Nearshoring From the United States to Central America: Registering a Manufacturing Company in Honduras and Guatemala Under CAFTA-DR

Are you considering nearshoring to Honduras or Guatemala? US manufacturers shifting supply chains to either country can register a company and claim CAFTA-DR tariff preferences for qualifying goods, although additional US tariffs may apply.

In this blog, we explain how to register a manufacturing company in Honduras and Guatemala and assess eligibility for CAFTA-DR preferences, covering entity choices, step-by-step setup, the taxes and filings to expect, and how to keep a multi-country compliance calendar under control.

Why Do Local Registration and CAFTA-DR Eligibility Matter for US Manufacturers?

CAFTA-DR provides preferential tariffs for qualifying goods and gives eligible US investors legal protections in both Honduras and Guatemala.

CAFTA-DR is the Dominican Republic–Central America Free Trade Agreement. It entered into force with El Salvador, Guatemala, Honduras and Nicaragua in 2006, the Dominican Republic in 2007 and Costa Rica in 2009.

The Office of the United States Trade Representative administers the agreement and publishes its rules of origin. Those rules determine whether your finished goods qualify for CAFTA-DR tariff preferences, subject to any other applicable duties and restrictions.

One point matters before you plan anything: the treaty does not create a special company type. You register an ordinary Honduran or Guatemalan company, and CAFTA-DR then governs how your goods move and how your investment is treated.

For US manufacturers expanding to Central America, that combination is the draw. Your plant sits in a nearshore time zone, qualifying components may receive duty-free treatment, and eligible US investments benefit from treaty protections.

1. Tariff preferences for qualifying goods

Products that satisfy CAFTA-DR rules of origin can receive preferential US tariff treatment, but additional duties may apply unless an exemption is available. Most US industrial inputs also enter the region duty-free, keeping landed costs predictable.

2. Rules of origin discipline

Origin depends on the applicable CAFTA-DR rules, which can include tariff shifts and regional value content; many textiles follow a yarn-forward rule, subject to exceptions. Build your bills of materials with these tests in mind from day one.

3. Investment protection for US parents

CAFTA-DR gives US investors national treatment and a route to investor-state arbitration. That protection sits on top of local company law, not instead of it.

4. Proximity that shortens feedback loops

Honduras and Guatemala sit roughly two to three hours' flight from Houston and Miami. Both operate on time zones closely aligned with US Central Time.

How Do You Set Up a Company in Guatemala for Manufacturing?

Most US groups register a Guatemalan Sociedad Anónima (S.A.) through a notary, then complete tax, municipal and employer registrations.

Guatemalan law recognises the Sociedad Anónima (S.A.) and the Sociedad de Responsabilidad Limitada (S.R.L.), alongside the branch (sucursal) of a foreign parent. The S.A. is the usual vehicle for manufacturers because it allows fully foreign ownership and flexible share structures.

Company law generally requires at least two founding shareholders, while no meaningful statutory minimum capital applies. You will also need a local legal representative with registered powers of attorney, and a registered office in Guatemala.

If you import inputs duty-free for re-export, Guatemala's export-promotion and free-zone regimes allow temporary admission of those materials. Enrolling with customs under the relevant regime keeps the supply chain compliant. Notary fees vary by practice, so treat quotes as part of your site-selection budget.

Step 1: Clear your company name

Your notary verifies the proposed name against the Mercantile Registry's index before anything is drafted.

Step 2: Execute the incorporation deed

A Guatemalan notary drafts and executes the escritura de constitución, your company's constitutional deed. Shareholders who cannot travel can act by power of attorney.

Step 3: Inscribe the company at the Mercantile Registry

The registry inscribes the deed, publishes the incorporation and records your registration details. The company legally exists only after inscription.

Step 4: Obtain your NIT and municipal licence

The Superintendencia de Administración Tributaria issues your Número de Identificación Tributaria (NIT) for VAT and income tax. Your municipality then issues the local operating licence.

Step 5: Register as an employer

Register with the Instituto Guatemalteco de Seguridad Social (IGSS) once you hire. Monthly payroll filings then follow on the statutory cycle.

What Does Nearshoring to Honduras Involve for a US Manufacturer?

Honduras follows the same continental pattern — notarised articles, Mercantile Registry inscription, then tax and employer registrations — with local specifics.

Honduras offers the Sociedad Anónima (S.A.) and the Sociedad de Responsabilidad Limitada (S.R.L.), and it also allows a foreign parent to register a local branch. Fully foreign ownership is permitted, and the S.A. suits most manufacturing ventures.

The route runs through a Honduran notary, who formalises your articles of incorporation. The company is then inscribed with the Mercantile Registry, which keeps the public record of commercial entities.

Honduras has reshaped its special economic zones and investment incentives in recent years, so confirm the current regime before committing to a site. Beyond the plant itself, our market primer on why set up business in Honduras covers the wider operating case, from ports to labour.

