Honduras: Tax Benefits for Foreign Investments

Honduras offers foreign investors different tax benefits and a wide variety of sectors enjoy these benefits such as the services sector, export, manufacturing, tourism, agribusiness, and others. In addition, within the tax framework, there are different investment incentives contained in different regulations. 

The country’s foreign investment is regulated through the Law for the Promotion and Protection of Investments, even so, those investments established under Decree 80-92 (previous Investment Law) still maintain the benefits for a period of five years.

Law for the Promotion and Protection of Investments

This law specifically promotes public policies to develop a favorable climate for private investment and the improvement of Honduras’ connectivity at the international level. The law offers a transparent legal framework and equal treatment to domestic and foreign investment, and also provides for partial exemptions from income tax, stability contracts and benefits related to pre-operating expenses and accelerated depreciation. 

Some of its benefits are:

  • Unlimited access to foreign currency in free-use currency for the import of inputs, payment to foreign suppliers and payment to outstanding credits abroad that come from investments in Honduras.
  • Right to open bank accounts without any requirements other than national ones.
  • Guarantee on property and right not to expropriation (except for art. 106 Constitution). In case of justified expropriation, the investor is guaranteed the right to repatriation of 100% of the amount received as compensation.
  • Freedom of production and marketing of goods and services in general, except those prohibited by law, as well as self-determination of prices.
  • No restrictions on the number of suppliers and no limitations on the total value of assets or the number of transactions.
  • Freedom to take out insurance inside and outside the country that covers your investments from commercial and non-commercial risks.
  • Guarantees are recognized for the protection of investors in real property: security on the title of the property; conflict prevention regime and guarantee regime of recovery of investments of continuity of a project in execution on a property in dispute.
  • Projects of “priority interest” or “investment by region”, provided that they exceed certain amounts, will receive partial exemptions from income tax (ISR) that will be between 60-80% of the amount invested.

The Act specifically guarantees foreign investors:

  • Domestic treatment of foreign investment.
  • Right to make the transfer abroad in currency of free use of the full amount of its capital from the investments made.
  • Right to access credit in the national financial system on an equal footing with nationals.
  • Right to repatriation of foreign currency and capital gains.
  • No imposition of measures restricting the types of establishment or joint ventures through which an alien may carry out an economic activity.
  • The foreign investor who participates in a Public-Private Partnership or who takes part in the tax benefits regime of this Law, may apply for the Residence Permit for himself, for his descendants and for his employees.

For any queries get in touch with our Honduras Business Specialist Carlos Alberto Galindo at honduras@d-b-in.com

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