US Company Formation from Honduras (2026): US LLC or C-Corp Under Territorial Tax, the Pending Worldwide-Income Reform and No US Treaty

Honduras sits in an unusual spot for anyone who owns a foreign company. Its income tax is territorial: it taxes income from Honduran sources and has never taxed residents on what they earn abroad. But the government has spent three years trying to pass the Ley de Justicia Tributaria, which would move Honduras to worldwide taxation and add a beneficial-owner concept aimed at offshore and foreign companies. So a Honduran setting up a US company in 2026 has to plan under today's rules and also be ready for a possible change.

This guide covers both. It explains what territorial taxation does and does not protect, what the reform would change, why there is no US treaty to soften US withholding, and how US LLC formation compares with US C-Corp formation, with examples for a freelancer in Tegucigalpa, a San Pedro Sula exporter and a family business split between Honduras and Texas.

In short: Hondurans and Honduran residents can own 100% of a US LLC or C-Corporation, formed remotely. Honduras currently taxes Honduran-source income only, and work performed in Honduras is Honduran-source income, whichever company invoices it. Individuals pay progressive rates up to 25%, and companies pay 25% plus a 5% solidarity contribution on taxable income above L 1 million. The pending Ley de Justicia Tributaria would bring in worldwide taxation, so plan as if foreign income may become taxable. There is no US–Honduras income tax treaty, so dividends from a US corporation to Honduras carry 30% US withholding. With UCB, a Wyoming LLC with EIN is $249, a Texas LLC with EIN is $504 and a Delaware corporation with EIN is $358, all-in.

Territorial tax: what it protects and what it does not

The Honduran income tax law (Ley del Impuesto Sobre la Renta) charges tax on income from sources in Honduras. A Honduran resident who receives a dividend from a foreign company, interest from a foreign bank or rent from property abroad has traditionally not been taxed on it in Honduras. That is the rule people have in mind when they say "Honduras doesn't tax foreign income".

It is narrower than many people think. Source depends on where the economic activity takes place, not on where the client or the paying company is. So:

• A freelancer working from La Ceiba for a client in Chicago produces Honduran-source income, because the work is done in Honduras. Putting a US LLC between the freelancer and the client does not change where the work is done.
• A consultant who travels to Guatemala for a project and is paid there has foreign-source income for that work.
• A US LLC that earns money from US activity carried on by other people, such as rental property in Houston managed by a US manager, produces foreign-source income for its Honduran owner.
• A dividend from a US corporation is foreign-source income.

The SAR (Servicio de Administración de Rentas) looks at substance. A Honduran who invoices clients through a US company while working at home is still earning Honduran income and should declare it, whether as an individual (comerciante individual or professional) or through a Honduran company.

The Ley de Justicia Tributaria: the reform that keeps coming back

The Castro government first sent the Ley de Justicia Tributaria to Congress in 2023. Its most contested provisions are:

• A move from territorial to worldwide income, so that residents would be taxed on foreign income as well, with a credit for foreign tax.
• A beneficial owner (beneficiario final) concept, to look through companies to the people who control them.
• The repeal of many tax exemptions, including several used by export and tourism regimes.
• A higher rate for large companies, with some versions taking the top corporate rate from 25% to 30%.

The bill went to a final debate in May 2025 and, as of late 2025, had still not won the votes it needed. Its future depends on the new Congress and government. For anyone forming a US company now, the sensible approach is:

• keep records of each year's foreign income and any US tax paid, so a credit can be claimed if worldwide taxation arrives;
• avoid structures that only work because foreign income is untaxed, such as leaving a passive portfolio in a US corporation and assuming it will never be reached;
• declare Honduran-source income properly now, because a beneficial-owner regime makes undeclared US companies easier to find.

No US–Honduras treaty

The USA and Honduras have a tax information exchange agreement and the CAFTA-DR trade agreement, but no income tax treaty. US domestic rates apply to payments from a US company to Honduras:

• 30% on dividends from a US corporation.
• 30% on royalties.
• 30% on interest to a related party (interest from unrelated US lenders and banks is generally exempt under the portfolio interest rules).

Under current Honduran law, a dividend from a US corporation is foreign income and is not taxed again in Honduras. The 30% US withholding is then the whole tax on it, and there is nothing to credit it against. That is the main reason Honduran individuals usually prefer an LLC for a business they run themselves.

