1. INVESTORS GUIDE HN - 2021 Starting an Enterprise

1. INVESTORS GUIDE HN - 2021 Starting an Enterprise

HONDURAS INVESTOR´S GUIDE 2020-2021

PRESENTED BY:

NATIONAL INVESTMENT COUNCIL HONDURAS

STAFF WWW.CNI.HN

NATIONAL INVESTMENT COUNCIL HONDURAS

JACQUELINE FOGLIA SANDOVAL Executive Director [email protected] RAQUEL AGUILAR Legal Advisor [email protected] GIVANILDO SOSA

Facilitation Officer and Investment Attraction [email protected] ELENA ANDONIE Information Specialist [email protected] ALEJANDRO ARONNE Research Specialist and Economic Statistics [email protected] DOUGLAS MARTINEZ Technical advisor [email protected] ANA MARICHAL Communication Specialist

[email protected] LUDING GUZMÁN Advertising and Marketing Officer [email protected] LUIS RODAS General counter [email protected]

STAFF WWW.SDE.GOB.HN

AÍDA RODRÍGUEZ International Promotion Director [email protected] NADIA DÍAZ International Promotion Officer [email protected] ALICIA CALDERINI International Promotion Officer [email protected] LINDA MONRROY International Promotion Officer [email protected] MABEL GUTIÉRREZ International Promotion Officer [email protected]

ILEANA BONILLA International Promotion Officer [email protected]

HONDURAS INVESTOR´S GUIDE 2020-2021

among others); the construction of the Palmerola International Airport megaproject; and the improvement in the different maritime ports both in the north and the south of the country. In order to continue promoting the national economy and thanks to the efforts of the Ministry of Economic Development and the National Investment Council, we present the third edition of the Investor's Guide, an informative instrument that serves as guidance on how to enter the Honduran productive market. and indicates which are the state procedures to be followed by any entrepreneur who wants to grow their industries and businesses in our land. In this new edition of the Investor’s Guide, you will find: the main procedures for starting and operating a business, a foreign trade company, to access the incentives offered by national laws, for immigration and immigration issues, among others. I thank the Honduran businessmen and the workforce, as well as all those who, in one way or another, set their eyes on Honduras to grow their industries and contribute their grain of sand in the consolidation of a prosperous country. I am convinced that this Guide will constitute a valuable tool for investors and entrepreneurs who wish to bet on Honduras, a blessed country, with hospitable people and endless wealth and resources. María Antonia Rivera Vice President and Minister in Charge of the Ministry of Economic Development

Dear Reader: I am pleased to give you the warmest welcome to Honduras; a country of opportunities and abundant potential. Since the begin- ning, the current Government of the Republic has seen the impor- tance of enhancing the resources that the country has; as a result, a route to development has been proposed. Our goal has always been to position Honduras as a leading country in investment and exports. Thanks to this, we can say that today we have one of the most dynamic and varied economies in the Central American region. Despite the adversities that we have faced as a country in 2020, today, we can affirm with certainty that we continue to be a competitive country, becoming a reference for investment in several productive sectors, such as: infrastructure, development of key road projects (the logistics, Lenca, agricultural corridors,

HONDURAS INVESTOR´S GUIDE 2020-2021

In first place, with the Federation of Chambers of Commerce of Honduras (FEDECAMARA) we execute the project MIPYME Emergency Fund (Micro, Small and Medium Enterprises), with the target of promoting the training and auditing of MIPYME’S in basic biosafety practices for reopening safe and responsible business, in adapting to the new normal generated by the Covid-19. The second phase is still in force. On the other hand, agreements have been signed with other international institutions and organizations in order to strengthen and promote the Honduran private forestry sector. The digitalization in private businesses and government, has been a key element in the continuity of business in Honduras during confinement because of the pandemic of the Covid-19. Therefore, since 2020 we have also worked hard to develop different virtual events, webinars, and forums, with important topics and support for all affected sectors. Likewise, through inter-institutional collaboration between the National Investment Council, we promote “Connecting Honduras with the World”, to make known to the Honduran diplomatic corps abroad, the free services provided by the CNI in terms of investment, tourism benefits, and the star products or those with the potential to export. In this new edition of the Investor's Guide, the reader will be able to find the mechanisms required to arrange a new investment or expand an existing one. Our professional and qualified staff is available to provide technical and legal advice, and support in your investment processes. We will continue to promote and support responsible economic reactivation, complying with strict biosafety measures, to sustain businesses, ensure the health of the population, maintain jobs, and continue on the path towards the economic development of the country. We are going for more investments in 2021! Jacqueline Foglia Sandoval Executive Secretary National Investment Council (CNI)

