Honduras is unusual in one respect: the corporate tax rate and the top individual income tax bracket land at the same 25%, so there's genuinely little tax-rate incentive to incorporate purely for arbitrage the way there can be elsewhere. The real reasons to form a company here are liability protection and governance clarity, not a lower rate. Here's what it takes to start a business in Honduras in 2026.
1. Which business structure fits you?
Before you register anything, it helps to know what you're actually choosing between.
- Empresa Individual (sole proprietorship). Full personal liability, simplest to set up.
- S. de R.L. (Sociedad de Responsabilidad Limitada). Minimum capital of just HNL 5,000 (under $200), 2 to 100 partners, 100% foreign ownership permitted, simplified management structure. The standard choice for foreign subsidiaries and closely held businesses.
- S.A. (Sociedad Anonima). Minimum capital HNL 25,000 (about $1,000), needs a formal Board of Directors or Sole Administrator plus an appointed statutory auditor (Comisario), better suited to larger-scale or institutional operations.
2. Register your business
Reserve your company name at the Mercantile Registry (roughly HNL 200, 1 to 2 business days), then draft and notarize the Articles of Incorporation. Register for your RTN (Registro Tributario Nacional, tax ID) with SAR, the tax authority, and obtain a municipal Operating Permit (Permiso de Operacion) from your local Alcaldia, which requires a verified physical address and involves municipal taxes based on your initial capital. Total registration fees max out around HNL 3,000 (about $114), and the full process, including bank account opening, typically takes 2 to 6 weeks.
3. Check licenses and permits
Honduras doesn't issue a single national business license. If you plan to hire, you'll separately register as an employer with IHSS (social security), INFOP (vocational training institute), and the Ministry of Labor for employment contracts.
4. Understand Honduran taxes
Corporate income tax is a flat 25% on net income earned within Honduras, the same top rate individuals pay. VAT (ISV) is 15% standard, rising to 18% for alcohol and tobacco. Withholding tax applies to dividends, interest, and royalties paid to non-residents, at rates that vary by payment type and can be reduced under Honduras's double taxation treaties. On top of national tax, municipalities levy a progressive industry and commerce tax on gross income, roughly 0.15 to 0.40 per thousand depending on your income band, an extra layer worth budgeting for that's easy to overlook.
5. Stay compliant
Expect an annual ISR (income tax) return, monthly ISV and withholding returns, monthly IHSS/RAP/INFOP filings if you have employees, and annual renewal of your municipal operating permit. Honduras isn't a tax haven, but it does offer targeted incentives like free trade zones and export incentives for qualifying activities.
Honduras business costs at a glance
| Item | Cost |
|---|---|
| S. de R.L. minimum capital | HNL 5,000 (~$190) |
| S.A. minimum capital | HNL 25,000 (~$950) |
| Name reservation + registration, max fee | ~HNL 3,000 (~$114) |
| Corporate tax, flat rate | 25% |
| VAT (ISV), standard rate | 15% |
| VAT (ISV), alcohol/tobacco | 18% |
Frequently asked questions
How much capital do I need to start an S. de R.L. in Honduras?
Just HNL 5,000, under $200.
What's the corporate tax rate in Honduras?
A flat 25%, the same as the top individual income tax bracket, so there's little tax-rate incentive to incorporate purely for arbitrage.
How much does it cost to register a company in Honduras?
Total registration fees max out around HNL 3,000 (about $114), with the full process, including bank account opening, typically taking 2 to 6 weeks.
What's the VAT rate in Honduras?
15% standard (ISV), rising to 18% for alcohol and tobacco.
Does Honduras charge a municipal tax on top of national corporate tax?
Yes, municipalities levy a progressive industry and commerce tax on gross income, roughly 0.15 to 0.40 per thousand depending on income band.
Fees and rates above come from the Mercantile Registry and SAR (Servicio de Administracion de Rentas) as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to a Honduras-qualified accountant or lawyer about your specific situation.