Law Of Legal Stability For Investments.

Original Language Title: LEY DE ESTABILIDAD JURÍDICA PARA LAS INVERSIONES.

Read the untranslated law here: http://www.asamblea.gob.sv/eparlamento/indice-legislativo/buscador-de-documentos-legislativos/ley-de-estabilidad-juridica-para-las-inversiones/archivo_documento_legislativo



1. Decree No. 905, the Legislative Assembly of the Republic of EL SALVADOR: I.-that article 101 of the Constitution establishes that the State shall promote economic and Social development through the increase in production, productivity and the rational use of resources and that same purpose, encourage various sectors of production.
II. that article 102 of our Constitution stipulates that the State will encourage and protect private initiative within the conditions necessary to increase national wealth and to ensure the benefits of this to the greatest number of inhabitants of the country.
III.-that the Government of the Republic has as one of their objectives primordial, the promotion to them initiatives of investment private as potential trigger, so is incentive it generation of employment and income, and is strengthen the creation of wealth in the territory national.
IV.-that is necessary dictate rules that ensure it security legal to the investor, to keep those conditions that are determinants of his initiative and that allow generate growth economic sustainable, establishing mechanisms that encourage, facilitate and conducive to the growth of them investments in our country.
Therefore, use of his constitutional powers and at the initiative of the President of the Republic, by means of the Ministers of finance and economy respectively.
DECREES the following: law of stability legal for the investment chapter I provisions General object and purpose article 1.-the object of this law is to attract and promote domestic and foreign investment through a legal framework that guarantees legal security to the investor, through the implementation of legal stability contracts, in order to contribute effectively to the economic and social development of the country; the growth of strategic sectors; to the integration efficient of the economy national with the international and to the generation of employment.

2 scope of application article 2.-will be subjects for the application of this law, persons natural and legal, national or foreign, that carry out new investment projects or expand the existing ones within the national territory, that contribute to the strengthening of the productive forces of the country and generate added value to develop the following sectors considered strategic and necessary for the growth of the economy of the country : Aeronautics, agro-industry, aquaculture, electronics, energy, logistics, strategic infrastructure, health services, business services distance, tourism, telecommunications, miscellaneous, science and technology.
New sectors that comply with the requirements, form and parameters laid down in this law and its regulations, which must be based on technical analysis to developed PROESA, in coordination with the specialized entities for this purpose, who shall be obliged to collaborate in the elaboration of the referred technical analysis may be incorporated.
DEFINITIONS article 3.-for the purposes of the present law shall mean: to) MINEC: Ministry of economy;
(b) PROESA: organism promoter of exports and investments of El Salvador;
c) contract: contract of legal stability;
(d) try national: consists in ensure a same treatment for them investments foreign and them investments national, without more exceptions that them designated by them laws in force;
(e) freedom for investments: any national or foreign natural or legal person may make investments of any kind in El Salvador, except those that are limited by law;
(f) stability: certainty in the maintenance of the legal conditions contracted with the investor;
(g) temporality: the contracts of stability legal shall have a term certain;
(h) transparency: the assessment and approval procedures of legal stability contracts carried out by the competent authorities, shall ensure publicity of acts and a proper accountability;
(i) promotion of investment: the legal stability contracts seek to promote national and foreign investment, within the national territory, for the economic and social development;
j) institutional efficiency: speed by the competent authorities in the 3 procedures, ensuring the lowest possible cost for investors; y, k) good faith: the relations between the State and the investor should be guided by honesty, trust and mutual respect.
(Chapter II entities responsible for PROESA Art. 4.-in the frame of the present law, PROESA will have them following powers: to) develop and provide to them investors interested, the format of application for host is to them guarantees established in the present law;
b) verify compliance with the requirements laid down in article 7 of this law at the time of receipt of the request by the interested investor, and resolved through reasoned resolution, approval or refusal;
(c) require report and enlightened opinion of any public institution when it is required by the nature of the investment and work to develop;
d) obtain judicial review of the decision of refusal to grant the application;
(e) issue of the change in ownership of investment opinion when required by MINEC;
f) define the new sectors that will be subjects of this Act; and, g) other determined in this law.
Ministry of economy article 5.-within the framework of this law, the MINEC shall have the following functions: to) signature of legal stability, after favourable resolution of PROESA contracts;
(b) Administration, verification and monitoring obligations and conditions laid down in the contract;
(c) to request information from the investor of the fulfilment of the obligations set forth in article 16 of this law;
d) have access to facilities or projects and others that are specified in the contract;

