Honduras Economy Profile - Doing Business 2016
Core Content Overview
The Doing Business 2016 report evaluates the regulatory environment for businesses in Honduras, focusing on 11 key areas that impact the ease of doing business. It provides a comparative analysis of Honduras with other economies in Latin America and the Caribbean, as well as global best performers, using both rankings and distance to frontier (DTF) scores. The report highlights the challenges and opportunities in Honduras's business environment and emphasizes the importance of regulatory reforms to improve it.
Main Points and Key Information
1. Economic Overview
- Region: Latin America & Caribbean
- Income Category: Lower middle income
- Population: 8,260,749
- GNI per capita (US$): 2,190
- DB2016 Rank: 110
- DB2015 Rank: 115 (adjusted for data revisions and methodology changes)
- Change in Rank: Improved by 5 positions
- DB2016 DTF Score: 58.06
- DB2015 DTF Score: 56.95
- Change in DTF: Increased by 1.11
2. Key Business Regulation Indicators
| Indicator |
Honduras DB2016 |
Honduras DB2015 |
Colombia DB2016 |
Costa Rica DB2016 |
El Salvador DB2016 |
Guatemala DB2016 |
Mexico DB2016 |
Nicaragua DB2016 |
Best Performer |
| Starting a Business |
150 |
139 |
84 |
121 |
125 |
101 |
65 |
123 |
New Zealand (1) |
| DTF Score |
74.92 |
74.84 |
86.13 |
80.95 |
80.19 |
83.87 |
88.94 |
80.49 |
New Zealand (99.96) |
| Procedures (number) |
12.0 |
12.0 |
8.0 |
9.0 |
8.0 |
6.0 |
6.0 |
6.0 |
5 Economies (7.00) |
| Time (days) |
14.0 |
14.0 |
11.0 |
24.0 |
16.5 |
18.5 |
6.3 |
58.0 |
3 Economies (1.00) |
| Cost (% of income per capita) |
38.7 |
39.0 |
7.5 |
11.1 |
42.7 |
25.0 |
17.9 |
958.6 |
Saudi Arabia (0.00) |
| Paid-in min. capital (% of income per capita) |
10.8 |
11.5 |
0.0 |
0.0 |
2.6 |
18.1 |
0.0 |
5.0 |
105 Economies (0.00) |
| Indicator |
Honduras DB2016 |
Honduras DB2015 |
Colombia DB2016 |
Costa Rica DB2016 |
El Salvador DB2016 |
Guatemala DB2016 |
Mexico DB2016 |
Nicaragua DB2016 |
Best Performer |
| Dealing with Construction Permits |
87 |
87 |
38 |
49 |
156 |
106 |
67 |
168 |
Singapore (1) |
| DTF Score |
69.24 |
68.69 |
75.99 |
74.61 |
56.85 |
67.17 |
71.76 |
52.69 |
Singapore (92.97) |
| Procedures (number) |
15.0 |
15.0 |
10.0 |
15.0 |
25.0 |
11.0 |
10.5 |
16.0 |
14 Economies (3.00) |
| Time (days) |
82.0 |
82.0 |
73.0 |
118.0 |
108.0 |
158.0 |
86.4 |
207.0 |
Qatar (0.00) |
| Cost (% of warehouse value) |
6.7 |
7.2 |
7.2 |
1.7 |
4.5 |
7.2 |
10.2 |
3.3 |
18 Economies (8.00) |
| Building Quality Control Index (0-15) |
10.0 |
10.0 |
11.0 |
11.0 |
8.0 |
10.0 |
11.7 |
3.5 |
New Zealand (15.00) |
| Indicator |
Honduras DB2016 |
Honduras DB2015 |
Colombia DB2016 |
Costa Rica DB2016 |
El Salvador DB2016 |
Guatemala DB2016 |
Mexico DB2016 |
Nicaragua DB2016 |
Best Performer |
| Getting Electricity |
143 |
143 |
69 |
23 |
107 |
21 |
72 |
94 |
Korea, Rep. (1) |
| DTF Score |
53.39 |
53.22 |
74.82 |
85.01 |
63.46 |
85.76 |
73.27 |
68.02 |
Korea, Rep. (99.88) |
| Procedures (number) |
7.0 |
7.0 |
5.0 |
5.0 |
8.0 |
4.0 |
6.8 |
6.0 |
14 Economies (3.00) |
| Time (days) |
39.0 |
39.0 |
102.0 |
45.0 |
61.0 |
39.0 |
78.9 |
55.0 |
Japan (0.00) |
| Reliability of supply and transparency of tariff index (0-8) |
0.0 |
0.0 |
6.0 |
7.0 |
5.0 |
6.0 |
7.0 |
4.0 |
18 Economies (8.00) |
| Registering Property |
88 |
85 |
54 |
53 |
71 |
75 |
106 |
147 |
New Zealand (1) |
| DTF Score |
64.24 |
64.23 |
72.85 |
72.97 |
67.13 |
66.42 |
58.74 |
48.61 |
New Zealand (94.46) |
| Procedures (number) |
6.0 |
6.0 |
6.0 |
5.0 |
5.0 |
6.0 |
6.8 |
9.0 |
4 Economies (1.00) |
| Time (days) |
22.0 |
22.0 |
16.0 |
19.0 |
31.0 |
24.0 |
63.7 |
58.0 |
3 Economies (1.00) |
| Cost (% of property value) |
