Honduras launches new attractive Tourism Promotion Law to foster investment
As an outcome of the Honduras2020 program, several public and private sector institutions accompanied President Juan Orlando Hernández in the approval act of the new Tourism Promotion Law, submitted by the National Congress with attractive benefits to detonate investment and employment in the tourism sector of Honduras.
Honduras set itself, the task of innovating country incentives to the investor, thus achieving the goal of 250,000 jobs in that sector, an additional 1 million tourists annually and double the amount of tourism exports for the national economy, proposed in the Honduras2020 Program.
The country lacked the right conditions to attract investment in the sector. Despite being one of the Central American countries with the most varied tourism offer with an enormous wealth of natural resources, its level of growth in this sector is barely 0.5% comparing to the rest of the region whose average annual growth reaches levels up to of 7%.
Several institutions joined forces to materialize the new legal framework for the promotion of tourism, including the private public partnership Honduras2020, the Honduran Tourism Institute (IHT), the Honduras National Tourism Chamber (Canaturh), the Honduran Business Council (Cohep) and the Honduran Business Association of Small Hotels, among other institutions and businessmen from all over the nation, who presented to the Congress the law.
This law, which was approved by President Juan Orlando Hernández, includes a package of attractive incentives for local and international investment and at the same time ensures a profitable fiscal benefits over time. It also becomes an important instrument to generate new sustainable jobs through the investment expected over the next few years.
Part of the characteristics of the Tourism Law are:
• Equal treatment to motivate small, medium and large Honduran and foreign entrepreneurs to invest in the tourism sector of Honduras.
• A new legal framework for existing companies that make additional new investments for more than 35% of their initial investment.
• Fiscal stability agreements
• Incentives for the investment of natural or legal persons
• Fund to support land and air transportation companies in tourism.
• Possibility of setting up investment trust funds
• Special provisions on municipal permits and taxes
• Fund for Investment, Promotion and Promotion to Tourism (FITUR) with concessional conditions
• Investor obligations
It is important to mention that the tourism promotion law guarantees a substantial return to the incentives provided, which is achieved – among others – by:
• Sales tax collection for lodging, purchase of food and alcoholic beverages, recreation and others
• Income tax / Sales tax collection paid from the hotel suppliers
• Sales tax collection increase for consumption of workers generated from new jobs
• Tourism Service Fee collection
Estimates suggest that additional tax revenues of approximately US $ 4 billion over the next 18 years could be achieved using a 60% hotel occupancy model.
This law is part of a larger strategy that will make the tourism sector a pillar of real growth to improve the quality of life of thousands of Hondurans. Which includes customer service training programs for the workforce and the necessary hotel, entertainment and urban infrastructure to compete as a world class tourist destination.
In addition, functionaries from Honduras2020 announced that there are already national and international investors are interested in investing in Honduras from the opportunities that this new Tourism Promotion Law will create, which will announce new investments and new sources of employment in the coming months.