In Honduras, the entire country has Free Zone status. Most foreign companies are located in Export Processing Zones and Free Zones. These include Fortune 500 companies. The majority are manufacturers of apparel, sporting goods and textiles, as well as electronic and automotive assembly operations.

Manufacturing facilities located within these sites enjoy a series of benefits. These are:

Plenty of Places and Advantages

There are 21 private industrial parks in operation or under construction in Honduras, located in the following cities and towns: Amarateca, Bufalo, Choloma, Comayagua, El Progreso, La Ceiba, La Lima, Naco, Potrerilllos, Puerto Cortes, Río Nance, San Pedro Sula, Tegucigalpa and Villanueva.

They are all very close to Puerto Cortes. For example, Amarateca is 3 1/2 hours away; Bufalo, 55 minutes; Choloma, 20 minutes; Comayagua, 3 hours; El Progreso, 55 minutes; La Ceiba, 3 1/4 hours; La Lima, 45 minutes; Naco, 1 1/2 hour; Potrerillos, 1 1/2 hour; Río Nance, 20 minutes; San Pedro Sula, 40 minutes; Tegucigalpa, 5 hours; Villanueva, 1 hour.

Also, a special law has been established for export companies operating in Free Zones that provides the following benefits:

Companies are permitted to construct buildings anywhere within the country, as long as the building is totally fenced, and has 24-hour security prior approval of corresponding authorities. To obtain a Free Zone Status (permit) you pay an annual fee to the Honduran Government through the Ministry of Industry and Trade and the Internal Revenue Service (DEI).
What the Law States

Foreign companies exporting from Honduras can take advantage of the following special incentives:

INVESTMENT LAW

Approved in 1992, this law seeks to improve Honduras' ability to compete in world markets. It provides a transparent legal framework for investment, treats both national and foreign investments equally, reduces government controls and intervention and guarantees a limitless percentage of foreign-owned capital.

EXPORT PROCESSING ZONE LAW

Since its approval in 1987, private Export Processing Zones can be established in any part of the country and companies within enjoy the same benefits as Free Trade Zones.

TEMPORARY IMPORT LAW

Applicable to companies operating outside the Export Processing Zones. Qualifying companies can import all equipment and materials required to manufacture their goods duty free. However, income and city taxes and a customs broker fee must be paid. Special approval must be obtained to operate under the Temporary Import Law.

ENVIRONMENT LAW

Issued in 1993, this law promotes agricultural, cattle, forest and industrial activities toward practices that are compatible with the conservation and sound and sustainable use of natural resources and the protection of the environment as a whole.

PROMOTION AND DEVELOPMENT OF PUBLIC WORKS AND NATIONAL INFRASTRUCTURE

This law was issued in 1998 to establish a legal framework for the provision and indirect management of public services, and the hiring of professional training and infrastructure projects by non/government individuals, companies or organizations. This law stimulates foreign participation in infrastructure development projects and emerging industries, enjoying a full array of concession rights while Honduras in turn, benefits from increased development, modernization and job opportunities.

INTELLECTUAL PROPERTY RIGHTS LAW

Issued in 1993 to protect national and foreign works published in Honduras or elsewhere, in compliance with international conventions and standards.

LAW OF ADMINISTRATIVE SIMPLIFICATION

The general purpose of this Law is to establish a framework to render the government's administrative procedures more straightforward and consistent, in order to guarantee that all government agencies fulfill their duties in compliance with strict standards of economy and promptness and in the spirit of service.

Information you need to know

The corporate legal framework in Honduras, states that 100% foreign ownership is acceptable under Honduran law and that corporations organized under Honduran law can take any of the following forms: Sociedad Anónima (Corporation); Sociedad Anónima de Capital Variable (Corporation); Sociedad de Responsabilidad Limitada (Liability Company LLC).

On the other hand, local labor requirements state that the labor force must be 90% Honduran (equivalent to 85% of payroll). Labor benefits are an attendance bonus of 1 day wage/week, full month pay bonus in December and June, an educational bonus and social security that covers sickness, accidents, handicap, maternity, retirement pension, death, and the employer pays 7%, employee pays 3.5% based in a Lps. 4,800.00 capped monthly salary.

Work shifts are as follows:

Compensation for working overtime is of 25% (day), 50% (night), with the overtime night work shift, having 75% surcharge.

There is one day of rest for every six days worked (Sunday). Paid holidays are January 1, April 14, May 1st, September 15, October 3, 12 and 21, December 25 and Easter (Thursday, Friday, Saturday). Employees are entitled to 10 days vacation for 1 year of work; 12 days per year after 2 years; 15 days after 3 years and 20 days after 3 years or more.

Source: FIDE, Investment and Exports.

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