Owning Property in Roatan and Honduras

From the offices of:
Gustavo A. Manzanares Vaquero
Attorney at Law

DESPACHO
PROFESIONALES ASOCIADOS
Edificio Los Jarros, 4to. Piso No.411, Bulevar Morazán, Tegucigalpa
Telefax (504) 237-3341, 220-1231
e-mail: gusman@netsys.hn

INCORPORATING A SOCIEDAD ANÓNIMA (CORPORATION) IN HONDURAS.

The Honduran Commercial Code regulates and governs the requirements that are to be met for setting up a Corporation in Honduras.

It stipulates that to incorporate there must be a minimum of two (2) share holders and a twenty five thousand lempiras (L. 25,000.00) social capital. The capital may be paid in full or a 25% in cash must be exhibited in a Deposit at a Local Bank at the time that the Corporation is set up. The 25% applies for any amount of Capital with which the Sociedad Anónima is set up with.

The Honduran Constitution Article 107 stipulates that only Honduran citizens by birth and Corporations solely owned by Honduran citizens may own property within forty (40) Kilometers of its borders, this includes the Bays Islands and the properties which are located adjacent to the coast line. In 1990 as a policy to attract foreign investments in Honduras the Government passed a Decree which regulates the process to purchase property for a dwelling, establishing that the maximum that a foreign citizen could purchase was ¾ of an acre.

Sociedades Anónimas are established as a General practice to purchase lots which are larger than ¾ of an acre. The incorporation process used is to have two (2) Honduran Citizens appear as the original share holders to incorporate and once the Corporate papers have been inscribed they will endorse their shares to the Bearer. The Articles of Incorporation are drafted and the person (s) who are the “real” owners are appointed as the Administrator(s) of the Corporation or the President of the Board if this type of Administration is considered.

The Honduran Commercial Code requires that the share holders meet at least once a year, basically to approve its General Balance and to appoint or confirm the appointment of the Administrators or Board of Directors. The share holders meeting should be held during the first three months of the
year as this coincides with the date that Income Tax Declarations must be filed with the Government. Basically the only reporting that would be needed for a Corporation which only purpose is to hold title on the land is to file its yearly tax declaration and pay the land tax. Costs for the filing will generally range between $ 325 and $ 375.00, for the act of filing and preparing a simple Financial Statement.

The services that are provided by our firm are:

• Drafting of the Articles of Incorporation
• Designation of the two (2) Honduran Stock Holders
• Filing and obtaining the National Revenue Card (RTN)
• Printing of the two (2) original stock certificates and obtaining signature endorsing the certificates to the “Bearer”

The Fees established by our firm to handle the process detailed above are $ 675.00, should the interested party (ies) need the firm to purchase and legalize its Corporate Books the fees are fixed at $ 875.00.

We require 50% of the fees to initiate the process, plus $ 365.00 that are used as the funds to establish the Deposit required by law. These are deposited in a local bank become available to the Corporation once it is dully inscribed at the Registry. Likewise we will need a name for the Corporation.

Please feel free to contact us for any questions or doubts you may have.

Gustavo A. Manzanares Vaquero
Attorney at Law