Page 180 - Caribbean-Central America Profile 2018

HONDURAS

CARIBBEAN-CENTRAL AMERICA PROFILE 2018

Official Name: Honduras
Capital: Tegucigalpa
Nationality: Honduran(s)
Official Language: Spanish
HONDURAS Population Total (millions): 9.11 (2016 est.)
Size: 43,266 square miles
Currency: Honduran Lempira (HNL)
Internet Domain: .hn
International Dialling Code: +504
Electricity: 110/220 volts/60 cycles

COUNTRY OVERVIEW INVESTMENT INCENTIVES
q The Republic of Honduras is the INCENTIVE AND PROTECTION OF INVESTMENTS ACT
second largest of the Central American Honduras offers investors generous tax benefits. In 2010, the Law of Incentive and Protection
countries. of Investments was promulgated. These incentives include tax exemptions for companies under
q It is bounded on the north by the Certain Circumstances investing in the country.
Caribbean Sea, on the east and south It is of paramount interest of the State attraction, promotion and protection of national and foreign
by Nicaragua, on the southwest by El investment, which will be given facilities and guarantees for development. The main objectives of
Salvador and the Pacific Ocean, and on this Act are:
the west by Guatemala. • The promotion and development of private investment.
q The capital is Tegucigalpa. • The establishment of offices facilitation and assistance to investors.
• The formulation of public policy proposals aimed at creating a favorable investment climate
Honduras has trade agreements with more both domestic and foreign.
than forty countries in the World that
allow access to 1500 million consumers. FREE ZONES ACT
It has attracted the attention of investors Recognising the potential of its growing industrial sector, the Honduran government has
worldwide due to the favorable conditions implemented an ambitious policy to attract investment, channeling its most concerted efforts
offered to facilitate investment in the into a thriving new industrial free zone system. All of Honduras has been designated as a Free
country and the attractive returns that can Zone. Foreign companies are in large part established in Industrial Processing Zones and Export
be generated from these activities. Processing Zones. The majority of these companies are dedicated to the manufacture of clothing,
sports accessories, electronic assemblies, automotive, textile industry, and agribusiness.
Production costs in many manufacturing
and service industries are the lowest in the Businesses located in these zones enjoy the following benefits:
region, due to the affordability of energy, • Currency conversion without restrictions
the accessibility of export costs, a floating • No import or export duties on all machinery, raw materials and components needed for
exchange rate and wage agreements. More operating the plant
than 300 companies worldwide have • Quick dispatch of incoming and outgoing shipments in less than one day with minimal
established operations in Honduras in paperwork
recent years. • 100% foreign property ownership
• Tax exemption on sales, corporate taxes and profits
Honduras actively promotes the • 100% repatriation of income and capital at any time
participation of foreign direct investment
to create high value added in these sectors: TOURISM INCENTIVES ACT
• Light manufacturing This Act allows for the permanent exemption from payment of income tax from the start of
• Industry Textile / Clothing operations. This incentive is granted exclusively to new projects. Similarly, the law exempts the
• Agribusiness and Forestry payment of taxes and other taxes which results in:
• Tourism • Imports of goods and new equipment needed for the construction and start of project operations.
• Service • The import of printed material for promotion or advertising of the projects or the country as a
• Renewable energy tourist destination.
• The import replacement impairment of property and equipment over a period of 10 years after
verification.
• Import of new motor vehicles as: buses, pick-ups, panel, truck and acquire the leasing of motor
vehicles
• Imports of aircraft or boats new and used, for air, sea or inland waterway transport.

C-22 Caribbean-Central American Action