Economy Guide in Honduras

Very Affordable costs with a Cost of Living Index of 35.6. Groceries (38.7) and restaurants (31.8) are also very affordable compared to the NYC baseline.

Property prices average 11.3 years of household income, indicating a moderate housing market. The rent index is 10.7, suggesting relatively affordable rental options.

A purchasing power index of 44.7 indicates low buying power compared to the NYC baseline. This suggests that average incomes are relatively low, with national per capita income around HNL 4,246 (approximately USD 165) per month in June 2024.

Honduras has a progressive income tax system for individuals, with an exemption up to HNL 217,493.16 (approximately USD 8,524) for 2025, and rates of 15%, 20%, and 25% on higher income. The corporate tax rate is 25%, with a 5% surcharge on net taxable income over HNL 1 million. The standard sales tax (ISV) is 15%, with a higher rate of 18% on certain goods. Property taxes vary by municipality, e.g., 0.35% of cadastral value for urban properties in Tegucigalpa.

Honduras ranked 133 out of 190 economies in the last available World Bank Ease of Doing Business report (2019). The business environment faces challenges due to slow bureaucracy, non-transparent processes, and systemic weaknesses in property rights protection. While there is a developing startup ecosystem in cities like San Pedro Sula, the overall regulatory environment is sluggish.

Honduras has a social security scheme overseen by the Honduran Social Security Institute (IHSS), providing benefits for sickness, maternity, death, disability, and old age. Employees contribute 2.5% for sickness and maternity, and 1% for death, old age, and invalidity benefits. Paid sick leave can extend up to 12 months, with two-thirds of salary covered by employers and social security. There is also a Social Housing Fund and entitlement to 13th and 14th-month pay.

Deposits in Honduras are protected by the Fondo de Seguro de Depósitos (FOSEDE) up to a maximum of L. 238,660.00 per depositor per financial institution for 2024, which is approximately USD 8,980. The financial system is regulated by the Central Bank of Honduras and the National Banking and Insurance Commission, adhering to international standards for anti-money laundering and progressing towards Basel III compliance.