Ciudad Morazán

What Ciudad Morazán is

Ciudad Morazán is one of Honduras’s three Zones for Employment and Economic Development (ZEDEs), and the one built for ordinary Hondurans. It is a complete community planned on 24 enclosed hectares: housing, an industrial area, commercial space, parks, churches and schools, laid out to grow gradually towards a population of about 10,000 and some three thousand jobs. Its developer calls it a blue-collar Free City, and its tenants are overwhelmingly Honduran families who work in the surrounding manufacturing region.

It was developed by Massimo Mazzone, an entrepreneur based in Honduras for some twenty years, whose holding company Centro American Consulting & Capital runs pharmacy and consumer businesses across Central America.

Where Ciudad Morazán is

The town lies on the outskirts of Choloma in the department of Cortés, Honduras’s third-largest city and the centre of its maquila manufacturing belt, between the port of Puerto Cortés to the north and San Pedro Sula to the south. Puerto Cortés, the country’s largest port, San Pedro Sula’s international airport and the main bus terminal are all within an hour’s drive, which is much of the reason the site was chosen.

How Ciudad Morazán is governed

As a ZEDE, Ciudad Morazán sets its own fiscal and regulatory rules within the Honduran constitution, criminal law and international treaties. Rather than importing a foreign legal code, it adopted a simplified version of the Honduran Civil Code, and its statutes on tax, labour, the environment, policing and dispute resolution must be approved by CAMP, the national committee that oversees the zones. Its highest authority is the Technical Secretary, a Honduran official whose role combines those of a mayor and a municipal council; residents vote on community matters, and the project intends that residents and landowners will hold the large majority of votes as the town matures.

Taxes and rules

The zone levies a single income tax of 5 percent, paid to the ZEDE, which passes 12 percent of its revenue to national agencies. Its minimum wage is set 10 percent above the national minimum, a business can be registered in a day for a nominal fee, and the zone has its own customs authority allowing duty-free imports and exports. Disputes are steered towards third-party arbitration. Security is provided privately inside a walled perimeter with a visitor-management system; anyone who commits a crime is handed to the national police, and tenants who break the community’s rules lose their lease.

Living in Ciudad Morazán

Everything in the town is rented, never sold, on what its developer calls the Entrecomm model. Any Honduran citizen, or a foreigner legally resident in Honduras, can lease a home or business premises, and rents include security, maintenance and the town’s services. The first phase consists of 64 townhouses, a second row of 44, and an apartment building of about seventy units; a bilingual private school opened beside the football pitch, its fees subsidised for families who cannot pay them, and a central park, minimarkets, a café, a laundry, a gym and restaurants have followed. The rental model keeps the town answerable to its residents: a landlord who wants tenants has to keep the streets safe and the services working.

How Ciudad Morazán came about

Honduras created the ZEDE framework by constitutional amendment in 2012 and organic law in 2013. Ciudad Morazán was approved as the country’s second ZEDE in December 2018, adopted its charter and bylaws in 2020 with advice from the Charter Cities Institute, and welcomed its first residents in 2021, the year it became cash-flow positive.

Legal status

Congress voted to repeal the ZEDE law in 2022, and the Supreme Court declared the ZEDE constitutional amendments unconstitutional in September 2024. The zones continue to operate: the repeal of the constitutional articles was never ratified by a following legislature as the constitution requires, and the ZEDEs hold fifty-year legal-stability agreements and treaty protections. Ciudad Morazán has kept building throughout.