How Erick Brimen Helped Launch a Honduran Charter City

Honduras issued a charter in 2017 to a private firm, allowing them to run a separate zone with its own governing policy called Zones for Economic Development and Employment.

Advocates believe the zones, with their regulatory and governance innovations, will create greater security, prosperity, and stability than any other country in trouble, notoriously riddled by crime and corruption.

The first ZEDE is run by a company called Próspera, which launched its website publicly in spring 2020 and began operating in a 58-acre area of the Honduran island of Roatan; the company is now also operating a ZEDE on the mainland, in La Ceiba. Its main selling point is the absence of tariffs and trade barriers that prohibit non-hazardous items from entering or leaving the country.

The October issue of Reason‘s Brian Doherty interviewed Próspera’s Venezuelan-born CEO, Erick Brimen, about the project via Zoom.

Q: There have been many attempts to obtain a ZEDE Charter. Why was Próspera the first to succeed?

Q: What did it? I believe it was our ability, in theory, to place the benefits of ZEDE law and link them to economic development. We are not trying to create a utopia; economic liberty generates wealth and jobs and that is why we want it. Instead of discussing a political ideology, we used ZEDE law as a tool for development.

Q: The island of Roatan is important?

A: Our goal is to be a regional financial hub and attract foreign investors and entrepreneurs. In Roatan [residents]Use the dollar instead of English. Roatan is an island in the Caribbean. Here, crime isn’t an issue. You can find flights from Atlanta, Houston, Miami and Atlanta at the international airport. Roatan was once a British colony. The rest of Honduras, however, is an ex-Spanish colony. They have two very distinct cultures.

Q: Do the current population need to be in agreement with the ZEDE?

A: Referendums must be conducted if there are a sufficient number of people. If not, there will not be anyone to talk to. It’s only for residents. If there are property-owners, each property owner must sign up to the ZEDE. Próspera thus far has incorporated on lands with no residents, all privately acquired at fair market prices, with no government intervention.

Q: Why would a person or company value being in Próspera?

A: What makes Próspera as a platform for government services unique is, instead of being structured as itself a provider of government services, it is a platform for others to provide dispute resolution, security. Every regulatory framework within the [Organization for Economic Cooperation and Development]Is already legally compliant within our jurisdiction. One company may petition the internal governance structure for a change in regulatory guidelines. It can use an already existing or adopted framework.

We will also empower the health care industry. The area of stem cells is one where doctors can perform any procedure approved by the FDA, provided they have adequate insurance that covers legitimate risks and get patient consent. It will allow any physician licensed to treat medical devices or drugs anywhere on the planet to practice medicine in this area.

Q: What tax advantages are available?

A: No taxes, no matter how high or low the land or income is paid or what sales they make or sell, can exceed 7.5% of the ZEDE’s average GDP. Honduran governments receive 15% from the ZEDE. You can get the remaining 85 percent. [Próspera]50 percent and 40 percent respectively of this revenue may be used to pay private dividends, if expenses for managing the territory allow.

If the holding company becomes publicly traded eventually, then we allow shareholders to become shareholders in publicly traded companies that derive their value from the economic activity within its jurisdiction. Because we believe liberty maximizes economic worth, a publicly traded company gives investors the opportunity to monetize that economic liberty.

The interview was edited and condensed for clarity and style.