In Since VOC and EIC, have there been countries run explicitly for profit?

I asked if a country is explicitly run for profit.

Many put horrible samples like Free Congo Republic and so on.

However, that was a long time ago. That was a time where genocide, slavery, and war was very common. That was a time where a libertarian country is simply impractical.

Today, assuming that countries do not attack one another, most countries are closer to libertarian anyway. Competition among countries mean any country raising too much tax, for example, will have jobs, investments, and other productive elements to move to another country.

So, even if a country has a ruler, that ruler may want to be much more benign. I may be wrong.

Then I read about ZEDE Prospera. It's one of zone for economic and employment.

It seems that the way it works is that it's similar with typical large developers. Usually, developers would buy large land from a country, in the hope of making profit after building infrastructure.

What makes ZEDE different is they seem to do more than buying land. It seems that they get more autonomy.

However, the fact that they are similar to real estate developers suggest that they are capitalists wanting reasonable and fair profit from their effort.

Is that so?

If so, how is it structured?

Is it run by a corporation? Is the corporation a publicly traded company? Are they trying to max out the difference between their small tax revenue and cost of running government?


1 Answer 1


My conclusion so far is: ZEDE are run by private companies through a layer of pseudo-participative institutions. They act externally like a for-profit corporation, internally there is an interaction layer with the residents through a public services company. ZEDE finances are organized in a trust fund, and partially are collected by the state of Honduras for its own purposes.


The nacla.org article gives an overview of the administrative structure of the Próspera ZEDE on Crawfish island. Its main actors are

  • the private company at the core of the enterprise, called "Promoter and Organizer" (Promotor y Organizador), in this case Honduras Próspera LLC, a Delaware registered company,
  • the Próspera Council of Trustees, a sort-of legislative body made up of people solely choosen by Honduras Próspera LLC, and elected representatives of the residents (the majority). Half of those are landowner representatives with voting powers proportional to their estate size,
  • the Technical Secretary, a head of government or executive officer, name it as you like,
  • the Public Service Provider, a company all residents have to contract with for access to public infrastructure.

There is also a nation-wide oversight committee called Committee for the Adoption of Best Practices. It was selected by the Honduran president in 2013 and, since then, fills its own vacancies. It approves any law and regulation passed by the ZEDE councils and can veto the choice of the Technical Secretary.

Residency requires consent to an "Agreements of Coexistence":

(2) Electronic residency (“e‐residency”) as well as physical residency for natural persons and legal entities shall be permitted in Próspera. Physical residency and e‐residency in Próspera requires entry into an Agreement of Coexistence between and among the person seeking residency and Próspera, which may include legal stability provisions, as provided in Articles 10 and 12 of the ZEDE Organic Law. The details for establishing physical or e‐residency may be further determined by Rule.
(3) Agreements of Coexistence, to be valid, shall, at a minimum:
(a) manifest each Resident’s and e‐Resident’s consent (i) to such delegation of popular sovereignty as is necessary to sustain the power and authority held in trust under this Charter for the benefit of the Residents and e‐Residents of Próspera, and (ii) to being governed under this Charter by Próspera, its officers, agents and instrumentalities;
(b) be binding on all successive administrations of Próspera;
(c) expressly adopt the Resident Bill of Rights set forth in Article XII;
(4) Rules may be promulgated to adopt template Agreements of Coexistence and may delegate the decision to accept new Residents or e‐Residents to the General Service Provider.
(5) Rules may be promulgated delegating authority to terminate Agreements of Coexistence to the General Service Provider or Promoter and Organizer (or determining the procedure for terminating such Agreements).

Somehow, the fact that Crawfish Island was already inhabited before the establishment of the ZEDE has escaped attention. There seems to be quite a bit of doubt involved concerning their status, especially since Article 28 of the Organic Law allows expropriations if it is considered "necessary for the development or expansion of the [zone]".

The financial aspect of the ZEDE is organized as a trust:

5.01 Establishment of the Próspera Trust.

(1) The Technical Secretary shall establish a trust, known as the Próspera Trust (...).
(2) This Trust may be established as a common law trust in the nature of an escrow, which may consist of subaccounts or funds, that, subject to the terms and conditions of its Trust Agreement:
(a) performs the duties required of it by the ZEDE Organic Law;
(b) administers the performance of financial obligations of Próspera and ensures that all financial activity of the Technical Secretary is also administered through the Trust;
(c) functions as a depository and steward of funds; and
(d) requires any institution which maintains the Próspera Trust’s account(s) within the jurisdiction of the Republic of Honduras to submit each and every dispute concerning the Próspera Trust...to full and final Resolution by arbitration administered by the International Centre for Dispute Resolution of the American Arbitration Association...

5.03 Use of assets of the Próspera Trust.

(1) The Technical Secretary with prior approval from the Próspera Council shall enter into a Trust Agreement with the Trustee of the Próspera Trust, which shall govern the use and distribution of trust assets in accordance with Articles 21 and 44 of the ZEDE Organic Law and this Charter.

The Organic Law describes the role of the trust in Article 44. (Article 21 only provides for financial assistance to those that cannot afford to participate in arbitration.)

Income from Areas of Employment and Economic Development (ZEDE) should be managed through a trust created for each one, which may involve a International Bank, a National Bank or both. In the same manner, twelve percent (12%) of the tax collection that the Area of Employment and Economic Development (ZEDE) procures within its area of ​​competence, must be used for the creation of one or several trusts distributed in equal proportions and for the following purposes:

  1. [strengthening of the judiciary]
  2. [development projects of the central district of Tegucigalpa]
  3. [development and infrastructure projects of the government]
  4. [municipial development projects]
  5. [strengthening of the military]

The trust or trusts indicated in this Article must be established by the Technical Secretary of each Area of Employment and Economic Development (ZEDE).

I have to admit I have no good understanding what a trust/escrow under common law entails. From my understanding (learned in a country with positive law) a trust must always state a legally binding purpose. Such a provision is missing here. Maybe someone else can point out who or what trust funds can be used for, and whether Honduras Próspera LLC can gain access to profits from the trust or not.

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