Dear Entrepreneur: Welcome to the country that offers you a world of opportunities for your investment…¡HONDURAS!; a nation that has had the vision of investing in air, land and port infrastructure to consolidate itself as the Logistics Center of the Americas. With a privileged geographical position, tax benefits and commercial agreements, qualified workforce, and an infinity of natural resources that allow an ideal business climate for national and foreign investors. The year 2020 presented great challenges to all Hondurans. We face a global pandemic, and phenomena natural, transformed in an opportunity to unite us, strengthen and harness the development potential to become a more competitive Honduras. In this sense, at the National Investment Council (CNI) we work to strengthen legal, commercial, economic, and financial conditions, through agreements with international organizations, trade unions, and state institutions, in support of key sectors.

COUNTRY PROFILE

HONDURAS INVESTOR´S GUIDE 2020-2021

Atlantic Ocean

AREA 112.492 km²

TIME ZONE UTC -6 (Central Standard Time)

Pacific Ocean

POPULATION 9.746.117

POPULATION GROWTH RATE 1,6%

CAPITAL TEGUCIGALPA LANGUAGE SPANISH CURRENCY LEMPIRA

MINIMUMWAGE $ 416.19 ADULT LITERACY 87% (2019)

EXCHANGE RATE 24.0166 = $1.00 (May 24, 2021)

LABOR 62% (2016)

INFLATION RATE 4.01% (December, 2020)

HONDURAS INVESTOR´S GUIDE 2020-2021

1

STARTING AN ENTERPRISE

CONTENT

1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8

COMPANY´S INCORPORATION PROCESS REGISTRATION OF THE ARTICLES OF INCORPORATION AT THE MERCANTILE REGISTRY REGISTRATION IN THE CHAMBER OF COMMERCE MEMBERSHIP IN THE CHAMBER OF COMMERCE (OPTIONAL) REGISTRATION IN “MI EMPRESA EN LÍNEA” NATIONAL TAX REGISTER (RTN) MUNICIPAL SOLVENCY FOR FOREIGNERS OBTAINING AN OPERATION PERMIT (TEGUCIGALPA)

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HONDURAS INVESTOR´S GUIDE 2020-2021

Who performs the procedure? The businessperson or the legal proxy Where is it done? The Chamber of Commerce and Industry of the Municipality or city where the company will operate. Average Time: One business day Cost: It varies according to the subscribed capital and the Chamber of Commerce and Industry closest to the location. * The Chamber of Commerce Registry must be renewed in the years ending in zero (0) and five (5).

1.1 COMPANY´S INCORPORATION PROCESS The Articles of Incorporation is a legal instrument or document containing: the name of the individuals (partners or stockholders) incorporating the entity, entity´s corporate name, the initial capital, duration, nature, and purpose. Who performs the procedure? A notary public Cost: The cost vary according to legal structure of the company to be established. Factors such as the legal fees, the company´s capital stock, and registration fees will also influence the price. Where is it done? A law firm of choice Average Time: Two (2) business days 1.1.1 PREPARING COMPANY ARTICLES OF INCORPORATION REQUIREMENTS Provide the following information and documents to the notary public: a. Company´s name or corporate name b. Description of the activity in which the company will engage. c. Company´s address. d. Initial capital, depending on the legal entity adopted. e. Copy of personal documents of shareholders or partners: identity card or passport; National Tax Registry (RTN, for its acronym in Spanish) of the shareholders; and Municipal tax solvency certification. * With these documents, the notary public will prepare the Articles of Incorporation. For this purpose, the notary public will purchase tax stamps according to the initial capital investment. 1.2 REGISTRATION OF THE ARTICLES OF INCORPORATION AT THE MERCANTILE REGISTRY Every company incorporated according to the provisions of the Commercial Code will register its Articles of Incorporation in the Mercantile Registry

SAMPLE COST IN MERCANTILE REGISTER

ACCORDINGTO ACTOR CONTRACT

REGISTRATION FEE

For an act or contract of undetermined value or when it does not exceed L.1,000.00

L.200.00 for basic registration fee In addition to the basic registration fee, L.1.50 per thousand or fraction of a thousand. L.300.00 for the first ten pages and L.20.00 for each additional page. L.200.00

When the value exceeds L.1,000.00

Complete certifications, registration certificate and legal representation.

