The branches of foreign companies that are domiciled in El Salvador, have the obligation to comply with the corporate obligations of their entities in our country, which must be complied with no later than May 31, 2022 and in which the following points must be considered (as a minimum) – this must be done by the highest authority of the Head Office, in its country of domicile:
I- Approval of the Annual Report of Activities of the Branch, the balance sheet, the statement of income, the statement of changes in equity, and the external auditor’s report, in order to approve or disapprove the first four and take the measures it deems appropriate.
II- The appointment and removal of the attorneys-in-fact (if applicable, either because there were changes in the administration at the parent company level, or because a power of attorney has reached its expiration date, or because of the branch’s own need to change its attorney-in-fact) and of the External and Statutory Auditors (if applicable), as the case may be.
III- The emoluments corresponding to the External and Statutory Auditors.
IV- The application of results.
The Commercial Code and the Tax Code additionally establish as an obligation to be complied with, that the certifications of the minutes recording the appointment of the External and Statutory Auditors, as well as the approval of the financial statements and distribution of results, must be registered in the Commercial Registry, within ten working days, counted from the date of the respective agreement.
In the case of the Fiscal Auditor, the DGII must also be informed of his appointment no later than ten working days from the date of the respective agreement, whose maximum date, if the meeting were held on May 31, would be JUNE 14, 2022.
All branch certifications must be duly notarized and apostilled (or legalized through consular channels, as applicable in the jurisdiction of the Head Office).
For the above, our Corporate Law and Tax Law areas are at your disposal to assist you in this regard.