Location:
The official name is Republic of Honduras, and its located in Central America – approximately 1000 miles southwest of Miami. A short 2 to 3-hour flight from Miami, New Orleans, Houston or Dallas. 5 Hour flight from New York.
Airports, Highways and Ports:
The main ports are the following: Puerto Cortés, Puerto Castilla, La Ceiba, Roatan and Tela, which are located on the North cost of Honduras along the Caribbean Sea; on the south and Pacific Ocean the ports of San Lorenzo and Henecan. The most important port in the Country is Puerto Cortés, and along with Puerto Castilla and San Lorenzo, they handle almost of the entire cargo of the country.
Currently Honduras has four international airports:

  • Ramón Villeda Morales (SAP) in San Pedro Sula
    · Aeropuerto Internacional Toncontín (TGU) in Comayagüela,
    · Aeropuerto Goloson (LCE) in La Ceiba
    · Aeropuerto Juan Manuel Gálvez (RTB) in Roatán
    Population:
    Total population of Honduras is ~8 million people.

Capital city: Tegucigalpa (~1.8 million people).
Industrial and Commercial Capital: San Pedro Sula (~ 800,000 people).
Language:
Spanish. English widely used as a second language and on the business and tourist sector.
Honduras is a multi-ethnic, multicultural and multilingual country, composed by four mayor ethnic groups: Mestizo or White (they are the majority), Indigenous (Lencas, Misquitos, Tolupanes, Chortis, Pech or Payas and Tawahkas), the Garifuna and Creoles (English speaking). The Indigenous Ethnics and the Garifunas constitute the cultural heritage of Honduras and represent around 7% of the country´s population.
Currency/Banking:
The local currency is the LEMPIRA (L) with an exchange rate exchange rate with USD$ for Lps.23.58 x 1.00 USD$
The only security exchange operating in the country is the Central American Securities Exchange (BCV) in Tegucigalpa. Honduras is a member of the World Bank, CABEI (which has its main regional office in Tegucigalpa), the International Monetary Fund (IMF) and founding member of the INTERAMERICAN DEVELOPMENT BANK (IDB).
Inflation Rate
3.84% as of August 2017 (BCH)s
GDP
US$19.4 billion
Governing in Honduras:
Republican, democrat and representative, exercised by three powers: legislative, executive and judicial branch, complementary and independent and with no subordination between them.
Political Structure
Honduras is organized in 18 departments, similar to provinces or states, which are also subdivided in 298 Municipalities.
Political Parties

  • National Party of Honduras
    • Liberal Party of Honduras
    • Innovation and Social Unity Democrat Party
    • Christian Democrat Party of Honduras
    • Democrat Unification Party
    • Anti Corruption Party (PAC).
    • Left-wing party (LIBRE)

The President of Honduras, Juan Orlando Hernandez Alvarado, (National Party) was elected in 2014 and is running for re-election. Mr. Alvarado is pro-mining and is proactive in attracting foreign investment for the country.
Every presidency term lasts 4 years, however, due to Supreme Court Approval, President Orlando Hernandez is seeking re-election. If successful this will be the first time in the history of Honduras that a President has been re-elected.  The former President of Honduras is Porfirio Lobo Sosa who is also of the National Party.
Doing Business in Honduras:
Source: World Bank, Doing Business database.
Note: The rankings are benchmarked to June 2016 and based on the average of each economy’s distance to frontier (DTF) scores for the 10 topics included in this year’s aggregate ranking. The distance to frontier score benchmarks economies with respect to regulatory practice, showing the absolute distance to the best performance in each Doing Business indicator. An economy’s distance to frontier score is indicated on a scale from 0 to 100, where 0 represents the worst performance and 100 the frontier. For the economies for which the data cover 2 cities, scores are a population-weighted average for the 2 cities.

Applicable Laws / Taxes
The General Mining Law, approved by Decree No. 238-2012 was published in the Official Gazette on April 2, 2013 and since then has been in effect in Honduras. This law supersedes in its entirety the previous law dating from 1998. The bylaws were published on September 4, 2013.
The mentioned law creates the competent authority Honduran Institute of Geology and Mines, identified with the initials “INHGEOMIN” as a decentralized entity of the State under the Presidence of the Republic, with exclusive competence to execute the National Policy of the mining sector in general, with authority to develop programs, projects and plans and create administrative, technical and operational units required. The law provides what the mining right is, the mining activities authorized in the country, also it defines what prospecting, exploration, exploitation, processing is about. The law identifies the rights and obligations of the parties, the procedure of a mining concession for each of the permitted activities and how the close or remedial measures must be done in case of suspension of mining activities on a temporary, progressive or permanently basis. It also states the penalties that may fall to the holders of mining concessions and what the grounds for annulment of the same are as well as it establishes the cause of cancellation of a concession.
Applicable tax laws related to The General Mining Law:

  1. The provisions of the Law on Income Tax;
  2. The provisions of the Sales Tax Act; (Ampac works under an Exemption Tax Regime for all the Imports needed for its operation. It does not pay the 15% of sales tax in all the incoming industrial parts from overseas).
  3. Tax Net Assets;
  4. Fees for services and taxes established in the Law of Municipalities and the Municipal Tax Plan.
  5. Security Fee as described in the Seven (7) and eight paragraphs (8).
  6. Effective law or Surface (Surface Territorial Canon).
  7. The non-metallic mining and industrial character of gems or precious stones, pay 2.5% based on the FOB value or value based on ex-factory or plant as appropriate.
  8. The metal mining, including oxides and sulfides which metals are extracted, you pay six percent (6%) on the value of sales or exports.