Certifications

REQUIREMENTS: Submit documentation at the Mercantile Register SOCIAL MERCHANTS a. Company´s Articles of Incorporation (either Articles of Incorporation, a Private Contract, or through the online platform www.miempresaenlinea.org b. A copy of the identity card of the individual performing the procedure. c. Payment of registration fee, considering the amount of the capital.

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HONDURAS INVESTOR´S GUIDE 2020-2021

INDIVIDUAL TRADER a. Articles of Incorporation authorized by a notary public, original and copy. b. A copy of the identity card of the individual performing the procedure c. Payment of registration fee, considering the amount of the capital. FOREIGN CORPORATION a. Registration Certificate of the Corporation in its country of origin b. Annual General Meeting agreement appointing a permanent representative, resident in Honduras. c. Payment of L.200.00 if an initial capital is not established. If the capital is established, the payment will be done according to the registration fee for local company. * Annual General Meeting agreement appointing a permanent representative, resident in Honduras. All the documents must be submitted legalized (Authentication or Apostille Certification), must be of recent date, duly legalized and when appropriate, translated into Spanish. 1.3 REGISTRATION IN THE CHAMBER OF COMMERCE Article 384 of the Code of Commerce establishes the following: "The Registration of all traders in the corresponding Chamber of Commerce and Industries is mandatory ..." Who performs the procedure? The businessperson Where is it done? The Chamber of Commerce and Industry of the Municipality or city where the company will operate. Average Time: One business day Cost: It varies according to the subscribed capital and the Chamber of Commerce and Industry closest to the locality.

1.3.1 COMMERCIAL LEGAL ENTITYANDMERCHANT REQUIREMENTS: a. Corporate Contract duly registered in the Mercantile Register (original and copy) b. Fill in the registration form for either a social or merchant c. Payment according to the amount of capital established in the corporate contract. d. A copy of the identity card of the individual performing the procedure. 1.4 AMEMBERSHIP IN THE CHAMBER OF COMMERCE (OPTIONAL) https://fedecamarahn.org/camaras/ Who performs the procedure? The Businessperson; law firm of choice Where is it done? The Chamber of Commerce and Industry of the Municipality or city where company will operate Average Time: One Business Day Cost: A membership fee is paid monthly. It varies according to the subscribed capital and the Chamber of Commerce and Industry closest to the company’s location

COSTS (in lempiras) AUTHORIZED CAPITAL

FROM 1.00 50,000.01 100,000.01 300,000.01 600,000.01 1,000,000.01 2,000,000.01 4,000,000.01 6,000,000.01

TO 50,000.00 100,000.00 300,000.00 600,000.00 1,000,000.00 2,000,000.00 4,000,000.00 6,000,000.00 ONWARDS

PAYMENT 200.00 300.00 350.00 425.00 550.00 750.00

RATES TABLE (in Lempiras)

FROM

TO

PAYMENTTOBEMADE INYEARS ENDING IN ZERO (0) AND FIVE (5)

590.00 850.00

1.00 200,001.00 400,001.00 700,001.00

200,000.00 400,000.00 700,000.00 ONWARDS

1,300.00 1,600.00 1,900.00

1,850.00 3,000.00

**Payments in “Banco Atlántida” and “BAC” *Chambers of Commerce are independent, costs vary according to the locality

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HONDURAS INVESTOR´S GUIDE 2020-2021

1.4.1 ISSUANCE OF THE ARTICLES OF INCORPORATION OF THE COMPANY REQUERIMENTS: a. Be legally registered with the corresponding Chamber of Commerce b. Fill in the entry form. c. Payment of 3 month membership fees in advance, according to the maximum capital authorized in the Articles of Incorporation. 1.5 REGISTRATION IN “MI EMPRESA EN LÍNEA” “Mi Empresa en Línea” is an online platform created by decree 284-2013, under the Job Creation, Business Initiative Development, Business Formalization and Investor Rights Protection Law, to promote company formalization, whether individual Merchant or commercial legal entity. REQUISITOS: a. Go to the website www.miempresaenlinea.org and create a login Id; fill in required information to complete the declaration as a Merchant, or per corporate contract. Identity card number, full name of shareholders, Personal Tax Registry (RTN, for its acronym in Spanish) of shareholders or legal representatives, copy of public service receipt (preferably of electric utility bill). b. Tracking procedure´s progress at: www.miempresaenlinea.org/CONSULTAR using the reference number received via e-mail. Cost: according to the Chamber of Commerce Registry (see table above). Average Time: 15 business days, 3 days for each institution involved in the process *For foreign corporations, a national legal representative is required

EXAMPLE OF PROCESS FLOW (ONLINE PLATFORM) This process is shown so that the entrepreneur understands what happens with his procedure once he enters the platform, and the institutions that intervene. It is completely transparent to the user.

