What are ZEDE in Honduras?

What are ZEDE in Honduras?

The Employment and Economic Development Zones (in Spanish, ZEDE) are defined by ZEDE Law as an inalienable part of the State of Honduras and are subject to the Constitution of the Republic and the national government on issues related to sovereignty, application of justice, territory, national defense, foreign relations, electoral issues, issuance of identity cards and passports.

The ZEDE have legal personality and are allowed to establish their own policies and regulations, in order to create conditions that allow the country’s integration into global markets under highly competitive and stable rules.
The ZEDE can be created with the aim to develop:

•    National or International Financial Centers
•    International Logistics Centers,
•    Autonomous cities,
•    International Business Courts,
•    Investment Special Districts,
•    Renewable Energy Districts,
•    Special Economic Zones,
•    Areas subject to a Special Legal System,
•    Special Agro-industrial Areas,
•    Special Tourist Zones,
•    Social Mining Areas,
•    Social Forestry Areas
•    Any other special arrangements that includes a combination of several of these regimes to ensure the development of investments under inclusive models.

The ZEDE enjoy functional and administrative autonomy which includes the functions, powers and duties as the Constitution and laws confer upon municipalities. They will have independent courts with exclusive jurisdiction thereof, which may adopt systems and legal traditions of other parts of the world, and must ensure the constitutional principles of protection of Human Rights.

The acts and contracts entered into or issued within the ZEDE, are fully applicable in the rest of the country and abroad in accordance to the rules of reciprocity. Likewise, they may establish obligations within and outside the country, noting that the state of Honduras will no endorsement, that is to say, it is not responsible in any way for the debts or financial commitments that are acquired.

The ZEDE will have the freedom to adopt best practices they deem appropriate to achieve compliance with the goal of developing and attracting investment and national and international talent.

The ZEDE are required to publish its internal rules for the mechanisms themselves determine, except in cases where the rules must be approved by Congress, which also must publish in the Official Journal La Gaceta.

The Regulations governing the ZEDE will have the following hierarchy:
•    The Constitution of the Republic
•    International treaties in what may be applicable
•    The Present Law of ZEDE
•    Applicable national laws
•    The internal regulations emanated by the authorities of the ZEDE or incorporated by the same

What is established regarding fundamental rights and duties of residents?

Everyone in ZEDE has equal rights and duties without discrimination of any kind and has the obligation to respect their peers, society, humanity, under the applicable law.

To this purpose may establish agreements of coexistence with people who live or want to live freely in their jurisdiction. Also, be required to create public spaces with the necessary conditions for residents will demonstrate peacefully in defense of their rights without affecting in any way the rights of others. The ZEDE should always ensure the continuity of public services and the use of methods and media.

Which jurisdiction apply to dispute resolution and internal security?

The ZEDE are subject to a special jurisdiction will have independent courts with exclusive jurisdiction in all instances on matters which are not subject to compulsory arbitration. They will be created by the judiciary through the Judicial Council at the proposal of the Technical Secretary and operate under common tradition or common law.
Those who dwell or operate in one of these areas may contractually agree the submission to arbitration or judicial jurisdiction different from the ZEDE.

The ZEDE will have a Court of Protection of Individual Rights, to protect his people against violations of their fundamental rights. It shall consist of few people decided by the Committee Adoption of Best Practice. The ZEDE will be liable to compensate the damages to which the State of Honduras is convicted for violations occurring within their jurisdiction and to comply with recommendations and precautionary measures or regulations issued by international human rights organizations.

The ZEDE should make use of mandatory arbitration for all contractual matters or patrimonial. Exceptions to this provision are criminal, childhood and adolescence matters.

The ZEDE should create legal assistance mechanisms necessary to ensure equal access for those who lack the financial means to exercise their rights, including those instances subject to mandatory arbitration.

The ZEDE should establish their own internal security organs with exclusive competence in the area, including its own police, prosecutorial organs and penal system.

How are economy and finance managed?

The ZEDE have an independent financial system, are authorized to use its financial revenues exclusively for its own purposes and will transfer resources to the authorities of the rest of the country in how to bring this Act.

ZEDE may recognize the title to real estate in urban areas that have their own infrastructure.

Ownership of land where they settled the ZEDE created in areas of low population density will gradually become the property of the State and shall be administered on its behalf by the ZEDE. When this occurs, the prior compensation ZEDE may expropriate the owners thereof. The fair value will be determined based on benchmark market values ​​of goods of equal quality that are outside of that jurisdiction.

