Doing business in Honduras may not be the first option that comes to mind for anyone trying to expand their firm into Latin America. However, Honduran company formation is becoming an increasingly appealing alternative due to decades of stable growth, improved security, a favorable business climate, and a variety of commercial options.
A professional employer organization (PEO) in Honduras can be an excellent option for anyone considering a shorter-term project or who just needs a small number of personnel.
The World Bank reports that Honduras has a significant amount of potential for even more accelerated growth in the upcoming years. In recent years, the country has seen the second-highest growth rate in Central America, trailing only Panama.
After nearly uninterrupted annual growth for 25 years, Honduras’ gross domestic product (GDP) reached $25.1 billion in 2019. As a result, the nation’s prosperity increased, with the gross national income (GNI) per person reaching $2,390 in that same year.
The nation has a lot to offer investors, including a young, expanding labor population that is available at very affordable rates. In addition, the nation benefits from a developing industrial base, a strategic location near Mexico and other significant North American economies, and ongoing government initiatives to diversify exports.
Reasons for doing business in Honduras
There are several compelling reasons to conduct business in Honduras, including the following:
Competitive labor conditions
With an average age of 24.3 years in 2020, Honduras has a young, urbanizing population that will be a ready source of labor for emerging firms. It also offers extremely low labor expenses that appeal to investors, with a national minimum salary that ranges from $236 to 365 depending on the sort of work being performed.
A growing pool of skilled workers is available in the nation, and English proficiency is relatively high. This is in contrast to popular Latin American investment locations like Brazil, Colombia, and Mexico, where it is noticeably lower.
Geography and logistics
Honduras, which is sandwiched between Guatemala and Nicaragua, is the second-largest nation in Central America in terms of both size and population. The nation boasts coasts that offer access to the Pacific and Atlantic oceans for trade, and the 700 km long Caribbean coast is home to four important ports.
The Panamerican Highway runs through the southern part of the nation, and major cities are connected by thousands of kilometers of multi-lane roads. Meanwhile, the country’s highway system is growing. Tegucigalpa is just over three hours from Houston and even closer to Miami.
Improving conditions for doing business in Honduras
The Honduran government announced plans for a series of free-trade zones (FTZs) known as Employment and Economic Development Zones in 2018. Honduras has made efforts in recent years to open up more to international business and encourage greater investment (ZEDE).
Additionally, Honduras has one of the fastest company creation times in Latin America, allowing foreign investors to launch a company in as little as two weeks.
Hiring via a PEO in Honduras
If you want to do business in Honduras but first want to learn more about the market or are simply planning a small-scale operation. You might want to think about hiring through a reputable employer organization (PEO).
You can quickly enter the market and have workers in hand by using a PEO in Honduras to hire staff and comply with local labor laws and conventions.
While you retain control over the workloads and schedules of all of those outsourced employees, the PEO business will also be able to handle your payroll.