Welcome to the Free Cities podcast.
My name is Timothy Allen and this is the official podcast of the Free Cities Foundation.
this is episode number two of the free cities podcast and this week i'm coming to you from the
island of roatan in honduras i've come here to visit a place called prospera now for those of
you that don't know, Prospera is a private charter city and special economic zone on this island.
And I've come here to speak with Ricardo Gonzalez, who is a council member at Prospera.
Prospera is based on the Honduran ZA law. ZAs are zones for employment and economic development,
and it has its own civil law and regulatory structure, independent of that of Honduras.
This conversation is basically a deep dive into everything Prospera,
including its history and the history of the ZA law,
what it's like to live in a place like Prospera, what it's like to work here,
and what it's like to deal with a government in respect to setting up a ZA.
This was the first time I've ever been to a place like Prospera,
so many of my questions are pretty basic,
but hopefully you'll get as much out of the answers
as I did.
Ricardo is very thorough in his explanations,
and I'm truly thankful for the time I spent with him.
So, without further ado, it just leaves me to say to you,
please relax, sit back, and hopefully enjoy
my conversation with Ricardo Gonzalez.
we're we're in prospera in on the island of ratan riotan roatan roatan in honduras and we're we're
in a lovely building overlooking sort of semi-jungle and which on a hillside which goes down to the
ocean just over there and it's we must be in the rainy season is that right because it's it's raining
a lot. That's right, yeah. From October and on, it's raining till maybe mid-February next year.
Right. So, thanks for inviting us here. And can you just tell us who you are and what your role
is here? Yeah, absolutely. So, my name is Ricardo Gonzalez. I am Honduras Prospera's
in-house council member here in the ground, you know, setting up base. I see everything
Prospera legal and Honduran compliance jurisdictions. I also help the business
development team with basically helping entrepreneurs from Honduras and the world learn more about how
Prospera works and how it can better suit their needs as a jurisdiction and a government as a
service platform. And what about your sort of like personal history yourself prior to this?
Obviously you're from Roatan or? Well no I was born and raised in the capital Tegucigalpa.
I lived there all my way through high school.
Right after that, I had sort of an opportunity to start over in the second biggest city of Honduras, San Pedro Sula.
Not necessarily because I wanted to, but my parents moved to that city right after high school.
So that's where I developed my professional career and my college years as well.
I studied as an attorney in law school there.
and right after law school I decided that I wanted to start up a law firm that was going to be catered
specifically for startups so I've always been startup centric in my life that's the way I wanted
to help people as a startup attorney my main focus was to help Hondurans navigate the Honduran legal
system for them to be able to basically fulfill their dream goal of being self-employed and
creating their own business and was like growing right and very early on in the first couple of
years of having this law firm myself and my partners noticed that Honduras was lacking
a lot on the startup ecosystem so we had a very nice small community of entrepreneurs in the
country however I would notice that very quickly you would just get all the market cap you could
in the first two to three years of your startup.
And then if you do not envision globalizing yourself
and expanding into foreign markets,
then you would never really grow beyond a very small market.
And since we're in Central America,
we are an emerging market.
We are not very well developed.
So I decided that I wanted to go get my corporate law master's degree
at Penn State University in the U.S.
with the whole intention to learn how corporate law worked in the U.S.
on a startup scale and literally took courses to develop my skills to understand how startups in
the u.s works how the incorporation process looks like and then bring that back here to honduras and
eventually bring my honduran entrepreneur clients to the u.s for them to globalize access better
funding better jurisdictions better taxation and whatnot and very serendipitous i would say
a friend of mine was already working for prospera and he's like visiting the u.s and he's like hey
I'm pretty close to you. I want to visit you or you can just come and visit me. I'm in Maryland.
And I just picked up a car, went to pick him up. And he's like, hey, but, you know, stay a night.
I actually want you to meet my boss, Eric Brimman. And I want you to hear about what the project he's
doing right now is. And so having some crab cakes in Maryland, which I've heard they're pretty famous
for, we sat down with Trey Goff as well. And they essentially pitched me this place. Right. So what
think about a place where you had a very amicable regulatory environment where taxation was very low
where you don't have to worry about bureaucracy and access to justice is swift and effective
and among other things i'm just hearing about this place or everything that i wanted for my
hondarian entrepreneur clients that's what i wanted for them and as i'm listening to eric and
try to go on and on and on explaining Prospera to me without telling me what Prospera was.
This was before Prospera came public.
I told him this sounds fantastic.
Like this is very aligned to what I already want for my underlying clients.
This is exactly what I was looking for.
