Investing in Honduras as a Foreigner 2026: Property, Energy and the Rules After ICSID
GUIDES · HONDURAS
Key Facts
- —What it is A guide to putting foreign money into Honduras in 2026, the year the country rejoined the World Bank’s investment arbitration system and legislated the break-up of its state power utility.
- —Who it’s for Foreign buyers of coastal and urban property, investors in energy, manufacturing and tourism, and anyone weighing a Central American base with duty-free access to the United States under CAFTA-DR.
- —What it costs Corporate income tax is 25 percent, with a non-deductible 5 percent solidarity surcharge on taxable profit above one million lempiras, about US$37,000. Municipal property tax runs up to 0.35 percent of cadastral value a year on urban land.
- —Why it matters Foreign direct investment has fallen three years running, to US$881 million in 2025, and more than 90 percent of the money that arrived between 2022 and 2025 was profit reinvested by companies already there.
- —The catch The special economic zones were declared void from origin by the Supreme Court in 2024, the ruling has never been enforced, and an arbitration over them is running in Washington.
What a foreign investor actually needs to know about Honduras in 2026: the arbitration protection that came back, the zones that are still in limbo, and where the money is really going.
Investing in Honduras in 2026 means reading two signals at once. The legal architecture for foreign capital has been rebuilt: the country rejoined the World Bank’s arbitration convention on 16 August 2026, and Congress passed the largest energy reform in decades a fortnight later. At the same time, foreign direct investment has fallen for three consecutive years, and almost none of what arrives is new money.
What investing in Honduras looks like in 2026
Anyone investing in Honduras should start with the number that matters. Foreign direct investment was US$1,076 million in 2023, US$994 million in 2024 and US$881 million in 2025, on central bank figures. The trend is one direction only.
The composition matters more than the total. Of the US$3,873 million that arrived between 2022 and 2025, more than 90 percent was reinvested earnings: profits that companies already operating in Honduras chose not to repatriate. In 2025 the equity component was actually negative, at minus US$18.8 million. In plain terms, essentially no new foreign capital entered the country that year.
Where it does land is narrow. Financial and insurance activities took 69 percent of 2025 inflows, the maquila export-assembly sector 12.6 percent, and commerce, hotels and restaurants 11 percent. The United States, Colombia and Panama are the main source countries.
The macro backdrop is stable rather than strong. The International Monetary Fund recorded real growth of 3.8 percent in 2025 and projects 3.3 percent for 2026 on the back of an oil shock, recovering to 3.7 percent in 2027. The lempira trades on a crawling band and lost about 4 percent against the dollar in 2025, sitting near 26.9 to the dollar in September 2026.
The ICSID return and what it changes
Honduras left the World Bank’s investment arbitration system and then came back. The government of Xiomara Castro filed notice of denunciation of the ICSID Convention in February 2024, and it took effect that August. President Nasry Asfura gave notice of intent to rejoin on his first day in office, 27 January 2026.
The sequence completed quickly. Honduras signed again on 6 March 2026, deposited its instrument of ratification on 17 July, and the convention re-entered into force on 16 August 2026. The country is the 159th contracting state.
For anyone investing in Honduras now, the practical effect is narrow but real. Consent to international arbitration can again be given and perfected under the convention itself, rather than only through treaty routes such as the CAFTA-DR additional facility. Leaving never extinguished the claims already filed, so the cases begun during the gap continue regardless.
Two caveats belong in the same breath. Honduras has no double taxation treaties in force at all, and its network of bilateral investment treaties is thin. CAFTA-DR and the Honduras–Kuwait treaty do most of the practical work.
The zones nobody has settled
The special employment and economic development zones, known as ZEDEs, are the single largest legal uncertainty in the country. Congress repealed their organic law in April 2022. In September 2024 the full Supreme Court declared the entire framework unconstitutional with effect from origin, and the judgment was published that November.
It has not been enforced. Próspera, the best known of the zones, expanded its territory in May 2026 and appointed its own prosecutor in September. The state’s response was a criminal complaint for treason against zone officers rather than closure.
Meanwhile the arbitration runs. Honduras Próspera and two associated companies filed at ICSID in December 2022 under CAFTA-DR. The claim was lodged at US$10.775 billion; the United States State Department still described it as up to US$11 billion in June 2026, while Honduran outlet Criterio reported it had been cut to about US$1.63 billion. That reduction could not be confirmed from a filing. A preliminary objection was rejected in February 2025 and the merits phase is under way.