Personal ID number legal representative RTN email public service receipt Go to www.miempresaenlinea.org and enter the information:

MERCANTILE REGISTER Service Administration Income (SAR) SENPRENDE

• Corporate contract obtained • 3 business days (approx.) • Enterprise´s RTN obtained • Obtain certificate • Certification generated • 3 business days (approx.)

SAR Online

• User creation

FINANCE SECRETARY (SEFIN)

• Exoneration request • Tax exemption benefit

COMPLETE PROCEDURE

• 115 business days (approx.)

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HONDURAS INVESTOR´S GUIDE 2020-2021

Cost: L.200.00. No charge first time

1.6 NATIONAL TAX REGISTER (RTN) Taxpayers responsible for the following obligations must be registered in the National Tax Register: • Natural persons, legal entities and organizations or entities that lack legal status, but carry out tax incurring activities, must be registered in the National Tax Registry (RTN), run by the Tax Administration Authority (SAR, for its Spanish acronym) pursuant legal provisions. • Legal entities must register in the National Tax Registry (RTN) concurrently with incorporation; a tax identification number is issued automatically, without any additional requirements. It cannot be required, as a prerequisite to the above mentioned registration, that the partners or shareholders of said legal entity obtain a National Tax Registration Number (RTN) , whether they are natural persons or legal entities, residents, domiciled or not in the national territory. However, identity documentation of the partners or shareholders must be presented. The National Tax Registry (RTN) of legal profit or non-profit entities, and those organizations or entities that lack legal personality, should be canceled only in those cases where according to the Law, the legal entity has been dissolved and liquidated. • Resident foreigners and domiciled foreign legal entities, who carry out tax incurring activities , must request their registration in the National Tax Registry (RTN), using a special simplified form to be issued by the Tax Administration Authority. The National Tax Registry (RTN) of domiciled foreign legal entities must be annulled when their country operation cancellation agreement is registered in the corresponding Commercial Registry. Who performs the procedure? The Businessperson or legal representative Where is it done? The Tax Administration Authority (SAR, for its acronym in Spanish) Average Time: One Business Day

Download form 410: https://www.sar.gob.hn/formularios-preimpresos/ Detailed procedure:

https://www.sar.gob.hn/tramitesrtn/ During the emergency send e-mail to: [email protected]

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HONDURAS INVESTOR´S GUIDE 2020-2021

REQUIREMENTS: 1.6.1NATURALPERSON a. Affidavit of Registration / Natural Person update, SAR-410 b. Original and copy of the Identity Card (Honduran) c. Original and copy of Passport or Resident Card (foreigner) d. Proof of domicile. e. Original and copy of one of the following documents: • Public utility bill • Certification of the Municipality or property tax payment receipt. • Contract of private services subscription (Internet, TV cable, telephone) f. If requested by a proxy, she/he must accompany original or copy of the notarized power of attorney, and a copy of her/his Identity Card 1.6.2NATURALPERSON (FYDUCA) Document issued only at duly authorized integrated border points, to citizens of the Central American Free Trade Agreement member countries in order to generate the Central American Invoice and Single Declaration (FYDUCA) document. a. Affidavit of Registration / Natural Person update, SAR-410 b. Original and copy of the Identification issued in one of themember countries (Currently Guatemala and Honduras, with possible incorporations of other Central American countries) 1.6.3MERCHANT a. Affidavit of Registration, start of activities and update to the National Tax Register SAR-410 b. Original and copy of the Identity Card (Honduran) c. Original and copy of Passport or Resident Card (foreigner) d. Original and copy of the Articles of Incorporation e. Proof of domicile. Original and copy of one of the following documents: • Public utility bill • Lease or Rental Agreement • Certification of the Municipality or property tax payment receipt • Contract of private services subscription (Internet, TV cable, telephone)

