Exporting to Honduras

Honduras is a Central American country with a population of 9.5 million and a GDP of USD23.8 million (United Nations Conference on Trade and Development, 2018). Due to the impact of the COVID-19 pandemic its economy is expected to grow -2.3% in 2020 and 3.9% in 2021 (World Bank, 2020). In 2019, UK exports totalled £31 million (ONS, 2019).

Growing import market

The import market has seen steady growth for the last 6 years. It is expected to continue growing until at least 2024 (IMF, 2019). In 2019 UK exports to Honduras rose by 93.8%, compared to 2018 (ONS, 2020). If you are thinking of exporting to Honduras or looking for a base to expand into the Central American market, now could be a great time to do so.

Demand for goods and services

In 2019, the top goods exported from the UK to Honduras were manufactured metals, industrial machinery, and cleansing preparations (ONS, 2019). The top services imported into Honduras from the rest of the world were travel, transport, telecommunications (ITC TradeMap, 2019). If you are in any of these sectors, Honduras could be a good market for you.

Honduras city

Ease of doing business

133rd

out of 190 countries (World Bank, 2019)

Currency

Honduran Lempira

Business language

Spanish

You are likely to need a translator

GDP per capita

$2,523

UK is $41,030 (IMF, 2019)

Economic growth

3.7%

(IMF, 2018)

Time zone

GMT -6

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Is this market right for you?

Make the right choice by comparing data from other countries.

Opportunities for exporters

There are opportunities for UK companies across a broad range of industries. Our trade advisers in Honduras have identified opportunities for UK businesses in the following sectors.

Doing business in Honduras

Preparing to Export

Double taxation agreement

Honduras does not have any double taxation treaties in force.

VAT

The standard rate of VAT for most goods and services in Honduras is 15%. There are no VAT rates for products such as pharmaceuticals, machinery for electricity generation, petrol, construction services, financial services and books.

Northern Triangle Customs Union

Since 2017 there has been a customs union between Guatemala and Honduras. El Salvador subsequently joined in 2018. This union means free transit of more than 95% of goods, by accelerating movement of goods at the border with the use of a Central American Invoice and Single Declaration document for electronic transfer and payment of taxes in real time.

Further information is on the website for SIECA (website in Spanish) the technical and administrative body of the Central American Economic Integration Process.

Regulations

Honduran laws on tax, labour, environment and health and safety allow foreign companies to operate in the country. There are some restrictions on setting up companies although bureaucratic processes for obtaining certain permits and licences represent the big challenge for foreign companies that do not know how the system operates. Obtaining professional help is strongly advised.

Operating in Honduras

Language

The national language in Honduras is Spanish. English is spoken by some people in government and business but is not universally spoken. Business documentation must be completed in Spanish; if original documents are in other language they need to be translated into Spanish.

Risks

There are some challenges in doing business in Honduras. These include:

  • bureaucracy
  • lack of clarity and transparency in the public tendering process
  • slow judicial system
  • business and human rights

Read theoverseas business risk for Honduras for more guidance on the challenges of doing business in the country.

Intellectual property

As a first step, you are advised to speak to an intellectual property lawyer if you think you need patent protection when exporting. Processes to protect patents, brand names, copyright and designs can take up to 90 days depending on the type of registration you are completing.

Further information is on the ProHondurus (website in Spanish).

Using agents and distributors

You are advised to use a local representative, distributor or agent with a commercial license. Securing exclusivity for a buying agent can be hard due to the competitive conditions of the market. A local counterpart or direct presence is needed to participate in a government procurement bidding process.

Next steps

DIT can advise you on doing business abroad, and help put you in touch with other people who can help such as lawyers and distributors.