Employer Of Record in Honduras

We make it easy and painless to expand your business into Honduras. Forget about dealing with local regulations, confusing tax laws and international payroll management. We take care of all that so you don't have to.

Accelerate your growth into Honduras Compliantly and hassle-free

At Serviap Global we handle all employee onboarding, payroll, compliance, risk, mitigation and benefits, so you can focus on what matters most – your business.

How we can help you expand in Honduras

As your EOR in Honduras we’d help you expand by hiring employees and running their payroll without establishing a local branch office or subsidiary.

Your candidate is hired by a PEO in Honduras provider in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. Shortly after, your new employee will be working for you, just like any other member of your team.

Expand to Honduras with Serviap Global

Through our PEO and EOR services, you can hire qualified talent in your industry without the trouble of opening your own legal entity.

In just a few days, you can easily and safely build a presence in Honduras being sure that your staff will be hired in compliance with labor and tax regulations

Quick Facts

Currency:
Lempira (HNL)

Capital:
Tegucigalpa

Payroll Cycle:
Monthly

Language:
Spanish

Honduras Country Facts

Honduras has an enviable location on the globe, a growing industrial base, and ongoing efforts to diversify Honduran exports. The island also has a young and growing population hungry for new opportunities. With beautiful ocean reefs, thriving rain forests and Mayan ruins it’s popular for both business and pleasure. With a location west of Guatemala, southwest of El Salvador and touches the Pacific Ocean and the Gulf of Honduras.

As a bonus, Hondurans views American visitors and expats in a positive light.

The Economy

Honduras has a mixed economic system which includes a variety of emerging private freedom, combined with centralized economic planning and government regulation. In recent years, Honduras registered the second highest economic growth rates in Central America.

The Importance of Small and Medium-sized Companies

Small and Medium Enterprises (SMEs) play a major role in most economies, particularly in developing, and poverty stricken, countries.

The United States is Honduras’ most important economic partner working to address constraints on inclusive economic growth.

Population Characteristics

Honduras has about 10 million citizens. Many students ages 15-18 attend Vocational School and the most common areas of study during the 2-3 year program are accounting and business. The literacy rate tends to stay just below 88% with an average age of 22 years old.

Honduras has a democratic constitutional republic government, and nearly 97 percent of its citizens are Catholic.

Economic Opportunities

Honduras is part of the United States – Central America – Dominican Republic free Trae agreement (CAFTA- DR) which creates new economic opportunities by eliminating tariffs, opening international markets, reducing barriers to international trade of services and promoting transparency.

Sustainability became an important goal along with inclusive growth, rather than the very stark differences between the opportunities for people in the country compared to those who live in a Honduran city.

Key Sectors of the National Economy

Some of the main drivers of economic growth in Honduras include foreign investment and exports.

Agribusiness
Agriculture is one of the main industries in Honduras. Crops include bananas, coffee, melons, and pineapples.

Manufacturing
Honduras is the fourth-largest maquila manufacturing exporter to the United States, behind China, Taiwan and Bangladesh.

Textile
Textile products from Honduras are mainly exported to foreign nations such as the US and Guatemala. To stimulate the growth of the Honduran textile industry, the government and the private sector have invested vast sums of money in reducing the environmental impact of textile production. Furthermore, Honduras has 11 preferential trade agreements in force. And the trade-weighted average tariff rate is 6.6 percent.

Human Talent

It is estimated that there are 1.2 million unemployed people in Honduras providing a large pool for employers to draw from. Low wages and the need for good jobs make Honduras attractive for outsourcing.

Prominent Cities for Business

Puerto Rico has many enticing perks for an outsourced business. Many of its cities make for an attractive option for a business center. Some examples include:

La Lima:
La Lima is well known for producing excellent soccer players. It is home to the corporate headquarters of the Tela Railroad Company, a subsidiary of Chiquita Brand. And in the early 20th century, La Lima was central to the banana industry.

Danli:

Danli is the most important corn production center in Honduras. It also produces coffee, and tobacco.

Siguatepeque:

A popular tourist spot with hotels and restaurants who employ people in the service industry.

Juticalpa:

Juticalpa is the commercial center of Olancho. You will find many banks here and this is the place to

exchange your USA dollars.

Technological Ecosystem

Honduras is undergoing a rapid emergence as an important technology ecosystem in Central America, with numerous tech startups and entrepreneurs working in unison to develop a valuable community that the government is finally recognizing.

Facilities for Foreign Investment

According to the U.S. Department of State, many of the approximately 200 U.S. companies that operate in Honduras take advantage of protections available in the Central American and Dominican Republic Free Trade Agreement (CAFTA-DR). Through its participation in CAFTA-DR, Honduras has enhanced U.S. export opportunities and diversified the composition of bilateral trade.

Business Culture in Honduras

Greetings

Men and women speak directly to each other, and handshakes are appropriate when greeting both, but wait until a woman extends her hand before offering to shake hands. Use business cards during introductions, with the Spanish side of your card facing the other person. Carefully review cards handed to you as a sign of respect.

