Consortium Legal

In February of this year, the Superintendence of Banks and Other Financial Institutions of Nicaragua (SIBOIF) published regulations updating the minimum capital requirements for the following financial institutions: The minimum capital requirement for financial institutions is initially outlined in the laws applicable to each institution and is updated every two years through prudential regulations published by the SIBOIF. The updating […]

On October 22, 2022, in the Official Gazette No. 36,057, the Corporate Governance Regulation for Supervised Institutions (hereinafter referred to as the Corporate Governance Regulation) was published, establishing an adaptation period of 8 months. During the adaptation period, we had the opportunity to advise banks, insurance companies, and other institutions supervised by the CNBS in updating their articles of […]

On March 12, 2024, the Legislative Assembly of El Salvador approved an amendment to the Income Tax Law (LISR), by adding a numeral 4) to Article 3 of the Law. The amended article regulates the cases of non-taxable income, and to this effect, the new numeral establishes the following: “Income for this Law does not include: All amounts received […]

During share purchase transactions between companies in Costa Rica, it is common for buyers and sellers to enter a non-compete agreement. This agreement aims to impose a “negative obligation” on the seller to refrain from participating in the acquired company’s market. Non-compete clauses or agreements represent ancillary restrictions agreed upon by the parties involved in […]

I know the title sounds strong; however, it is true. Amendments to the law in Guatemala have caused the legislative branch to steal our tax credit, resulting in obvious violations of the principle of neutrality, which we have previously discussed. This is how the law originally stated, in Article 22: Article 22. Tax Credit Refund. The […]

I- Background of Carbon Credits: Carbon Credits have their origins in the Kyoto Protocol of 1997, where they were proposed as a mechanism to combat climate change. The primary focus was on preventing, capturing, or reducing Greenhouse Gas (GHG) emissions. This is achieved through the conservation or reforestation of long-term forests, equivalent to not emitting or […]

Art. 237 of Law No. 822, the “Tax Concertation Law” (LCT), establishes the Stamp Tax, also known as “ITF.” This indirect tax applies to the consumption of certain legal acts outlined in art. 240 of the law, each with its applicable rate. According to art. 239 of the LCT, stamp taxes must have designations and other characteristics defined by the […]

In recent days, news has emerged that, as of January 1, 2024, the smiling Mickey Mouse has entered the public domain. This character is known for being the first Mickey to appear on the small screen in the 1928 short film Steamboat Willie: This is significant news considering the economic value that this character represents for Disney. However, for […]

Today, on our journey to better understand VAT, we will delve into the exciting and mysterious world of VAT tax credit. In VAT, the problem – as a philosophical exploration – lies in the mystery of the tax credit. But what is this? While the term is commonly used, sometimes, just sometimes, it seems as understood as […]

1- Introduction The constraints of public finances and limited access to state borrowing for socially desirable projects have led to various schemes involving private sector participation in the design, planning, financing, construction, operation, and maintenance of infrastructure projects, particularly in the areas of roads, ports, and airports. Examples of such participation include the concession of […]

In this article, we will review the general provisions regarding the technique for the determination of Income Tax (IR) on capital gains and losses in accordance with the Tax Agreement Law (“LCT“) and its Regulations (“RLCT“), applicable to taxpayers not exempted by Art. 77 LCT, with respect to non-exempt income established in Art. 79 LCT or special legal […]

Continuing with the VAT neutrality topic. To define the concept in this series of articles, it must be clarified that “The principle of tax neutrality is equivalent to the absence of adverse economic effects derived from taxation; the analysis of this principle of external neutrality concerning VAT is carried out in greater depth” (Tax Neutrality). The mechanism […]

The Salvadoran Tax Code, in its art. 188, stipulates that, regarding resources, one must adhere to the provisions of the Law on the Organization and Functioning of the Internal Revenue and Customs Appeals Tribunal. Being competent to hear the appeals filed by taxpayers before the Internal Revenue and Customs Appeals Tribunal (TAIIA), concerning administrative acts issued by […]

