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Honduras Report

Entrepreneurial Missions Index

44.84

General Information

Population

7,449,923 (92nd most populous country in the world)

Religions

Languages

Roman Catholic          97% Spanish
Protestant   3% Amerindian Dialects

Industries

Sugar, coffee, textiles, clothing, wood products, cigars

Unless otherwise noted, all information included here was obtained from the World Factbook project 4, conducted by the Central Intelligence Agency (CIA). For more detailed information about Honduras, visit https://www.cia.gov/library/publications/the-world-factbook/geos/hn.html.

Business Information

The World Bank ranks Honduras as 0 out of 183 economies in terms of ease of doing business. The country ranks as 0 (of 183) in terms of ease of starting a business.

It requires 0 procedures, takes 0 days, and costs N/A% of income per capita to start a business in Honduras.

The World Bank ranks Honduras as 141st out of 183 economies in terms of ease of doing business.  The country ranks as 144th (of 183) in terms of ease of starting a business.

It requires 13 procedures, takes 14 days, and costs 47.3% of income per capita to start a business in Honduras. 

In order to start a business in Honduras, one must follow these procedures:

  1. Procure a certificate of deposit at a local bank; pay the registry fee
  2. Constitute the company before a notary public, who is to draw up the instrument of organization
  3. Publish the registration notice in “La Gaceta,” the official journal or an ordinary newspaper
  4. Purchase the bar stamps from the Banco Atlantida S.A. and Banco de Occidente
  5. File the articles of incorporation with the Mercantile Registry at the Chamber of Commerce
  6. Apply for the tax identification code (Registro Tributario Nacional, RTN) at the Direccion Ejecutiva de Ingresos (DEI), Ministry of Finance
  7. Acquire legal accounting and minutes books
  8. Register with local and national chambers of commerce
  9. Apply for an operational permit (Permiso de Operacion) from the municipal authorities
  10. Register for sales tax and acquire the authorization of the company books
  11. Register at Social Security Institute (Instituto Hondureno de Sefuridad Social, IHSS0
  12. Register at the Hand Labor Training Institute (Instituto Nacional de Focmacion Profesional, INFOP)
  13. Register at Social Fund for Housing (Regimen de Aportacion (RAP) al Fondo Social de la Vivienda (FOSOVI))

Unless otherwise noted, all information included here was obtained from the Doing Business project 3, conducted by the World Bank. For more detailed information about starting a business in Honduras, visit http://www.doingbusiness.org/.

 

The World Economic Forum (WEF) was founded in 1971 by Klaus Martin Schwab at the University of Geneva in Switzerland.  It is a non-profit foundation best known for its annual meeting in Davos, Switzerland, which brings together top business leaders, international political leaders, selected intellectuals and journalists to discuss both economic and social issues facing the world.  The WEF also serves as a think tank, and publishes a wide range of reports focusing on issues of concern and importance to Forum communities. In particular, Strategic Insight Teams focus on producing reports of relevance in the fields of competitiveness, global risks and scenario thinking.  The Global Competitiveness Report measures competitiveness of countries and economic competitiveness among a wide range of factors such as corruption, tax rates, work ethic, and many others.

 

Honduras Economic Freedom

The annual survey Economic Freedom of the World is an indicator produced by the Fraser Institute, a libertarian think tank which attempts to measure the degree of economic freedom in the world's nations. Economic Freedom of the World index has been more widely used than any other measure of economic freedom, because of its coverage of a longer time period

Their measure of economic freedom is based on that the following standards:

  • Personal choice rather than collective choice,
  • Voluntary exchange coordinated by markets rather than allocation via the political process,
  • Freedom to enter and compete in markets, and
  • Protection of persons and their property from aggression by others.

A state will rate high when it focuses on protection of people and their property from the actions of aggressors, enforcement of contracts, and provision of the limited set of public goods like roads, flood control projects, and money of stable value and little else, but a country’s rating on the EFW summary index will fall as government expenditures increase and regulations expand.   

1A General government consumption spending as a percentage of total consumption 6.6
Area 1-A Data 17.5
1B Transfers and subsidies as a percentage of GDP 9.7
Area 1-B Data 1.5
1C Government enterprises and investment 10
Area 1-C Data 13.7
1Di Top marginal income tax rate 9
Area 1-Di Data 25
1Dii Top marginal income and payroll tax rates 8
Area 1-Dii Data 28
1D Top marginal tax rate 8.5
1 Size of Government: Expenditures, Taxes, and Enterprises 8.7
2A Judicial independence (GCR) 3.7
2B Impartial courts (GCR) 4
2C Protection of property rights (GCR) 5.6
2D Military interference in rule of law and the political process (CRG) 6.7
2E Integrity of the legal system (CRG) 2.5
2F Legal enforcement of contracts (DB) 2.9
2G Regulatory restrictions on the sale of real property (DB) 7.7
2 Legal Structure and Security of Property Rights 4.7
3A Money growth 8
Area 3-A Data 10.2
3B Standard deviation of inflation 9.2
Area 3-B Data 1.93
3C Inflation: Most recent year 8.6
Area 3-C Data 6.94
3D Freedom to own foreign currency bank accounts 10
3 Access to Sound Money 9
4Ai Revenues from trade taxes (% of trade sector) 9.4
Area 4-A(i) Data 1
4Aii Mean tariff rate 8.9
Area 4-A(ii) Data 5.6
4Aiii Standard deviation of tariff rates 7.1
Area 4-A(iii) Data 7.3
4A Taxes on international trade 8.4
4Bi Non-tariff trade barriers (GCR) 6.4
4Bii Compliance cost of importing and exporting (DB) 7.1
4B Regulatory Trade Barriers 6.7
4C Size of the trade sector relative to expected 10
4D Black-market exchange rates 10
4Ei Foreign ownership/investment restrictions (GCR) 7.5
4Eii Capital Controls 3.1
4E International Capital Market Controls 5.3
4 Freedom to Trade Internationally 8.1
5Ai Ownership of banks 10
5Aii Foreign bank competition 6
5Aiii Private sector credit 9.6
5Aiv Interest rate controls/negative real interest rates 9
5A Credit Market Regulations 8.7
5Bi Minimum wage (DB) 2.6
5Bii Hiring and firing regulations (GCR) 5.1
5Biii Centralized collective bargaining (GCR) 6.3
5Biv Mandated cost of hiring (DB) 7
5Bv Mandated cost of worker dismissal (DB) 3.1
5Bvi Conscription 10
5B Labor Market Regulations 5.7
5Ci Price controls 6
5Cii Administrative requirements (GCR) 4.8
5Ciii Bureaucracy costs (GCR) 5.5
5Civ Starting a business (DB) 8.7
5Cv Extra payments/bribes (GCR) 4.5
5Cvi Licensing restrictions (DB) 8
5Cvii Cost of tax compliance (DB) 7.5
5C Business Regulations 6.4
5 Regulation of Credit, Labor, and Business 6.9
SUMMARY INDEX 7.48
Rank c 28
 

Honduras Summary

 

1 World Economic Forum

2 Free the World
Gwartney, James and Robert Lawson with Herbert Grubel, Jakob de Haan, Jan-Egbert Sturm, and Eelco Zandberg (2009). Economic Freedom of the World: 2009 Annual Report. Vancouver, BC: The Fraser Institute. Data retrieved from www.freetheworld.com.

3 World Bank Data

4 World Factbook Project