Step 1: Notarise your articles of incorporation

A Honduran notary formalises the articles naming your shareholders, administrators and legal representative.

Step 2: Inscribe the company at the Mercantile Registry

The Mercantile Registry records your notarised articles in its public register. Inscription gives your company legal personality and a public registration number.

Step 3: Obtain your RTN and operating permit

The Servicio de Administración de Rentas issues the Registro Tributario Nacional (RTN), your tax identity. Your municipality issues the local operating permit for the plant.

Step 4: Register as an employer

Register with the Instituto Hondureño de Seguridad Social (IHSS) and related payroll registries before your first hire.

Step 5: Enrol with customs for export production

For eligible duty-free inputs for re-export, apply for the appropriate Honduran regime, such as the temporary import regime or a free-zone regime, and comply with its customs requirements.

Honduras or Guatemala: Which Base Suits Your Manufacturing Model?

Logistics reach, sector clusters and labour depth usually decide it; both countries are credible export manufacturing bases.

Honduras pairs Puerto Cortés, the region's principal deep-water Atlantic port, with established apparel and automotive wire-harness clusters. Guatemala offers both Pacific (Puerto Quetzal) and Atlantic (Santo Tomás de Castilla) ports, a larger domestic market and diversified light manufacturing.

Sector fit matters more than headline rankings. Wire harnesses, apparel and agri-processing have deep supplier bases on both sides of the border, while electronics and medical-device activity tilts toward Guatemala. Site visits shortlist quickly once your bill of materials is clear.

The comparison table below summarises the practical differences for a US parent choosing between the two.

What Are Your Ongoing Tax and Filing Obligations?

Expect monthly VAT and payroll filings, annual income tax returns, and customs reporting if you operate under an export regime.

Once your local company registration is complete, the compliance clock starts in both countries. Monthly filings cover VAT, withheld payroll taxes and social security contributions, while annual income tax returns close each fiscal year.

The standard VAT rates — 15% in Honduras (ISV) and 12% in Guatemala (IVA) — have been stable for years. Confirm the applicable rate and any incentive regime for the 2026 fiscal year with your advisors before pricing contracts.

Companies under temporary-import or free-zone regimes also file periodic customs reports on inputs, scrap and re-exports. In practice, we treat customs compliance as part of company administration, because lapses can suspend the regime and stall production.

1. Monthly VAT returns

Both countries operate invoice-based VAT systems, with monthly filings and electronic invoicing increasingly enforced.

2. Annual income tax returns

Guatemala applies a general 25% corporate rate with special regimes for certain exporters, while Honduras levies corporate income tax on its own schedule. Model both before fixing your holding structure.

3. Employer and social security filings

IGSS in Guatemala and IHSS in Honduras anchor monthly employer filings, alongside worker registries and municipal renewals.

4. Customs regime reporting

Export regimes require periodic reports on duty-free imports, production volumes and re-exports to keep the benefits alive.

How Do You Keep a Multi-Country Compliance Calendar on Track?

One master calendar, built backwards from every statutory deadline in every jurisdiction, keeps multi-country groups ahead of penalties.

Many US manufacturers expanding to Central America already hold entities elsewhere — a Singapore sourcing office, a European sales company, a regional headquarters. Each carries its own statutory calendar, and none of it pauses while you launch a plant.

Take Singapore, where our network's founding member operates. According to the Inland Revenue Authority of Singapore (IRAS), a company files its Estimated Chargeable Income (ECI) within three months of its financial year end. For a 31 December 2025 year end, that means 31 March 2026, unless revenue is S$5 million or below and estimated chargeable income is nil.

For Year of Assessment (YA) 2026, companies must e-file Form C-S, Form C-S (Lite) or Form C by 30 November 2026, subject to IRAS eligibility conditions and waivers. The Accounting and Corporate Regulatory Authority (ACRA) separately requires most non-listed companies to file the annual return by 31 July 2026 for that year end.

Late annual return lodgment costs S$300 within three months of the due date, and S$600 beyond it. Calendar drift is expensive, which is why we run one master deadline map per client group.

The same planning applies wherever your other entities sit. Our guides cover setting up a business in Thailand and why set up business in Hungary, and our checklist for choosing a multi-country expansion partner lists what to ask. Coordinated overseas setup support keeps every market on the same page.

Conclusion

Nearshoring to Honduras and Guatemala works when the legal entity, the trade treatment and the compliance calendar are built together. Choose your entity and port with your bill of materials in hand. Register with the Mercantile Registry, SAT or SAR, customs and municipal authorities in the right order. Then keep every deadline, from Central American VAT months to Singapore's YA 2026 filings, on one master calendar.

That is exactly how 3E Accounting Global works. As an international network of independent corporate services providers spanning six continents, we pair in-country execution in Central America with coordinated group compliance across your other markets.

Tell us your sector, timeline and site shortlist. We will map your local registration and CAFTA-DR eligibility step by step, and keep every entity in your group on schedule.

Frequently Asked Questions