Gambling License in El Salvador

• Cryptocurrency settlements. Bitcoin is the official means of payment in this jurisdiction. In the Development Bank of El Salvador (BANDESAL) it is possible to exchange cryptocurrency (BTC) to the US dollar at the market rate.
• A global marketplace is open. The gambling license of El Salvador gives the right to operate worldwide. At the moment, there are no countries/zones/regions where there would be a ban on operators with this type of license.
• Loyal attitude to the work of the platform. The authorities promote the development of new business, so there are no strict requirements for policies, documentation, and the whole operation of the platform.
• One license for multiple activities. The authorization from the Salvadoran authorities allows you to cover B2B and B2C activities.
• Fast authorization process. A gambling license can be issued within 2-3 months.
  No regional requirements for servers. The operator has the right to place its servers anywhere in the world.
• Actively developing zone. The country has signed several agreements that promote active interaction with neighboring countries, as well as the USA, EU, China, and Korea.
• Territorial principle of tax payment. Companies that have received profits outside this jurisdiction do not pay corporate tax (30%). There is no real estate tax, land purchase is allowed for non-residents.

Most often entrepreneurs choose to register an LLC (LLC) with an initial capital of at least $2000 (25% is paid immediately upon registration), for public companies (SA) the authorized capital should be $11450.

To open a gambling business, you must fulfill several requirements:

• Appoint a director (no requirements for citizenship, place of residence). The director can be the founder of the company.
• Have at least two shareholders (legal entity/individual, no criteria for residency).
• A local office is mandatory.
• Employ a secretary and a local representative/administrator to interact with the tax office.
• Meet the conditions for registering the company name (no reference to government agencies allowed, must use Latin alphabet).
• Audit is mandatory, financial statements are submitted to the Chamber of Commerce, and there is also an audit by the Tax Service once a year.

License requirements include opening an account in a local bank. The Central Reserve Bank of El Salvador (Central Reserve Bank of El Salvador) regulates the financial system in which more than 20 banks operate, accounts are opened in US dollars, euros, and BTC. Accounts can be opened remotely, based on a power of attorney. In addition, there is no currency control and no restrictions on residence and citizenship for account holders.

El Salvador gambling laws have undergone several changes and finally, on December 31, 2021, a new law was passed which authorizes the National Lottery (LNB) to regulate, supervise, and issue permits for activities related to lotteries, online gambling, and sports betting.

The mandatory documents that are submitted when applying for a license include:

• Copies of passports (identification documents) of all managers and shareholders.
• Confirmation of the place of residence of all managers and owners.
• Confirmation of the absence of criminal records.
• Proof of work experience and qualifications of the main managers (diplomas, certificates, resumes, letters of recommendation).
• If one of the shareholders is a legal entity, in this case, company documents (registration certificate, financial report, list of shareholders) should also be submitted.

Running a gambling business involves obtaining a permit from the LNB:

• Collect a package of documents.
• Send the completed electronic application together with the documents to LNB for inspection.
• LNB (Compliance and Inspection Department) checks the documentation, the financial condition of the operator, and technical characteristics and submits it to the Board of Directors for approval.
• The LNB Board of Directors decides whether to grant or deny a permit for gambling activities and informs the operator of its decision.

• Unique name. There should be no references to government agencies, the name indicates the organizational form (LLC, SA, etc.), and the Latin alphabet is used.
• Local representative. The company must have a local representative/administrator (no residency requirements) who will work on behalf of the company with the IRS.
• Audit and Taxes. Financial statements are mandatory, tax audit is done annually. There are customs privileges with countries with which trade agreements are signed. Corporate tax is up to 30% but is paid on a territorial basis. The peculiarities include the collection of tax “Pago a Cuenta” – 1.75%, which must be paid every month as an advance payment of income tax.
• Organizational structure. Minimum of one manager (can be a shareholder), a secretary, and two shareholders (can be part of a legal entity).
• Start-up capital. When registering a company, 25% of the mandatory initial capital (for LLC-$2000, SA-$11450).
• Business plan. A detailed description of future activity with a description of the technical component, and types of activities.
• Perform AML/KYC procedures. Data on owners and directors are in the public domain. When opening a company, all identification documents for directors and owners are submitted. The country fights illegal financial flows and fulfills the requirements of the Caribbean Financial Action Task Force (CFATF).

According to the LNB, El Salvador now has 7 official casinos, and gambling is also available on many cruise ships. LNB has already issued more than 1,300 permits for gaming operators. It is not prohibited for residents of El Salvador to gamble online. There is also no prohibition for providing services to offshore operators either.
All operators must be registered with the local municipality, the Trade Register of the Main Department of Statistics and Population Census, and be authorized to conduct lotteries, online gambling, or sports betting by the LNB.

To conduct gambling activities, the company is registered with several state bodies: the Ministry of Finance, the Chamber of Commerce, and the City Council. All these state bodies regulate the legality of the company’s activities, payment of taxes, as well as the reliability of financial reporting. Since 2021, the LNB has been responsible for the supervision of gaming operators and issuing licenses.

El Salvador’s gambling laws have changed several times. In 1999, the government banned casinos, but local City Hall still issued permits. Then in 2011, the Law on Violations and Civil Coexistence (Ley de Contravenciones y Convivencia Ciudadana) allowed gambling but prohibited the marketing, and installation of slot machines without a permit. Since December 2021, the Law (the new Organic Law of the LNB) gave the National Lottery (LNB) full authority to regulate, supervise, and decide on authorization for online gaming, lottery, and sports betting operators.
El Salvador also adheres to the principles of the Caribbean Financial Action Task Force (CFATF).

Loteria Nacional de Beneficencia (LNB) has introduced a new draft law that will tax all casinos up to 55%.
According to statistics, players in El Salvador most often prefer to use online platforms, with 49,700 people projected to participate in online gambling by 2028. El Salvador’s Ministry of Economy expects to generate revenue from gambling in 2024 of about 20.37 million euros, from sports betting 8.79 million euros.