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Financial Regulatory Bodies in Honduras: Understanding Annual Entity Compliance Requirements
Honduras has a complex regulatory framework that businesses must navigate before conducting operations in the country. One of the key aspects of this framework is annual entity compliance, which involves adhering to various corporate and mercantile requirements.
Types of Companies in Honduras
In Honduras, there are several types of companies, including corporations, limited liability companies, and branches of foreign companies. Each type has its own set of requirements and obligations.
Entity Annual Compliance in Honduras: Corporate Requirements
Businesses in Honduras must comply with distinct corporate and mercantile requisites, which include:
- Financial Statements: Submitting financial statements and tax returns on an annual basis
- Corporate Records: Maintaining current corporate records
- Shareholder Meetings: Organizing regular shareholder meetings
- Corporate Governance: Complying with the stipulations outlined in the Honduran Commercial Code concerning corporate governance
Requirements for Setting Up a Corporation
To set up a corporation in Honduras, businesses must:
- Obtain Certificate of Registration: Obtain a Certificate of Registration from the foreign company’s place of origin
- Appoint Permanent Representative: Agree on the appointment of a permanent legal representative in Honduras
- Ensure Documents are Up-to-Date: Ensure that the documents confirming the above are of recent date, duly notarized, and where appropriate, translated into Spanish
Entity Annual Compliance in Honduras: Tax Considerations
The fiscal year in Honduras runs from January 1st to December 31st. Businesses must have a Unique Taxpayer Registry obtained via the ATV portal of the Ministry of Finance.
- Income Tax: an annual tax 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: an annual tax levied on income from capital, labor, or a combination of both
Entity Annual Compliance in Honduras: Labor Regulations
Foreign companies doing business in Honduras must comply with labor regulations, which include:
- Trial Period: Providing employees with a trial or probationary period that cannot exceed 60 days and must be paid
- Minimum Wage: Payment to employees of at least $305 USD per month, which is Honduras’s national minimum wage
- Vacation Time: Payment to employees of fourteen monthly salaries (12 regular monthly salaries, plus the June bonus payment and Christmas bonus paid in December)
- Working Hours: A standard workday of eight hours
- Paid Leave: Entitlement of 10 days of paid vacation per year
Meeting Entity Annual Compliance Requirements
To meet entity annual compliance requirements, businesses must:
- Provide Social Security: Provide their employees with social security
- Pay Employer/Employee Contributions: Pay employer/employee contributions to monthly social security payments
Simplifying Processes
Biz Latin Hub has designed an Annual Legal Calendar that outlines fundamental responsibilities every company in Honduras must attend to.
Common Questions on Entity Legal Compliance in Honduras
Based on extensive experience, common questions and doubts of clients include:
- Statutory Appointments: What are the common statutory appointments for a company in Honduras?
- Registered Office Address: Is a registered office address needed for a legal entity in Honduras?
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. Our portfolio of services includes hiring & PEO accounting & taxation, company formation, bank account opening, and corporate legal services.
Contact us to learn more about how we can help you navigate entity annual compliance requirements in Honduras and beyond.