Doing Business in
Honduras is strategically located in the middle of the Americas
A Strategic Geographical Location
Those that are doing business in Honduras benefit from that fact that it is located in the center of Latin America and is a two-hour flight from major airports in the United States. The country also has ports on both the Atlantic and Pacific coasts and is 48-72 hours from the US by sea. There are a number of transport services providers located at Honduran ports that link the country for trade with the rest of Latin America, as well as with North America, Asia, Europe, and Africa.
When doing business in Honduras one will find that it has the lowest logistics costs in all of the region and operates as a distribution center for the rest of Central America. Puerto Cortes, on Honduras’ Atlantic coast, is the largest deep-water port in the region and it is one of four mega ports that are found in Latin America.
A Cost-Effective Labor Force
Those that are considering doing business in Honduras will find that the country has a significantly sized and cost-effective labor pool. Honduran workers are experienced in a number of productive sectors that include auto parts, food processing, as well as a wide range of other light manufacturing activities. The cost of labor in Honduras is one of the lowest in the region and the country is known for the availability of bilingual workers that are professionals and possess skills.
A Business-Friendly Legal System
According to information gathered by the World Bank, it takes only 13 days to establish an entity and to begin doing business in Honduras. Also, according to World Bank information, the average time needed to set up a business entity in the rest of Latin America is 31 days. For production and sales purposes, the country can be divided into two regions. The first area is the North Coast of the country, which includes the industrial and commercial city of San Pedro Sula, while the second region of the country is the central part of the country which includes the political capitol of the country, Tegucigalpa.
Free Trade Zones (FTZs)
Honduras has a number of free trade zones within its national territory. The largest of these is located at the northern city of Puerto Cortés and is owned and operated by The National Entity of Ports (ENP). Additionally, there are several private Free Trade Zones located throughout the country. Companies that are doing business in Honduras enjoy the following:
- Imports free of charge. This includes all machinery, spare parts, raw materials as well as other supplies used in the production process;
- Free currency exchange;
- Expedited approvals (one day or less) for items imported into and exported from FTZs.
In addition to special treatment within Free Trade Zones, companies that are located outside Honduran FTZs that export 95% or more of production qualify to utilize the Temporary Importation Law. Under this mechanism, manufacturers doing business in Honduras can import their raw materials free of import duties.
Member of the DR-CAFTA
Honduras is a signatory of the Dominican Republic-Central America Free Trade Agreement. This pact between the United States, the Dominican Republic, Honduras, Nicaragua, Guatemala, Costa Rica, and the United States eliminates most tariffs and impediments to trade between member countries. Those doing business in Honduras can ship their products to the United States duty-free.
The Central American Group in Honduras
The CAG acts as a shipping agent and third-party logistics company in Guatemala through Grupo Maritimo.
Interested in Honduras?
Among the topics addressed in this paper are:
- starting a business;
- getting electricity;
- dealing with construction permits;
- labor market regulations
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