US LLC formation from Honduras

How the IRS sees it

A single-member LLC owned by a non-resident is a disregarded entity. It pays no US income tax of its own, and its income is treated as the owner's. A Honduran owner pays US tax only on income effectively connected with a US trade or business, meaning business carried on in the USA through people or premises there (see effectively connected income explained). If you work from Honduras and the LLC has no US office, staff or dependent agents, there is generally nothing for the IRS to tax, and money moved from the LLC to you is not a dividend.

Each year the LLC files Form 5472 with a pro forma Form 1120, whether or not it earned anything. The penalty for missing it is $25,000 (see Form 5472 explained).

Example: a developer in Tegucigalpa

These are illustrative figures, not a client case, at L 26.3 to the dollar.

Daniela is a mobile developer in Tegucigalpa. Her main client is a US health-tech company that pays vendors only by ACH and wants a US W-9 on file. She forms a Wyoming LLC, opens a US business account, and the LLC bills US$54,000 a year.

• USA: The LLC files Form 5472 and a pro forma 1120 and owes no income tax, because Daniela does all the work in Honduras.
• Honduras: The income is Honduran-source, because she works there. She is registered with the SAR as a professional and declares the income in lempiras (about L 1.42 million), with deductions for her costs. Honduran tax is charged at the progressive personal rates.

What she got from the LLC is a US vendor that the client can pay easily, a US bank account and lower payment costs. She did not get a lower Honduran tax bill, and she should not expect one.

Example: a US rental owned from San Pedro Sula

Rodrigo, a business owner in San Pedro Sula, buys a duplex in Houston through a Texas LLC, with a local property manager. The rental income is US-source income. He can elect to have it taxed in the USA on a net basis, after deducting depreciation and expenses, and files a US non-resident return each year (see real estate investment LLC for foreigners). In Honduras, under current law, this is foreign-source income. If the reform passes, he would declare it in Honduras and credit the US tax.

US C-Corp formation from Honduras

How the IRS sees it

A C-Corporation is a US taxpayer in its own right. It pays 21% federal tax on its profits, plus state tax where it operates, and files Form 1120 and Form 5472 every year (see the 21% corporate tax explained and the C-Corp guide for non-residents). Its dividends to Honduras are withheld at 30%. Profits kept in the corporation and reinvested are not withheld.

When a corporation is the right choice

• Maquila and export groups selling into the USA. Honduras is one of the largest apparel exporters to the USA, and many San Pedro Sula and Choloma groups sell to US brands. A Delaware or Texas corporation can import, hold inventory in a US warehouse, employ US account managers and sign contracts with US retailers. The US corporation pays US tax on its distribution margin, and the Honduran factory is paid for production at arm's-length prices (see US subsidiary for a foreign company). Check with your customs broker how CAFTA-DR origin rules apply to goods the US company imports.
• Coffee, shrimp and melon exporters that want a US company to sell directly to roasters, distributors or supermarkets instead of through an importer.
• Start-ups raising investment. Investors need a Delaware C-Corporation (see raising US investment as a foreign founder).
• Any business with US staff or premises, which would owe US tax anyway and is better contained in a corporation than passed through to a Honduran individual.

A worked comparison

Take an illustrative case: a US company earns US$100,000 of profit from a US warehouse operation.

• As a C-Corporation: it pays 21% federal tax (US$21,000) plus any state tax. If it then pays the remaining US$79,000 as a dividend, 30% is withheld (US$23,700), so about US$55,300 reaches Honduras before state tax. If it reinvests instead, only the US$21,000 is paid for now.
• As a single-member LLC: the profit is US business income of the Honduran owner, taxed at individual rates up to 37%. The owner files a US Form 1040-NR, and the LLC may have to withhold tax on the owner's share.

For an active US operation, the corporation is usually simpler. For work done in Honduras, the LLC is usually better.

Hondurans in the USA and family businesses

There are more than a million people of Honduran origin in the USA, in Houston, New Orleans, Miami, Charlotte, New York and the Washington area. Many run construction, landscaping, cleaning, trucking and restaurant businesses with relatives in Honduras as partners or investors.

