+504
HONDURAS
We have a team of seasoned professionals dedicated to supporting all your business needs - ensuring seamless operations and full regulatory compliance. This foundation empowers you to confidently establish and expand your business in Honduras with efficiency and confidence.
WHY HONDURAS?
Located at the crossroads of Central America, Honduras is an increasingly attractive destination for international investors. Its strategic access to both Pacific and Caribbean coastlines, coupled with membership in CAFTA-DR, offers advantageous export potential to the U.S. and beyond. With a GDP of approximately $32.1 billion and 4.2% annual growth in 2025, Honduras is bolstered by strong manufacturing, agriculture, and a budding renewables sector. The government has introduced free trade zones and renewable energy incentives that reduce bureaucracy and attract foreign participation. However, investors need to navigate administrative delays, security challenges, and a judicial system that can take up to three years to resolve commercial disputes.
ADVANTAGES
Honduras offers compelling benefits as a cost-effective, strategically located investment hub:
- Strategic Location & Trade Access
Dual-coast geography and CAFTA-DR membership grant preferential access to large export markets.
- Manufacturing & Export Strength
A key exporter of textiles—especially socks and apparel—benefits from modernized ports like Puerto Cortés for fast shipping.
- Attractive Investment Zones
Zona Libre de Importación (ZOLI) and ZEDEs offer full foreign ownership and tax exemptions—though ZEDEs face constitutional and legal uncertainty.
- Renewable Energy Incentives
Tax holidays and streamlined approvals under recent reforms (e.g., 2025 Energy Sector Act) promote solar, wind, and hydropower projects.
- Low Operational Costs
Competitive workforce and utility prices make Honduras preferred for manufacturing and agribusiness.
SIMPLE TAX REGIME
- Corporate Income Tax
Standard rate is 25%, with a minimum tax of 1% for high earners, and a 5% solidarity surcharge on incomes over HNL 1 million.
- Individual Income Tax
Progressive brackets at 15%, 20%, and 25%, with annual income thresholds and exemptions.
- VAT & Exemptions
Standard VAT of 15%, with a reduced 8% for tourism and exemptions on medicines, staple foods, and agricultural machinery.
- Withholding Taxes & Transfer Pricing
Dividends are subject to 10% withholding, royalties at 25%, and interest at 10%. Transfer pricing rules conform with OECD BEPS, along with mandatory country-by-country reporting starting 2025.
- ZOLI & ZEDE Incentives
Full income tax and duty exemptions. Note that ZEDEs like Próspera are now legally uncertain but existing zones remain under grandfathered terms.
HONDURAS COMPANIES
Modern and versatile legal entities facilitate foreign investment and structured operations.
- Sociedad Anónima (S.A.)
A stock corporation needing 2–5 shareholders, minimum capital of US $1,250, board of directors, and statutory auditor. Suitable for larger enterprises.
- Sociedad de Responsabilidad Limitada (S.R.L.)
Ideal for SMEs—requires 2–25 partners, capital as low as US $250–200, with limited liability protection.
- Branch Office
A foreign entity can form a branch by appointing a local resident agent, with capital set at US $1,300, and must maintain separate local accounting.
- Representative Office
For demonstration, liaison, and market research—cannot carry out commercial activity. A resident representative is required.
HOW TO FORM YOUR COMPANY
- Reserve your company name via the Mercantile Registry.
- Draft and notarize Articles of Incorporation (apostille needed for foreign entities).
- Register with SAT for RUC/RMT tax identification.
- Secure municipal operating licenses.
- Register with the Honduran Social Security Institute (IHSS).
- Open a corporate bank account (approx. 4-week timeframe).
Digital filing options have streamlined timelines by 30%, reducing set-up time to about 4–7 weeks for SRL/S.A.
Honduras offers a solid foundation for investment with its strategic location, competitive tax regimes, and flexible company structures. Nonetheless, investors should remain alert to security, corruption, and legal risks—especially around ZEDEs—and pursue comprehensive due diligence, backed by local counsel.
Contact Us
Get in touch with the right people to get the right help in setting up your business in Honduras.
enquiries@chandrawatpartners.com.