The Costa Rican legal framework, in conjunction with copyright law, places video games in a category analogous to computer programs or cinematographic works. However, neither of these classifications is suitable for comprehensively covering and safeguarding the elements that make them stand out as a complete creation in themselves without the need to fragment the work […]

On Tuesday, November 7, 2023, Law No. 769 , Law for the Promotion and Regulation of Microfinance, approved on June 9, 2011, was reformed on the first occasion by Law No. 1,168 , Law Reform Law No. 769 , Law for the Promotion and Regulation of Microfinance, published in La Gaceta No. 201. The purpose of the reform is to modify articles […]

Migration, without a doubt, is a phenomenon that has been present in our world since time immemorial and that today is more present than ever in our globalized world. Every day, many people seek new opportunities in other countries and cross borders in search of better jobs, greater security and a better life for themselves and […]

The enormous effort that the Salvadoran State has been making to encourage investment in the country must be recognized. As an example of the above, we can mention the recent reforms to the Industrial and Marketing Free Zone Law ( LZFIC) , which have been in force since September 2023. It is worth asking what these reforms are […]

Currently, the issue of cybersecurity takes on special importance for companies that operate in the Fintech ecosystem that, precisely, operate at the intersection between finance, technology and regulation, together with the exponential growth in the use of technological means and digital for the execution of financial transactions. Cybersecurity or computer security of an entity or […]

The value added tax is a phenomenal invention thanks to its main support: neutrality. VAT should be classified as a consumption tax, meaning that we seek to tax it on the consumer of goods and services. To achieve this, the tax structure is built on the pillar of neutrality. The OECD itself indicates: “The basic principles underpinning neutrality are […]

Over the past thirteen years, Costa Rica has undergone a profound process of tax reforms. During this time, there has been no legislative change to the principle of territoriality, nor has the interpretation of the producing source, as developed by the Tax Administration, been formally adopted. Furthermore, the law does not include references to the […]

With the recent implementation of electronic invoicing in El Salvador, it is of interest for taxpayers issuing VAT control documents to know the platforms enabled by the Tax Administration to comply with the technical and regulatory requirements established to allow the digitalization of the invoicing process. Art. 119-A of the Tax Code states that electronic tax […]

The term digital nomad is not a concept derived from the pandemic, as it had already been coined in 1997 by the authors of the book of the same name, Tsugio Makimoto and David Manners. However, it did become popular with the pandemic. Digital nomads are people who choose to work outside their home countries and may […]

Have you ever wanted to own an establishment like McDonald’s, Marriott International or RE/MAX? All over the world, and the Central American region is no exception, we have these types of businesses that, in the legal context, translate into franchise contracts that establish the legal framework to start the business. Lawyers call franchises sui generis, […]

Intellectual Property is divided into two large areas, copyright and industrial property. In order to see them applied to the fashion industry, both within the national and international context, we will be addressing each of them in greater depth.  The fashion industry has the particularity that garments can be protected through the work of applied art […]

With the aim of reducing the effects of climate change and guaranteeing access to energy in various latitudes, the figure of Energy Communities has been developed . These are legal organizations formed by a variety of partners that may include individuals, associations, small and medium-sized businesses, government entities, among others. Climate change is a real existential threat that […]

There are so many things that are attributed to bills. Many qualities and functions that are colloquially promulgated by even the authorities are repeated and repeated without actually being functions of these documents. An invoice, in Guatemala, is a fiscal document of the VAT regime. Its function is solely to document the obligation to charge VAT on […]

It may sound obvious, but historically, economics has recognised that the profits of any business are obtained after selling or transferring an asset, at a higher value than the cost of acquiring it by the transferor. This profit margin, or greater value, has always represented income and indicates that the recipient has gained something (hence […]

Having policies and controls for the prevention of money laundering is of vital importance for organizations (whether supervised or not) to avoid incurring administrative or criminal liabilities, taking into consideration that the Criminal Codes regulate this crime in its intentional and reckless modalities. Legal persons are obliged to implement policies and controls when they are […]

On December 14, 2022, the Central Bank of the Republic of Nicaragua (“CBN”) approved Resolution CD-BCN-LXXX-1-22 “Check Truncation Regulation” (hereinafter, the “Regulation”) with the in order to regulate and establish the requirements and procedures that must be met in the process of truncation of bank checks by the participants of the Nicaraguan Interbank System of […]