• If any owner is a US citizen, green card holder or US tax resident, a multi-member LLC is a partnership and files Form 1065. Each owner reports their share, and the Honduran partner's share of US business income is subject to partnership withholding.
• The company must be registered where it operates. A Houston construction business is a Texas business, whatever state it was formed in.
• Remittances are not business payments. Money a US-resident partner sends home as family support is separate from a Honduran partner's share of profits. Keep them apart in the books.

See single-member vs multi-member LLC and Texas LLC for non-residents.

Próspera and the ZEDEs

Some readers will know Próspera, the charter city on Roatán set up under Honduras's ZEDE law. Congress repealed the ZEDE law in 2022, and Próspera's status is now the subject of an international arbitration claim against Honduras. Próspera has its own tax regime, but that regime does not change how a US company is taxed in the USA. Anyone working from Roatán should take legal advice on the current position before relying on ZEDE rules.

Which state

• Wyoming or New Mexico for a contracting or online LLC run from Honduras, because annual costs are low and there is no state income tax for an LLC with no state operations.
• Texas for diaspora businesses in Houston or Dallas, and for property in Texas.
• Florida for businesses with a Miami base.
• Delaware for a corporation that will raise investment or sign enterprise contracts.

See best state for non-residents, state taxes for a foreign-owned LLC and the state selector.

What it costs

UCB's formation prices include state fees and the first year of registered agent service:

• Wyoming LLC with EIN: $249, or $348 with a US bank account application.
• Texas LLC with EIN: $504.
• Florida LLC with EIN: $299.
• Delaware corporation with EIN: $358.

A Wyoming LLC costs $121 a year to keep active, or $421 with the annual federal return. A US business address with your own suite number is $60 a year. See what a US LLC costs every year.

Documents and banking

You need your Honduran passport, because US banks do not accept the DNI on its own, and proof of address such as an ENEE electricity bill, a Hondutel or Tigo bill or a bank statement, translated into English. Use the same spelling of both surnames on every document; a mismatch between "Hernández López" and "Hernandez" is a common reason for bank delays.

US banks and fintechs accept Honduran owners, but they ask detailed questions about the business, because Central America is a higher-risk region for their compliance teams. What helps:

• a specific description of what the company sells and to whom;
• an English website and invoices;
• client contracts or emails showing real US customers;
• a US business address with your own suite number.

Money sent to Banco Atlántida, Ficohsa, BAC Credomatic or Banpaís arrives by international wire and can be kept in a dollar account or converted to lempiras. Honduran banks will ask where the funds come from, so keep your LLC's invoices and US bank statements ready. See US business bank accounts for non-residents, why banks reject non-resident applications and receiving payments from US clients.

Mistakes we see

• Believing territorial tax means a US LLC's income is tax-free in Honduras, when the work is done in Honduras.
• Paying dividends from a US corporation to Honduras at 30% when the profit could have stayed in the USA or the business could have been an LLC.
• Running a Houston business from a Wyoming LLC without registering it in Texas.
• Ignoring the reform. Structures that rely on foreign income staying untaxed may stop working.
• Missing Form 5472 in a year with no US tax due.

Frequently asked questions

Can a Honduran citizen own 100% of a US company? Yes. No US visa, Social Security number or visit is needed.

Does Honduras tax income from my US LLC? Under current law, Honduras taxes Honduran-source income. If you do the work in Honduras, the income is Honduran-source and taxable there. Income from US activity done by others, such as US rent, is foreign-source for now.

Will Honduras start taxing worldwide income? The Ley de Justicia Tributaria would introduce it, but it had not passed as of late 2025. Keep records so that you can claim credit for US tax if it does.

Is there a US–Honduras tax treaty? No. Dividends, royalties and related-party interest from the USA are withheld at 30%.

Does my US LLC pay US tax? Not if it has no US office, staff or agents. It files Form 5472 and a pro forma 1120 every year.

How UCB can help

We form US companies for Honduran owners remotely: the state filing, EIN, registered agent, US business address and bank application, in Spanish or English. Each year we file the US federal return through our US tax filing service, including Form 1065 for family partnerships. Your Honduran contador handles SAR declarations, and we give them the US records they need. See our formation, EIN and bank account package, and the Guatemala and El Salvador guides for neighbouring rules.

Setting up a US company from Honduras? WhatsApp us at +1 315 961 2956 or email enquiries@ucbsolutions.com.