All the properties included within the spatial domain of competence of the ZEDE can be incorporated to the regime expropriation, purchase or partnership with owners interested in joining them. If opposition to the sale or association show, the government may expropriate the property ZEDE stating the value. May be expropriated for reasons of public utility or need for the goods they deem necessary for the development or expansion thereof. Opposition to that fair value should be determined by arbitration and shall not be imposed precautionary measures to prevent or halt the expropriation process.

The ZEDE must have a separate tax regime and should be guided by a policy of low taxes. The collection of taxes is optional for the ZEDE and should be done according to the rules laid down in this Law. Its tax system may consist of one, several or all of the following components as decided by the Committee Adoption of Best Practice:

1.    The income tax for natural persons can never be greater than twelve percent (12%).
2.    The income tax on legal persons can never be greater than sixteen percent (16%).
3.    Tax over value added may not exceed five percent (5%).
4.    A property tax of land in disuse whose percentage will be determined by the ZEDE;
5.    A real estate tax whose percentage will be fixed by the SIDE;
6.    A flat tax which will be fixed by the ZEDE;

The ZEDE will define the percentage of taxes receivable in each case within the parameters outlined in this Article. The ZEDE are authorized to set reasonable fees to be charged for the provision of utilities to recover the costs thereof.

The ZEDE are offshore tax and customs, different from the rest of the country areas, so it must operate on a policy of free trade and competition, guaranteeing the free movement of goods, intangible assets and capital so as to ensure free entry of sea and air craft to ZEDE. Regulation of sea and air transport, as well as control of ports and airports in the jurisdiction of the ZEDE will be under their responsibility, and may establish such fees deemed appropriate.

Imports made by ​​legal persons operating in a ZEDE, to enter the national customs territory are free from paying any taxes, tariffs, fees, surcharges, consular fees, excise, consumption tax that have direct or indirect relationship with import and export operations and shall be processed using a single customs declaration, without the intervention of a customs broker or customs special agent.

Purchases of goods and services made ​​in the domestic market enterprises operating within a ZEDE are exempt from paying Sales Tax or any other value-added tax. However, when selling products, goods or services in the rest of the country will have to pay tariffs or taxes determined by the National Congress.

Regarding education, health, social security, science, religion and work what is important to know?

The ZEDE are allowed to establish their own systems of education, health, social security and the promotion of science, and to guarantee freedom of conscience, religion, labor protection and freedom of association. The rules of the ZEDE regulate these matters.

The ZEDE are required to ensure the labor rights of workers according to international treaties and provisions emanating from international bodies such as the ILO. Conciliation and arbitration for the settlement of disputes will be used.

It is established that under equal conditions, Honduran workers will have preference over foreign workers.
Employers are prohibited to employ less than 90% of Honduran workers and pay them less than 85% of total wages earned.

Conclusion

The creation of ZEDE will be made by decree of Congress upon the following rules:
•    When Zone to be declared to be of low population density, it must have the opinion of the National Statistics Institute certifying the situation in accordance with the provisions of Article 329 of the Constitution of the Republic.
•    When Zone to be declared it is located in an area of ​​high population density, prior to its creation should hold a plebiscite in the municipality or municipalities in which the area is located, being able to be decreed its creation only if the result of the query it is for the same.

CONATEL will deliver to ZEDE the administration of the radio spectrum that has not yet been assigned to the jurisdiction thereof.

Revenues from ZEDE must be administered through a trust created for each, which will include an International Bank, National Bank, or both. Similarly, twelve percent (12%) of the tax revenue to make the ZEDE within its jurisdiction should be allocated to the creation of one or more trusts distributed in equal proportions and for the following purposes ZEDES preset by the Act.

For more info about Labor and Employment Law in Honduras, please contact This email address is being protected from spambots. You need JavaScript enabled to view it.

Marcela Aguilar
CENTRAL LAW Honduras


a. Legislative decrees by which the National Anthem, National Emblem, National Flag and other national symbols are adopted.
b. Legislation on the Territorial Sea of the Nation and the contiguous Zone.
c. While ZEDE not emit their own or incorporate by reference the most efficient to consider the scope of its purposes, the following criminal laws apply: The Criminal Code and complementary legislation which are punishable offenses and impose penalties or allow the extradition of people, especially for crimes such as drug trafficking, money laundering, human trafficking, genocide, terrorism, child pornography, child exploitation and organized crime in the way that they were written at the time of entry into force of this organic Law.

Cerrar