Border Measures (MF) are temporary measures designed to prevent the importation or exportation of products that violate the rights of the owner of a trademark and allow the suspension of customs activity and the elimination or confiscation of the infringing merchandise. The objective of the MF is to suspend the dispatch of counterfeit or “pirated” […]

The issue of the capital premium has gained momentum in Guatemala, especially due to concerns about how ventures can be financed, since: They do not want to be diluted; They need capital; Your company is not valued more than an expectation of income. There are essentially two ways in which you can bring money into […]

On May 18, 2023, the Executive Branch presented five Bills to the Legislative Assembly related to fiscal and public finance matters. The mentioned projects are: File 23759: Modification of the Tax Code regarding joint and several liability in tax matters. File 23760: New Income Tax Law. File 23761: New Vehicle Property Tax Law. File 23762: Strengthening […]

The London Interbank Offered Rate (LIBOR) has long been one of the most important benchmark rates in the financial world, but its full discontinuation is around the corner. LIBOR has been discontinued in all its currencies and terms as of December 31, 2021, except for references in US dollars for one-day, three-, six- and twelve-month terms, which will be published […]

Every April 26th is celebrated worldwide as Intellectual Property Day. This celebration was officially established in the year 2000, however, its raison d’être dates back much earlier. The celebration was decreed by the United Nations and was particularly set aside on April 26, taking into consideration the date on which the WIPO Convention came into force, the international instrument by […]

From the labor field, the needs of commerce have generated the creation of schemes for the rendering of services other than the one known as “employer – employee” relationship. These needs of the market have allowed the emergence of other figures such as intermediaries, contractors, and/or outsourcing, including the so-called employment agencies. For this reason, it is […]

The basis of any arbitration procedure is the clause that agrees to it. From this, the court will be structured , certain procedural rules will be adopted and the essential aspects of that specific arbitration will be defined. A good arbitration clause guarantees a smooth process, while a bad one is a sure path to disaster. The arbitration clause […]

The usufruct is a right that gives a third party the possibility of using and enjoying an asset that does not belong to them and grants them the possibility of making their own the fruits that it produces, in this case, they would be the civil fruits that are those that come from businesses where […]

Special Law for the Change of the Legal Regime of Non-Profit Organizations” was published in La Gaceta – “Official Gazette” No. 214, which, according to its text, has as purpose of establishing the procedure for the change of regime, from non-profit to commercial, of entities whose activity is to create financial or microfinance services, all […]

On Thursday, February 23, 2023, the regulations to Law No. 9996 for the Attraction of Investors, Rentier Residents and Pensioned Residents were published in the national newspaper “La Gaceta”. Within which the following modifications are established: The foreign person who makes an investment in Costa Rica for an amount not less than… Read more

The Inter-American Convention of the Legal Regime of Powers to be used Abroad and its Application in Guatemala n our professional practice, we are frequently presented with powers of attorney granted abroad, and we must bear in mind that as Notaries we have to certify that the legal representation exercised through said power of attorney […]

Last year 2022 ended with the approval of the Reforms to the Notary Law by the Legislative Assembly, which are still in the process of forming a law, waiting for the veto of the executive body, and those that were expected to come into force. On January 1, 2023, this reform is made up of […]

This is exactly the phrase I entered in my internet browser to try to inform myself a little bit about the presence, position and participation of women in the world of litigation, very confident to find names of colleagues in the world of litigation both nationally and internationally. This happened a few minutes after talking […]

On November 15, 2022, it has been published in The Gazette Official Daily No. 214, Law No. 1137, Special Law for the Change of Legal Regime of Non-Profit Organizations, which has the following objectives: 1. To establish special conditions and procedures for the change of the mercantile legal regime of 29 Non-Profit Organizations (hereinafter “NPOs”) to recipient […]

Yesterday, legislative file 22.215, Law to Attract International Workers and Remote Service Providers, was approved in first debate. The main purpose of this project is to attract digital nomads to Costa Rica, who will be granted a series of tax benefits.  Who is a digital nomad? Digital nomads will be those persons who meet the […]

