source: WIRED
The autonomous city financed by Peter Thiel in Honduras is attracting the interest of Mexican investors.
The island of Roatán, in Honduras, is not only recognized for its paradisiacal beaches and natural parks, which offer exceptional ecotourism and cultural experiences; the region is also home to Próspera ZEDE, an experimental political-economic initiative driven by technology investors, such as Peter Thiel (co-founder of Palantir), which today is at the center of one of the most costly sovereignty disputes in Latin America.
Prospera is considered a charter city , a model of economic and urban development based on establishing a city that operates under its own laws, justice system, and tax regulations , without necessarily adhering to the legal framework of the territory where it is located. According to its proponents, this design facilitates attracting investment and accelerates economic development. It is estimated that there are currently around 30 projects of this type in different parts of the world.
In the case of Honduras, initiatives of this nature were legally authorized following a constitutional reform approved in 2009. This allowed the creation of the Zones of Employment and Economic Development (ZEDE) with the argument of increasing foreign investment in the country.
In general terms, the reform authorized the establishment of these zones as areas with their own legal personality and the power to create their own administrative bodies , courts (with foreign legal systems), and security policies. In addition to preferential tax regimes, these areas could incur international financial obligations without the guarantee of the Honduran state and could not request resources from the national government.
They were also empowered to establish “their own education, health and social security systems”, as well as “their own police, crime investigation bodies, intelligence, criminal prosecution and prison system”.
The formalization of these unique economic entities occurred in 2013, when the conservative government of Porfirio Lobo, of the National Party, approved a comprehensive law that gave them legal support.
With that legal backing, Próspera was officially founded in 2017. Three years later it began to receive its first residents and investors and, subsequently, experienced remarkable growth with the arrival of new companies, inhabitants, real estate developments and the organization of events that gave it international exposure.
Economic and technological development in exchange for sovereignty?
According to a report published by The New York Times , by 2024 Honduras Próspera Inc., the main company behind the charter city located in Roatán and based in the United States, had raised around $120 million in investments, including contributions from venture capital funds backed by Peter Thiel, Sam Altman, CEO of OpenAI, and Marc Andreessen, co-founder of Netscape Communications Corporation.
Recently, Jorge Constantino Colindres, technical secretary of Próspera, recalled that the project was the first ZEDE established in Honduras and stated that “its vision is to build in Honduras the best place in the world to do business, live, and work, with legal stability, physical security, and individual freedom. It does not receive funds from the central government, does not issue passports, has no army, and transfers 12% of its tax revenue to the national government and municipalities. What Próspera does have is what Honduras has needed for decades: a world-class regulatory environment .”
These statements contrast with the massive demonstrations in which millions of Hondurans participated between 2020 and 2021 to express their rejection of the ZEDEs and, in particular, of Prospera.
Former Honduran President Xiomara Castro pushed through a reform in 2022 to eliminate the ZEDEs (Special Economic Development Zones). In response, US investors in Honduras Próspera Inc. sued the Honduran state before the International Centre for Settlement of Investment Disputes (ICSID), seeking $10.775 billion in compensation for alleged damages to their investments.
Despite pressure from investors, in 2024 the Supreme Court of Honduras declared the ZEDEs unconstitutional. The highest court argued that the existing legislation granted these territories a degree of autonomy that violated the "entrenched articles" of the Constitution, which protect essential aspects of the State, including the organization of the national territory, the justice system, and the planning of the economic system.
Shortly after, Colindres maintained that Prospera could resume operations based on international trade agreements such as CAFTA-DR. Thus, by the end of that same year, residency applications were reactivated, and Prospera reached 250 incorporated companies. Furthermore, the project attracted investors such as Coinbase, North Island Ventures, and BoostVC.
The dispute between the owners of Próspera and the Honduran government continues, albeit with some changes. The amount of compensation claimed by the private company has been reduced to $1.63 billion. Even so, what remains at stake is the potential expansion of the business model promoted by Próspera into other regions of the world.
Thiel in Argentina and more than a dozen interested Mexican investors
On its website , the project states: “We have already implemented our governance framework in Roatán, Honduras, and we will scale it globally.” This claim takes on greater significance considering that its investors include some of Silicon Valley’s most influential entrepreneurs, such as Sam Altman and Peter Thiel.
Available information indicates that Honduras is the only country to have approved, at least temporarily, a constitutional reform favoring the development of these types of cities. However, it is estimated that there are around 10,000 Special Economic Zones (SEZs) distributed across approximately 70 countries , which, although they offer tax and customs incentives, do not replace the government or establish completely independent judicial or legislative systems.
Beyond this specific case, we cannot ignore the growing influence that large technology companies exert on the global economy. Across various sectors, companies like OpenAI and Palantir are transforming economic, social, and even regulatory governance.
In this context, Peter Thiel's recent visit to Argentina also did not go unnoticed , where there was speculation about possible agreements related to surveillance and security technologies, as well as future investments in the country, mainly in the energy sector.
Similarly, in April of this year, a delegation of 11 high-level Mexican investors and businesspeople from the real estate, architecture, and private equity sectors visited Próspera to explore business opportunities and establish strategic alliances focused on future infrastructure projects.
Although most Latin American countries currently lack legislation that promotes spaces for economic and technological development with a degree of autonomy like that proposed by Prospera, it cannot be ruled out that similar initiatives will begin to expand throughout the region and other parts of the world, in a context where the development of new technologies, concentrated in the hands of a small group of entrepreneurs, seems to increasingly influence the course of economic growth and the governance models of the future.