Anyone who tells you the zones are finished, or that they are safe to invest in, is guessing. No court has ruled on enforcement and no political settlement has been announced.
Energy, the biggest domestic reform
On the night of 31 August 2026 Congress passed the Energy Justice Law by 78 votes. It restructures ENEE, the state electricity company, across 37 articles.
The utility is split into three state-owned companies under a holding structure: generation, transmission and distribution, each capitalised at 150 million lempiras, about US$5.6 million. Distribution may create regional subsidiaries. The law does not privatise ENEE; it separates its functions legally, operationally and financially.
The problem it addresses is severe. Distribution losses have run above 38 percent for years, arrears to private generators stretch six to twelve months, blackouts are routine, and tariffs are among the highest in the region. The Fund’s loss-reduction targets were missed at every test date.
Do not treat the vote as the finish line. The demerger only takes full effect once the agreement and the new companies are entered in the commercial register, and the law sets no deadline for that. The finance minister said publicly that the decree does not by itself guarantee a rescue.
What foreigners may own, and where they may not
For investing in Honduras the law is generous on paper. Decree 51-2011 guarantees national treatment, no market-access limits on establishing an investment, free participation of foreign capital in company shareholdings, and access to domestic credit on the same terms as Honduran persons.
Land is the exception, and it is a constitutional one. Article 107 reserves to Honduran nationals by birth, to companies formed entirely of them, and to state bodies: state land, communal land, all land within 40 kilometres of the borders and coastlines, and land on islands, cays, reefs and sandbanks.
That is why foreign buyers on Roatán and the north coast either use the urban-lot exception or hold through a Honduran company. The mechanics belong in the property guide; what matters here is that the restriction is written into the constitution, not into a regulation that a minister can change.
Outside those bands, foreign individuals and companies buy and hold in their own name without prior authorisation.
Tax, profits and getting money out
Corporate income tax is 25 percent of net taxable income. A non-deductible solidarity contribution of 5 percent applies to taxable profit above one million lempiras, roughly US$37,000, so the working headline for a profitable company is 30 percent. A net asset tax of 1 percent applies on top.
There is a structural quirk worth knowing. Individuals carrying on business directly are subject to neither the net asset tax nor the solidarity contribution, which can make trading as a sole trader cheaper than incorporating.
Resident withholding is 10 percent on dividends and 10 percent on bank interest above 50,000 lempiras, about US$1,860. Municipal property tax is annual, falls due in August, and is capped at 3.50 lempiras per thousand of cadastral value for urban property and 2.50 per thousand for rural, so 0.35 and 0.25 percent respectively.
Repatriation is legally guaranteed under Article 7 of the investment law, in currency or securities at the investor’s choice. The constraint is operational rather than legal. Honduras allocates foreign exchange through a central bank auction. The threshold below which a bid needs no documentation has been raised in stages under the Fund programme. It went from US$10,000 to US$50,000, then to US$100,000 in February 2026 and US$125,000 in May. Reserves were about US$11.6 billion at the end of April 2026.
The risks, in order
First, legal risk around the zones. A live treason complaint, an unenforced judgment voiding the framework from origin, and a billion-dollar arbitration are all running at the same time.
Second, contested political legitimacy. President Asfura won the November 2025 election by about 26,000 votes, 40.27 percent to 39.53 percent, after a month-long count. His opponent still disputes the result. Reform depends on shifting congressional coalitions, and the energy law itself passed only after an opposition text replaced the committee version.
Third, electricity. Fourth, institutional capacity, with a declared health emergency and roughly half a hospital bed per thousand people. Fifth, crime and extortion: the homicide rate is somewhere around 25 per 100,000, a state of exception has run for years, and extortion of businesses is a routine operating cost rather than an exceptional event.
Connected Coverage
Honduras Lets Foreigners Buy One Coastal Home on 3,000 Square Metres
Taxes in Honduras for Expats 2026
Honduras Visa and Residency 2026
Sources: Investment flows and the exchange rate from the Banco Central de Honduras, growth and reserves from the International Monetary Fund’s June 2026 review, the arbitration record from ICSID and the United States State Department, the energy law from the Honduran press of 1 September 2026, and tax rates from the SAR schedule and the Big Four summaries.