5.7 |
5.7 |
2.0 |
3.4 |
3.8 |
3.7 |
5.1 |
5.0 |
Saudi Arabia (0.00) |
| Quality of land administration index (0-30) |
14.0 |
14.0 |
16.0 |
17.0 |
12.5 |
13.0 |
14.3 |
6.5 |
3 Economies (28.50) |
| Indicator |
Honduras DB2016 |
Honduras DB2015 |
Colombia DB2016 |
Costa Rica DB2016 |
El Salvador DB2016 |
Guatemala DB2016 |
Mexico DB2016 |
Nicaragua DB2016 |
Best Performer |
| Getting Credit |
7 |
6 |
2 |
7 |
15 |
15 |
5 |
97 |
New Zealand (1) |
| DTF Score |
85 |
85 |
95 |
85 |
80 |
80 |
90 |
45 |
New Zealand (100) |
| Strength of legal rights index (0-12) |
9.0 |
9.0 |
12.0 |
10.0 |
9.0 |
9.0 |
10.0 |
1.0 |
3 Economies (12.00) |
| Depth of credit information index (0-8) |
8.0 |
8.0 |
7.0 |
7.0 |
7.0 |
7.0 |
8.0 |
8.0 |
26 Economies (8.00) |
| Credit bureau coverage (% of adults) |
36.2 |
36.1 |
88.7 |
100.0 |
34.4 |
8.8 |
100.0 |
48.7 |
22 Economies (100.00) |
| Indicator |
Honduras DB2016 |
Honduras DB2015 |
Colombia DB2016 |
Costa Rica DB2016 |
El Salvador DB2016 |
Guatemala DB2016 |
Mexico DB2016 |
Nicaragua DB2016 |
Best Performer |
| Paying Taxes |
155 |
149 |
136 |
80 |
162 |
50 |
92 |
165 |
United Arab Emirates (1) |
| DTF Score |
57.28 |
58.55 |
63.32 |
75.67 |
52.73 |
81.18 |
73.67 |
50.59 |
United Arab Emirates (99.44) |
| Payments (number per year) |
48.0 |
48.0 |
11.0 |
9.0 |
53.0 |
8.0 |
6.0 |
43.0 |
China (3.00) |
| Time (hours per year) |
224.0 |
224.0 |
239.0 |
151.0 |
312.0 |
256.0 |
286.0 |
207.0 |
Luxembourg (55.00) |
| Total tax rate (% of profit) |
44.3 |
41.8 |
69.7 |
58.0 |
38.7 |
37.5 |
51.7 |
63.9 |
Ireland (25.90) |
| Indicator |
Honduras DB2016 |
Honduras DB2015 |
Colombia DB2016 |
Costa Rica DB2016 |
El Salvador DB2016 |
Guatemala DB2016 |
Mexico DB2016 |
Nicaragua DB2016 |
Best Performer |
| Trading Across Borders |
136 |
135 |
110 |
67 |
46 |
78 |
59 |
81 |
Denmark (1) |
| DTF Score |
55.98 |
55.98 |
62.83 |
79.86 |
87.78 |
75.31 |
82.09 |
74.49 |
Denmark (100) |
| Time to export: Border compliance (hours) |
88 |
88 |
112 |
20 |
38 |
36 |
20 |
60 |
15 Economies (0.00) |
| Cost to export: Border compliance (USD) |
594 |
594 |
545 |
347 |
160 |
310 |
400 |
80 |
18 Economies (0.00) |
| Time to export: Documentary compliance (hours) |
96 |
96 |
60 |
24 |
9 |
48 |
8 |
96 |
Jordan (0.00) |
| Cost to export: Documentary compliance (USD) |
345 |
345 |
90 |
80 |
50 |
105 |
60 |
127 |
20 Economies (0.00) |
| Time to import: Border compliance (hours) |
56 |
56 |
112 |
80 |
40 |
72 |
44 |
72 |
19 Economies (0.00) |
| Cost to import: Border compliance (USD) |
475 |
475 |
545 |
400 |
160 |
405 |
450 |
330 |
28 Economies (0.00) |
| Time to import: Documentary compliance (hours) |
72 |
72 |
64 |
26 |
13 |
32 |
18 |
16 |
21 Economies (1.00) |
| Cost to import: Documentary compliance (USD) |
70 |
70 |
50 |
75 |
67 |
140 |
100 |
86 |
30 Economies (0.00) |
| Indicator |
Honduras DB2016 |
Honduras DB2015 |
Colombia DB2016 |
Costa Rica DB2016 |
El Salvador DB2016 |
Guatemala DB2016 |
Mexico DB2016 |
Nicaragua DB2016 |
Best Performer |
| Enforcing Contracts |
150 |
150 |
180 |
124 |
109 |
173 |
41 |
94 |
Singapore (1) |
| DTF Score |
45.54 |
45.54 |
29.66 |
52.41 |
55.2 |
34.55 |
67.39 |
57.79 |
Singapore (84.91) |
| Time (days) |
920.0 |
920.0 |
1,288.0 |
852.0 |
786.0 |
1,402.0 |
389.0 |
519.0 |
Singapore (150.00) |
| Cost (% of claim) |
35.2 |
35.2 |
45.8 |
24.3 |
19.2 |
26.5 |
30.9 |
26.8 |
Iceland (9.00) |
| Quality of judicial processes index (0-18) |
7.5 |
7.5 |
6.5 |
8.0 |
7.5 |
6.0 |
10.6 |
6.5 |
3 Economies (15.50) |
| Indicator |
Honduras DB2016 |
Honduras DB2015 |
Colombia DB2016 |
Costa Rica DB2016 |
El Salvador DB2016 |
Guatemala DB2016 |
Mexico DB2016 |
Nicaragua DB2016 |
Best Performer |
