Honduras top court declares self-governing ZEDE zones unconstitutional

21/9/2024 12:44

        The Honduran Supreme Court on Friday declared unconstitutional the legal underpinning of special economic zones exempt from local laws and taxes known as ZEDEs, which have drawn foreign investors lured by the promise of light taxation and regulation.
        
        A small number of ZEDEs operate in Honduras after they were granted 50-year concessions, including so-called start-up cities that enjoy significant autonomy over how they are run.
        
        The law allowing them was approved about a decade ago by a conservative government that touted the zones' ability to boost needed investment and job creation, but leftist President Xiomara Castro has called for the semi-autonomous entities to be abolished.
        
        By a majority vote, the court ruled that the law laying out the terms for creating the Zones for Employment and Economic Development, or ZEDEs, as well as related constitutional reforms, violated articles of the constitution "written in stone."