- International Monetary Fund — fourth and fifth reviews, Honduras, 29 June 2026
- Banco Central de Honduras — monthly exchange rate series
- United States State Department — United States investment in the Próspera zone, June 2026
- Reuters — the Supreme Court declares the zones unconstitutional
- La Prensa — what the Energy Justice Law changes at ENEE
- PwC Worldwide Tax Summaries — Honduras corporate taxes
- Servicio de Administración de Rentas — the 2026 income tax schedule
- Reuters — Nasry Asfura takes office after a razor-thin election
What Is Not Known
Whether Honduras taxes the foreign income of residents. Deloitte, PwC, EY and Chambers all state that the system is territorial and reaches only Honduran-source income. But the regulation under the income tax law still refers to residents being taxed on income sourced abroad, KPMG’s 2026 guide says foreign income would be taxable because no double taxation agreement has ever been concluded, and the government’s own programme with the Fund lists a move from territorial to global income among its revenue measures. With a three-month residence trigger and no treaty network, this is a live exposure rather than a technicality.
What happens to the special zones. The framework was voided from origin in 2024, the repeal of the organic law dates from 2022, and yet the zones continue to operate and expand while the state prosecutes their officers. No court has ruled on enforcement and the arbitration outcome is unknown.
The size of the Próspera claim. It was filed at US$10.775 billion and was still being described as up to US$11 billion by Washington in June 2026, while Honduran reporting in May and September 2026 put it at about US$1.63 billion. The reduction could not be confirmed from a filing or an ICSID document. No award has been issued.
Whether the energy reform will work, or when it starts. The demerger takes effect on registration in the commercial register and the law sets no deadline. The investment minister was still waiting for publication in the official gazette in mid-September 2026, and the finance minister said the decree does not guarantee a rescue.
What commercial rent costs in Tegucigalpa or San Pedro Sula. Honduras publishes a food basket, a minimum wage and a consumer price index, but no official rent index and no city cost series. The figures circulating for the mainland cities come from crowd-sourced databases and agency listings, and none of them is verifiable.
Frequently Asked Questions
Can a foreigner own property in Honduras?
Yes, outside the restricted bands. Article 107 of the constitution reserves state and communal land, all land within 40 kilometres of the borders and coastlines, and land on islands and cays to Honduran nationals by birth and to companies formed entirely of them. Outside those areas foreign individuals and companies buy in their own name without prior authorisation, and inside them buyers typically use the urban-lot exception or a Honduran company.
Is Honduras a member of ICSID again?
Yes. Honduras denounced the ICSID Convention in February 2024, with effect from 25 August that year, then signed again on 6 March 2026 and deposited ratification on 17 July. The convention re-entered into force for Honduras on 16 August 2026, making it the 159th contracting state.
What tax will a company pay in Honduras?
Corporate income tax is 25 percent of net taxable income, with a non-deductible solidarity contribution of 5 percent on taxable profit above one million lempiras, about US$37,000, and a net asset tax of 1 percent. Individuals trading directly pay neither the solidarity contribution nor the net asset tax, which sometimes makes not incorporating the cheaper route.
Can profits be taken out of Honduras?
Legally yes, and without restriction: Article 7 of the 2011 investment law gives foreign investors the right to transfer profits, dividends, royalties, capital gains or the whole investment abroad. The practical constraint is access to foreign exchange, which the central bank allocates by auction, though the threshold for a bid requiring no documentation has been raised in stages to US$125,000 as of May 2026.
Are the ZEDEs still operating?
Yes, and that is the problem. The Supreme Court declared the framework unconstitutional from origin in September 2024 and Congress repealed the organic law in 2022, but the ruling has never been enforced, Próspera expanded in May 2026, and the state has responded with a criminal complaint rather than closure. An ICSID arbitration over the zones is running in parallel.
How much foreign investment does Honduras actually receive?
US$881 million in 2025, down from US$994 million in 2024 and US$1,076 million in 2023. More than 90 percent of the total for 2022 to 2025 was earnings reinvested by companies already present, and the equity component in 2025 was negative, meaning almost no new foreign capital arrived that year.
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