One of the recurring immigration categories that can be found throughout Central America is the Residence for Investors. This category of residence as an investor is that granted to foreigners and their dependents, who invest a sum of money in real estate, registrable assets, shares, securities and productive projects or projects of national interest (in which […]

The Law Against Money and Asset Laundering has the purpose of preventing, detecting, sanctioning and eradicating the crime of money and asset laundering, as well as its concealment, expressly stating that financial entities must adopt policies, rules and behavioural mechanisms; as well as developing and executing programs, regulations, procedures and internal controls to prevent activities […]

According to a report published by the Central Bank of Nicaragua (“BCN”) on August 3, 2022, the flow of remittances registered in the country in the second quarter was US$763.6 million dollars from the United States of America, which implies a growth of 44.1% compared to the same quarter of 2021. In the first semester […]

On October 24, the Bill called “Cryptoactive Market Law” was presented to the Legislative Assembly of Costa Rica, corresponding to file No. 23,415. The proposal aims to generate greater financial inclusion and modernize the Costa Rican digital economy through the promotion and regularization of mining, commercialization, exchange, transfer, possession, establishment, uses and taxation of crypto […]

The Salvadoran Income Tax is levied on the income obtained in an exercise or period of taxation, understanding by this, all products or profits received or accrued, either in cash or in kind, from multiple sources, including those that come from capital, such as rents, interest, dividends or participations . This leads us to a concept that […]

Carrying out the registration of Final Beneficiary is an obligation that falls on all commercial companies registered in Nicaragua. As of August 25, 2020, through Law number 1035 of August 25, 2020: “Reform Law to Law No. 698, General Law of Public Registries and the Commercial Code of the Republic of Nicaragua” created the first obligations to […]

Data Protection and Information Privacy in Honduras Currently, we live in the so-called “Digitalization Era”, in which data protection and privacy of information and communications at a global level are increasingly necessary. According to the Digital 2020 report, which evaluates how people around the world use the internet, smartphones, social networks and electronic commerce, the world […]

When thinking about investing in the region, companies must not only take into account the tax systems of each country, but also the oversight power of the Tax Administrations to ensure tax compliance. In this sense, this article aims to give an overview of the determination processes in the different countries of the region and general […]

In accordance with the General Law of Immigration and Immigration, and its respective regulations, all foreigners who request a temporary residence as an annuitant, must provide proof of the enjoyment of monthly income, coming from abroad or from Costa Rica, for a minimum amount of two thousand five hundred dollars. When the income is generated […]

In the month of July 2022, the State of Honduras signed the Agreement on Mutual Administrative Assistance in Tax Matters of the ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT (OECD in Spanish) . The officials appointed by the Honduran government to carry out said work were the Chancellor of the Republic and the Minister Director of the Revenue Administration Service (SAR); who, in […]

Workplace Violence and Harassment Referring to violence and harassment in the world of work as unacceptable behavior is because it constitutes a violation or abuse of human rights and a threat to equal opportunities and is incompatible with decent work. The first and most important thing is to define what is considered violence and harassment according […]

Electronic wallets or e-wallets are defined as a technological tool through which currencies can be kept and transferred on a virtual platform that is accessed through an application or web page. Currency stored in an electronic wallet can typically be loaded via credit or debit cards or via cash payments to a centralizing bank account or other authorized […]

Following the definition given by the International Labor Organization, sexual harassment can be defined as “… insistent propositions, touching, approaches or unwanted invitations of a sexual nature, which may come from a superior or a co-worker. work, which directly influence the possibilities of employment and the working conditions or environment and which also produce effects on […]

The due diligence process (or “Due Diligence”) is the one that is carried out when you want to evaluate the compliance status of a company, in order to identify the level of risk and opportunities before signing any contract or economic agreement. Before starting this process, it is important for the interested party to define […]

Is a work created entirely by artificial intelligence eligible for protection? What role does artificial intelligence play in the process of creating a work? Thanks to the emergence of new technologies, especially the Internet, people have benefited in many aspects, mainly in the dissemination of knowledge as well as the ability to access a vast world […]

