Honduras is an excellent place to do business because it has grown steadily over the past few decades, security is getting better, and there are good business opportunities. Since setting up a company here is one of the fastest processes in Latin America, more and more foreign businesses are looking at the Central American country as an excellent place to invest. Honduras is next to El Salvador, Guatemala, and Nicaragua. It has a well-developed agricultural economy, as well as an industrial base that is growing and a professional services sector that is changing. Bananas, coffee, fish, clothes, and electronics are some of the country’s most important exports. In the past few years, the country has grown at the second-fastest rate in Central America, behind only Panama. The World Bank says that Honduras has a lot of potential for even faster growth in the years to come.
How to register a business in Honduras
The steps and requirements for registering a business here can vary depending on what kind of business you want to start. This guide shows the most important steps:
Put your starting money into a bank account in Honduras
The first thing you need to do to start a business is to put your initial capital in a local bank. You might be told to go to a certain bank based on the type of business you have, where you live, or the industry you are in.
File the company’s founding documents
With the help of a notary, you’ll need to make and register the company’s articles of incorporation with the Chamber of Commerce. These documents will include information like the company’s name, registered address, structure, and purpose. Most of the time, this will take about a week.
Get a tax identification number
After registering the articles of incorporation, you will need to apply for a tax identification number (TIN), which will be used to identify the company on tax returns, invoices, and other official financial documents. Most of the time, this process takes no more than one business day.
Sign up with local and national chambers of commerce
In Honduras, the next step in making a company is to register it with the Chamber of Commerce. This will cost money based on the initial share capital. As of May 2021, the maximum fee is 3,000 lempiras, which is about $125.
Get the zoning certificate and operating permit you need
In order to start a business in Honduras, you need to get a zoning certificate and an operational permit. The first one will show where the business activities are taking place and confirm that the company is allowed to do those things there. The second one will show that the company is allowed to do those things.
Register with the local government to start a business in Honduras
Your business will have to register for taxes with the revenue administration service of the Ministry of Finance, as well as with the Social Security Institute (IHSS), the Professional Training Institute (INFOP), and the Social Housing Fund (FOSOVI). Each worker gives 5% of their salary to the IHSS, while the INFOP and FOSOVI get 1% and 1.5%, respectively.
What form of company you can start in Honduras
When starting a business in Honduras, you can choose from four main types of legal entities:
- A proprietorship.
- A partnership.
- A private limited liability company (LLC).
- A public liability company (PLC).
Each type of business entity has its own benefits and requirements. A sole proprietorship is the easiest to set up, but the owner is fully responsible for all of the company’s debts and assets. A partnership is a similar arrangement, but it is different because the liability is shared among the named partners of the entity.
In the case of an LLC, you only need $250 in share capital to start up. A company like this can be owned entirely by people from outside the country. It must have between 2 and 20 shareholders, who are each responsible for the amount they put into the company. For an LLC, only one manager is needed, and it can be one of the people who put money into the business. Conversely, a PLC needs two directors, and company ownership is split into shares that can be traded on a stock exchange.