4 e) keep a record, which shall be public, of the legal stability contracts endorsed in accordance with this law; and, f) others established in this law.
Chapter III procedures for celebrate contracts of LAS guarantees article 6.-starting from the signing of the contract, the signatory investors shall enjoy the following guarantees: to) stability tr ibutaria at the national level, which is derived from the legal regime of existing taxes;
(b) tax stability at the municipal level, which is derived from the legal regime of existing municipal taxes;
(c) stability in tax exemptions contained in special laws, the term that had been granted by the relevant institution;
(d) stability of customs regimes, which are derived from the special laws relating to refund of tariffs, the suspensive and exemptions;
(e) stability of free transfer abroad of funds from foreign investment, according to the investment law; and, f) stability of the immigration regime related to the residence of the investor, in accordance with the law of investment and other legislation.
All warranties set forth in this article shall be subject to compliance with the provisions of article 16 of this law.
Indirect taxes are exceptions to the present regime of tax legal stability.
During the term of duration of the legal stability contracts, that stability may be not filled rules declared unconstitutional by the constitutional of the Supreme Court of Justice Division.
INFORMATION and documentation required article 7.-to benefit from the guarantees provided for in this Act, all investor must be 5 lodged PROESA a request according to format developed by this institution, which shall contain the following information and documents: a) General data of the natural person or legal investor as well as your legal representative or proxy, including copies certified by a notary; the writing of the Constitution and its amendments, if any; Credential current of the legal representative or the respective power in case of acting by proxy; also it should be accompanied by copies certified by a notary of the single document of identity (DUI) or passport and identification number tax (NIT) of the legal representative or proxy, according to the case and certification of the copy of the card of the VAT;
(b) description of the activity that will develop the investor, accompanied by their respective investment plan, which must include among others: i. category and amount of the investment, according to the period referred to in article 14 of this law;
II. number and type of jobs to generate; III. the commitment to the training of human resources to hire; IV. technology transfer to be given during the execution of the activities; v. An estimate of the value added economic; VI. the benefits social that the activity will generate; VII. the reasons that justify the stability of all investment, in the cases of enlargement; and, viii. In general, the form in that is shall comply with the objectives of this law.
(c) indication of the regime legal whose stability is requested, as it prepared in the article 6 of the present law;
(d) origin of them resources with which is made the investment, through a statement sworn or any other medium probative of them referred in our legislation; and,

(e) clearance certificates tr ibutaria, municipal, customs, of security social and pension of the institutions relevant. This requirement will not take place in the case of natural or legal persons not domiciled in the country.
In the cases in that the documentation comes from a country with a language other than Spanish, you must bring the respective steps of translation, according to article 24 of the law of the notary exercise of the voluntary jurisdiction and other proceedings. If the documentation submitted is duly translated into Spanish from abroad and with their respective legalization, such proceedings shall not be required. All documentation coming from abroad, should come with their corresponding authentic or Apostille, depending on the case.
(Criteria of evaluation Art. 8.-PROESA, to approve or deny the request, must evaluate it following: 6 to) that it request meets with them requirements established in the article 7 of the present law;
(b) that the investments correspond to sectors established in accordance with article 2 of this law;
(c) compliance with the objectives and eligibility criteria established by this law, as the case may be; and, (d) in cases of extension of an existing investment, that effects projected in the economic and social development of the country are obviously superior and justify coverage of investments made previously.
PROCESS of processing of the application article 9.-received the application referred to in the preceding article; PROESA shall verify whether it meets all the requirements established by this law to continue the process and resolve the contract request, which will have a maximum period of 25 working day period from the filing of the application, to approve or deny it by reasoned decision.
COOPERATION INTERINSTITUTIONAL article 10.-If PROESA deems it necessary to expand or verify the information submitted by the investor in the related application, it may require report or enlightened opinion of any public institution linked to the matter of the project and in the limits of their powers, finding these forced to provide it within a maximum period of 15 working days from the date of your request , which will be within the established in article 9 of this law.
Expired the term to is concerns the subsection previous, without have received response any from the institution to which is you has requested report u opinion, this is considered as favorable and is will continue with the procedure.
Prevention Art. 11.-If the request to is refers it present available not will fill them requirements legal required, PROESA, through resolution reasoned, will prevent to the applicant, so this, within the term of 15 days working remedy the lack of documentation or information found in it application presented. This time limit shall run from the day following its notification and may be extended by a period at the request of the person concerned and with just cause.
The expired referred to in the subsection above or has formulated prevention PROESA will continue with the processing of the application. The term to address the Prevention shall suspend the time limit referred to in article 9 of this law. If the applicant does not remedy within the aforementioned period the warnings made in the resolution, it will be denied and filed.

