Owning Your Piece of Roatan Real Estate!

For foreigners or Honduran Residents, securing your Caribbean real estate can be accomplished in various manners.

OPTION 1. Owning your Roatan real estate under your personal name. Applicable to homes, condos, land, garages, etc. that are less than ¾ of an acre and limited to one (1) property. All subsequent real estate investment will be via option 2.

OPTION 2. Placing your property into a Honduran corporation. A corporation has no limitations to size or amount of properties it can own.

We look forward to helping you choose the best option for you.

Despacho PROFESIONALES ASOCIADOS

Gustavo Manzanares, Attorney-at-Law

08/02/05

PURCHASING PROPERTY IN HONDURAS

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 Decree 90-90 which regulates the process to purchase property for a dwelling, establishing that the maximum that a foreign citizen could purchase was 3, 000 square meters which is equivalent to % of an acre. On January 13th, 2005 the Honduran Supreme Court disregarded an Unconstitutional recourse that was filed by an Ex Prosecutor General of Honduras. The Court decision confirmed that the Executive Branch acted according to Honduran Law.

Sociedades Anonimas or Trading Companies/Corporations are established as a General practice to purchase lots which are larger than 3/4 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 Closing costs are based on the sales price of the Property and are estimated at 5.2 % of the agreed or listed sales price.

The above quoted percentages include the title search of the title for the Property, should the interested party require a title Report prior to purchase this may be provided, with no supporting documentation at a cost of $ 175.00. In the case that supporting documentation need to be presented or a Title Report for Title Insurance purposes be needed the Costs will be assessed as per the complexity of the chain of titles, costs will be $ 1,250.00. These costs are not included in the percentages quoted in the previous paragraph.

Despacho PROFESIONALES ASOCIADOS

Gustavo Manzanares, Attorney-at-Law

08/02/05

INCORPORATING A SOCIEDAD ANONIMA (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 Anonima 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 % of an acre.

Sociedades Anonimas are established as a General practice to purchase lots which are larger than % 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 shareholders 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”
  • Inscription at the Local Chamber of Commerce

The Fees established by our firm to handle the process detailed above are $725.00, should the interested party (ies) need the firm to purchase and legalize its Corporate Books the fees are fixed at $ 1,000.00.

We require 50% of the fees to initiate the process. Likewise we will need a name for the Corporation and instructions on whether there will be a Board of Directors; Administrator(s) or a Sole Administrator.

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

GUSTAVO A. MANZANARES VAQUERO