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Honduras is the second-poorest country in Central America and its international reputation among investors suffers because the country is subject to one of the highest homicide rates in the world, drugs-related money laundering and reports of extensive corruption. Nonetheless, in line with the previous year, Honduras’ economy expanded by 3.6% in 2016; this growth was primarily driven by increased private consumption levels, a follow-on from lower oil import prices and greater remittances from the US (upon which the country is highly dependent).

Of particular note in the political sphere (given the country’s recent history), in 2015 Honduras’ Supreme Court struck out the single-term limit for the country’s presidency, leaving President Juan Orlando Hernández, who has promoted foreign investment, free to seek a second term in November 2017.

On the legislative front, a new Tax Code entered into force at of 1st January 2017; in addition to a brief amnesty to taxpayers willing to meet certain tax obligations and regularise their tax position (thereby avoiding non-compliance fines), the reform introduces the 'territoriality principle’ (eliminating the previous worldwide taxation system); the verification of compliance with transfer-pricing regulations, a limit to the amendment of tax returns, a new statute of limitations and new penalties, as well as incorporating certain tax-payers’ rights. This chapter includes a new tax section to reflect the growing levels of tax structuring, planning and litigation work for Honduras’ leading practices.

Notable developments in the Honduran legal market include the arrival of Guatemalan firm Mayora & Mayora, S.C., which opened its first international office, in Tegucigalpa, in April 2016; and the emergence of Arias in late 2016, a consequence of the departure of the former Costa Rica partners from what was Arias & Muñoz (the first Pan-Central American law firm) to form Muñoz Global (with offices in Costa Rica, Panama and Nicaragua) before associating with global law firm Dentons.

While a number of Honduras’ leading firms, such as, Bufete Melara & Asociados, or López Rodezno & Asociados, remain proudly independent, the latest phase of regionalisation over the past 2-3 years has seen, many if not most of Honduras’ multi-practice corporate law firms become part of broader Central American platforms. Some, such as Matamoros Batson – LatamLex, Casco-Fortín, Cruz & Asociados (part of both the Meritas global alliance and the Central American regional alliance, Expertis) and Bufete Gutiérrez Falla & Asociados, the local Lex Mundi member, have opted to become members of alliances of varying types; others, such as Aguilar Castillo Love, BLP or García & Bodán, constitute the local office of would-be, one-stop regional firms. The degree and depth of integration and the homogeneity of service across jurisdictions differs in each case

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