Doing business in Honduras
- How quickly can I set up a business?
- What is the minimum investment needed?
- How can I raise finance?
- What are the legal requirements for setting up my business?
- What structure should I consider?
- What advice can you give me in regards to payroll and taxation requirements?
- Is there anything else that I should know?
How quickly can I set up a business?
You can register as a sole trader; or if you have one or more partners, you can create a partnership.
What is the minimum investment needed?
The most used companies in Honduras are the Limited Liability Company and the Corporation, both of which can be of variable capital where a minimum capital is recorded. (L. 5,000.00)
How can I raise finance?
Through loans or your own money.
What are the legal requirements for setting up my business?
The Mercantile Registry is the place where this registration is made, in Tegucigalpa it is in the offices of the Chamber of Commerce and Industry of Tegucigalpa. In the rest of the country, business registers are in the local offices of the Property Institute.
Companies are constituted in a public deed authorized by a notary and are constituted in accordance with the provisions of article 14 of the Commercial Code.
Any natural person who wants to engage in acts of commerce individually and formally, must declare himself as a sole trader.
Once registered in the Mercantile Registry, you must register with the Chamber of Commerce and Industry of Tegucigalpa, then obtain your RTN and your operating permit.
However, there is no distinction between your personal wealth and that of the business, and he will answer on your estate for the debts of the business.
What structure should I consider?
Small & Medium Enterprise Model
known in Honduras as “PYMES”
What advice can you give me in regards to payroll and taxation requirements?
The Corporate Income Tax rate is 25% on business profits. If the company’s profits are greater than L. 1,000,000.00 (approximately USD 40,859.35), you must pay an additional 5% in solidarity taxes.
If the company presents losses and its assets are greater than L. 3,000,000.00 (approximately USD 122,578.06), they must pay an additional 1% in solidarity taxes.
The distribution or payment of dividends or any other form of distribution of retained earnings or reserves to resident or domiciled individuals and/or legal entities are taxed through a 10% withholding tax.
Is there anything else that I should know?
After selecting the type of entity, it is necessary to complete six steps to start a business in the country:
1. Obtain the public deed through a notary public who will write the documentation.
2. Register in the Mercantile Registry located in the Chamber of Commerce and Industry of the municipality where you have your domicile.
3. Obtain the National Tax Registry (RTN) in the Revenue Administration Service (SAR), Ministry of Finance. This process can take between 23 and 25 business days.
4. Apply for an Operating Permit in the municipality where you are domiciled. This process can be completed within 2 to 3 weeks.
5. Register and obtain an import and export license. This can take around 20 days.
6. There are three necessary registries for a company with employees: the Private Contributions Regime (RAP), the Honduran Social Security Institute (IHSS), and the Honduran Institute of Vocational Training (INFOP). These processes can take between 1 and 2 days each.
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