Honduras: Investing

FDI in Figures

According to the UNCTAD's World Investment Report 2023, FDI inflows to Honduras increased from USD 739 million in 2021 to USD 823 million in 2022. Honduras' FDI stock also increased, reaching USD 18.4 billion (around 58.6% of GDP). Main investing countries include the U.S., Canada, and Mexico followed by other Caribbean and Latin American countries. The most attracting sectors for investment also include production of harnesses, garments, and textile products, bank services, transport, storage and telecommunications, among other services (El Economista). According to the Banco Central de Honduras, in 2023, the country attracted USD 1.07 billion in FDI flows.

Honduras has many characteristics that make it attractive to international and domestic investors: the close proximity to U.S. markets, legal protections and low tariffs provided under the Dominican Republic-Central American Free Trade Agreement (CAFTA-DR), a skilled labor pool with well-organized labor unions, a rich endowment of natural resources, and productive agricultural zones. However, investors report persistent uncertainty caused by security concerns, corruption, inadequate rule of law, expensive and unreliable electricity, problems with licensing and permitting, and deteriorating infrastructure, which continue to present significant challenges for enterprises of all sizes. Honduras’ Investment Law does not limit foreign ownership of businesses, except for those specifically reserved for Honduran investors, including small firms with capital less than USD 6,300 and the domestic air transportation industry. For all investments, at least 90% of a company’s labor force must be Honduran, and companies must pay at least 85% of their payrolls to Hondurans. Majority ownership by Honduran citizens is required for companies in the commercial fishing sector, forestry, local transportation, radio, television, or benefiting from the Agrarian Reform Law. There is no screening or approval process specific to foreign direct investments in Honduras. Foreign investors are subject to the same requirements for environmental and other regulatory approvals as domestic investors. According to the law, investors can establish, acquire, and dispose of enterprises at market prices under freely negotiated conditions without government intervention, but some foreign business operators report difficulty closing businesses. In early 2022, the Honduran special economic zone of Próspera adopted cryptocurrencies as legal tender which can be used as a form of payment for individuals and businesses, in an endeavour to boost economic activity and attract foreign investment through crypto. Honduras ranks 154th among the 180 economies on the 2023 Corruption Perception Index and 89th out of 184 countries on the latest Index of Economic Freedom.

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Latest Update: May 2024