The Honduran ZEDE Law, from Ideation to Action

Honduras has struggled to attract the investment needed to spur sustained economic growth in recent decades, and as a result remains one of the poorest countries in Latin America and the Caribbean. To attract greater foreign investment, the Honduran government passed a groundbreaking special economic zone (SEZ) law in 2012 creating Zonas de Empleo y Desarrollo Economico (Zones for Employment and Economic Development) or ZEDEs. Among the most innovative special jurisdictions in the world, ZEDEs grant sweeping legal and regulatory autonomy to allow for improved governance and economic competitiveness, in order to attract greater investment in Honduras. In this paper, we detail the political and legislative history of the ZEDE law, offer a textual analysis of the ZEDE statute, discuss the principal objections to the ZEDE law and responses to those objections, and provide case studies of the first two ZEDEs.