Zones of Employment and

Economic Development
(ZEDE)
Marvin Espinal
Lawyer MBA & Public Notary
What are the Zones of Employment and
Economic Development (ZEDE)?
Zones Employment and Economic Development (ZEDE)
are a new administrative division of the Republic of
Honduras subject to central government and provided
with considerable autonomy with its own political,
administrative, economic and judicial system, clear
market rules that allow high levels of competitiveness.
The creation of these same aims to attract investment
and create jobs in uninhabited areas of the country or
municipalities applying for conversion to ZEDE by
referendum (if necessary).
Are there other places in the world like the
ZEDE?
They do exist. In fact, they have as a reference the
experience of the Special Administrative Regions of
China (Hong Kong, Shenzhen, Shanghai Macao), in
addition to East and Southeast Asia as it is South Korea
(Songdo) and Singapore.

Due to the economic success that these places have

had, countries like: Japan, Cuba and North Korea are
establishing similar legislation in order to recreate the
economic miracle that has happened in the cities
mentioned above.
The Honduran Constitution
The Right to own property & ZEDE
Article 103
The State recognizes, guarantees, and promotes the
existence of private property in its broadest sense as a
social function and without further limitations than
those established by law for reasons of necessity or
public interest.
Article 106
No one may be deprived of his property except by reason of
public need or interest defined by law or a decision based on
law, and shall not take place without assessed prior
compensation.

In the event of war or internal disorder, it is not necessary that

the compensation be paid in advance; however, the
corresponding payment shall be made not later than two years
after the termination of the state of emergency.
 CHAPTER XI: THE DEPARTMENTAL AND MUNICIPAL
SYSTEM
Article 294 The national territory shall be divided into
departments. Their establishment and boundaries shall be
determined by the National Congress.
The departments shall be divided into autonomous
municipalities administered by corporations elected by the
people, according to law.
Without prejudice to that established in the previous
paragraphs, the National Congress may create zones subject
to special regimes in accordance with Article 329 of this
Constitution.
 TITLE VI: THE ECONOMIC REGIME
CHAPTER I: THE ECONOMIC SYSTEM
Article 329 ZONES OF EMPLOYMENT AND ECONOMIC
DEVELOPMENT:
The state may establish zones of the country subject to
special regimes which shall have juridical personality, and are
subject to a special fiscal regime and may incur obligations
which do not require the guarantee or collateral of the state
in solidarity, and may create contracts until the fulfillment of
their timely objectives and during various governments.
Article 329 ZONES OF EMPLOYMENT AND ECONOMIC
DEVELOPMENT:
They shall enjoy functional and administrative autonomy that
shall include the functions, abilities, and obligations that the
Constitution and the laws confer on the municipalities.
The creation of a zone subject to a special regime is the
exclusive power of the National Congress, by a qualified
majority, given an approving plebiscite by two thirds in
accordance with that established in article five of the
Constitution.
Article 329 ZONES OF EMPLOYMENT AND ECONOMIC
DEVELOPMENT:
This requirement is not necessary for special regimes
created in zones of low population density. A zone of low
population density means those in which the number of
permanent inhabitants per square kilometer is less than the
average for rural zones calculated by the National Institute of
Statistics, which shall issue the corresponding ruling.
The zones are subject to the national legislation in all topics
related to sovereignty, application of justice, national
defense, foreign relations, electoral matters, and issuance of
identification documents and passports.

