Many companies believe the key to an expansion is setting up a subsidiary. By taking the traditional route, you would need to incorporate in Honduras before hiring employees, add them to payroll, and give out compensation and benefits. Incorporating can take weeks or months, and that’s prior to starting your work in the country.
G-P offers an alternative. We can help you start working in a few days. Plus, we’ll manage compliance as the Employer of Record, so you can focus on growing your business.
How to set up a Honduras subsidiary
Learning how to set up a Honduras subsidiary depends on a variety of factors. Different regions or cities can have separate laws and regulations. Companies should research the target region before settling on an office space.
Honduras also allows companies to choose which type of entity is best for their expansion. The various options include a limited liability company (LLC), public limited company (SA), branch (sucursal), and representative office (oficina de representación). Each structure has pros and cons, but many companies choose to incorporate as an LLC. The steps to set up this type of Honduras subsidiary include:
- Giving a local bank a certificate of deposit and paying a registry fee.
- Establishing your company with a notary public who can get your articles of incorporation drawn up.
- Filing your articles of incorporation with the Mercantile Registry at the Chamber of Commerce.
- Applying for a Tax Identification Number (TIN).
- Acquiring legal accounting and “minutes” books.
- Registering with the local and national Chambers of Commerce.
- Applying for an operational permit.
- Registering for sales tax and obtaining authorization of the company books.
- Registering with the Social Security Institute.
- Registering with the Professional Training Institute and the Social Housing Fund.
Honduras subsidiary laws
Staying compliant should be a priority for your business, and you need to learn Honduras’ subsidiary laws to do so. Every entity has its own laws and regulations, so you need to learn the specific rules before incorporating. LLCs require at least 1 director and 2 shareholders who can be of any nationality. They do not need to live in Honduras, and the shareholders can either be individuals or corporate bodies.
You’ll also need USF 250 of minimum share capital to complete the incorporation process. Companies will need to open a bank account with a local bank in Honduras to deposit the share capital. All partners have to go before a notary public to authorize the incorporation deed. Then, the incorporation deed must be registered before the Public Registry of Commerce of the domicile of the company.
Benefits of setting up a Honduras subsidiary
Although setting up a Honduras subsidiary is a lengthy process, it does bring certain benefits. Companies that incorporate can operate legally in the country and also begin to form vital business relationships. Incorporating as an LLC will benefit both the subsidiary and the parent company. The subsidiary has limited liability from the parent company, allowing it to operate the way it wants in Honduras, while the parent company does not have to worry about costly litigation.
Other important considerations
Every company looking to incorporate should create a plan that includes the time and money the Honduras subsidiary setup process requires. If the process requires more time than you can spare, you should work with another company executive who will take the lead. Since certain steps of the incorporation process require fees, you should work with your team to budget for all expenses ahead of time.
Enter new markets with G-P — no new entities required.
Beat the competition and enter new markets in minutes, not months, with G-P. We’ve paired our industry-leading team of in-region HR and legal experts with our #1 Global Growth Platform™ to help you hire compliantly in 180+ countries, eliminating the need to set up local entities or subsidiaries.
Get in touch today to learn more about how we can streamline the global growth process.