Meetings

Show up on time for meetings, even though your host may keep you waiting. Expect meetings to go on for longer than scheduled. It’s important to Hondurans to get to know the people they’ll do business with.

Sales

Hondurans expect negotiations to remain friendly. A hard sell approach is unlikely to be successful. They place a very high value on relationship building and avoid confrontations and conflicts.

Honduras Gastronomy: regional and traditional cuisines

No other country has the mix of flour tortilla, beans, egg, sausage, plantains and hot sauce that makes up baleadas. Breakfast is usually scrambled eggs, black beans and lots of tortillas with coffee. Burritos, tamales and ceviche are also common and delicious dishes.

General Highlights

Year	2022
Country	Honduras
Capital	Tegucigalpa
Num. States / Province	18 provinces
Principal Cities	La lima, Danlí, Siguatepeque and Juticalpa
Language	Spanish
Local Currency	Honduran lempira
Major Religion	Christianity
Date Format	DD/MM/YYYY
Thousands Separator Format	999,999,999.99
Country Dial Code	+504
Time Zone	GMT-6
Population	10,109,227
Border Countries	Nicaragua, El Salvador, Guatemala
Continental surface	112.492 km²
Fiscal Year	Ended on 31 December.
VAT %	15% is standard, 18% sale of first class airline tickets, importation or sale of alcoholic beverages, carbonated water and tobacco products.
Minimum Wage	5,681.73 Honduran lempiras per month (ap- proximately $234 USD)
Taxpayer Identification Number Name in the country	NIF / TIN
Current President	Juan Orlando Hernández

What you need to know about employing personal in Honduras:

Laws and Agencies that regulate labor relationships

Laws	Brief Description
Constitution of the Republic of Honduras	Honduras is a State of law, sovereign, constituted as a free, democratic and independent republic to ensure its inhabitants the enjoyment of justice, liberty, culture, and social and economic well-being. Article 2 Sovereignty originates in the people, from which stem all the powers of the State, which are exercised through representation.
Labor Code	The Honduran Labor Code establishes that employees’ regular weekly working hours must be limited to 44 daytime hours or 36 hours if employees work at night. The Honduran Labor Code states the employer may establish a “continuous” or a “discontinuous” workday.
Tax Code	Honduran resident companies are taxed on territorial income. Non- resident companies are subject to corporate income tax (CIT) on income derived from Honduran sources.
Social Security	The Honduran Social Security Institute (IHSS) will cover contingencies and the following services: • Death. • Old age and disability. • Sickness. • Non-occupational accident. • Maternity. • Family, widow’s, widower’s and orphan’s benefits. • Social services, subject to special regulations. • Forced unemployment due to legal causes or proven unemployment.

Key Tax and Labor Authorities

Honduras Tax Commission (Servidio de Administracion de Rentas)

The tax authority in Honduras is responsible for the administration of the tax system.

Taxpayers may request approval from the SAR regarding direct or indirect taxes.

Labor Contracts

Honduran Labor Law

The law prohibits all of the worst forms of child labor. The law regulates child labor, sets the minimum age for employment at age 14, and regulates the hours and types of work that minors younger than 18 may perform. The law prohibits discrimination based on gender, age, sexual orientation, gen- der identity, political opinion or affiliation, marital status, race or national origin, language, nationality, religion, family affiliation, family or economic situation, disability, health, physical appearance, or any other characteris- tic that would offend the victim’s human dignity.

Contracts

• Name, surname, age, etc.

• The designation of the services that the worker is obliged to pay for, or the nature of the work to be performed.

• The duration of the contract or the statement of indefiniteness and

the date on which it is to commence.

• The place or places where the services are to be rendered or the work is to be performed.

• The time of the working day and the hours to be provided.

• The salary, profit, commission or participation to be received by the

worker.

The International Labor Organization (ILO)

Honduras is a member of the ILO.

Work Hours

The ordinary daytime workday shall not exceed 8 hours per day or 44 hours per week.

The ordinary night workday shall not exceed 6 hours per day or 36 hours per week.

The ordinary mixed workday (mixed day and night schedules) shall not exceed 7 hours per day or 42 hours per week.

Payroll

Minimum Wage	5,681.73 Honduran lempiras per month (approximately $234 USD)
Wages	Salaries range from 7,110 HNL (lowest average) to 126,000 HNL (highest average, actual maximum salary is higher).
Overtime	Regulated by employment contract/collective agreements. When employee works overtime or works on holidays, the maximum hours allowed are 12 hours per week. Overtime hours in excess of 44 hours a week are paid at an overtime compensation rate, 137.50% of the employees’ regular salary. Overtime hours on a rest day are compensated at 200% and 125% for additional hours worked during the night.
Bi-Yearly Bonus	13th month bonus paid in December; 14th month bonus in July. Each bonus is equal to one month’s salary.
The Honduran Social Security Institute (IHSS) will cover contingencies and the following services:	• Death • Old age and disability • Sickness • Non-occupational accident • Maternity • Family, widow’s, widower’s and orphan’s benefits • Social services, subject to special regulations. • Forced unemployment due to legal causes or proven unemployment.