7 in the event that the applicant will continue to be interested in the realization of your project, you must submit a new application.
RESOURCE of review article 12.-the resolution of refusal allowed judicial review before PROESA, which must be brought by the person concerned in one period of no more than ten working days after notification. However the above, designated resolution will not lead to action of claim for compensation.
Chapter IV contract of stability legal subscription article 13.-adopted the aforementioned request, PROESA shall forward to the Ministry of economy the relevant documentation, within a maximum period of ten working days from the issuing of the resolution, so that the respective contract is drawn up, to which the investor must sign a contract of legal stability, hereinafter 'the contract' in order to access the stability guarantees contained in this law, within a period of no more than 15 working days from the favorable resolution of referral issued by PROESA. Said contract shall be awarded by means of public deed and it shall contain as a minimum the following: to) certification of the resolution issued by PROESA, which approves the request referred to in article 9 of this law;
(b) the reference of the provisions legal of the different laws on which is ensures the stability;
(c) the amount and destination for investment;
d) the obligations assumed by the investors in accordance with the approaches contained in the investment plans referred to in the literal b) of article 7 of this law;
(e) the commitment to allocate three percent (3%) of the total value of the investment in the contract for the execution of works of local development in the municipality where the investment, which will deliver during the first two years counted from the commencement of operations of the project will be established. Similarly, the way in which such works will be selected and implemented, in coordination with the corresponding Municipal Government and the Fund of Social investment for Local Development (FISDL), must be set in the contract
(f) the grounds for termination of the contract;
(g) the deadline for their execution; (and, 8 h) entry into force of the contract.
The parties may agree to additional clauses according to the nature of the investment, provided they do not contradict this law, its principles and the law in force. In no case may stipulated the granting of fewer guarantees than those laid down in article 6 of this law.
Omit any of the conditions mentioned above, the contract will be null.
Once signed such a contract, the investor will have within two years to start the implementation of the investment in the agreed terms, renewable for an equal period, only once, at the request of the investor, presenting the justifications for the extension; period within which it is obliged to comply with all the requirements that are required to operate legally. In the course of this period, means that the legal stability agreement will be in effect.
In cases of extension of an existing investment, the legal stability contract will mean coverage to all investment of the already established production unit, not that of other investments made by the investor subscriber, in other twists or economic areas.
Once signed the contract between the parties, the Ministry of economy shall forward it to the Ministry of finance and other institutions involved, within a maximum period of 15 working days.
AMOUNT of the investment to develop and term of the contract article 14.-the national or foreign investors, for the guarantees granted the legal stability agreement under the framework of this law, shall make an investment in fixed assets by an amount equal to or greater than four thousand two hundred and twenty (4,220) minimum wages in force in the sector industry, in dollars of the United States of America new projects or expansion of existing ones.
The term of the contract will keep direct relation to the amount of the investment, in the following manner: to) investments in fixed assets by an amount equivalent of 4,220 and 21,100 minimum wages in force of the industry sector, may have a contract with a maximum term of up to five (5) years. The investment must run in its entirety during the first two years, counted from the commencement of the works;
(b) investments in fixed assets by an amount equivalent to 21,101 and 42,200 minimum wages in force of the industry sector, may have a contract with a maximum period of up to ten (10) years. The investment must run is in its entirety during them five first years, numbered starting from the home of them works; and, c) investments in fixed assets by an equivalent amount superior to 42,200 minimum wages prevailing in the industry sector, may have a contract with a maximum period of up to twenty (20) years. The investment must run in its entirety during the first ten years, counted from the commencement of the works.

9. the contract shall enter into force from your subscription by the parties, however the the same period shall run from the date on which it begins to run the investment.
Once signed a contract of legal stability, a natural person or legal beneficiary, you can not celebrate another contract of the same nature derived from subsequent investments, before the end of the first period.
MODIFICATIONS of the contract article 15.-in case approval of reforms guaranteed national or municipal legal regime during the term of the contract, the investor may ask the Ministry of economy addenda thereto, where it considers that such reforms are favourable, for which must submit all relevant documentation that justifies them.

