A close-up of a gavel resting on a clipboard with the words "BIZLATIN HUB" and "Honduras" prominently displayed, highlighting the significance of entity annual compliance in Honduras. Scales of justice are visible in the blurred background.

How does entity annual compliance in Honduras work?

Before entering the territory, it’s crucial to have a good grasp of the annual entity compliance in Honduras and the broader regulatory framework. Investors should be aware of these financial regulations before officially registering a company in Honduras, as non-compliance could lead to legal challenges and financial penalties. Financial regulatory compliance is a significant aspect of overall corporate compliance.

If you’re thinking about company formation in Honduras, a comprehensive guide to annual entity compliance is indispensable. This overview is designed to assist you in navigating the legal landscape and ensuring adherence to all regulatory requirements, including how entity annual compliance in Honduras works in practice.

For businesses already operating in the territory or those exploring market entry, we provide tailored assistance. Feel free to contact us today to learn more about how we can support your business’s unique needs and help you navigate entity annual compliance in Honduras. With 18 dedicated local offices throughout the region, no one knows Latin America and the Caribbean as well as we do.

Types of companies in Honduras

In Honduras there are a variety of company types, but the most commonly used are the following: 

  • Corporations – A corporation exists under a name and has capital divided into shares. The partners are responsible for the payment of what they have subscribed.
  • Limited Liability Companies – A limited liability company exists under a corporate name. The partners are only required to pay their contributions, and are not responsible for the financial liabilities or the debt of the company as a whole.
  • Branch of foreign company – The foreign parent company regulates the rules and assumes the responsibilities before third parties.

What corporate requirements are there for entity annual compliance in Honduras?

In Honduras, businesses are have a number of regulations pertaining to operations, aiming to guarantee both legal adherence. These requisites include: 

  • Yearly submission of financial statements and tax returns
  • Meticulous upkeep of current corporate records
  • Organization of regular shareholder meetings, usually conducted on an annual basis.

Additionally, companies must conform to the stipulations outlined in the Honduran commercial code concerning corporate governance. The stipulations mandate tasks such as appointing a legal representative, and, depending on the company’s scale and nature, constituting a board of directors.

Furthermore, board meetings and annual shareholder meetings that involve the following aspects must be disclosed to financial authorities as part of entity annual compliance:

  • Presentations are given
  • Job appointments are made
  • The company’s financial status is reported
  • Profits or losses are discussed
  • Other similar activities

Requirements for corporation formation in Honduras

If you have not yet set up a corporation in Honduras, you must complete the following steps:

  • Obtain a certificate of registration of the foreign company in its place of origin.
  • Agree on the appointment of a permanent legal representative in Honduras.
  • Ensure that the documents confirming the above are of recent date, duly notarized, and where appropriate, translated into Spanish.

What tax obligations are there in Honduras?

In Honduras, the fiscal year runs from January 1st to December 31st. To start commercial operations, companies must have a unique taxpayer registry, which is obtained via the ATV portal of the Ministry of Finance.

The main taxes that must be declared and paid are:

TAXDETAILS
Income TaxThis annual tax is levied on income from capital, labor or a combination of both
Sales Tax Applied in a non-cumulative manner on imports and the sale of goods and services 
Municipal TaxesThis local tax is levied on income from capital, labor, or a combination of both
We recognize the challenges inherent in adapting to the new legislation, especially when it comes to complying with corporate obligations. In order to simplify this process, Biz Latin Hub has designed the following Annual Fiscal Compliance calendar.
Taxation is a key part of entity annual compliance in Honduras

What labor regulations are there in Honduras?

Foreign companies doing business in Honduras must comply with labor regulations, which include:

  • Providing employees with a trial or probationary period that cannot exceed 60 days and must be paid
  • Payment to employees of at least USD$305 per month, which is Honduras’ national minimum wage
  • Payment to employees of fourteen monthly salaries (12 regular monthly salaries, plus the June bonus payment and Christmas bonus paid in December)
  • A standard workday of eight hours
  • Entitlement of 10 days of paid vacation per year

To meet entity annual compliance in Honduras, companies must also provide their employees with social security. The employer/employee contributions are as follows:

  • The employer covers 10.66 percent of the employee’s salary to monthly social security payments
  • The employee must contribute 6.5 percent of their salary to monthly social security payments
In order to simplify processes, Biz Latin Hub has designed the following Annual Legal calendar as a concise representation of the fundamental responsibilities that every company must attend to in Honduras
Key dates for entity annual compliance in Honduras

Based on our extensive experience these are the common questions and doubts of our clients on entity legal compliance in Honduras:

1. What are the common statutory appointments for a company in Honduras?

The following are the most common statutory appointments for Honduran legal entities:

– An appointed legal representative who will be personally liable, both legally and financially, for the good operation and standing of the company. This should be a local national or a foreigner with the right to live/work in the country.

2. Is a registered office address needed for a legal entity in Honduras?

Yes, a registered office address or local fiscal address is required for all Honduras entities to receive legal correspondence and governmental visits.

3. What is the deadline for companies to submit their income tax declaration in Honduras?

Companies in Honduras have to file their income tax declaration by the 30th April each year.

4. When must a General Shareholders Meeting be held in Honduras?

The Ordinary General Shareholders Meeting must be held within the first three months following the closure of the fiscal year in Honduras and by the deadline of March 31st.

5. What are the main taxes that a company must declare and pay in Honduras?

The main taxes that a company must declare and pay in Honduras are the following:
Income tax: This annual tax is levied on income from capital, labor, or a combination of both.
Sales tax: Applied in a non-cumulative manner on imports and the sale of goods and services.
Municipal taxes: This local tax is levied on income from capital, labor, or a combination of both.

Biz Latin Hub can help you with entity annual compliance in Honduras

At Biz Latin Hub, we provide integrated market entry and back-office services throughout Latin America and the Caribbean, with offices in Bogota and Cartagena, as well as over a dozen other major cities in the region. We also have trusted partners in many other markets.

Our unrivaled reach means we are ideally placed to support multi-jurisdiction market entries and cross border operations.

As well as knowledge about entity annual compliance, our portfolio of services includes hiring & PEO accounting & taxation, company formation, bank account opening, and corporate legal services.

Contact us today to find out more about how we can assist you in finding top talent, or otherwise doing business in Latin America and the Caribbean.

If this article about entity annual compliance in Honduras was of interest to you, read about our team and expert authors. 

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Key services offered by Biz Latin Hub can help with entity annual compliance in Honduras.

The information provided here within should not be construed as formal guidance or advice. Please consult a professional for your specific situation. Information provided is for informative purposes only and may not capture all pertinent laws, standards, and best practices. The regulatory landscape is continually evolving; information mentioned may be outdated and/or could undergo changes. The interpretations presented are not official. Some sections are based on the interpretations or views of relevant authorities, but we cannot ensure that these perspectives will be supported in all professional settings.
Craig Dempsey
Craig Dempsey

Craig is a seasoned business professional in Latin America. He is the Managing Director and Co-Founder of the Biz Latin Hub Group that specializes in the provision market entry and back office services. Craig holds a degree in Mechanical Engineering, with honors and a Master's Degree in Project Management from the University of New South Wales. Craig is also an active board member on the Australian Colombian Business Council, and likewise also active with the Australian Latin American Business Council.

Craig is also a military veteran, having served in the Australian military on numerous overseas missions and also a former mining executive with experience in various overseas jurisdictions, including, Canada, Australia, Peru and Colombia.

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