And he just goes, well, what do you think about the fact that I'm doing that in your
country already?
And this is what we're doing.
And he just introduces Prospera to me and all that.
And I'm like, this is fantastic.
This is what I wanted.
so right after I graduated from my master's degree my friend had reached
out to me and said hey you already graduated are you ready to come on board
I'm like can I and he's like yeah for sure like you had the common law
background which we apply inside of Prospera you're already a civil law
Honduran attorney and you're also very startup inclined so you very much fit
what we're trying to accomplish here you're basically a Honduran who's gonna
to be able to show Prospera itself how to better mix and match with what best practices
would be in comparison to the under-regulation.
As I was listening to you then, it occurred to me maybe I should hear your definition
of what Prospera is because there most probably will be a few people out there that aren't
necessarily sure what it is.
I'd quite like to know physically what it is, according to you,
but also after that, like maybe ideologically for you,
it seems that you were interested in the concept behind Prospera
and other people may not find as inspiring.
Right. Well, yeah.
So, Prospera itself is a platform that catalyzes opportunities and prosperity
by providing the best governance services that are privately handled to people from across the
world in Honduras to enjoy from less bureaucracy, less constriction, and more freedom of speech,
market, private property, and whatnot. So Péros Pérez as a platform just provides this
great platform that's not necessarily a physical space, but a platform that you could use for your
businesses or just to come live on a freer part of the world but i mean as far as i can tell
this is most definitely a physical place yes and it's got buildings and there's houses there's
accommodation being built and i'm i'm very much in i mean educate me on this you know like how big
is it you know how many buildings are there already here what's planned you know yeah for sure
So yeah, definitely.
So Prospera, it is a place, in fact, yes.
But Prospera is the platform.
And then Prospera has built this governance platform that is to be replicated in different parts of the world.
So Prospera is not just here where we're sitting down right now.
Prospera could potentially be somewhere else in other countries.
And different sites have different names.
For instance, right now we're sitting in St. John's Bay.
that's the name we've given to this Roatan development that we're doing under the Prosper
platform so we also have another hub in La Ceiba which is going to be more industrial
the hub here in St. John's Bay is meant to be more of a financial center with more service
oriented businesses and then in La Ceiba we're looking to be more industrial more factories more
import export activities so currently in here in St. John's Bay we are sitting in the Beta building
the beta building will i know trey already mentioned about a little bit in the liberty
and lifetimes conference but this is our first building where we prove the concept that
by law the set a law gave us through the government of honduras the ability to be
functionally self-autonomous in the regulations that we can generate right can i just um butt in
a little bit and have you um elaborate a little bit on what a zeta is in case someone doesn't know
Yeah, for sure.
What is it? It stands for something, right?
Yeah, so CERE stands for Zones of Economic Employment and Development.
It's a law that was passed back in 2013 by the Honduran government,
essentially to be able to create these platforms that would essentially become known as charter cities
in a way in which the government gives a concession of land that is purchased by the developers of the CERE
to essentially then have them try out a better way to do things.
So the CEDA law establishes that you can create your own municipal-like authority
that then would promulgate different regulations and govern in regards to taxes,
to registries, to norms in general.
So the CEDA is the law that gives life to charter cities in Honduras.
and what about the size of this place the area is there a limit to the amount of land that a ZTE can
occupy I'm interested to know how a government how you approach a government to basically
sort of like say we kind of want to do our own thing here right so the set of law establishes
already what areas can be converted into Cere land. So you're basically limited and I cannot
give you a specific number because this is depending on how much land you're able to acquire,
how much land can you buy from people and private entities. But itself, the government is not like
giving you the whole country, like you're gonna just do this anywhere you want. It has to be low
density areas where there's no people living, where you can essentially start from scratch and start
that development. And if at some point, well, anybody else wants to integrate their communities
into the CEDE platform, the Próspera platform, then they would have to go into a more public
voting procedure in which people would say like, yes, I'm in favor of us subjecting ourselves to
that jurisdiction. So it's voluntarily. Like everybody could become part of it, but it has
to be in certain specific zones that the law already establishes. And for instance, right now,
we're sitting in 58 acres of land that is the first 58 acres of lands that we
acquired to start building this platform and in total with all the properties
that have already been incorporated not only this 58 acres but the rest it's
becoming around 700 acres they're not all adjacent they don't have to be next
to each other but it also serves as the hubs that I was speaking about prior to
this that you have St. John's Bay here you're gonna have something else in La
and we can potentially have some other hub named differently,
but always under the Prospera platform in other parts of the country.