* If requested by a proxy, she/he must accompany original or copy of the notarized power of attorney, and a copy of her/his Identity Card. 1.6.4 LEGALENTITY a. Affidavit of Registration, start of activities and update to the National Tax Register SAR-410 (legal entity) b. Annex 410-B, Affidavit of Registration, start of activities and update to the National Tax Register c. Original and copy of the Articles of Incorporation d. A copy of the Identity Card or Residence Card of the Legal Representative,whomust be previously registered in theNational Tax Register e. A copy of the Identity Card, Passport or Residence Card of the President of the Board of Directors, Administrator, Manager, or other Deputy Head of Administration,whomust be previously registered in the National Tax Register f. A copy of the Identity Card, Passport or Residence Card of the Natural Person shareholder g. A copy of the RTN of the Legal Entity shareholder or Articles of Incorporation duly registered. In the case of being a foreign shareholder not registered or incorporated in Honduras, copy of the Tax Identifier from the country of origin or a copy of the Articles of Incorporation or Certificate of Constitution, certifiedwith apostille and translated into Spanish h. If requested by a proxy, she/hemust accompany original or copy of the notarized power or of the power of attorney, and a copy of her/his Identity Card i. Proof of domicile. Original and copy of one of the following documents: • Public utility bill • Lease or Rental Agreement • Certification of the Municipality or property tax payment receipt • Contract of private services subscription (Internet, TV cable, telephone)

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HONDURAS INVESTOR´S GUIDE 2020-2021

1.6.5 COOPERATIVES a. Affidavit of Registration, start of activities and update to the National Tax Register SAR-410 (Legal Entity or Merchants). b. Annex 410-B, Affidavit of Registration, start of activities and update to the National Tax Register . c. Original and copy of the Legal Personality Certification granted by the regulatory body. d. Original and copy of the Certification of the Minutes of the current Board of Directors, issued by the regulatory body duly protocolized and registered. e. A copy of the identity card or residence card of the legal representative, whomust be previously registered in the National Tax Register. f. A copy of the identity card, passport or residence card of the President of the Board of Directors, Administrator, Manager, or other Deputy Head of Administration,whomust be previously registered in the National Tax Register. g. If requested by a proxy, she/hemust accompany original or copy of the notarized power or power of attorney, and a copy of her/his identity card. h. Proof of residence. Original and copy of one of the following documents: • Public utility bill • Lease or Rental Agreement • Certification of the Municipality or property tax payment receipt • Contract of private services subscription (Internet, TV cable, telephone)

1.6.6 FOREIGN COMPANIES INCORPORATED IN HONDURAS a. Affidavit of Registration, start of activities and update to the National Tax Register SAR-410 (Legal Entity or Merchants). b. Annex 410-B, Affidavit of Registration, start of activities and update to the National Tax Register. c. Certification issued by the Ministry of Economic Development, registered in the Mercantile Register. d. A copy of the identity card, passport or residence card of Legal Representative, President of the Board of Directors, Administrator, Manager,members of the Board of Directors or other Deputy Head of Administration,whomust be previously registered in theNational Tax Register. e. A copy of the identity card, passport or Residence Card of the Natural Person shareholder. f. A copy of the RTN of the Legal Entity shareholder or Articles of Incorporation duly registered. In the case of being a foreign Legal Entity shareholder not registered or incorporated in Honduras, copy of the Tax Identifier of the country of origin or copy of the Articles of Incorporation or Certificate of Constitution, certifiedwith apostille and translated into Spanish. g. If requested by a proxy, she/hemust accompany original or copy of the notarized power or power of attorney, and a copy of her/his identity card. h. Proof of residence. Original and copy of one of the following documents: • Public utility bill • Lease or Rental Agreement • Certification of the Municipality or property tax payment receipt • Contract of private services subscription (Internet, TV cable, telephone) * When a foreign person (proxy, foreign shareholder, legal representative, public accountant and shareholders) has a relationship with the company, a copy of the passport must be required. In the case of an administrator or a President, no document will be required.