For several years, Central America has been presenting itself as a strategic zone for doing business. Thus, in addition to the intra-regional expansion of Central American businessmen, there has also been an increase in the interest and participation of companies from outside the region to invest and do business in Central America. One example of […]

The proof ideally constitutes the soul or essence of a process, allowing the Judge to have proven knowledge of what happened, that is, reasonable certainty about the facts presented by the parties. The person who settles a controversy must be convinced about: What happened? depending on the credibility of the case that was presented by […]

All companies registered in Costa Rica that do not carry out activities, must file an assets declaration as of March 15th. Therefore, if you or your company are in any of the following situations, you must prepare the legal, fiscal and accounting information required for the filing of the company: Individual or legal entity not […]

On October 26, 2021, agreement number 380 of the Attorney General’s Office was published in the Official Gazette, which contained the new Instructions of the Financial Investigation Unit for the Prevention of Money Laundering and Asset Laundering.  Said instructions will enter into effect on June 6, 2022 as a result of an extension granted so […]

In Guatemala, in the case of commercial, civil entities or associations, as a rule and in accordance with the law, they have their legal representatives. In addition, depending on their line of business, they may appoint attorneys-in-fact for one or several matters, or for all matters, depending on the structure of their government. In view […]

Again, we address the importance of transfer transactions of shares of commercial companies; a topic that we have previously addressed in the series of articles on “Mergers and Acquisitions in Nicaragua” and “Tax Effects in Stock Transfer Operations”. Recently, this topic has gained great relevance, since the legal system applicable to this type of operation has been […]

The Income Tax Law, in its Article 14, provides us with a definition of what we must understand by Capital Gain, and it is that obtained by a natural or legal person that is not habitually engaged in the sale, exchange or other form of negotiations on movable or immovable property. That is to say, they […]

On October 26, 2021, agreement number 380 of the Attorney General’s Office was published in the Official Gazette, which contained the new Instructions of the Financial Investigation Unit for the Prevention of Money Laundering and Asset Laundering.  Said instructions will enter into effect on June 6, 2022 as a result of an extension granted so […]

Litigation & Arbitration Regional Team For several years, Central America has been presenting itself as a strategic zone for doing business. Thus, in addition to the intra-regional expansion of Central American businessmen, there has also been an increase in the interest and participation of companies from outside the region to invest and do business in […]

Stock transfer transactions are a common way of acquiring and capitalizing businesses. This type of transaction can materialize through onerous legal acts ( Eg Buying and Selling) or free ( Eg Donation). The importance of the subject transcends the commercial sphere and extends to the fiscal impact that derives from this type of operation; being the latter on which we will […]

As is known, the trustees of private, national or foreign trusts that carry out activities within the territory, will have to present the ordinary declarations of the Registry of Transparency and Final Beneficiaries in the month of April, as well as the other obligated subjects, except when they are trusts. with recently assigned legal ID, […]

As of the amended to the Public Registry Law, new obligations have been regulated for all companies that are registered before the Public Registry of Commerce and that should be considered relevant during their operation. First, we will address the provisions that were already regulated in the Commercial Code of our country, in which we […]

On Thursday, December 9, 2021, Law # 10,069 was published in the Official Gazette La Gaceta called “Law on Bills of Exchange and Electronic Promissory Notes”, which provides an excellent opportunity to encourage the use of technology in our country and boost the secure and efficient access to credit, through the use of these securities […]

The Development Banking System (SBD) was created in 2008 by Law N ° 8634, reformed in 2014 by Law N ° 9274. As its name indicates, it is a system that comprises organizations of different nature, whose purpose is to finance and promote technically and economically feasible productive projects, in accordance with the country’s development […]

On November 17, 2021, amendments to certain provisions of the Salvadoran Competition Law (the “Law”) were approved in order to harmonize it with the Administrative Procedures Law (“LPA”) during an ordinary session of the Salvadoran Congress. Given that, as of its entry into force on February 13, 2019, both the Antitrust Regulator (the “Regulator”) and […]