Give me an example of where the Prospera platform's rules
are very different from the government's rules, let's say.
I'm trying to understand what the difference is, let's say.
Give me a really obvious example of one that's quite distinct.
Right.
Okay.
So very right off the bat, we operate under common law.
Honduras is a civil law country.
So we follow something that's called Roman law.
That's where it all derives.
It's black and white letter law that is followed by the book.
Then in Prospera, we are using common law because it's more flexible, more convenient for investment in companies itself.
So just having two different legal systems entirely, it's already a big difference from the main government.
But not only that, our registers are different, our procedures are different.
Bureaucracy-wise, it's much, much less than the regular government of Honduras.
Steps to creating entities or to becoming a resident are much straightforward and easier to complete than if you go through the national level.
and in itself it just provides a ton of benefits from taxation which is super low here in Próspera
in comparison to many places in the world but especially Honduras and then import regulations
entity creation registry of humans who are going to start operating individually or just coming to
live here so it's it's almost a completely set of rules that are different in the national
government. However, we are still under the supervision of the government by the Committee
of Adoption of Better Practices, which is a branch of the executive power that oversees
the regulation that we are trying to approve. And that's just the regulatory side of the
government. But also, we have a... Sorry, went on a tangent there.
Sorry, what's that hissing noise? It's actually the rain coming down.
it is yeah it really picks it up yeah yeah um let me just butt in then yeah because i i i'm
listening to you saying how amazing it is here and how easy it is than in other parts of honduras
and i'm thinking surely that makes the government feel pretty insecure about what they're doing
i mean how does that how does that side of it work if if what you're offering here is is
bureaucratically better, possibly socially better, I don't know.
How does that, do they look at it or are they looking at it and going,
well, we should mimic that or we should stop that or we should, you know?
Yeah, so effectively I think that that's what we're going for.
I think that Prospera itself is going to be an example of competitive governance
on a local level, to which point not the main government first,
but probably other municipalities are going to be like, okay,
they're having a ton of success by applying that specific regime they're using we want some of that
so i would expect that in the next five to ten years you would see municipalities trying to seek
some type of government approved program similar to seris that would allow the municipality to have
as much of autonomy as we have that would allow them to channelize their prosperity that way and
that eventually would make the whole government say okay we need to be more competitive because
Everybody's just going there, but we're not getting as much money from there as we could if we just tax it at the regular level.
So how can we start using their regulation to be mimicked and implemented into the rest of the country?
And you're, personally, you're quite positive about the idea that a government might try and be more competitive.
It's not something they're well known for.
yeah i mean you know i think at the at the end of the other day uh competition is good
competition has always been healthy uh of course it can get out of hand but on this scenario like
what i would expect is to say okay many people say okay why don't you just not make the whole
country a set a why don't we just change everything and i think that it's not something
bad i think that's something good if progressively you start trying to mimic better practices that
are already being implemented in the country, then it makes a lot of sense that those things
go rippling out of the set and into the national government and effectively making everybody's
lives better and easier.
Yeah, I totally agree with the idea and the concept that what I slightly struggle with
is the notion that a government would shoot itself in the foot like that, as we say.
It's like allowing, in one way, you could see it as you allow a Trojan horse in and
the horse then completely changes everything but like I say historically governments aren't
notorious for wanting to be more competitive because they have a monopoly on on the rules on the the whole So do you know much about the process as it began of when the Honduran government were first approached with this idea
and what kind of hoops that were needed to be jumped through in order to sort of allow to arrive at this situation?
Of course. So think about this. Special economic zones are better known and implemented in developing countries more than they are in countries that have already been developed, like the US or European countries that are already well off.
the reason special economic zones exist especially why prosper exists is because as a developing
country we've had flaws all across history that have stopped or hindered our development and doing
it the way that we've been doing it for the last hundred years has not worked it has not proven
to be successful so it's not as much as shooting yourself as a government in the foot but rather
saying like we need to try something different to get different results than what we've had
in the past so at the beginning uh the government back in the 2010s 2012
they went to approve this law that was substantially more
radical i'd say so it was more in accordance to what paul romer wanted when he defined a charter
city right uh it was almost completely autonomous completely detached from the host country it was
itself a government instead of another government right and that of course got repealed that really
quickly the the hundred government says like no this is this is too crazy this is too much
uh that's too much power uh and that's exactly what people were saying at the moment like this
is a state inside of a state so that law got repealed and it was even seen at the supreme
court level and the supreme court says like hey no you gotta like look at this and change all these
things if you ever want to try this again so sure thing they went go back to the drawing board and
start scraping off things that were unconstitutional or were against national treaties or that would
hinder sovereignty from the undarian government into these specific zones so after cutting trimming
and fixing they presented this set of law as we know it now and after a review again by the supreme
Court, they say, okay, we judge and we rule that everything that we asked them to change
got changed.
