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.

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

Intellectual property (IP) rights are territorial and rights granted in the UK do not provide protection elsewhere. You should consider getting IP protection abroad if you want to trade overseas or sell to overseas customers via the internet.

The Intellectual Property Office provides practical information to help you protect, manage and enforce your IP abroad. Further support for British businesses can be found through a network of IP attachés, based in key UK export markets.

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.