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HONDURAS INVESTOR´S GUIDE 2020-2021

1.6.7 DE FACTO CORPORATIONS AND ASSOCIATIONS a. National Tax Register SAR-410 (Legal entity or Merchant) b. Annex 410-B, Affidavit of Registration, start of activities and update to the National Tax Register c. Original and copy of the Private or Public Document of the De facto Corporation or certification issued by the regulatory body or publication in the Official Gazette d. A copy of the Identity Card or Residence Card of the Legal Representative,whomust be previously registered in theNational Tax Register e. A copy of the Identity Card of the parties to the contract or notarial deed. f. If requested by a proxy, she/he must accompany original or copy of the notarized power or power of attorney duly authenticated, and copy of her/his identity card. Original identity card, passport or residence card of the represented persons will not be required. g. Proof of domicile. Original and copy of one of the following documents containing the exact address:

• Public utility bill • Lease or Rental Agreement

• Certification of the Municipality or property tax payment receipt • Contract of private services subscription (Internet, TV cable, telephone) * If requested by a third party, accompany original and a copy of the power of attorney duly authenticated, as well as a copy of the identity card of the Legal Proxy. 1.6.8 TRUST FUND a. Affidavit of Registration, start of activities and update to the National Tax Register SAR-410 (Legal Entity or Merchant). b. Annex 410-B, Affidavit of Registration, start of activities and update to the National Tax Register . c. Original and copy of private or public Trust document. d. Copy of the Identity Card or Residence Card of the Legal Representative,whomust be previously registered in theNational Tax Register. e. Acopy of the RTNof the parties to the contract (Trustor,Trustee, Joint Trustee, Beneficiary). f. If requested by a proxy, she/he must accompany original or copy of the notarized power or power of attorney duly authenticated, and a copy of her/his identity card. g. Proof of residence. Original and copy of one of the following documents containing the exact address: • Public utility bill • Lease or Rental Agreement • Certification of the Municipality or property tax payment receipt • Contract of private services subscription (Internet, TV cable, telephone) * When a foreign person (proxy, foreign shareholder, legal representative, public accountant and shareholders) has a relationship with the company, a copy of the passport must be required. In the case of an administrator or a President, no document will be required.

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HONDURAS INVESTOR´S GUIDE 2020-2021

c. A copy of the identity document of the owner(s) or Legal Representative. d. A copy of the numerical RTNof the company or Legal Representative. e. A copy of the identity document of the person authorized for the procedure (if applicable). f. Sketchmap of location of the property g. Account Statement tax solvency (real estate) from the last years. h. If the area of use of the establishment is greater than 75 m2, Form F-01 (for Business compatibility) should be used. i. Economic activity identification ticket j. A copy of the RTNof the Corporation k. A copy of Identity Card of the legal representative and/or power of attorney. l. A copy of theMunicipal Solvency of the current legal representative m. A copy of theArticles of Incorporation of the corporation n. Industry, Trade and Services Tax Affidavit Form (ICS, for its acronym in Spanish) o. Authenticated power of attorney , if not the legal representative p. Rental Agreement of the premises (if not own) 1.8.2MERCHANT a. Fill in theAffidavit form. b. Show Identity Card. c. Legal representative or owner (must not owe personal tax). d. Authenticated power of attorney , if not the legal representative * Depending on the activity in which the company is engaged, the Municipality may request other permits and technical studies. * Municipalities will not authorize Operating Permits to any Merchant, natural person or legal entity that does not previously register or renew the registration in the respective Chamber of Commerce. Details of the procedure for the Municipalities of San Pedro Sula and Tegucigalpa at the following links: SANPEDRO SULA: https://www.sanpedrosula.hn/storage/app/media/PDF/Gobi erno%20Digital/Servicios/licenciadeoperacion.pdf TEGUCIGALPA https://www.amdc.hn/index.php/aer

1.7MUNICIPAL SOLVENCY FOR FOREIGNERS Requirement to carry out municipal procedures such as: Opening and renovation of business, change or modification of sales volume, certificate of possession or non-possession of real estate, certification of neighborhood, etc. REQUIREMENTS: a. Individual affidavit form (income affidavit for personal tax) b. A copy of valid Residence Card or passport, and a copy of the certication of entries to and exits fromHonduras c. If not the owner, authenticated power of attorney and copy of the identity card of the authorized person d. For solvency replacement due to loss, theft ormisplacement,no form needs to be filled in; go directly to the Municipality Assist, Understand and ResolveAER (spanish acronym) offices and pay L.30.00 1.8 OBTAINING AN OPERATION PERMIT (TEGUCIGALPA) Document issued by the different Municipalities to ensure that the company operates in accordance withmunicipal laws. Who performs the procedure? The businessperson or legal representative Where is it done? Municipality where the company will operate. In Tegucigalpa it can also be done at the Chamber of Commerce and Industry of Tegucigalpa (CCIT, for its acronym in Spanish) Average Time: It depends on the Municipality where the procedure is done and the type of company. In the Municipalities that have carried out the administrative simplification process, the average time for the companies that are engaged in trade and services, can be one day. Cost: Varies according to the Municipal Office where the procedure is carried out. REQUERIMENTS: 1.8.1 COMMERCIAL LEGAL ENTITY a. Compatibility approved by the Construction Control Management or Historic Center Management through the Offices of Assist, Understand and Resolve (AER, for its acronym in Spanish) of the Municipality of Tegucigalpa. b. Certificate of Compatibility Form (CC, for its Spanish acronym) containing complete information and signed by the owner(s) and / or Legal Representative. (LINK http://amdc.hn/images/PDF/COMPATIBILIDAD-UNICA.pdf).