And now this is not a violation of the Constitution or the international treaties.
It does not affect sovereignty.
This now can work as is.
And that's more or less when in 2013, the set of law was approved and the Supreme Court
ruled in favor of it.
And ever since then, the government has been looking for investors to say like, hey, I
have this very cool law right now that you could try out.
Who's a taker?
Who wants to come and actually invest in Honduras
under this set of rules that are substantially better
than almost anything there is in the region?
And sure thing, eventually Prospera caught wind of this law
and said, okay, this is the place where we can do
what we were already planning on doing.
We've been working for almost a decade
on getting all of our regulations,
all of our things together.
And this is the country where we can do it.
And well, we have the advantage
being an amazing paradise island where not only you have a great amount of regulations but you also
have usually an amazing weather. I like the sound of it it's very comforting hearing the rain out
there so okay you've changed my mind so arguably then the government had foresight they didn't
shoot themselves in the foot you could say they they thought that what they may have done in the
you know the the seeds they're sowing now we will be reaped in the future yeah I mean what's the
definition of crazy doing the same thing over and over and expecting something to change so something
different had to happen for eventual development to happen so this is it you said earlier that you
when you heard about prosper you realized that you're you were kind of quite ideologically
aligned with what was going on here was that something that was in your consciousness before
or was it that you heard about it and they went, oh yeah, yeah.
So I was already into a lot of studies.
I worked at a think tank.
That's where I did most of my internship for law school.
And I was already ideologically inclined
into the whole concept of free cities and whatnot.
I already knew about the set a lot back in the time.
I had the chance to work with amazing people
who were very knowledgeable on these matters.
but then I grew more into the startup local environment and I kind of threw that in the
back of my head and when I got it pitched to me by Eric and Trey I was not really thinking about
CETIS at the time and CETIS again the law was passed in 2013 I remember hearing about it back
then I was fresh into law school and then the next time I heard about CETIS was 2020
20 so it was seven years from when the law was approved then seven years of silence about this
law and then boom but it appears and it's like okay we've been on the works ever since to make
sure that we were ready to launch so when i got a pitch and i heard about it i knew already about
the set of law and and everything about this but it was more about the fact that i wanted a better
place for my hundred entrepreneurs to be able to grow for them to create prosperity and not leave
the country like i could have definitely just stayed in the u.s and become an attorney over
there and earn a bunch of money but then that didn't fulfill the goal that i set myself for
that i wanted to help the entrepreneurs of my country progress and prosper and globalize
themselves to a better market that that wouldn't help me accomplish that goal you're also a living
breathing example of why a ZA works as well.
Yeah.
Arguably, you chose to come here and bring your own prosperity with you,
whatever that might be.
Which is, I assume, would you say that's a core principle of the ZA idea?
Yeah, I would say that since its inception as a thought
was to try to stop mass migration of the country, stop the brain drain.
so again central america has been known historically for mass migration to the u.s
looking for better opportunities because of the lack of employment that you could find
in central american countries so yes that even it's in the name the said a lot literally says
zones of employment and economic development so it is meant to be able to catalyze prosperity
through the creation of better employment better salaries and better regulatory environments that
would allow for more people to want to open up businesses and by that create
more jobs so yes that's completely the whole point of the set is and how long
have you been here yourself so I've been working for Prospera since August 2020
and I've been hearing the island since November 2020 so we are almost at the
two-year mark and from your perspective you personally in those two years what's
changed here? Oh, a lot. I came here before the building was even built. The
reason I came is because the building was about to be done. Just describe
this building here. I mean it's a very lovely looking modern design based
around a courtyard as far as I can see. I haven't had a proper look around yet but
maybe you could. So it's like a contemporary architectural design which
has open spaces wooden facades very incorporated into nature on some parts
you're gonna be able to see that we avoid chopping trees where we could even
allowing them to just grow through the roofs and just let the holes for the
trees to exist this building was made specifically for us not to just create a
concrete jungle in an island but rather start being more in touch with the nature
that's already on it and all the aesthetic of what we have here is what
you would expect of seeing in an island rather than just going from like just a concrete city
no you see buildings that are more harmonized into the nature of the island so here it's it's
been great to see how this building has developed how many people we've been hiring it's been crazy
demand of endurance that from the island and from the mainland have come here to work because
salaries are better conditions are better taxation is lower they get more money instead of having a
lot of deductions and seeing so many people here and families being transformed it's just very
gratifying because just sorry about in but um who is here i see a lot of people moving around
um as what i understand no one's actually living here yet is that correct not on this side of
