Taxation of Financial Services

In accordance with Article 329 of the Honduran Constitution, Próspera ZEDE enjoys an independent special fiscal regime that operates under a territorial tax system. Income derived from sources outside of Próspera is not subject to be taxed unless explicitly stated in the Tax Statute.

Within Próspera there are only four taxes: A 10% Personal Income Tax, where only 50% of income is deemed taxable, thus resulting in an effective 5% tax on gross income; a 10% Business Income Tax, where only 10% of income is deemed taxable, thus resulting in an effective 1% tax on gross income; a 5% Value Added Tax, where only 50% of the final retail sales price is deemed value added, thus resulting in an effective 2.5% sales tax; and a 1% Land Value Tax on the fair market value of real estate, without considering improvements.

There are no additional taxes on dividends, capital gains, excise taxes, or any other type of tax; additionally, there is a 100% exemption on import taxes and duties for any businesses operating in Próspera, without regard to its economic sector[1].

The Tax Statute states that the income tax will be charged on interest that arises through or from a financial institution’s business in Próspera ZEDE, notwithstanding that the money in respect of which the interest is received or accrued is made available outside of Próspera. The income tax will also be charged on income received by or accrued to a financial institution, by way of revenue arising through or from a financial institution’s business in Próspera ZEDE from the sale or other disposal or on the redemption, on maturity or presentment or otherwise, of a certificate of deposit or bill of exchange even if (i) the moneys laid out for the acquisition of the certificate or bill were made available outside Próspera; or (ii) the sale, disposal or redemption is effected outside Próspera[2].

Financial institutions, however, are also entitled to apply for a Most Favored Nation Treatment (MFNT) before the Próspera Council. Through the MFNT Próspera ZEDE has the power to match the tax benefits of any other special regime in Honduras, or any other tax jurisdiction competing for a specific company or investment. If a company can demonstrate that its overall tax burden would be lower under a different special regime or tax jurisdiction, then Próspera may adopt the necessary exemptions and credits to match the tax burden that the company or investment would face under the other regime[3].


[1] Article 32 of the ZEDE Organic Law.

[2] Section 8 of the Próspera Tax Statute.

[3] Section 8.02(8) of the Próspera Charter and Section 78(1)(d) of the Próspera Tax Statute.