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HONDURAS INVESTOR´S GUIDE 2020-2021

1.8.3 AUTHORIZATION OF FINANCIAL STATEMENTS AND MINUTES This document is issued by the different Municipalities to ensure that the company operates in accordance with municipal laws. Who performs the procedure? The businessperson or the legal representative Where is it done? The Municipality where the company will operate. Average time: It depends on the Municipality where the procedure is done and the type of company. In the Municipalities that have carried out the administrative simplification process, the average time for the companies that are engaged in trade and services, can be one day. Cost: Payment of one Lempira (L.1.00) per folio and five hundred Lempiras (L.500.00) required for each financial statement, which will be deposited in Banco Ficohsa. REQUIREMENTS: a. Valid business Operation Permit (original and copy for comparison). b. Statements duly listed in correlative order. c. A numbered booklet containing only the accounting information corresponding to one (1) year prior to the current year. d. Statements authorization request, addressed to the Municipal Secretary. e. Corresponding payment

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HONDURAS INVESTOR´S GUIDE 2020-2021

1.8.4 OBTAINING A PERMIT FOR INSTALLING SIGNS AND BILLBOARDS Who performs the procedure? The businessperson or legal representative Where is it done? Municipality where the company will operate. Average time: It depends on the Municipality where the procedure is done and the type of company. In the Municipalities that have carried out the administrative simplification process, the average time for the companies that are engaged in trade and services, can be one day. Cost: According to the Tax Plan of each Municipality. REQUIREMENTS: a. Form 2-A, duly completed and signed by the company owner or legal representative. b. A copy of the identity card of the company owner or legal representative. c. A copy of valid Municipal Solvency of company owner or legal representative. d. A copy of numerical RTN of owner or legal representative. e. If the sign to be installed is located in buildings whose cadastral references begin with 01, 02 or 06, that belong to the Historic Center, a valid authorization from the Historic Center Office must be presented. f. For billboards: Copy of the Articles of Incorporation and rental agreement of the land where the element will be installed, duly authenticated with cadastral reference included. g. Act of Civil Liability (in case of totems, electronic screens, conventional billboards larger than 70 m2, billboards and/or unipolar signs), signed and sealed by legal representative and printed on company letterhead. h. In case of opening, provide copy of approved business compatibility payment receipt, a copy of the current Operation Permit of the company requesting the permit for billboard installation in the specified building and/or branches. i. Solvent Tax statement of real estate, for the last five (05) years.

j. Present Affidavit of signs, billboards and/or any type of advertising elements (inventory) installed in the Central District, specifying type of element, photograph, dimensions, number of faces, legend, and content. k. Location with cadastral references of the property where installation is required (branches), either in form 2-A, or in the attached document. (*) l. In case of Totems, electronic screens, conventional billboards larger than 70m2, billboards and/or unipolar signs: provide a copy of a third-party damage insurance policy covering the requested element. m. Location Plan of the property where the advertising is installed (sketch map) and the advertising element located there. n. Clear photograph of the spot or location of the advertising element. o. If a new installation, present a photograph of the site where the element will be installed, and the proposed location of the assembly. p. Sketch of the advertising element with dimensions (height and width) including text, advertising image and description of the material to be used. q. For the installation of consolidated structures, submit detailed drawing of foundation and total structure of the element, containing signature, seal, and stamp by a construction sector professional (Civil Engineer), for signs and/or unipolar billboards, electronic screens, totems, and conventional billboards larger than 70m2. * If there are more elements than the ones declared or errors in measurement during the corresponding audit, the taxpayer must fix irregularities and the correspondingpenaltieswill be applied according to the current municipal taxation plan.

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