As of the amended to the Public Registry Law, new obligations have been regulated for all companies that are registered before the Public Registry of Commerce and that should be considered relevant during their operation. First, we will address the provisions that were already regulated in the Commercial Code of our country, in which we […]

As of the amended to the Public Registry Law, new obligations have been regulated for all companies that are registered before the Public Registry of Commerce and that should be considered relevant during their operation. First, we will address the provisions that were already regulated in the Commercial Code of our country, in which we […]

On October 22, 2021, the new Instructions for the Financial Investigation Unit for the Prevention of Money and Asset Laundering, Terrorism Financing and the Financing of the Proliferation of Weapons of Mass Destruction were approved, through agreement number 380 issued by the Attorney General of the Republic, which was destined to take effect on November […]

In this new installment, we address the issue of the different guarantees that govern the sale of movable or immovable property. In this sense, it should be noted that, in our legal system, all sales are by law, covered by three different types of guarantee [1] : a) Eviction Guarantee, b) Guarantee for Hidden Defects, and c) […]

Intangible assets, such as Intellectual Property, are gaining more and more economic importance, and with this, natural or legal persons, owners of trademarks and other distinctive signs, are frequently dealing with various problems related essentially to the use, protection, and preservation of their trademark. For this reason, in this article we will briefly refer to […]

On November 17, 2021, amendments to certain provisions of the Salvadoran Competition Law (the “Law”) were approved in order to harmonize it with the Administrative Procedures Law (“LPA”) during an ordinary session of the Salvadoran Congress. Given that, as of its entry into force on February 13, 2019, both the Antitrust Regulator (the “Regulator”) and […]

As of the amended to the Public Registry Law, new obligations have been regulated for all companies that are registered before the Public Registry of Commerce and that should be considered relevant during their operation. First, we will address the provisions that were already regulated in the Commercial Code of our country, in which we […]

Written by: Francisco Letona The application of good compliance practices in the corporate sphere has not reached the expected level; However, in recent years, these practices have been a trend and have been growing, mainly in large organizations such as transnationals and multinationals. According to the WORLD COMPLIANCE ASSOCIATION (hereinafter: -WCA-), “ Corporate Compliance ” is a set of […]

Written by: Diana De Mata The COVD-19 pandemic has resulted in a legal crisis in all countries of the world. The legal systems have been reached in the fight and confrontation with this serious health crisis. It is in this scenario that we ask ourselves: Where are our freedoms? ; What role should our authorities play in the effective restoration of […]

Written by: Astrid Dominguez Today more than ever, the concern for living surrounded by acts that we call “acts of corruption” resounds in the different areas of our lives, our social networks and our surroundings. Many times we focus this concern on the public sphere, acting as authorities that have more media presence and that we […]

Written by: Christian Betancourt According to IBM, in 2019 humanity produced 2.5 trillion bytes of data every day (for perspective, a trillion is a 1 followed by 18 zeros). According to Forbes, in the same year 16 million text messages were sent, as well as 156 million emails, every minute worldwide. These are impressive and steadily rising […]

Introduction: In El Salvador, the Bitcoin Law was approved by the Legislative Assembly and published in the Official Gazette last June 9th of this year, establishing a vacatio legis of ninety days from its publication; in that sense, its entry into force is scheduled for next September 7th. There are still several questions about how […]

In today’s world its common that when a company is managed by different groups of shareholders, whether they belong to the same family or not, a shareholder’s agreement is negotiated and executed (hereinafter referred to as the “Agreement” or the “Shareholders Agreement”) that regulates the relationships between them. This article will not analyze the validity […]

(Guatemala, July 2020) Guatemala has the largest economy of Central America, excluding Panama, and its gross domestic product (GDP) represents one third of the region’s GDP.  It has strong macroeconomic indicators with adequate reserves, a controlled public deficit and debt, controlled inflation, and a stable exchange rate.  Guatemala’s economy is mostly dependent on agricultural exports, […]

(Central America, July 2020) Confinement and strict measures of social distancing are now part of the reality of millions of people around the world. In the face of the world’s uncertain economic, political, social, and cultural environment, authorities must go one step further to try to mitigate the severe consequences that the COVID-19 pandemic has […]