinery
(El Diario de Hoy)
Weighing and packaging mussels (El Diario de Hoy)
Although El Salvador won the Millennium account
and was expected to have growth in infrastructure,
the construction was the most affected sector for
the economic crisis. Since there is a housing deficit
affecting over 1 million homes, it is expected that
this sector will have a relevant growth upon US
economy recovery. That is why the country is very
attractive to international housing and infrastructure
builders, indeed, the country is investing in
improving its highway network. Jobs provided from
the construction sector represent almost 8% of the
workforce.
These two sectors are very important, since 22%
of the workforce of the country is employed in the
commerce sector and 38% in the service area.
CONSTRUCTION
COMMERCE AND SERVICES