He Ministry of economy shall resolve on it requested, in a term maximum of ten days working subsequent to the presentation of the request. The resolution of approval of the application shall contain reforms to the national or municipal legal regime will be taken by incorporated in the contract, and must sign the same within a maximum period of 15 working days.
If not to pronounce on such addendum within the prescribed period, means that such changes shall apply to the contract from the date of expiry of that term, provided the investor has submitted all the required documentation.
Chapter V obligations of the investor obligations Article 16.-all signatory investor of a legal stability agreement shall comply with the following obligations: a) those set out in the contract within the stipulated period and in accordance with the Investment Plan referred to in subparagraph b) of article 7;
(b) register the investment in the Office national of investments of the Ministry of economy;
(c) be solvent with the Ministry of finance and the corresponding municipality in the payment of the respective taxes;
(d) be solvent in the payment with the Salvadoran Social Security Institute and the various pension funds, of contributions and deductions made to their workers, corresponding to the previous next month;
(e) submit to the Ministry of economy, on 31 January and 31 July each year, reports half-yearly 10 that reflect the fulfilment of the commitments acquired and set forth in the agreement;
f) comply with the literal d) of article 5 of this law;
(g) comply with the permissions of operation and permits corresponding to the type of productive activity to perform, within the period fixed for the beginning of the investment referred to in article 13 of this law; and, h) to comply with the regime of guarantees established in article 6 of this law; the infringement to this regime will give place, prior analysis of PROESA, to request the termination of the contract of stability legal regulated by this law.
Chapter VI provisions late finish-early contract article 17.-the legal stability agreement will be terminated for the following reasons: to) by resignation of the investor, communicated in writing to the Ministry of economy;
(b) by default by the investor, of any of the obligations indicated in article 16 of this law;
(c) by the breach in the home of the execution of it investment, according to the term established in the article 13 of the present law or by its lack of registration before it Office national of investments of the Ministry of economy, except checking of force greater or case queued; as well as by removal of all or part of the investment, so you place it below the amount established in article 14 of this law, as the case may be; and, (d) for being the company investor, orchestrated for the Commission or concealment of offences set out in the law regulating the activities relating to drugs and the law against the laundering of money and assets; as well as crimes relating to public finances, the public health and to nature and the environment, regulated in the Penal Code, provided that any firm and definitive judicial conviction, which for the competent judge or the Attorney General of the Republic shall inform the Ministry of economy and PROESA.
In the case of the literal b), c) and (d)) shall be termination of the contract after having proven breach of the investor, through a procedure, whereby the Ministry of economy will give audience for a period of ten working days to the administered; evacuated this, is issue resolution reasoned in a period of twenty-five days working, which shall be notified to the investor. This resolution will not appeal.

11. If it is found the existence of a breach, the Minister of economy declared the early termination of the contract, which will result in the loss of guarantees granted from such termination.
OF the owned article 18.-any change in the ownership of the investment giving rise to the contract, must be approved by the Ministry of economy, prior favourable opinion of PROESA.
The MINEC shall grant or deny an owner to enjoy the guarantees stipulated in the contract, the rights and obligations that correspond to the amount of the initial investment.
SOLUTION of disputes article 19.-within the clauses of the contract's legal stability, the parties must establish the mechanism based in which disputes that arise will be resolved in their application, execution or the interpretation of this law or of the contract itself, within the framework of article 15 of the investment law.
REGIME of exceptions article 20.-will not be covered in this law, investment in metal mining, or the financial.
SPECIAL character article 21.-the provisions of this law, by its special character had on any others that contradict them.
FORCE article 22.-the present Decree shall enter in force eight days after its publication in the daily official.
GIVEN in the blue room of the Legislative Palace: San Salvador, eighteen days after the month of December of two thousand fourteen.
OTHON SIGFRIDO REYES MORALES, PRESIDENT.
ENRIQUE ALBERTO LUIS VALDEZ SOTO, GUILLERMO ANTONIO GALLEGOS NAVARRETE, SENIOR VICE PRESIDENT. SECOND VICE PRESIDENT.

12 JOSÉ FRANCISCO MERINO LÓPEZ, LORRAINE GUADALUPE PENA MENDOZA, THIRD VICE PRESIDENT. FOURTH VICE PRESIDENT.
CARLOS ARMANDO REYES RAMOS, FIFTH VICE PRESIDENT.
WILLIAM FRANCISCO MATA BENNETT, MANUEL VICENTE MENJIVAR ESQUIVEL, FIRST SECRETARY. SECOND SECRETARY.
SANDRA MARLENE SALGADO GARCÍA, JOSÉ RAFAEL MACHUCA ZELAYA, THIRD SECRETARY. FOURTH SECRETARY.
IRMA PALACIOS LOURDES VASQUEZ, ERNESTO ANTONIO ANGLE MILE, FIFTH SECRETARY. SIXTH SECRETARY.
FRANCISCO JOSE ZABLAH SAFIE, JOSE SERAFIN RODRIGUEZ ORANTES, SEVENTH SECRETARY. EIGHTH SECRETARY.
Presidential House: San Salvador, to the twelve days of the month of January of the year two thousand and fifteen.
PUBLISHED, Salvador Sanchez Ceren, President of the Republic.
Juan Ramon Carlos Enrique Caceres Chavez, Minister of finance.
Tharsis Salomon Lopez Guzman, Minister of economy.
D. o. No. 10 vol. No. 406 date: 16 January 2015 JQ/geg 11-02-2015 legislative index