| Resolving Insolvency |
139 |
139 |
30 |
87 |
79 |
153 |
28 |
103 |
Finland (1) |
| DTF Score |
31.67 |
31.83 |
72.06 |
44.06 |
45.9 |
27.3 |
73.03 |
40.13 |
Finland (93.81) |
| Recovery rate (cents on the dollar) |
18.2 |
18.5 |
70.0 |
26.7 |
33.0 |
27.5 |
68.9 |
33.9 |
Japan (92.90) |
| Time (years) |
3.8 |
3.8 |
1.7 |
3.0 |
3.5 |
3.0 |
1.8 |
2.2 |
Ireland (0.40) |
| Cost (% of estate) |
14.5 |
14.5 |
8.5 |
14.5 |
12.0 |
14.5 |
18.0 |
14.5 |
Norway (1.00) |
| Outcome (0 as piecemeal sale and 1 as going concern) |
0 |
0 |
1 |
0 |
0 |
0 |
1 |
0 |
- |
| Strength of insolvency framework index (0-16) |
7.0 |
7.0 |
11.0 |
9.5 |
9.0 |
4.0 |
11.5 |
7.0 |
4 Economies (15.00) |
Summary of Key Findings
- Starting a Business: Honduras ranks 150th, with a DTF score of 74.92. It requires 12 procedures, takes 14 days, and costs 38.7% of income per capita.
- Dealing with Construction Permits: Honduras ranks 87th, with a DTF score of 69.24. It requires 15 procedures, takes 82 days, and costs 6.7% of warehouse value.
- Getting Electricity: Honduras ranks 143rd, with a DTF score of 53.39. It requires 7 procedures, takes 39 days, and costs 861.7% of income per capita.
- Registering Property: Honduras ranks 88th, with a DTF score of 64.24. It requires 6 procedures, takes 22 days, and costs 5.7% of property value.
- Getting Credit: Honduras ranks 7th, with a DTF score of 85. It has a strong legal rights index (9.0) and a depth of credit information index (8.0), but its credit bureau coverage is only 36.2% of adults.
- Protecting Minority Investors: Honduras ranks 134th, with a DTF score of 43.33. It has a low strength of minority investor protection (4.3) and moderate conflict of interest regulation (5.7).
- Paying Taxes: Honduras ranks 155th, with a DTF score of 57.28. It requires 48 payments per year, taking 224 hours and costing 44.3% of profit.
- Trading Across Borders: Honduras ranks 136th, with a DTF score of 55.98. It takes 88 hours to export via border compliance and 56 hours to import.
- Enforcing Contracts: Honduras ranks 150th, with a DTF score of 45.54. It takes 920 days to enforce contracts and costs 35.2% of claim.
- Resolving Insolvency: Honduras ranks 139th, with a DTF score of 31.67. It takes 3.8 years to resolve insolvency and costs 14.5% of estate value.
Methodology Notes
- The report uses DTF scores and ease of doing business rankings to measure regulatory quality and efficiency.
- The DTF score reflects the absolute distance to the best performance in each indicator.
- Rankings compare economies relative to each other.
- The report does not include labor market regulation in the aggregate ease of doing business ranking, but the data are still presented.
- Methodology updates in 2016 include:
- Expanding the focus of five indicators.
- Substantially revising the methodology for the trading across borders indicator.
- Small updates for the protecting minority investors indicator.
- The distance to frontier metric is used to track changes in the regulatory environment over time.
Conclusion
Honduras has made some improvements in its business environment, as seen from its improved rank and DTF score. However, it still lags behind many other economies in Latin America and the Caribbean, and even more so in the global ranking. The report highlights the need for further reforms to reduce the number of procedures, time, and costs involved in business regulation. The data also show that Honduras has some weaknesses in areas such as minority investor protection, contract enforcement, and insolvency resolution. The Doing Business methodology is a valuable tool for policymakers to identify these areas and implement necessary reforms.