For the creation and operation of these zones the National

Congress must approve an Organic Law, which may only be
modified, reformed, interpreted or revoked by a favorable
two thirds of the members of the National Congress.
The celebration of a referendum or plebiscite by the people
who inhabit the zone subject to the special regime is also
necessary when its population is greater than one hundred
thousand inhabitants. The Organic Law shall expressly
establish the applicable regulations.
The authorities of the zones subject to special regimes have
the obligation of adopting the best national and international
practices to guarantee the existence and permanence of the
social, economic, and legal environment adequate in order to
be competitive at the international level.
 Organic Law of the areas of
Zones of Employment and Economic Development
(ZEDE)
Article 1.- The areas of employment and economic
Development, hereinafter referred to as ZEDE, are an
inalienable part of the state of Honduras, subject to the
Constitution of the Republic and the national Government in
matters related to sovereignty, enforcement of justice,
Territory, National defense, Foreign affairs, electoral issues,
issuance of identity documents and passports, as is
Established in article 329, in its seventh paragraph of the
Constitution of the Republic.
The areas of employment and economic Development
(ZEDE), have legal status, are authorized to establish their
own policy and regulations, created for the purpose of
accelerating Fulfilling the goals of the nation Plan and
facilitating conditions that allow the country to insert into
world markets under highly competitive and stable rules.
Article 3.- The zones of employment and economic
Development (ZEDE) enjoy functional and administrative
autonomy that includes the functions, faculties and
obligations that the Constitution of the Republic and the laws
confer to the municipalities. They shall have autonomous and
independent courts with exclusive competence, those which
may adopt legal systems or traditions from other parts of the
world, and must ensure the constitutional principles of
protection of human rights.
Acts and contracts that are held or issued within the areas of
employment and economic Development (ZEDE), are fully
valid in the rest of the country and abroad in accordance with
the bylaws of reciprocity.
Article 8.-The normative hierarchy applicable in the zones of
employment and economic Development (ZEDE) shall be as follows:
1. The Constitution of the Republic in whatever applies;
2. International treaties held by the State of Honduras as applicable;
3. This organic law on the areas of employment and economic
Development (ZEDE);
4. The laws set out in the final provisions of this organic law; and,
5. The internal regulations emanating from the authorities of the
areas of employment and economic Development (ZEDE) or
incorporated therein.
Article 45.-In accordance with the Established in article 329 of the
Constitution of the Republic, this organic law may only be amended,
reformed, interpreted or repealed by two thirds (2/3) favorable of the
members of the National Congress. It will also be necessary to
celebrate a Referendum or plebiscite to persons living in the area
subject to special regime when their population exceeds one hundred
thousand inhabitants. If the repeal of this organic law occurs, it will
be kept in force for the period indicated in The clause or Contract of
legal stability signed with natural persons or Legal entities that reside
or invest in the areas of employment and economic Development
(ZEDE). The transition period may not be less than ten (10) years,
during which time the rights of inhabitants and investors in the areas
of employment and economic Development (ZEDE) will be kept in
effect.
ADMINISTRSTIVE ORGANIZATION OF THE ZEDE

Committee for the adoption

of Best practices(CAMP)
Technical
Secretariat(ST)
Member of the Committee for the adoption
of Best practices

Decreto Legislativo
No. 368-2013
REQUIREMENTS TO BECOME PART OF THE ZEDE REGIME
Article 39 of the Enabling Law of the ZEDE’s gives CAMP the authority
to incorporate projects into the ZEDE regime. The requirements are
the following ones:
1)An opinion issued by the National Statistics Institute on what is
considered a low density coastal area. The opinion states that a low
density area is any place with less than 35 persons living in a 1 km2
2)Other requirements issued by CAMP on what it will review to grant
authorization. Those requirements consist of:
1. Presentation of a feasibility study;
2. Evidence of financial capacity; and,
3. A master development plan.
Aside from these two elements the enabling law requires that the
group interested in creating a ZEDE has to own the land that it’s going
to develop. The owner of the land has to appear before a notary
stating that it has the intention to enter the ZEDE regime. If CAMP
decides to incorporate the project into the ZEDE regime, that deed is
registered in a special registry of land under ZEDE regime that CAMP
has to create.
The acceptance and review process of request to incorporate to the
ZEDE regime will begin on May 3rd, 2016. It will be done by an ad-hoc
committee integrated by members of CAMP that don’t reside in
Honduras. The review process will be finalized within the next 30 days
after the reception of a complete proposal.
The ad-hoc committee has the authority to ask for clarifications on the
proposals presented before them and establish yearly fees for the
services CAMP will provide to that ZEDE during the life of the project.
The projects incorporated to the regime have to begin within a year of
their registration. A six month extension can be granted.
After a project is incorporated into the ZEDE regime, the developer of
the project have to propose a Technical Secretary who would be
appointed by CAMP.
 Marvin Espinal
marvinespinalhn@gmail.com
abogado@marvinespinal.com