prosper yes so we have the other part at pristine bay which is a more premium development that was
already there that we incorporate into the platform there's people living there already
but in this first 50 58 acres that we can call uh ground zero of st john's bay there's no one
living here yet we're currently building a 13-story building that's going to be mixed-use
residential office and retail areas but currently the people living here well not living but working
these people are employees for different companies from abroad so perospa already has over a
entities created inside of the platform and these entities are hiring and hundred employees for
different type of things finance administration operations marketing a bunch of different tasks
that are they are being outsourced into the jurisdiction because we provide a channel that
basically has low cost in regards to labor costs for our company so we have a bunch of people from
the island and the mainland working this knowledge works but we also have people from the community
from around the island who are working for instance we have a small farm down here if you
can see it on the left and these are being taken care of by people from the community who will
eventually harvest all these vegetables and fruits sell them across the island take them back home
for their families give them to our kitchen and give them to our other developments on the other
site that has restaurants. So that's helping them get a job where there wasn't none. Currently,
we're one of the biggest employers of the island. And we can certainly say we're the biggest employer
of the community right next to us. So seeing how much we've improved many people's lives,
how much we've changed their mindsets, and how much we've liberated markets here and diversified
the economy of the island by introducing different type of lines of work that were not previously
here in the island that just gives me a lot of hope for the future because previously you would
see islanders that grow up here and say okay i want to be a fisherman i want to work at a hotel
when i have my own hotel or my own restaurant so like you could see that all of their ambitions were
very defined by either tourism or the fish industry but now like there's more encouragement
for people to start going to school going to university learning more things because now they
have a place where knowledge work is required that was previously not there.
So the ambition changes. Can you give me an example of some of the companies
that have located themselves here? Right, so we have a property management
company which is one of the biggest. They manage properties in the US so you have
people from sales here on the ground and they go over, have contract signs, people
from collections, people from operations that help out with the different
buildings that they already manage you have accountants from that same company then you have
programmers companies that are asking for good quality programmers that not necessarily have to
be in the u.s and you have other people who have schools for instance and they are doing different
types of educations that are not non-traditional but are good for the people here in the island
then you're bringing people who are getting taught how to teach on different ways so different type
of errors are coming here from marketing, sales, operations again. So that's just one of them.
But then you also have another outsourcing company that is just all across the board creating jobs
for people here. And when the large building we saw as we were driving in, which is going to have
residential units in, are you imagining that they're going to be occupied by people that are
working here is that the idea yes so right now the island has uh one big issue and that's housing
so because this is such a touristic island there's not necessarily a medium income place to live like
there's either very budget friendly places that are not necessarily the best places to live at
or everything is super expensive so we're trying to solve those things by creating different
opportunities of housing situations by having deluxe areas but having mid-tier areas and having
low-cost opportunities as well for living. Why do you think it is that there are no mid-tier
areas? Why does that happen? I know what you mean. You get backpacker places or you get
five-star hotels. Exactly. So why is that? I think that that's just because of what I had mentioned,
the lack of economic diversity in regards to the job opportunities present in the island.
So here again, you had base-level workers that would be waiters or retail workers that would just
be living on the minimum wages
but then you would have the super
developers or the people who are already
retiring, you have expats
that are just living the life in the Caribbean
and an island full of luxuries
but there's nothing in the middle that you
would say I have a
regular medium income job
and living here in the island
so there wasn't that job
so I mean arguably you're trying to
one of the purposes
of a place like this is to build a middle
class, is that right?
I wouldn't say that's the main purpose.
Not the main.
I mean, one of the side effects could be.
I think that's one of the side effects for sure.
Like, I wouldn't say that people here working are middle class.
I'd say that for all 100 standards, these people would be upper class if living in the mainland because of the salaries being much more superior.
But definitely, that's one of the side effects.
People having now medium-sized income that they would require medium-priced housing for them to live in.
So, yeah, that's some of the things that happen.
So going back to what's happened in the last two years, what would you see as the biggest change that's happened since you've been here?
Forget the building that's gone up.
Is the idea of the Zete or is it the notion of what they are?
Is it something that's becoming better known?
I'll be honest, I've spoken to a few people on the way here just because we've met so many Americans and no one yet has known what it was.
And that's a very anecdotal evidence.
But how do you see it? In two years, has anything changed?
Yes, it has changed a lot.
