Honduras Market Entry

Honduras Market Entry

Basic conditions for the use of Czech goods on the market

Subchapters:

  • Market entry
  • Forms and conditions of operation on the market
  • Marketing and Communications
  • Issues of intellectual property protection
  • Public procurement market
  • Payment terms, payment ethics and resolution of commercial disputes
  • Visas, fees, specific conditions of travel to the territory
  • Employment of citizens from the Czech Republic
  • Fairs and events

Market entry

Distribution and sales channels, use of local representatives, other factors affecting sales
Entry into the Guatemalan market should be supported, as in the case of other remote territories, by a detailed study. Therefore, the preparation for entering the local market should be thorough and well thought out, it is necessary to count on a longer-term operation. The most effective form of distribution used in the country by most foreign companies is sales through local sales representatives specialized in a certain commodity. As in many other countries, it is not possible to expect to establish business contacts or implement business cases simply by sending an offer and company presentation to selected companies from the field. If you are interested in the Guatemalan market, you must expect a certain initial investment, long-term efforts and the need to be physically present on the market often.

Import conditions
According to cheeroutdoor.com, the export and import regime has been significantly relaxed after joining the WTO. The release is also related to the conclusion of free trade agreements not only with the states of Central America, but also with the USA (DR-CAFTA) and the EU (Association Agreement). Tariffs and import controls apply not only to the member states of the Central American Common Market (MCCA), but unified Central American tariff rates based on the Central American Customs System (SAC) and newly signed agreements are applied. When clearing goods, it is necessary to use the services of a customs agent.

Import documents, customs system, export control:
As regards the documents required for importation, original invoices, bills of lading, certificates of origin, packing slips are required. Invoices and transport documents should be certified by the Honduran embassy in the place of origin of the goods. The procedure depends on the terms of the contract or the terms of tenders for the import of goods and services. Foreign trade and the internal market is liberalized. Non-customs barriers to trade are virtually non-existent, but phytosanitary certificates, certificates of origin, or quality certificates are required for certain products. An import permit issued by the relevant ministry is necessary for the import of certain products (wood, weapons, waste, narcotics). Honduras forms a duty-free zone with Guatemala and Honduras. This grouping, according to the official statements of state representatives, has increased trade between the two members by 9% in just one year of existence, and enables duty-free transit of up to 80% of mutual trade and lowers logistics costs by up to 20%. If the zone expanded to include all the states of Central America, it would have a potential of 47 million people and a combined GDP of $250 billion. This is an opportunity both for Czech exporters who could benefit from duty-free trade with member countries of the zone, and for importers looking for cheap labor and duty-free access to the markets of North and South America, the European Union and South Korea.

Forms and conditions of operation on the market

The establishment of an office, representation, or joint venture is one of the most suitable forms for achieving the required effectiveness of implemented business plans. In the preparatory phase, however, it is necessary to expect a complicated and lengthy administrative procedure, and despite the significant financial demands of the roto, it is advisable to use the services of specialized local law firms.
Honduran law allows 5 traditional forms of business:

  • Limited Liability Company (Sociedad de Responsabilidad Limitada)
  • Joint Stock Company (Sociedad Anónima)
  • Sociedad en Comandita Simple/por Acciones
  • Cooperative Society (Sociedad Colectiva)

The most used corporate form is similar to our limited liability company (Sociedad de Responsabilidad Limitada, S. de RL). Local law firms provide assistance with setting up a company. If necessary, the Honorary Consulate of the Czech Republic in Honduras can recommend a suitable law firm.

Marketing and communication

Promotional materials in Spanish, preferably printed and delivered in person, are an essential part of communication. Cooperation with Honduran chambers of commerce or advertising agencies is also appropriate, taking into account their knowledge of the local mentality and the ability to choose the most suitable strategy for a given type of goods or services. Advertising on the Internet and social networks (Facebook, Instagram, Whatsapp) is also increasingly being used. In the initial phase of penetrating the Honduran market, Czech companies can be recommended to participate in mass events such as trade fairs, or promotional events organized by the embassy, ​​PaulTrade or one of the chambers of commerce.

Issues of intellectual property protection

The issue of intellectual property falls under the competence of the Honduran Institute of Intellectual Property (Instututo de la Propiedad) and is governed by the Law on Intellectual Property. In Honduras, a trademark must be registered to secure exclusive rights to it (prior use of a trademark does not create any rights). Trademarks registered in Honduras are valid for 10 years from the date of registration and can be renewed up to 12 months before expiration. A period of six (6) months from the date of expiry of the trademark is set for late renewal of the trademark; in which case a late renewal fee must be paid. If the trademark is not used for more than three years after registration, third parties can file a lawsuit to cancel the trademark due to its non-use. Piracy in the field of music, cinematography and software is widespread

Public procurement market

The public procurement regime is based on tenders announced by the state. The system of providing information on state tenders is very inflexible and inoperative. The announcement of tenders is communicated with a delay, the closing dates are in most cases only a few days from the date of announcement of tenders. In addition, tender notices usually do not contain complete and clear information about all conditions. The conditions of tenders are generally characterized by considerable complexity, with the current requirement for the preliminary submission of relatively high or guarantee fees.
Not only knowledge of the local mentality, but especially the official language (i.e. Spanish) and perfect fulfillment of all conditions of the tender are a must. Precisely for these reasons, it is advisable to look for a reliable representative who notifies the Czech business entity in advance of the government’s intention to announce a public tender and without language problems submits an offer that corresponds to the last point to the announced tender conditions, incl. dates and form of tender submission. Without a representative, successful participation in these tenders is excluded. Up-to-date information on the listed tenders can be found at https://www.honducompras.gob.hn/.