 
Summary of tax rates and administration:
 

Tax or mandatory contribution Payments (number) Notes on payments Time (hours) Statutory tax rate Tax base Total tax rate (% of profit) Notes on total tax rate
Municipal tax on industry and commerce 1     0.4% sales 7.07  
Solidarity tax 0 jointly   5% taxable profit over Lps 1,000,000 4.11  
Corporate income tax 4   35 25% or 1.5% taxable profit or gross income 26.52  
Fixed assets tax 1     1% over Lps 3,000,000 assets value 2.14  
Employer paid – Pension contribution – RAP 0     1.5% gross salaries 1.69  
Employer paid – Professional training tax – INFOP 1     1% Gross salaries 1.13  
Municipal property tax 12     Lps 3.5 per 1,000 Property value 0.53  
Capital gains tax 1     10% Capital gains 0.51  
Employer paid – Social security contributions 12   93 7.2%, 8% Gross salaries 0.44  
Tax on interest 1     10% if above 50,000 Interest 0.19  
Vehicle tax 1     Lps 2,200 Fixed fee 0.03  
Fuel tax 1     0.6106 per gallon Fuel consumption 0.00  
Stamp duty 1     Lps 20 for contracts with a value less than 1,000 and Lps 1.5 per 1,000 of value of transaction Transaction value 0.00 Small amount
Employee paid – Social security contributions 0 Jointly   5% Gross salaries 0.00 Withheld
Value added tax (VAT) 12   96 15% Value added 0.00 Not included

Source: Doing Business in Honduras, World Bank
 
Anti-corruption:
 
Honduras has signed agreements with many different countries to fight against corruption.  Transparency International (TI), its national chapter in Honduras, Asociación para una Sociedad más Justa (ASJ), and the Government of the Republic of Honduras signed a collaboration agreement aimed at promoting and encouraging transparency and accountability, combatting corruption in the country as well as strengthening the institutions that make up the national integrity system.
 
Investment/Trade Agreements:
 
In February of 2016, President Juan Orlando Hernández presented the National Economic Development Program 20/20 Honduras, the largest platform for growth promoted in the country’s history, focusing on tourism, textiles, intermediate manufacturing and business support services, which will generate 600,000 jobs in five years, among other objectives. This program, developed by the government of President Hernandez with private enterprise and the international consulting firm McKinsey, will allow for investments of more than $13,000 million. Moreover, in a subsequent phases, sectors such as agribusiness and housing will be included in this plan, which has been approved by the Council of Ministers. Recently the Agricultural Industry has been added to this investment plan, to make Honduras a major grain supplier in the Central American region. [1]
Trade Agreements:

Multilateral Agreements
Agreement/Partner(s) Date of Signature Text of the Agreement Trade Policy Developments
WTO members 01 January 1995
(Contracting Party to GATT 1947 as of 10 April 1994)
n.a.
Customs Unions
Agreement/Partner(s) Date of Signature Text of the Agreement Trade Policy Developments
CACM members 13 December 1960 n.a.
Free Trade Agreements
Agreement/Partner(s) Date of Signature Date of Entry into Force Text of the Agreement Trade Policy Developments
Peru 29 May 2015 01 January 2017
Canada 05 November 2013 01 October 2014
Central America – European Union (Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama) 29 June 2012
Central America – Mexico (Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua ) 22 November 2011
Northem Triangle -Colombia (El Salvador, Guatemala and Honduras) 09 August 2007
Taiwan (Republic of China) – Honduras, El Salvador 07 May 2007
DR-CAFTA (Central America – Dominican Republic – United States) 05 August 2004
Central America – Panama (Costa Rica, Guatemala, El Salvador, Honduras and Nicaragua) 06 March 2002
Central America – Chile (Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua) 18 October 1999
Central America – Dominican Republic (Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua) 16 April 1998
Preferential Trade Agreements
Agreement/Partner(s) Date of Signature Date of Entry into Force Text of the Agreement Trade Policy Developments
Venezuela (AAP.A25TM N° 16) 20 February 1986 n.a.

Source: SICE, Foreign Trade Information System

Crime in Honduras:

The Honduran delinquency rate has dropped from 85% in the year 2012 to 54.1% in the beginning of 2017. More high security jails have been built and the most dangerous criminals related to organized crime are confined there. Prior to becoming President, President Orlando Hernandez was the National Congress President in 2011, assisting in the approval of the Honduran Extradition Law. Since that time drug lord cartels have been dismantled and different security groups and agencies have been formed (FUSINA, ATIC) to combat drug cartels and money laundering. Honduran security measures have been supported by the US Embassy and US Army which is settled in Honduras (military base in Palmerola, Comayagua) in relation to its international agreement between the two countries USA and Honduras.
Source: National Autonomous University of Honduras (Universidad Nacional Autónoma de Honduras – UNAH)

Honduran Exports and Other Related Facts:

  • The 6th largest Coffee Producer in the world. ~60% of its coffee is exported to European countries;
  • Insulated wire accounts for 9% of total Honduran exports;[2]
  • One of the largest US military bases is located in Comayagua, Honduras;

Honduras has many residing corporate agency offices from different countries – such as the Japan International Cooperation Agency (JICA), USAID, Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) all have helped to develop different projects in the areas of health (nutrition), education, environment, security, governance and more.
 
Company Note:  The El Mochito Mine is the region of Central America’s example of responsible mining as a result of its employment generation and community development projects. The El Mochito Mine is a CSR leader in Honduras and is the only mining company to received the Foundation for Corporate Responsibility in Honduras (FUNDAHRSE) award 9 years in a row.