Many companies believe the key to an expansion is setting up a subsidiary. According to this traditional model, you would need to incorporate in Honduras before you could hire employees, add them to payroll, and give out compensation and benefits. Just incorporating could take weeks or months, and that’s prior to starting your work in the country.
Globalization Partners is a global PEO that offers an alternative method. Through Honduras subsidiary outsourcing, we can help you start working in a few days. Plus, we’ll take on all the compliance as the Employer of Record, so your only concern can be 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 operate like states in that they have separate laws and regulations. You should research the physical area where you want to expand before settling on an office space to see if that region’s laws make it easy or difficult to expand.
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 your 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 it. Every entity has its own laws and regulations, so you need to learn the specific rules that apply to you before incorporating. LLCs require at least one director and two shareholders who are any nationality. They do not need to live in Honduras, and the shareholders can either be individuals or corporate bodies.
You’ll also need $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 will get registered before the Public Registry of Commerce of the domicile of the company.
Benefits of Setting Up a Honduras Subsidiary
Although setting up your Honduras subsidiary is a lengthy process, it does bring certain benefits when you’re done. 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.
Globalization Partners is a global PEO that offers additional benefits through our Honduras subsidiary outsourcing services. Choosing us will mean you do not have to spend weeks or months trying to set up a subsidiary before you can even start working. We can use our Employer of Record solution to help you start working in a few days and ensure that you always stay compliant.
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.
Let Globalization Partners Help With Your Expansion
Globalization Partners will help simplify your expansion process and make you more productive through Honduras subsidiary outsourcing. Contact us today to learn more.