El Salvador being one of the first countries in Latin America to develop a legal framework for cryptocurrencies offers companies the opportunity to pioneer a potentially growing market. By obtaining a crypto license, companies can take a leadership position in the development of the crypto industry in this country.
Ability to open a bank account
Opening bank accounts for cryptocurrency companies can be challenging in most countries. However, in El Salvador, there are several crypto-friendly banks and financial institutions that can provide banking services for cryptocurrency companies if certain conditions and regulations are met, which is very rare.
El Salvador provides tax incentives for companies and individuals who are involved in cryptocurrencies. These incentives include tax exemptions on the face value, returns, and capital gains from cryptocurrencies. The same applies to issuers, certifiers, and service providers for registered digital assets, who will be exempt from the goods and services transfer tax as well as income tax.
Opportunity to enter a market that supports cryptocurrencies
El Salvador, by making Bitcoin a legal tender and granting a cryptocurrency license, has created a favorable environment for the development of the cryptocurrency industry. These measures create a favorable environment for the development of the cryptocurrency industry, which may attract new companies such as cryptocurrency exchanges, wallet providers, payment systems, and blockchain startups.
Legislative clarity and enforcement
The regulation of the cryptocurrency industry in El Salvador gives companies the confidence that they are operating by the law and complying with regulations. Obtaining a crypto license shows that a company is compliant with legal requirements, including KYC and AML regulations. This can increase a company’s trust and credibility with customers and partners.
Potential for global market entry
El Salvador’s decision to introduce cryptocurrencies and create a regulatory framework could attract international companies looking to expand their business. With a cryptocurrency license, these companies can enter the El Salvador market and explore opportunities to expand their presence in Central and South America. This expansion can be accompanied by increased market reach and potential collaborations with local businesses.
Participation in government programs
El Salvador has expressed its willingness to support cryptocurrencies and blockchain technology. Crypto-licensed companies can enter into collaborations with government initiatives and possibly participate in joint projects related to digital payments, financial inclusion, or blockchain-based solutions. Such partnerships may open up opportunities for joint ventures, research, or participation in government contracts.