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ZEDEs created for companies to operate under a special regime

ZEDEs created for companies to operate under a special regime

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On August 16, 2021, commentator Edmundo Orellana had talked about the ZEDE and its implications in Honduras on the “La Tribuna” website.

1. Law for the creation of the ZEDE

It should be noted that there is a Law that creates the ZEDE (Ley Orgánica de las Zonas de Empleo y Desarrollo Económico – Organic Law of Employment and Economic Development Zones), being a mechanism by which sovereignty and territory are ceded for companies to operate with no obligation to Honduras under a special regime.

The purpose of the ZEDE is to facilitate the conditions for national insertion in world markets under highly competitive and stable rules.

2. Law enforcement means

The application of the law that creates the ZEDE would be given through “the adoption of technologies allowing production with high added value in a transparent environment and capable of attracting domestic and foreign investment required to grow rapidly, create the jobs needed to reduce social inequalities, providing the population with education, health, public safety, and infrastructure services for a real improvement in the living conditions of Hondurans”.

3. Unfavorable effects for Honduras

According to the commentator, the ZEDE are closed circuits, whereby only those who are authorized will reside and access the provision of the services (health, education, and others) who live within them. What is produced will be exported, acquired, or enjoyed by those authorized by the ZEDE living within its limits.

If industrial enterprises operate among them, only those involved in the production process will reside in the area. If they are financial activities, only those who carry out financial transactions may participate, even if they do not reside in the area, not paying taxes to Honduras.

4. Effects of the ZEDE on contiguous areas

It is stated that those who live in the contiguous areas will not receive any benefits and will be exposed to losing their properties through expropriation, paying the State of Honduras such compensation with its own taxes, to be enjoyed by the businessmen whose companies operate there.

In addition, the municipalities will have the problem of wastewater and other waste (garbage, for example) expelled from the ZEDE, generating costs for the municipality and possible harm to the neighbors, particularly if the waste is toxic.

5. Under what regime do ZEDE’s operate?

ZEDEs are created and operate under a special regime. The law declares subject to the ZEDE regime “areas with low population density in the municipalities located in the departments adjacent to the Gulf of Fonseca and the Caribbean Sea”, but this declaration does not automatically convert these areas into ZEDE.

6. A possible way out

According to the aforementioned commentator, one option that remains is the Public Ministry, given is facing a notorious fact, since the ZEDEs are being authorized illegally, operating and causing very serious damage to the country, being of public knowledge. It will have to assume the consequences of its omission if there are no measures to prevent it.

Source: La Tribuna 16/08/21

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