El Salvador is emerging as Central America’s most lucrative destination for tax-free real estate investments, thanks to a groundbreaking law offering 15-year income tax exemptions for high-rise developments of 35+ floors.
Approved in October 2024, this policy has already sparked a surge in mega-projects, with five skyscrapers in development by January 2025. Here’s why global investors are racing to claim their stake.
This post only covers the incentives for high-rise construction, but El Salvador has been working comprehensively to become a good country for investment. For this reason, it has also modified laws and approved other legislation to become a prosperous nation according to President Nayib Bukele’s vision.
Why El Salvador? The 2024 Law Explained
The Special Provisions for High-Rise Real Estate Development grants unparalleled fiscal advantages:
- ✅ 0% Income Tax: For 15 years on profits from first sales, tourism rentals, or hospitality services tied to qualifying projects.
- ✅ No Capital Gains Tax or Withholdings: Investors keep 100% of earnings during the exemption period.
- ✅ Flexible Projects: Developers can pivot between uses (e.g., offices to hotels) without losing benefits.
Who Qualifies?
- Developers (local or foreign) building new 35+ floor towers.
- Projects must start after the law’s enactment (October 2024).
Exclusions:
- Secondary buyers, subtenants, or end-users.
You might also like: Why El Salvador is Becoming the Skyscraper Capital of Central America
2025 Update: Momentum in Motion
Just three months post-approval, El Salvador is witnessing:
- 5 Skyscrapers in Planning: Including mixed-use towers in San Salvador (luxury apartments, tech hubs) and coastal zones (tourist-focused complexes).
- $500M+ in Projected FDI: According to the Ministry of Economy, with 2,000+ jobs expected by 2026.
- Speed Over Red Tape: The law’s rapid enactment—just 8 days after official publication—signals a pro-business government.
Bukele’s Blueprint: “We Are Building Prosperity”
President Nayib Bukele’s 2024 inauguration speech set the tone, stating that they are tearing down barriers to make the country a beacon of growth. This law aligns with his strategy to:
- Modernize Cities: Replace low-density sprawl with vertical, sustainable urban centers.
- Attract FDI: Compete with regional players by offering unbeatable tax terms and becoming a leading country in the region.
- Create Jobs: Skyscraper projects require engineers, architects, and hospitality staff—boosting local talent.
How to Capitalize on This Opportunity
For investors, El Salvador offers:
- First-Mover Advantage: Secure prime locations before prices rise.
- Long-Term Stability: 15 years of tax predictability in a dollarized economy.
- Strategic Location: 3-hour flights to Miami and Houston, and about a 2-hour flight to Panama City.
Pro Tip: Partner with local firms to navigate permits swiftly—the government prioritizes mega-projects.
The Bottom Line
El Salvador isn’t just building skyscrapers—it’s building trust. With tax-free profits, rapid approvals, and a president betting big on urban transformation, this is your window to invest in Central America’s next skyline.
On top of all this, El Salvador spent approximately two to two and a half years fighting crime, ultimately becoming the country with the lowest crime rate in the entire American continent by 2023-2024.
Initially, it was surpassed only by Canada, but by 2024, El Salvador had already surpassed Canada. President Bukele and his government cabinet understand that building a new El Salvador required a foundation of security, respect for private property, and legal certainty.