International Trade

China and Honduras negotiate free trade agreement

After establishing diplomatic relations in March 2023, representatives from the Republic of Honduras and the Republic of China have started this past July 4th negotiating a free trade agreement that, as authorities state, is expected to boost bilateral trade and strengthen relations between the two countries.

Tax

Project to reform the tax regime

The Honduran government submitted a draft law to the National Congress of Honduras containing significant reforms to the current tax regime. The draft law has not been approved and is still pending discussion at the National Congress. Among the most important matters covered by the draft law is included the transformation of the tax system to a worldwide regime instead of a territorial regime which is currently in place. The draft law also seeks to repeal 14 special tax regimes that granted exemptions of different kinds, such as the current Free Trade Zone Regime (ZOLI) and exemptions to the energy, tourism, and BPO/Call center sectors. Instead, the draft law creates two new tax incentive regimes that would be available for future beneficiaries. If the law is enacted, beneficiaries of the existing tax exemption regimes would continue enjoying the corresponding exemptions until their original terms expire, but no new applications to the regimes would be considered.

Finance

Finance and Cybersecurity

The National Banking and Insurance Commission approved the minimum guidelines that supervised banking and other institutions must follow to prevent and mitigate the occurrence of fraud and cyber scams against financial users. The guidelines impose new security measures that banks must implement mainly in relation to their digital channels, such as online banking.

Fintech Ecosystem

After the Central Bank approved the Rules for Electronic Payment Services last year, entities regulated by such rules were recently granted a deadline extension of 60 business days to complete registration with the Central Bank in order to continue operating. The aforementioned rules seek to regulate national or foreign entities that, through the use of financial technologies, offer electronic payment and transfer services but do not carry out the activity of converting physical money to electronic money and vice versa, and that are not regulated by the Financial System Law or the Cooperatives Law.