So for the first year, we happened to have a political year here in the country.
So we were about to have our presidential elections, and that just put us on a bull's eye for the opposition of a past government who was in power for the last 12 years.
so this opposition that is currently now in power they were just trying to get into power by saying
everything the last government did was wrong right and unfortunately the set of law happened in the
last 12 years so consequentially once we started developing and prosper became public at the
beginning everything was sunflower and sunshines and whatnot but then because of the political year
things got changed there was a lot of misinformation in the air and then there was a lot of flash outs
from people who didn't understand it at all.
People who were just afraid of something different.
But throughout these two years,
and at least this year,
I've seen much more of that changed
because we have an open door policy.
Anybody who comes to the island and says,
I want to learn more about Purospa,
I want to know about business opportunities,
job opportunities.
I want to know the truth.
I want to see it with my eyes.
We have people come from the mainland,
from all around the island,
and from across the world as well,
saying like, I need to understand better what it is.
And once these people have come here and seen the benefits that we offer and seen that people here are not slaving away in a job that doesn't have any meaning, you see people here happy, having lunch, seeing the amazing view we have to the beach, just meeting people that would not normally be here in the island as well.
It's just a blend of cultures as well.
So I've seen it.
I've seen the perspective of people changing as they come to know us.
and not only know us, but also know the people who work here, the islanders work here. They're
living examples of saying like, hey, this is not what politicians said it was. Like I'm working
here. I feel free. I feel good. I don't feel constrained and I'm earning a good salary.
And then that helps their families. That helps the economy of the island. I think that's one
of the byproducts of us being here is that we are not just here. We are all across the island. We are
going to supermarkets, going to restaurants, going to support any businesses around the island.
And this is basically siphoning more people and more people that would have never been here in the island.
Otherwise, they're coming and they're also spending money across the island.
So that helps a lot.
Have you got Honduran businesses here?
Yeah, absolutely.
So the ones you described earlier, were they?
Those are foreign.
So right now, one of my main roles after two years is to start helping startups start up here.
So that's my main focus currently, is bringing the Honduran talent
and mixing it with the rest of the world.
This is the door for globalization that I was hoping for.
And now we're slowly but surely bringing more entrepreneurs
who know better now, that they have a better place.
Instead of going to the US and having to go through hoops that they don understand or just living the country we hosting different events that we call Prospera summits with different emphasis And we been bringing Hondurans and people from across the world that are entrepreneurs as well mingle them together probably mix and match some
ideas, start up new businesses here in Prospera. And they've seen the benefits. They've seen that
it's much easier and they can start operating. And also we have other businesses from Honduras
that said, hey, I want to open like a remote position or something that might be able to
hire people there or just have a service online that could potentially grow faster than it would
if I just do it in the regular Honduran regulation. And presumably in the future, you'll have
businesses actually moving here as in providing food, you know, those kind of businesses.
Yeah, absolutely. So right now, because of the fact that we are still building,
we have this building that again, it's almost at capacity because we've been hiring so many
people so quickly. We have other buildings that are separate from this one that we're going to
start to populate and start moving people around. That means that now in other property that has the
office space, we're going to need a cafeteria for the people who work there. And we already have a
coffee shop that's being installed in that same place. And then in this 13-story building, that's
going to have four floors for businesses to open up their offices and a commercial area on the
bottom for people to just open retail businesses so yes we are creating the spaces not ourselves
but looking for developers who develop this buildings and these spaces for people to start
opening those businesses and it's kind of the chicken in the egg type of situation where
how do you bring businesses to the middle of a jungle and that's just solved by having people
working in the middle of the jungle and then how do you sell houses to people who live in the middle
of the jungle well they have jobs in the middle of the jungle so they need to live close to work
and that's going to bring all the rest of the economy with it.
And I must say, it really is in the middle of the jungle.
We drove here down a fantastically windy road
that's only paved, only the last bit of it's paved
and then you kind of arrive here and you're in a small oasis.
It's really quite impressive.
This is my first time here.
Can you give me an example of a Honduran startup?
Okay.
Or in particular, a successful one
or one that excites you, let's say?
One that excites me.
So, it's many years of working with startups.
I have a bunch of them.
But if I want to talk about startups
that have already come here to Prospera,
let's talk about the health tech.
We held the health tech summit about a month and a half ago,
and we brought several health tech startups here
to learn more about the platform and to see how it could work.
So we have a platform that eventually helps doctors connect with patients that would not necessarily be able to either move around or just think about remote work for doctors.
So a platform where doctors can provide telemedicine.
