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
(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
(b) be binding on all successive administrations of
(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
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
(b) administers the performance of financial obligations
of Próspera and ensures that all financial activity of the
Technical Secretary is also administered through the
(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
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:
- [strengthening of the judiciary]
- [development projects of the central district of Tegucigalpa]
- [development and infrastructure projects of the government]
- [municipial development projects]
- [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.