Invoice factoring and Decreto 1-2018

The Factoring and Discount Contracts Act (Decree 1-2018) was published in the Diario de Centro América on 22 February 2018 and came into force six months later, on 22 August 2018 (Perspectiva treated it as in force on that date; the publication date comes from law-firm summaries). It gives legal certainty to the assignment of invoices and receivables in order to raise liquidity. Technically, factoring is assignment to a factor, with or without recourse and with collection or advance functions; discounting is the assignment of a future-maturity claim for an agreed amount (Consortium Legal). Banks and finance companies offer it within their corporate banking arms; there is no public register of factors and no published market volumes.

The research is written in English; quoted figures, source names and the titles of legal instruments stay in the language their source published them in.