We have others that are providing not only telemedicine, but are looking for spaces that they can then share clinics with some of the doctors.
We're eventually going to become medical tourists here in the island.
So once we have like the clinics, people are going to say, OK, I want to get out of my place in the U.S. or in the EU.
And I just want to go and relax somewhere else. But I don't want to stop working. I still want to help people.
You're going to have clinics here available for people that are doctors and say, OK, I'm going to stay here in this island for three years.
Sorry, three months. And in those three months, I want to help people from the island or from the mainland or whoever.
And then just set up their practice for three months and get up and leave.
so those spaces are going to be available through these apps from these startups and then you get
the fintech like right now we have a fintech summit coming up november 18th and it's going
to be crazy big like we're expecting people from across the world from across anduras
who are just interested in learning how the financial industry works inside of prospera
because of the ease of regulation that we have can you elaborate on the how the financial system
works within prospera is it very complicated or is that something that you could explain to my
five-year-old son well I would love to see how you explain a financial regulation anywhere in
the world to a five-year-old but well I regulate his finances he kind of understands well that's
good you probably tax him right only a little bit 20% all right that's a little bit for you okay
oh well yeah I'm trying to you know I'm trying to I I'm I fully appreciate that probably
a lot of this stuff is not necessarily really that interesting unless you're heavily into those kind
of things but but i'm sure some people are interested in that like so let's talk about
the governance model or the way pick the your sort of most uh the one you know the most about
the particular aspect of the governance model you know the best about and explain how it's
new, innovative, different, etc.
So I'll just give you the best that Prosper has to offer.
The one thing that makes us different than any other special economic zone in the world
and is the fact that we have regulatory election.
So think about the car factory, right?
So what place in the world does the best cars?
In theory, let's go for German.
Germans are known for good quality vehicles, right?
but let's say germany not doesn't have the most attractive regulation for everything else
business-wise they have a good regulation for car manufacturing but not necessarily taxation
or other regulatory environments for those businesses here in prosper you could open
a car factory and let's say you want to hold yourself accountable for german standards of
car manufacturing you could do that you could come up and say at the moment of registering your
business a i'm gonna be under x y r c industry and i want to select this regulation which is
adopting a better practice that currently exists in honduras and i want to apply this specifics
to what my business is going to be so i can have german standards of production for vehicles but
not be subjected to the rest of the things that might be too constrictive so taxation all those
things you get the best of the germany's regulation for car manufacturing but you don't have none of
the constrictive stuff from one of those type of countries so you can choose up to 24 countries at
the oecd and choose best practices and then apply them here at prosvita this is something that
no other special economics in the world has the fact that you can come up and pick and choose
a best regulation and apply it here while not having to comply with the rest of the things
that might be too constructive.
And enlighten me then,
is that something that's set in stone into the future,
that particular methodology?
Like, say, does that company know
that those rules will be the same in 20 years or 10 years?
Or this framework, let's say,
who decides what the framework is?
And how do you, does it change?
Okay, so whenever you become an e-resident,
a resident, you start up a business
and you find you've signed your agreement of coexistence.
An agreement of coexistence is basically a social contract where you say,
I voluntarily submit myself to this prosperer jurisdiction.
And that becomes sort of an instability agreement.
So once you decide, I want to submit myself to this regulation specifically,
then you're subjected to that jurisdiction, to that specific regulation in perpetuity
until eventually you say, I want to change it.
Because it's also malleable.
You don't have to stick for it forever.
You can even come up with your own regulation.
But who do you go to?
Say I start my car company, and I'm doing it the Mercedes-Benz way.
And then now in 10 years' time, I realize I want to change that.
Who do I go to?
You literally just send us an email.
You can send an email, or our eProspera platform is going to be probably in 10 years,
more than possible to just change these things online.
But as of now, if you want to just change the regulation you are operating under, you just notify the general service provider of Prospera that you're going to be changing that regulation for this other regulation.
But hold on a sec.
That seems a little bit crazy.
I must be misunderstanding.
So there are a preordained set of regulations.
Yes.
Within which you can change.
Or if you I'm talking about they want to change something completely new.
Do they need some kind of agreement?
Right.
So, okay, let's say that you now don't want the Germany regulation for your car manufacturing company.
After 10 years, you know you can do a better regulation that suits your needs.
Okay, what about if actually what you're planning to do, someone thinks is actually a worse version?
Like, who is it that's deciding whether or not?
Okay, let's go to that then.
So the Prospera Council is the first level of review that the regulation would get.
So whenever you're selecting a regulation to apply to your business or to your specific project, the Prospera Council would oversee it with experts, knowledgeable in the matter, and say, yes, this qualifies as a best practice.
