Foreign Ownership of Islands in Honduras, Central America

As a foreigner in Honduras, there are restrictions on owning real estate. Coastline and land within 40 kilometres of international borders is considered a restricted zone for non-nationals. It is also not permitted for a foreigner to own more than 3/4 of an acre. Some exceptions exist in designated tourism zones established by the Ministry of Tourism. In addition, foreign citizens and businesses may also buy coastal properties for approved tourism or other development projects that will generate economic benefits for Honduras. Otherwise, the purchase of restricted land is limited to those who are Honduran by birth or a corporation formed entirely by Hondurans. There are legal methods to acquire restricted land through a Honduran corporation.

Sociedades Anónimas are established as a general practice to purchase land that is either larger than ¾ of an acre or includes coastline, like private islands. The incorporation process involves having two Honduran citizens as the original shareholders to incorporate. When forming the corporation, the citizens endorse their shares to the Bearer. The Articles of Incorporation are drafted and the owner is appointed as the Administrator of the Corporation or the President of the Board.

That said, the US Embassy frequently deals with claims of corruption in land sales and the registry and dispute resolution process. These include claims against attorneys, real estate companies, judges and local officials. Squatter activity, spurred by earlier land reforms, has also been a problem. In order to avoid the same problems, make sure you are dealing with qualified and trusted professionals.

As always, a competent and respected lawyer should handle the process of forming a corporation to buy a private island. The same lawyer should also check the property title, going back at least 20 years. If you have any doubts, check and double check titles yourself. Things move slowly in Honduras because everything is done by hand. Title documentation is generated by non-electric typewriters and lots of rubbers stamps. If you have formed a corporation, you will get stock certificates which are bearer, so you will want to keep them in a safe deposit box or your broker’s safe. Once you own property in Honduras, don’t be an absent landlord. Get to know people who will look out for your interests.

Regional Statistics for Honduras, Central America

Location:

Central America, bordering the Caribbean Sea, between Guatemala and Nicaragua and bordering the Gulf of Fonseca (North Pacific Ocean), between El Salvador and Nicaragua

Population:

7,326,496

Languages:

Spanish, Amerindian dialects

Capital:

Tegucigalpa

Currency:

Lempira

Climate:

subtropical in lowlands, temperate in mountains

Temperature Range:

+2 to +36

Terrain:

mostly mountains in interior, narrow coastal plains

Natural Hazards:

frequent, but generally mild, earthquakes; extremely susceptible to damaging hurricanes and floods along the Caribbean coast