Startup Country

El Salvador’s decision in 2021 to make bitcoin legal tender was not a fluke.

This election was a symbol of determination, a nation focused on the future.

Three years later, the country presses forward. El Salvador boasts the lowest homicide rate in the Americas, a growing number of completed public works and a renewed sense of national pride. This follows decades of conflict and stagnation.

But El Salvador’s rebirth continues. The country views emerging technology as key to sovereignty, economic and human development.

El Salvador’s Asamblea Legislativa has recently approved updates to the country’s commercial code that establish El Salvador as a global destination for startups. The changes go into effect 13 February 2024 (English translation)*.

Notably, these changes enable the use of safe contracts popularized by Y Combinator.

Safe: Valuation Cap, No Discount (El Salvador)*

These updates come in a wave of modernization reforms aimed at attracting startups and investment to El Salvador.

In May 2023, El Salvador’s legislative assembly passed the Ley de Fomento a la Innovación y Manufactura de Tecnologías. This law grants tax exemption to technology companies able to exhibit performance of innovative activity.

Palestra anticipates similar efforts to continue in 2024.

* Documents on Palestra’s website are subject to Terms.