Video · From El Salvador
US Company from El Salvador: Is Work Done Here Taxed Here? (2026)
Running a US company from El Salvador? El Salvador taxes Salvadoran-source income, and pay for work done here counts, wherever it's paid. 4:38 long, published .
Transcript
What the video says
0:00Can a Salvadoran resident own a US LLC?
It's late afternoon in San Salvador, and Gabriela is pulling the last print of the day. She sells her posters online, and buyers abroad keep asking to pay by card. So she's wondering about a US company. On the American side, she can have one. No social security number, and no trip to the US. We're BaseAcross. We set up US companies for founders outside America, so we'll be straight with you. El Salvador taxes only income from El Salvador.
But work done here counts, even when a US company sends the invoice, and that's the part to plan around.
0:33Do I need a US company for Stripe in El Salvador?
First, does she need a US company at all? The big card processor doesn't take Salvadoran businesses, so a US company is a common route to it. With an EIN and a US bank account, the company can apply for a US account there. It reviews the business and the person behind it, and it can decline. Some US buyers and platforms want a US contracting party, which is another reason.
Gabriela wants card payments from buyers worldwide, so she has a reason.
1:02Is income from my US company taxed in El Salvador?
Now El Salvador's central rule. It taxes Salvadoran-source income: activities carried out here, and services rendered or used here. So when Gabriela prints in San Salvador, that work is done in El Salvador, wherever the money lands. Pay for work done here counts too, wherever it's paid. You're resident after more than a set number of consecutive days here in a calendar year, or if your main source of income is here. And there are no controlled foreign company rules, so profit kept in a foreign company isn't taxed to you through them.
These rules come from PwC's tax summaries, so confirm them with your adviser.
1:38Wyoming LLC or Delaware C-Corp, and an EIN without an SSN
The American part is quicker. A Wyoming LLC suits an owner-run business that needs the card processor or sells to US customers. A Delaware C-Corp suits raising from US investors, though it pays US corporate tax. The company needs a registered agent, an address in that state for legal papers, not where you work. Then the EIN, the company's US tax number. Without a social security number or an ITIN, the application goes on a separate IRS form instead of the online tool. You don't need a Salvadoran company to form a US company.
Prices are in US dollars, El Salvador's own currency, so just check your card's fees.
2:18Can I open a Mercury account from El Salvador?
Where can the dollars land? Founders living in El Salvador can apply to a US fintech bank, because El Salvador isn't on its list of countries it doesn't serve. It decides each application. A multi-currency account gives no US dollar account details to founders living here. Another US bank doesn't bar El Salvador, but it asks every owner for a physical US address.
Each provider decides for itself, so use the same names, addresses and business description everywhere.
2:47What does a company pay in El Salvador?
So what does El Salvador tax? A company pays a standard rate, or a lower one when its taxable income is up to a set amount. People domiciled here pay on a rising scale, on income from El Salvador. The guide works one example through. Say Gabriela's Wyoming LLC makes sixty thousand dollars of profit, from work she does in San Salvador for clients abroad. If El Salvador treats that as income of a permanent establishment here, the lower rate applies, and the tax is fifteen thousand dollars. That's an illustration, not a quote. Work done outside El Salvador would be outside its tax.
Whether there's a permanent establishment, and how the LLC is classed, are for your adviser.
3:29Do I pay US tax, and is there a US–El Salvador treaty?
On the American side, there's no income tax treaty between the US and El Salvador. So US-source dividends, interest and royalties paid to you are withheld at the full rate, unless a US exemption applies. Pay for work you do in El Salvador generally isn't US income. A single-owner LLC with no US office or staff often owes no US income tax on it. It still files a report with the IRS when it has reportable transactions with you. Money you put in, take out or are paid for your work can count, and missing it is expensive.
For a calendar-year company, it's usually due in mid-April.
4:05What to do first, in order
Put together, the order runs like this. Start with a Salvadoran tax adviser: whether you need a US company at all, and how El Salvador will tax the work you do here. Then form the company, get the EIN, and apply for the accounts. Keep the books, and a record of where the work is done. Put the IRS report and your Salvadoran return on one calendar. The full guide, with every source and a checklist in English and Spanish for your adviser, is linked below. And Gabriela?
Tomorrow's prints get made in San Salvador, so that's what she'll tell her adviser first.
The founder in the video is an example, not a customer. The rules in it were checked when it was made; the guide carries the current sources.
The guide
Costs, documents, timelines and the rules in El Salvador, with sources.
Read the guide for El SalvadorWatch on YouTube