How to start a business in Honduras as a foreigner (2026)

On his inauguration day, President Nasry Asfura signed the ICSID Convention, reversing the Castro administration's 2024 withdrawal and restoring multilateral investor-state arbitration protections. The move directly targets the business-climate deterioration that followed the 2022-2024 ZEDE dispute wave and signals a return to FDI-friendly policy.

The Castro government filed written notice withdrawing from the ICSID Convention, triggered by the multi-billion-dollar Próspera ZEDE arbitration claim and nine other pending investor disputes; withdrawal took effect six months later on August 25, 2024. Honduras became the only Central American country outside ICSID, sharply raising political-risk premiums and deterring new foreign business formation.

Published in the Diario Oficial, the law grants five years of income-tax exemptions (100% for the first three fiscal periods, 50% for the next two) to micro and small enterprises that formally register with SENPRENDE and comply with municipal and tax obligations. It directly attacks Honduras's high informality rate by lowering the regulatory cost of starting a legal business.

Congress repealed the 2013 ZEDE Organic Law, ending the right to establish new autonomous economic zones with independent legal, tax, and governance systems; existing zones (including Próspera) remain grandfathered for 50 years under legal stability agreements. The repeal immediately triggered a cascade of international arbitration claims against Honduras, unsettling the broader investment environment for business formation.

This law introduced tax incentives and administrative simplifications specifically for micro and small enterprises, benefiting over 7,600 companies across its five-year effect window and institutionalizing SENPRENDE as the national entrepreneurship-support body. It established the fiscal-relief template that the 2022 Decree 48-2022 would later replicate and expand.

After the Supreme Court struck down a 2012 predecessor charter-city law, Congress ratified a constitutional amendment permitting Zones for Employment and Economic Development (ZEDEs), quasi-autonomous zones empowered to adopt their own laws, taxes, courts, and police, followed by the ZEDE Organic Law. The framework created the most deregulated business-formation environment in Honduran history, attracting international investors but stoking sovereignty controversies.

This landmark law guaranteed foreign investors national treatment equal to domestic investors, established legal stability agreements, and mandated creation of a Ventanilla Única de Inversiones (Single Window for Investors) to consolidate business permits and licenses into one process. It remains the primary legal framework governing foreign direct investment and new company formation in Honduras today.

Amended the Commercial Code to cut procedural steps for company incorporation and Registro Mercantil registration, imposed faster government response times, and set the legal basis for single-window investment services. This was the most significant modernization of the business-formation process since the 1950 Commercial Code and directly preceded the 2011 Single Window mandate.

Honduras's foundational commercial legislation established the Registro Mercantil (Mercantile Registry), defined all major business-entity types (partnerships, corporations, sole traders), and set the rules governing commercial obligations and accounting. Every subsequent business-formation law in Honduras amends or builds on this code, which remains in force.