Free Zones in Honduras are of vital importance for the development of the Honduran economy. These regimes contribute to a Tax System that favors investment, but at the same time provides the resources to achieve sustainable development in the social, environmental and economic spheres. They promote a greater mobilization of resources and seek to generate adequate conditions to attract domestic and foreign investment, without neglecting tax collection.
CREATION OF FREE ZONES IN HONDURAS
The Free Zone Law in Honduras was created by Legislative Decree number 356-1976 approved by the National Congress and published in La Gaceta Official Gazette on July 21, 1976. It was originally called Constitutive Law of the Free Zone of Puerto Cortes since it was created for a specific geographic area.
The strategy to attract foreign investment and generate employment was carried out by means of tax incentives granted to the companies that joined the regime, in articles 4 and 5 of the law are the tax benefits that the companies that joined the regime will enjoy and among them are the payment of customs taxes, charges, surcharges, consular fees, internal taxes, excise taxes and other taxes and levies that are directly or indirectly related to import and export customs operations, being also exempted from the payment of taxes and municipal contributions and from the municipal taxes and excise tax, consular duties, internal taxes, excise taxes and other taxes and charges directly or indirectly related to import and export customs operations, being also exempted from the payment of taxes and municipal contributions and Income Tax (ISR) of the profits obtained in their operations in the Free Zone by the companies established there.
Over the years the needs were changing and inevitably came the reforms to the law and by Decree 131-1998 dated May 20, 1998 in Article 17 the Constitutive Law of the Free Zone of Puerto Cortes is reformed and becomes Free Zone Law and extends to the entire national territory; Being the last one the reform made by means of Decree 08-2020 published in the Official Gazette La Gaceta on February 14 of the year 2020, in this reform several articles were added among them article 4-A which talks about the fiscal benefits that the companies under the Free Zone regime will enjoy, which are:
Exemption from Sales Tax (ISV) on local purchases, Contribution for Attention to Social Programs and Conservation of the Road Heritage (ACPV) and Income Tax (ISR) and Related Taxes; Exemption from the payment of municipal taxes and contributions that exempts compliance with the formal and material obligations derived from such taxes, with the exception of the formal and material obligations derived from the neighborhood tax.
Currently in Honduras there are Free Zones dedicated to different industries, among them are cardboard recycling, shrimp farming, manufacturing, marketing, various services companies, etc.
Natural or juridical persons that apply to the Free Zone regime may enjoy the benefits established in the Law for a period of 15 years, extendable for 10 more years, as established in article 4-B of Decree 8-2020 dated February 14, 2020.
Category of Free Zones
- BASIC COMMERCIAL ENTERPRISE - REEXPOR-TATION MIND: It is that national or foreign company that operates in the restricted area and allocates not less than fifty percent (50%) of its annual sales to re-export;
- BASIC INDUSTRIAL COMPANY- EXPORT MIND: It is that national or foreign company that operates in the restricted area and is dedicated to the mechanical, physical or chemical transformation of raw materials, semi-finished products or finished articles, they can carry out activities destined for the sale in the national market of fifty percent (50%) of its production or sale;
- INTERNATIONAL ELECTRONIC SERVICES COMPANY: It is that national or foreign company that operates within a restricted area to offer international services of contact centers or call centers, data processing, back office, information technology or any other service that can be offered electronically, using wired or wireless means;
- COMPANY OF SERVICES AND RELATED OR COMPLEMENTARY ACTIVITIES: It is that national or foreign company that operates within a restricted area, whose production or activity is destined to the supply of productive processes or to the supply of services to other beneficiary companies of the Regime; and,
Who can adhere to the Free Zones regime?
Any natural or juridical person may adhere to the Free Zone regime as long as it complies with the requirements established in the Free Zone Law and its Regulations.
REQUIREMENTS
OPERATOR:
- Main activity to which the company will be dedicated.
- Exact address, telephone and e-mail.
III. Amount of the investment, as well as the number of jobs to be created, with their respective salaries and wages.
- Descriptive plan of the existing property or where the project will be developed, identifying the areas that comprise it, including the area destined for the customs office, location, limits, surface and access roads, duly endorsed by a Civil Engineer or Architect.
- Title of ownership of the real estate where the project will be developed, or in its absence, a lease contract for said real estate, granted for a term of no less than five years, except when the lessee is the State through its institutions.
- Photocopy of the National Tax Registration
VII. Duly authenticated Power of Attorney granted by the legal representative of the company, accompanied by a photocopy of the Public Instrument stating that said representative has the authority to grant powers of attorney.
- Photocopy of the Public Deed of Incorporation of Commercial Company or declaration of individual trader, duly registered in the Registry of Social or Individual Traders, as appropriate, and in the case of foreign companies, the authorization to trade in Honduras must be registered in the Registry of Social Traders.
- Foreign companies must present proof of registration as an investor issued by the National Investment Council (CNI);
- To certify by means of a Certificate, before the Secretary of State in the Office of Economic Development, at least one Permanent Representative of the company, with ample faculties to carry out all the legal acts of civil, mercantile and labor character that have to be celebrated and to take effect in the national territory, by means of a power of attorney granted in Public Deed. It will be the obligation of the beneficiary of Free Zones, to maintain updated the information relative to the changes that take place with respect to the designation of this permanent representative.
- Proof of current solvency, issued by the Tax and Customs Administration.
- The photocopies of the required documents must be submitted duly authenticated, signed and stamped by a notary public.
- TGR Receipt for L.200.00
OPERATOR - USER
In addition to the requirements demanded of the Operating Companies, the Operator-Usual Companies must prove the following information:
- List of products or services to be developed.
- Target markets for your products or services
- Activities or services to be provided
- Three (3) year projection of foreign exchange to be generated.
Williams Mendez
