flag Honduras Honduras: Investing

FDI in Figures

According to the UNCTAD's World Investment Report 2023, FDI inflows to Honduras increased from USD 739 million in 2021 to USD 823 million in 2022. Honduras' FDI stock also increased, reaching USD 18.4 billion (around 58.6% of GDP). Main investing countries include the U.S., Canada, and Mexico followed by other Caribbean and Latin American countries. The most attracting sectors for investment also include production of harnesses, garments, and textile products, bank services, transport, storage and telecommunications, among other services (El Economista). According to the Banco Central de Honduras, in 2023, the country attracted USD 1.07 billion in FDI flows.

Honduras has many characteristics that make it attractive to international and domestic investors: the close proximity to U.S. markets, legal protections and low tariffs provided under the Dominican Republic-Central American Free Trade Agreement (CAFTA-DR), a skilled labor pool with well-organized labor unions, a rich endowment of natural resources, and productive agricultural zones. However, investors report persistent uncertainty caused by security concerns, corruption, inadequate rule of law, expensive and unreliable electricity, problems with licensing and permitting, and deteriorating infrastructure, which continue to present significant challenges for enterprises of all sizes. Honduras’ Investment Law does not limit foreign ownership of businesses, except for those specifically reserved for Honduran investors, including small firms with capital less than USD 6,300 and the domestic air transportation industry. For all investments, at least 90% of a company’s labor force must be Honduran, and companies must pay at least 85% of their payrolls to Hondurans. Majority ownership by Honduran citizens is required for companies in the commercial fishing sector, forestry, local transportation, radio, television, or benefiting from the Agrarian Reform Law. There is no screening or approval process specific to foreign direct investments in Honduras. Foreign investors are subject to the same requirements for environmental and other regulatory approvals as domestic investors. According to the law, investors can establish, acquire, and dispose of enterprises at market prices under freely negotiated conditions without government intervention, but some foreign business operators report difficulty closing businesses. In early 2022, the Honduran special economic zone of Próspera adopted cryptocurrencies as legal tender which can be used as a form of payment for individuals and businesses, in an endeavour to boost economic activity and attract foreign investment through crypto. Honduras ranks 154th among the 180 economies on the 2023 Corruption Perception Index and 89th out of 184 countries on the latest Index of Economic Freedom.



Country Comparison For the Protection of Investors

  Honduras Latin America & Caribbean United States Germany
Index of Transaction Transparency* 3.0 4.1 7.0 5.0
Index of Manager’s Responsibility** 8.0 5.2 9.0 5.0
Index of Shareholders’ Power*** 6.0 6.7 9.0 5.0

Source: Doing Business - Latest available data.

Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.

Foreign Direct Investment 202020212022
FDI Inward Flow (million USD) 419739823
FDI Stock (million USD) 16,898.017,636.718,459.2
Number of Greenfield Investments*
Value of Greenfield Investments (million USD) 40363191

Source: UNCTAD - Latest available data

Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.


Return to top

Tax Rates

Value-added tax (VAT) - Impuesto sobre ventas (local name)
15% on goods and services.
18% for alcohol, cigarettes, and first, executive and business class air travel.
Exempt items include: goods that form part of the average weekly shopping; pharmaceutical products; cleaning fluids and disinfectants; raw materials and tools for agricultural and agro-industrial production; major and minor poultry species and fish, herbicides, insecticides, pesticides, rodenticides and other anti-rodents, live animals; means of animal reproduction; seed and vegetative material for the sowing and sexual and asexual spreading; raw material for the elaboration of balanced food in its final presentation, except that destined for pets; transfer of assets in a merger or liquidation; medical services; personal insurance and reinsurance; gasoline, kerosene and related oil products; firewood and coal; books and newspapers; leather, except fine leather goods; water and electrical services; education; passenger transport; financial services.
Company Tax
Withholding Taxes
Dividends: 10%, Interests: 10%, Royalties: 0 (residents)/25% (non-residents)
Social Security Contributions Paid By Employers
10% (8.5% for state welfare and 1.5% for the private contribution regime).
Other Domestic Resources
Fiscal Administration Services
Overview of Honduras' tax measures in response to Covid-19
Consult Doing Business Website, to obtain a summary of the taxes and mandatory contributions.

Individual Taxes

Income tax Progressive rate up to 25%
From HNL 0 to 172,117.89 0% (including NHL 40.000 for non-documented medical expenses)
From HNL 172,117.89 to 262,449.27 15%
From HNL 262,449.27 to 610,347.16 20%
Above HNL 610,347.16 25%
Individuals with gross income above HNL 1 billon 1% on gross income, if it is greater than the tax payable as per the standard progressive rates

Country Comparison For Corporate Taxation

  Honduras Latin America & Caribbean United States Germany
Number of Payments of Taxes per Year 59.0 28.2 10.6 9.0
Time Taken For Administrative Formalities (Hours) 203.0 327.5 175.0 218.0
Total Share of Taxes (% of Profit) 39.1 46.8 36.6 48.8

Source: Doing Business - Latest available data.

Return to top

Investment Opportunities

Tenders, Projects and Public Procurement
Inter-American Development Bank, Tenders in South America
DgMarket, Tenders Worldwide
Setting Up a Company
Consult Doing Business Website, to know about procedures to start a Business in Honduras.
Useful Resources
Foundation for Investment and Development of Exports (FIDE)
Contact the British Embassy in Honduras.

Business Setup Procedures

Setting Up a Company Honduras Latin America & Caribbean
Procedures (number) 11.00 8.00
Time (days) 42.00 25.22

Source: Doing Business.


Return to top

Any Comment About This Content? Report It to Us.


© eexpand, All Rights Reserved.
Latest Update: May 2024