By: Pablo Sorto y María Celeste Rodríguez
After the approval, publication and entry into force of the “Bitcoin Law” many questions and doubts have arisen for both Salvadoran and foreign investors; this because El Salvador is the first country to implement this cryptocurrency as legal tender along with the Salvadoran colón and the US dollar.
In addition to the different benefits, the President of the Republic has offered foreign investors, who intend to exploit this currency through investments that boost the country’s economy, different incentives in terms of obtaining different immigration statuses and figures; being the most attractive, obtaining a residence for owning bitcoin as well as nationalization for these investors; quite complex immigration process and reserved for a very select group of people, specifically for Central Americans and Spaniards.
However, so far no clear guidelines, instructions, regulations or laws have been established to regulate this type of immigration benefits. Although there are constant references to such incentives, the immigration authorities and the General Directorate of Migration and Alien Affairs of El Salvador are working on the requirements and regulations as well as the pertinent procedures to follow in order to be eligible for these immigration benefits.
Having established the above, the lack of clear guidelines for obtaining these migratory incentives, has not mitigated the desire, interest or even the investment itself aimed at the use and exploitation of this cryptocurrency. Since the President made it known through national chain, different interviews and tweets as well as since the entry into force of the “Bitcoin Law”, there has been an evident growth and interest in the country in issues related to Blockchain, Fintech and the use and exploitation of cryptocurrencies in general, with a clear emphasis on bitcoin.
Although, according to what was previously established, the figure of a residence for the possession and use of bitcoin is not yet regulated, there are still different types of migratory figures to which a foreigner could apply in case of having either the desire, interest or need to reside in the country to exploit this cryptocurrency.
In El Salvador, there are different types of residencies, statuses and migratory figures to which a foreigner can apply, taking into consideration the motive and functions that the foreigner would come to perform in the country. Since the functions that this group or segment of foreigners would perform with the use of the Bitcoin cryptocurrency would be mainly the investment in the country, the residence that investors should apply for or adhere to would be the “Temporary Residence for Investors”. Although this residence is not a residence for holding bitcoin, it has many similarities and fulfills the same purpose.
The requirements to apply for this residence, in addition to the basic requirements that any residence demands, as well as an application signed by the interested party or designated person, proof of not having a police record from the country of origin duly apostilled and a digital copy of all the used pages of the passport, this residence requires that the foreigner and investor, demonstrates the investment capital for a minimum amount of four thousand minimum wages in force or ONE MILLION FOUR HUNDRED AND SIXTY THOUSAND UNITED STATES DOLLARS. Such investment must be approved, authorized and protected by the Ministry of Economy by the Foreign Investment Unit which by means of a resolution will establish that the foreigner has such capital which will be destined to be invested in the country. Since the Bitcoin is legal tender, such investment may be authorized through the cryptocurrency.
As mentioned above, the residence for investors is not the same or equivalent to a “Bitcoin residence”; and it would be much more convenient to use the residence from the use of Bitcoin as it is much more economically viable and more applicable to the specific case. Unfortunately, this does not yet exist, so until such residence is duly regulated, this would be the most viable option and the one that comes closest to it. It should be clarified that although this is the closest residence to the “bitcoin residence”, it is necessary to analyze each specific case in order to establish the type of residence or immigration status that best suits each foreigner and his or her specific case.
Finally, it should be noted that regardless of the type of temporary residence for which a foreigner applies, he/she may opt for a definitive residence by holding any type of temporary residence for a maximum of three consecutive years, depending on the nationality of the foreigner.
For further information, please contact Dr. Diego Martín (firstname.lastname@example.org) or Mr. Pablo Sorto (email@example.com).