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Creation of the Economic Recovery Trust Fund Law

Creation of the Economic Recovery Trust Fund Law

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By means of Decree No. 112, the Legislative Assembly of the Salvadoran Government established the reforms to the Creation of the Economic Recovery Trust Fund Law of Salvadoran companies.

1. Subsidy Programs

The regulation creates the temporary subsidy program for Micro, Small, and Medium Enterprises registered as employers with the Salvadoran Social Security Institute and have a maximum of up to one hundred employees to grant non-refundable financial support to cover one hundred percent of the increases granted to the personnel of such companies, up to the value of the minimum wage.

The amount to be delivered to each employer of micro, small, and medium-sized companies will be equivalent to the amount to be allocated to comply with the salary increase of employees earning a minimum salary or any other amount that at the date of the entry into force of the published regulation is higher than the preceding minimum salary.

2. Delivery of the Subsidy

The corresponding subsidy may be paid through the delivery of monthly installments to be transferred within the period corresponding from August 2021 to July 2022. The corresponding benefit will also include the hiring of personnel that have been made effective as of May of this year.

3. Trust Property

The regulations state that the Trust Property will be made up of contributions from the Ministry of Finance, up to a total of seven hundred million United States dollars.

In this regard, the financial subsidy program may support for one year the supplement to the new minimum wage, including employer and social security contributions, for Micro, Small, and Medium-Sized Enterprises (MSMEs) up to one hundred million US dollars.

4. Approval of the Regulations

The conditions for the granting of the subsidy included in the program in question will be defined in the corresponding regulations. Said document must be prepared and submitted by the Board of Directors through the Financial System and the Economic Development Fund administered by BADESAL (Banco de Desarrollo de El Salvador – Development Bank of El Salvador).

Source: Diario Oficial 12/08/21

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