How to Register a Business in the US from Honduras

Step 1: Benefits of starting your US business from Honduras

Starting a US business from Honduras offers a multitude of benefits that can drive entrepreneurial success. One of the most compelling advantages is the favorable time zone overlap with the United States, facilitating real-time communication and collaboration. This is particularly advantageous for businesses that require frequent interactions with clients, partners, or suppliers based in the US. Additionally, Honduras has a growing pool of skilled professionals who can provide cost-effective services ranging from customer support to software development, allowing entrepreneurs to optimize their operational costs.

Another significant benefit is the access to a broader market. By establishing a US-based business while operating from Honduras, entrepreneurs can tap into the vast consumer base in the United States, which is renowned for its purchasing power and market diversity. Moreover, the regulatory environment for businesses in the US is well-established and provides multiple legal protections and financial incentives that can be advantageous for growth and scalability. Coupled with the strategic geographic location of Honduras, which serves as a bridge between the Americas, this dual-market approach can significantly enhance a company's competitive edge and revenue potential.

Step 2: How to start your US business from Honduras

Starting a US business from Honduras involves several key steps. First, you will need to choose the type of business entity you want to form, such as a corporation, limited liability company (LLC), or partnership. Each entity type has different legal and tax implications, so it is advisable to consult with a legal expert to determine which structure is best for your business. Once you decide on the business entity, you will need to register it with the appropriate state authorities. Most states have online portals where you can submit the necessary forms and pay the registration fees.

After registering your business, it is important to obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This number is essential for tax purposes and allows you to open a US bank account. Speaking of which, setting up a US bank account is crucial for managing your finances efficiently. You may need a US mailing address for the bank account, which can be secured through various mail forwarding services. Additionally, consider consulting with a tax advisor to understand your tax obligations both in the US and Honduras, and to ensure you comply with both countries' regulations.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in Honduras

Understanding Compliance Requirements for Running a US Business in Honduras

Running a US business in Honduras requires understanding and adhering to a range of compliance requirements. These requirements can vary significantly from those in the United States, making it essential to fully understand the local regulations. Below are key considerations for compliance when operating a business in Honduras:

Legal Structure and Registration

1. Business Entity Selection: Selecting the correct legal structure, such as a corporation or limited liability company, is crucial. The entity chosen will determine the registration requirements and tax obligations.
2. Business Registration: All businesses must register with the Honduran government. This includes obtaining a business license and registering with the local municipality where the business will operate.
3. Foreign Investment Registration: US businesses must register as foreign investors with the Honduran Ministry of Industry and Commerce to ensure compliance with local investment laws.

Tax Compliance

1. Corporate Taxes: Honduras imposes corporate income taxes on businesses operating within the country. Understanding the local tax rates and compliance requirements is essential.
2. Value Added Tax (VAT): Businesses must collect and remit VAT on most goods and services. It is critical to understand which transactions are subject to VAT and the applicable rates.
3. Withholding Taxes: Companies may be required to withhold taxes on payments made to non-residents, including payments for services or royalties.

Labor Laws and Employment

• Employment Contracts: Honduran labor laws dictate the terms of employment contracts, including wages, working hours, and termination conditions.
• Social Security Contributions: Employers are required to make contributions to social security on behalf of their employees. This system provides benefits such as healthcare and retirement pensions.
• Employee Rights: Understanding employee rights under Honduran law, including minimum wage, vacation entitlements, and severance payments, is critical to maintaining compliance.

Regulatory Compliance

• Environmental Regulations: Businesses must comply with local environmental laws, which may include obtaining permits for certain activities and adhering to regulations on waste disposal and emissions.
• Health and Safety Standards: Ensuring a safe working environment is mandated by Honduran law. This includes complying with health and safety standards relevant to the industry.
• Sector-Specific Regulations: Certain industries, such as finance, pharmaceuticals, and telecommunications, are subject to additional regulations. It is essential to understand the specific requirements for operating within these sectors.

By thoroughly understanding and adhering to these compliance requirements, US businesses can successfully operate in Honduras while minimizing legal and regulatory risks. Consulting with local legal and accounting professionals can also ensure full compliance with Honduran laws.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in Honduras

Understanding Tax Obligations for Running a US Business in Honduras

Setting up and running a US business in Honduras involves navigating a complex tax landscape. Here are some key considerations to understand your tax obligations:

1. Corporate Income Tax

In Honduras, corporate income tax is imposed on the net income of companies. The standard corporate tax rate is 25%. US businesses must comply with Honduran tax laws and may also be subject to the tax regulations of their home country.

2. Value Added Tax (VAT)

VAT, known as Impuesto sobre Ventas (ISV) in Honduras, is applied to the sale of goods and services. The standard VAT rate is 15%, with a higher rate of 18% for specific goods like alcoholic beverages and tobacco. Businesses must register for VAT and submit regular returns.

3. Withholding Taxes

Honduras imposes withholding taxes on various types of payments to non-residents, such as dividends, interest, and royalties. The rates vary:

• Dividends: 10%
• Interest: 10%
• Royalties: 25%

4. Double Taxation Treaties

Honduras has entered into Double Taxation Treaties (DTTs) with several countries. These treaties can help reduce the tax burden by preventing double taxation. It's crucial to understand the provisions of any applicable DTTs.

5. Filing and Payment Deadlines

Compliance with filing and payment deadlines is essential. Corporate tax returns are generally due by April 30th of the following year. VAT returns are typically filed monthly. Late payments may lead to penalties and interest charges.

6. Social Security Contributions

Employers in Honduras must make social security contributions on behalf of their employees. These contributions fund the Instituto Hondureño de Seguridad Social (IHSS). The total contribution is approximately 12.5% of the employee’s salary.

7. Tax Incentives

Honduras offers various tax incentives to attract foreign investment. These may include tax holidays, exemptions, and reduced rates for specific industries or regions. Understanding and leveraging these incentives can reduce the overall tax burden.

Understanding the tax obligations when running a US business in Honduras requires a thorough examination of local tax laws and international tax considerations. Consulting with a tax professional experienced in Honduran and US tax regulations is advisable to ensure compliance and optimize tax efficiency.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country