Vacations or PTO

• 1 year of employment / 10 days of paid leave

• 1-2 years of employment / 12 days of paid leave

• 2-3 years of employment / 15 days of paid leave

• 4+ years of employment / 20 days of paid leave.

Leaves of Absence :

• Maternity Leave:

Female employees receive up to 10 weeks of maternity leave with four weeks before the birth. It is capped at 66% of their wages, averaged over the previous three months. They also receive a paid leave of three months maximum in case of a pregnancy or delivery related illness. There is no statutory paternity leave.

• Vacation Leave:

Employees receive paid annual leave of 10 days after one year of employment, 12 days after two years of employment; 15 days after three years of employment; and 20 days after four or more years of employment.

• Sick Leave:

Employees receive 66% of the last three months of income as paid sick leave for up to 26 weeks which can be extended to 52 weeks after a three-day observation period. In the event of hospitalization and there are no dependents, the rate falls to 50%. Employees must have at least two months of contributions in the previous four months to qualify.

Employers Contribution or Labor Cost

Annual Taxable Income

Employer Payroll Contributions

• Healthcare (IHSS)

• Disability, Old Age, Death (up to a maximum of 10,282.37 HNL)

• Pension Regimen de Aportaciones Privadas (RAP)

• Labor coverage insurance

• Collective Capitalization pillar

• 5.00%

• 3.50%

• 1.50%

• 4.00%

• 2.60%

Corporate Tax Rates

Taxable Gross Income	Tax Rate
Honduran resident companies	Territorial income
Non-resident companies are subject to corporate income tax (CIT) only on income derived from Honduran sources.	The CIT rate for a resident company is 25% of its net taxable income.

Disability

The provisions are regulated within the content of Executive Agreement No. STSS-001-02, which approves the “General Regulations on Preventive Measures for Occupational Accidents and Occupational Diseases”, the country’s main legal standard for the protection of workers against occupational hazards.

Public Holidays

The Labor Code provides for public holidays that are observed in Honduras

Date	Holiday Name
1 January	New Year’s Day
Thursday before Easter	Maundy Thursday
Friday before Easter	Good Friday
Saturday before Easter	Saturday of Glory
14 April	Day of the Americas
1 May	International Labor Day
15 September	Independence Day
3 October	Soldiers’ Day
12 October	Columbus Day
21 October	Armed Forces Day
25 December	Christmas Day

Termination

The employers can terminate a fixed term contract with these reasons: business, personal, or workers misconduct. The notice should be written with the explanation of the termination. If the cause is misconduct, a warning needs to be given, and the employee gets a chance to explain their actions.

The employee holds the right to take an employer to court in the case of unlawful dismissal; the employer must then provide evidence that the termination was fair. If the employer fails to provide evidence of a lawful dismissal, the employee may be entitled to compensation. If termination is deemed wrongful and the employee is reinstated, the employer is not required to pay termination benefits.

Type of Termination

Brief Description

Justified Dismissal

Article 112 LC provides a list of just causes which allow the employer to dismiss an employee, which are related to the employee’s conduct or capacity:

a. Deceit by means of false letters of recommendation or certificates,

b. acts of violence, indiscipline at work,

c. deliberate material damages against the plant, machinery etc,

d. acts of immorality,

e. revealing manufacturing secrets,

f. criminal conviction,

g. unjustified absence from work without any justification for two consecutive working days, or a total of three days within the same months,

h. repeated failure to adopt the preventive measures or to follow the proper procedure to avoid accidents at work and occupational diseases,

i. incapacity or manifest inefficiency to fulfill the obligations under the

contract,

j. infectious disease or mental illness when the worker refuses treatment.

Unjustified Dismissal

According to article 120 LC unfair dismissal occurs when the employer can´t allege a justified cause -or prove the just cause at Court, if employee challenges it- (article 113) and when the employee terminates the employment agreement due to the employer´s gross misconduct – indirect dismissal- (article 114 LC).

The LC is very strict in the definition of dismissal related to incapacity as it requires inefficiency to be manifest. In addition, individual redundancy is not a just cause for dismissal.

Voluntary Resignation

In this case, there is no severance payment, but there is payment of

outstanding benefits.

Required notice for voluntary resignation :

Length of Employment	Required Notice
Less than 3 months	24-hour notice
More than 3 months but less than 6	1 weeks’ notice
More than 6 months but less than 1 year	2 weeks’ notice
More than 1 year but less than 2 years	1 months’ notice
More than 2 years	2 months’ notice

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Serviap was identified as a Professional Employment Organization that could hire an individual who has Mexican Customs and World Customs Organization experience and familiarity with the region. They were able to do so in short order, meeting our needs, our customer’s needs, and the expectations of the new employee.

Serviap has helped us in the most comprehensive and professional possible way, managing to adapt to the times that the company needs, collaborating with exceptional needs and always having the best disposition and relationship with the internal points of contact.