NAFTA PARITY UNDER NEW U.S. TRADE AND DEVELOPMENT ACT OF 2000

The above Law approved by the U.S.Congress in Mid-May and which will become effective on 1 October 2000 means good news for the Honduran manufacturing (maquiladora) industry, since once the Law enters to effect it will provide immediate elimination of duties and quotas on qualifying apparel and textile products, including knit apparel, t-shirts and luggage. Other products such as canned tuna fish, petroleum derivatives and footwear are also eligible for the benefits of the Law.

Boasting the best port in the Caribbean for the whole Central-American region and enjoying a strategic geographical position, industry leaders have said that up to 800 million dollars in new investments will be generated and almost 100,000 new jobs will be created.

With main offices in the city of San Pedro Sula (Heart of the textile and “maquiladora” industry) we are well positioned to help with the establishment of operations of companies looking for offshore manufacturing sites in everything from apparel to electronics assembly.



REQUIREMENTS FOR THE AUTHORIZATION AND OPENING OF A HONDURAN BRANCH FOR A CORPORATION INCORPORATED AND DOMICILED ABROAD

  1. An official document attesting that the main office is in Good Standing in the country of origin.
  2. Official document proving that according to the articles of incorporation and the by-laws of the company, it is entitled to establish foreign branches. The board resolution by which the creation of the foreign branch was decided is also required. This resolution must clearly indicate that the branch will abide by Honduran Laws with respect to all business conducted.
  3. The designation of at least one permanent legal representative in Honduras, the proxy conferred to him/her and its submission to Honduran Laws. The legal representative must be empowered to conduct all necessary business in Honduras.
  4. The assignment and establishment of at least a minimum capital for the foreign branch. Currently, the required capital is of about US. $1700.00. A deposit in a local bank institution is needed to this end.

Ø      A Honduran Consulate must duly legalize all documents.

 

With the above documents, an application in writing must be filed before the Ministry of Finance requesting the authorization of the branch. This Ministry will examine the application and if in order, will issue a resolution authorizing the opening of the branch, will indicate the term in which the branch must commence its operations in Honduras and will order the publication of the resolution in the Official Gazette. Finally the branch will be recorded at the corresponding Register of Companies.

 

It takes from 60 to 90 working days to obtain the above authorization.