Company formation in Honduras can be initiated by foreign investors or by their legal representatives, who can complete all the formalities associated with the registration of a legal entity through the power of attorney. Our team of consultants offers full legal representation during the registration process, and may also assist in other legal matters once the company begins its operations.
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Legal entities available for foreign investors
Foreign investors may register any of the legal entities that are regulated under the local commercial law. However, for company incorporation in Honduras it is recommended to register limited companies, which can take the form of limited liability companies or joint stock companies (the latter allow investors to list the business on the stock exchange).
There is also the possibility of starting a business by opening a branch office. Other options are available – for instance, businessmen can register a representative office. However, this entity can’t engage in commercial activities, as it may develop only research or marketing activities. Partnerships are another option for company formation in Honduras.
Highlights of the registration process
Investors who will open a company in Honduras must know basic information on the shareholding structure, the director requirements, the duration of the registration procedure, the minimum share capital obligations and many other crucial aspects. Some of these can be analyzed in this list below, prepared by our team of consultants:
- it can take at least 4 weeks to set up a company in Honduras;
- local legal entities need to have a corporate bank account, and the procedure to open it at a local commercial bank can take around 4 weeks;
- limited companies can be incorporated by minimum 2 shareholders;
- companies registered in Honduras allow 100% foreign ownership;
- investors must appoint at least 1 director (we mention that there aren’t any residency obligations for the person appointed as director in a Honduras company).
What are the rights of a legal entity in Honduras?
Business forms that are incorporated in Honduras have a variety of rights, some of which are:
- they can rent an office space;
- they can purchase property in Honduras in their own name;
- they can own shares in other companies (local or foreign);
- they can enter import-export activities;
- they can sign commercial contracts.
Please mind that the representative office has limited rights compared to a commercial company, given that its purposes are not set up for profit. Our consultants in company incorporation in Honduras can present the legal differences between commercial entities and representatives offices.
Tax-related matters
After the process of company formation in Honduras is completed and the company begins its business activities, it will have a variety of obligations, including in terms of taxation. Commercial companies need to have a Tax Identification Number (TIN), obtained during the registration formalities, which will further be used for its communication and report obligations with the Honduras tax authority.
All commercial companies need to pay the corporate income tax (currently charged at a rate of 25%) and they also have to prepare annual financial statements and submit tax returns, documents that reflect the financial image of a company at a given moment in time. However, the representative office does not need to comply with the obligations presented here, given its non-commercial nature.
It must be noted that public companies have to comply with audit obligations. Our consultants in company incorporation in Honduras can assist with further information on any other matter concerning the registration of local business forms, therefore we invite you to contact our team for assistance.