Ciudad Morazán
(Morazán City)

Overview

Ciudad Morazán is a Honduran ZEDE (Zone for Employment and Economic Development) on the outskirts of Choloma, the third-largest city in Honduras. At its current extent, the city is projected to house ca. 10.000 residents. However, ZEDEs can acquire new land and Ciudad Morazán is planned out with possible future growth in mind.

Ciudad Morazán aims to become a proper city with all the associated amenities. Besides housing zones, Ciudad Morazán will also provide commercial spaces, parks, churches, and schools. A flexible industrial zone is also being planned within the city. Around three thousand jobs are expected to be created in Morazán. Unlike the other prominent ZEDE project—Próspera—Ciudad Morazán markets itself as a blue-collar ZEDE, targeting middle- and working-class individuals. Properties in Ciudad Morazán are not for sale—all of them are being rented out instead.

Ciudad Morazán has a comprehensive urban master plan fitted for specific Honduran circumstances but based on the highest international standards. Honduras suffers from poor rule of law, limited access to justice, and serious infrastructure problems. Hondurans often have to live in constant fear of violence and insecurity. In light of these shortcomings, Ciudad Morazán aims to provide Hondurans with an alternative to achieve a better and more prosperous life.

The city will combine the autonomy of modern special governance zones with the trade preferences of an industrial export-processing zone. This will enable lower taxes, simplified bureaucracy, and higher competitiveness compared to the rest of Honduras.

Legal Status

Having been established under the ZEDE framework, the city enjoys a certain degree of fiscal and regulatory autonomy. The only existing tax is an income tax of 5% on earnings. Of the taxes collected in Ciudad Morazán, 12% are paid to the Honduran state. Goods entering Ciudad Morazán do not need to pay tariffs, but goods produced within the city and sold in Honduras need to pay tariffs just like any other imported product.

The city has adopted a simplified version of the Honduran Civil Code, future minor laws and regulations can be implemented after the approval of the Comisión para la Adopción de las Mejores Prácticas (CAMP), the entity supervising all the ZEDEs in Honduras. Nevertheless, the city remains an integral part of Honduras, and the Honduran constitution, international treaties, and Honduran criminal law all apply in Ciudad Morazán.

The ZEDE law was repealed by the Honduran National Congress in April 2022. While this means that no new ZEDEs can be established, the existing ZEDEs, including Ciudad Morazán, will continue to be operational for the foreseeable future. Despite the repeal, the legal position of Ciudad Morazán should reportedly remain unchanged for the next 50 years.

In Ciudad Morazán, the highest authority is the ‘Technical Secretary’. This position resembles the combination of a mayor and a municipal council in regular cities. In the first stages of the project, the Technical Secretary is nominated by the developer and ratified by the CAMP. Later, residents will be able to vote. Anyone wishing to become the Technical Secretary must be Honduran by birth.

Current Situation

Construction in Ciudad Morazán is underway, with some early parts of the city already completed. A cluster of row houses, a park, and an industrial area are already operational.

Ciudad Morazán has around 130 residents as of mid-2023, but growth slowed after the 2021 elections because of political uncertainties. Since late 2021, Morazán has been facing, together with Honduran ZEDEs in general, an immense volume of media attacks and disinformation campaigns, resulting in decreased attractiveness of the city to potential partners. Since the repeal of the ZEDE law in April 2022, several prospective industrial tenants have canceled or postponed their plans to bring their businesses (and jobs) to Ciudad Morazán.

Sixty-four residential homes have been completed and are fully occupied. Construction was delayed for a year and a half, and there is now a waiting list of around 300 prospective residents. Because of that demand and the fact that the government has not taken action against the project other than media attacks, the developer is now planning the construction of a four-story apartment building and another 24 townhouses.

There are finally industrial tenants willing to risk government hostility to operate in Ciudad Morazán. Two more companies, for a total of three, are renting industrial space with a few jobs each. Larger companies that employ more people are still waiting for more certainty.

There are now several small resident-owned businesses operating, including a café, a minimart, a laundry service, a beauty salon, and a gym. More small businesses are being planned.

Since late 2022, the cryptocurrency eCash and a stablecoin called eLPS have seen ever-increasing use for transactions within Ciudad Morazán.

How to Move in

Ciudad Morazán’s own residency and immigration system represents an additional layer on top of the broader Honduran system. Therefore, before applying for Ciudad Morazán residency, prospective movers need to obtain a residency permit or a work visa from the Honduran state. A residency permit can be obtained in several ways, including by establishing a company or making investments in Honduras. See official sources for further details.

Individuals who have the right to remain in Honduras and wish to become physical residents of Ciudad Morazán will need to rent a property in the city and sign its Agreement of Coexistence. The monthly rent for townhouses starts at 3000 lempiras (ca 120 USD) and for apartments at 2000 lempiras (ca 80 USD).