Payment terms, payment ethics and resolution of commercial disputes

Possible resolution of disputes connected with business operations before Honduran arbitration bodies must be resolved only and only through a local lawyer. Therefore, it is generally recommended to enshrine in the relevant commercial contract a clause on the jurisdiction of the arbitration court of the exporting country, for the resolution of any disputes arising from the given transaction. The Honduran court system is generally characterized by inflexibility and “holding on” to local entities, and disputes can drag on for years – so it is recommended to consider the route of out-of-court settlement.
The competition of foreign companies due to the globalization process as well as the competition of local production on the Honduran market is getting stronger every year. Bidding activities are therefore mainly carried out in the form of demanding acquisition trips of representatives and representatives of local and foreign companies around Honduras. Attention must be paid in particular to the realistic price requirements for the offered items in order to maintain their marketability in relation to comparable competitive products, e.g. from Asia or Mexico.
Usual payment terms are documentary letter of credit, documentary collection with deferred payment in various forms. In some cases, especially when establishing new business contacts, it is appropriate to request an advance payment from Czech entities. Satisfactory payment discipline prevails in the country, trade debts tend to be the exception rather than the rule.

Visas, fees, specific conditions for traveling to the territory

Visas, customs regulations
There is a bilateral agreement in force on the abolition of the visa requirement for citizens of the Czech Republic and Honduras, while the total length of the tourist stay may not exceed 90 days.

Vaccination
Travelers arriving from a yellow fever endemic country or transit country should be prepared to present an international yellow fever vaccination certificate. Recommended vaccinations include hepatitis (A/B), rabies, typhoid, diphtheria, tetanus and measles.

Another caveat

: Honduras is one of the countries with a relatively high crime rate, often associated with drug trafficking or fighting between rival criminal gangs. It is therefore recommended to follow some basic principles:

  • keep valuables in the hotel safe and travel with only a minimum of cash
  • always park in a guarded parking lot, never leave any valuables in the car
  • travel only on main roads and in daylight
  • travel with travel insurance with sufficient coverage
  • be careful of luggage and bags with documents in the city center, at hotel receptions, at bus stops and also directly on buses

It is recommended to drink only bottled water. Protect yourself from mosquitoes, especially near the coast. Recently, epidemics of Zika, malaria, chikungunya and dengue have appeared in Central American countries.

Movement within the country
Hotel: The offer in larger cities and tourist locations is wide. It is highly recommended to stay in a category of at least 3*, not only with regard to hygiene, but also safety.
Car: Renting is a good choice in terms of comfort, speed and, above all, safety, as the distances within the country are short.
Taxi:In Honduras, taxis do not use a taximeter, so you must agree on the price with the taxi driver in advance. Make sure that the taxi driver knows where to go, as they often do not have GPS navigation (it is ideal to choose a waypoint such as hotels, offices, squares, etc.). Uber is also generally a safe option for getting around the capital, Tegucigalpa.
Buses: It is not recommended to use public transport, especially if you are traveling with valuables. Otherwise, buses are the most common form of public transportation for ordinary Hondurans. Bus lines also operate throughout Honduras. Tickets even outside the city are cheap, but you have to take into account that the buses are often overcrowded.

Employment of citizens from the Czech Republic

Conditions for employment of citizens from the Czech Republic
Employment of foreigners in the country is possible, but compared to the employment of local forces, this mechanism is more complicated due to the protection of the national labor market. Both are governed by applicable labor law and migration regulations, which are continuously updated. For this reason, we recommend that you consult a local legal advisor on a case-by-case basis, recommended by the ZÚ or honorary consul in the place. The minimum wage varies by sector and number of employees. The lowest is in agriculture, where it amounts to 7,033 HNL per month (approx. 6,400 CZK). The highest is in financial services, where it is 10,008 HNL per month (approx. 9,130 ​​CZK).

Conditions for the use of local health care by Czech and EU citizens
The Czech Republic has no bilateral agreement with Honduras on the mutual provision of health services. Local medical care (especially in the capital) is at a good level, but the reimbursement amounts for foreigners are very high. It is therefore highly desirable to secure health insurance already in the Czech Republic.

Fairs and events

Congreso Latinoamericano de Avicultura (24-27/08/2022) – venue: San Pedro Sula
Honduras Mega Beauty Show (no date yet) – venue: San Pedro Sula, Honduras
Expo Construye (no date yet) https:// expoconstruyehn.com/

 

Practical telephone numbers (emergency services, police, firemen, information lines, etc.)

Police: 199
Firefighters: 198
Red Cross HN: 195
Information: 192

Important web links and contacts

Ministry of the Office of the President of the Republic: www.presidencia.gob.hn,  www.sep.gob.hn
Ministry of Foreign Affairs:   www.sre.gob.hn
Ministry of Agriculture and Livestock:  www.sag.gob.hn
Ministry of Culture, Arts and Sports: www.scad.gob.hn
Ministry of Defense:  www.sedena.gob.hn
Ministry of Education:  www.se.gob.hn
Ministry of Finance:  www.sefin.gob.hn
Ministry of the Interior:  www.sdhjgd.gob.hn
Ministry of Industry and of Trade:  www.sefin.gob.hn
Ministry of Natural Resources and the Environment:  www.serna.gob.hn
Ministry of Health:www.salud.gob.hn
Ministry of Security:  www.seguridad.gob.hn
Ministry of Labor and Social Affairs:  www.trabajo.gob.hn

Honduras Market Entry