HONDURAS Law and Practice Contributed by: Alberto Zúniga, Carlos Zúniga and Garhem Padilla, Baker Tilly Honduras
Baker Tilly Honduras Blvd Morazán Torre Agalta Piso 21 Oficinas 2113-2114
11101 Tegucigalpa Francisco Morazán Honduras Tel: +504 2263 5241 Email: info@bakertilly.hn Web: www.bakertilly.hn
1. Corporate Structures, Residence and Tax Treatment 1.1 Corporate Forms and Their Tax Treatment Commercial activity in Honduras is predominantly car - ried out through incorporated entities governed by the Commercial Code. The legal framework provides a closed list of corporate forms that qualify as mercan - tile entities, regardless of their underlying purpose. Under Article 13 of the Commercial Code, the recog - nised corporate forms are: • Sociedad en Nombre Colectivo (general partner - ship); • Sociedad en Comandita Simple (limited partner - ship); • Sociedad de Responsabilidad Limitada (SRL); • Sociedad Anónima (SA); • Sociedad en Comandita por Acciones and • Sociedad Cooperativa . All of these entities may adopt a variable capital struc - ture. In practice, the Sociedad Anónima and the Socie- dad de Responsabilidad Limitada are the most com - monly used vehicles. The SA is typically preferred for medium and large-scale operations, regulated sectors and structures involving multiple investors. The SRL is widely used for closely held businesses and for - eign subsidiaries due to its governance flexibility and streamlined internal structure.
From a tax perspective, all incorporated entities are treated as separate taxpayers. Corporate income tax is assessed at the entity level, and the choice of legal form does not alter the principle of separate taxation. Each company must obtain its own tax identification number and comply independently with accounting, reporting and filing obligations before the Tax Admin - istration. Honduran law also allows simplified incorporation mechanisms, including single-shareholder compa - nies, subject to certain restrictions. Activities in regu - lated industries – such as financial services, extractive operations or public-private partnership projects – are generally excluded from simplified formation proce - dures and remain subject to enhanced regulatory oversight. Foreign investors may operate through a locally incor - porated subsidiary or through a registered branch. In both cases, the Honduran presence is taxed on Hon - duran-source income under the territorial tax regime. 1.2 Use and Taxation of Transparent Business Structures Honduran tax law does not formally recognise trans - parent entities for domestic tax purposes. As a result, business structures formed under Honduran law are generally treated as taxable entities rather than as pass-through vehicles. Certain partnership forms exist under commercial leg - islation; however, for tax purposes, they are typically
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