{"id":16025,"date":"2025-05-21T19:13:26","date_gmt":"2025-05-21T19:13:26","guid":{"rendered":"https:\/\/central-law.com\/?p=16025"},"modified":"2025-05-21T19:13:26","modified_gmt":"2025-05-21T19:13:26","slug":"el-salvador-approves-the-foreign-agents-law-key-implications-for-ngos-and-internationally-funded-entities","status":"publish","type":"post","link":"https:\/\/central-law.com\/en\/el-salvador-approves-the-foreign-agents-law-key-implications-for-ngos-and-internationally-funded-entities\/","title":{"rendered":"El Salvador Approves the Foreign Agents Law: Key Implications for NGOs and Internationally Funded Entities"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">In <\/span><b>May 2025<\/b><span style=\"font-weight: 400;\">, the <\/span><b>Legislative Assembly of El Salvador<\/b><span style=\"font-weight: 400;\"> approved the <\/span><b>Foreign Agents Law<\/b><span style=\"font-weight: 400;\">, a legal framework that establishes a new regulatory regime for natural or legal persons, whether national or foreign, who receive funds, goods, or services from abroad and carry out activities within the country.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">This legislative step marks a significant shift in the relationship between the State and organizations operating with international cooperation, particularly those engaged in social, technical, or human rights-related work.<\/span><\/p>\n<h3><b>Who is subject to the law?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">The regulation defines \u201cforeign agents\u201d as <\/span><b>any individual or entity receiving resources from abroad<\/b><span style=\"font-weight: 400;\">, regardless of nationality or legal form. Those most directly affected include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Non-governmental organizations (NGOs)<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Non-profit foundations and associations<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Branches of foreign entities<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Companies or individuals channeling funds from abroad<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">This means that even organizations legally established in El Salvador may be classified as foreign agents if they receive external financial support.<\/span><\/p>\n<h3><b>Main obligations<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Entities subject to the law must comply with a series of requirements, including:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Registration<\/b><span style=\"font-weight: 400;\"> in the <\/span><b>Registry of Foreign Agents (RAEX)<\/b><span style=\"font-weight: 400;\">, administered by the Ministry of the Interior<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Periodic reports<\/b><span style=\"font-weight: 400;\"> detailing income, expenditures, and activities funded with foreign resources<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">An <\/span><b>explicit prohibition<\/b><span style=\"font-weight: 400;\"> against allocating funds to political campaigning, influence operations, or interference in internal affairs of the State<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A <\/span><b>mandatory label<\/b><span style=\"font-weight: 400;\"> as \u201cForeign Agent\u201d on all communications, reports, and public campaigns<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Payment of a special contribution<\/b><span style=\"font-weight: 400;\"> of <\/span><b>30%<\/b><span style=\"font-weight: 400;\"> on all funds, goods, or resources received from abroad, unless formally exempted<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<\/ul>\n<h3><b>Are there any exclusions?<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Yes. <\/span><b>Article 5<\/b><span style=\"font-weight: 400;\"> of the law acknowledges that some cases may be <\/span><b>excluded<\/b><span style=\"font-weight: 400;\"> from general obligations. Interested individuals or entities may formally request exclusion from RAEX, which will assess factors such as:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The nature of the project<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The origin and destination of the funds<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The type of work or service being performed<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Strict compliance with declared purposes<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">In other words, <\/span><b>exclusion is not automatic<\/b><span style=\"font-weight: 400;\">\u2014it is subject to a qualification and authorization process.<\/span><\/p>\n<h3><b>What about exceptions to the 30% contribution?<\/b><b><br \/>\n<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">In addition to exclusions, the law provides for specific <\/span><b>exceptions to the 30% contribution<\/b><span style=\"font-weight: 400;\">, in cases such as:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Technical or humanitarian cooperation<\/b><span style=\"font-weight: 400;\"> channeled through the State or duly accredited entities<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Family remittances<\/b><span style=\"font-weight: 400;\"> or payments for personal services unrelated to political activities<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Personal transfers<\/b><span style=\"font-weight: 400;\"> that are non-ideological, non-partisan, and do not involve political interference<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Such exceptions must be properly <\/span><b>documented and substantiated<\/b><span style=\"font-weight: 400;\"> to be formally recognized.<\/span><\/p>\n<h3><b>Consequences for non-compliance<\/b><b><br \/>\n<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">Sanctions may include:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Fines<\/b><b>\n<p><\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Cancellation of registration<\/b><b>\n<p><\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Suspension of operations<\/b><b>\n<p><\/b><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Possible referral<\/b><span style=\"font-weight: 400;\"> to the Office of the Attorney General of the Republic<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<\/ul>\n<h3><b>Practical recommendations<\/b><b><br \/>\n<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">In light of this new legislation, at <\/span><b>CENTRAL LAW<\/b><span style=\"font-weight: 400;\"> we recommend that all entities and individuals receiving international cooperation:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Evaluate<\/b><span style=\"font-weight: 400;\"> whether they qualify as foreign agents<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Prepare in advance<\/b><span style=\"font-weight: 400;\"> the necessary financial and documentary compliance mechanisms<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Consult with us<\/b><span style=\"font-weight: 400;\"> regarding the need for registration and\/or the possibility of requesting exclusion or exemption<\/span><span style=\"font-weight: 400;\">\n<p><\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">This law significantly alters the <\/span><b>operational landscape for many organizations in El Salvador<\/b><span style=\"font-weight: 400;\">. Proper legal interpretation and compliance will be essential to avoid legal contingencies and ensure the continuity of projects funded from abroad.<\/span><\/p>\n<p><a href=\"https:\/\/central-law.com\/en\/portfolio\/francisco-murillo\/\"><strong>Francisco Murillo<\/strong><\/a><br \/>\n<strong>Partner<\/strong><br \/>\n<strong>El Salvador<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>In May 2025, the Legislative Assembly of El Salvador approved the Foreign Agents Law, a legal framework that establishes a new regulatory regime for natural or legal persons, whether national or foreign, who receive funds, goods, or services from abroad and carry out activities within the country. This legislative step marks a significant shift in 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