So for us, we have up to 24 countries of the OECD that we can choose from, and these are already considered best practices.
because the bar is set at anything that is as good or better than Honduras regulation.
That is the bar.
Anything that is better than that can be approved.
So you can choose from either of the 24 countries of the OECD
that are already considered best practices internationally,
or you can come up and propose your own regulation.
Again, you can go to the example that you already got it
and you have this regulation you want to propose.
You send it to the Council of Prospera.
The Council of Prospera is going to hire the experts necessary
to determine whether this effectively is best practices.
Once that's deemed to be best practices or if it requires an edit, it would be sent back to the applicant and say, hey, you've got to change a few of these things for it to be considered best practices.
Or if you continue with this regulation, we would not be able to approve it because it might be non-constitutional for Honduras or it would be in violation of a treaty.
So then it would go back to the applicant until they hash out something that they believe is best practices.
And then that would be sent to the camp.
The camp is the governmental body that oversees all status.
And they're the ones who, at the end, would have to approve a new regulation to be implemented here.
If it's already been approved here, anybody can use it.
But if it's completely new, then the camp would have to say, okay, yes, this is mispractices.
Is that, I mean, not that I know much about this, but I would assume in the government it works in a similar way, right?
I mean, you know, proposal of regulations, etc.
Yeah, sort of like a congressman proposing a bill.
Right.
So how do you stop that becoming a new bureaucratic nightmare in the future then?
Like, you know, when, yeah, I don't know.
Like, what happens to a place like this, you know, 30, 40 years in the future if people are, you imagine all these incentivized people all trying to get what they want.
Presumably, there's going to be a lot of bureaucracy, I'd imagine.
Is that something that you consider might be a problem?
I'm going to answer this personally, not based on facts because we haven't been there yet.
But would you go ahead and choose something that is quite more complicated
and you know they're going to have to wait for a bit
rather than just choosing a good option that's already there?
Are you talking about me as a car producer or any company?
Sure, yeah, I know.
I want the least bureaucracy.
Yeah, you want the least bureaucracy.
So like in 10 years, again, any regulation that has already been approved for someone else, it is available for anybody else.
So you as a car manufacturing company, you already set the standard that you've already applied the OECD version of German car manufacturing regulation.
If I come up as Ricardo Gonzalez and want to start up a car manufacturing business as well, the quickest thing for me to do is just grab that regulation you already have.
Because I don't need any more approval.
It's already been approved.
So I'll give you a specific case scenario where Seshit Bank, the first native bank in Honduras Prospera, Seshit Bank came up with their regulation by hiring a big team of lawyers and creating their most optimal regulation.
It's called Financial Regulation A. And it's already been approved. It has already been through everything that it had to go.
and it has already been published through the Prosper Gazette.
And that financial regulation can and will be applied to any other bank institution
or financial institution that fits under that specific type of regulation.
And they can just go ahead and say, oh, that's already there. I'll take it.
So the theory of these kind of ZAs then,
if you sort of extrapolate it to a point in the future where they're all over the world, let's say,
Let's imagine they are.
It becomes a competitive governance model that ends up with the best practice.
Is that the theory of it?
So think about it.
So again, let's go to government as a service.
What incentivize a current government anywhere in the world?
Well, yeah, I'm not quite sure because they have a monopoly already.
Exactly.
There's no incentive.
There's no incentive for absolutely nothing else.
And as a president, as a congressman, or as a just government official, it doesn't matter how good you do your job.
There's no bonuses.
There is no salary raises or anything that you're going to get just because of doing a good job.
You also don't get penalized for a bad job on the whole either.
Not as much as you should, but definitely.
So there's no incentive for the regular government.
but this government as a service business model,
the main incentive is that I have the best practices
available for anybody.
And as long as you as a business owner
inside of Prospero are making money,
you're making money that is taxable.
And me as a promoter and organizer
of this government as a service,
I get part of the money that comes out of those taxes.
So my revenue is dependent on your success
and your success depends on my regulation.
So I want to make sure that I have the best regulation and the best regulatory environment possible for your business to be successful.
Because as long as you're successful, me as a government will be successful and profitable.
So that is the main thing that guarantees that we're going to have better practices in general and less bureaucracy.
Because as long as people want to come here and do business and people want to come and buy here because it's profitable for them as well, then everybody's making money.
The government is making money.
and because the government is making money,
the promoter and organizer behind that is also making money.
So everybody gets happy.
Just out of interest, you mentioned earlier
about the political divide causing problems before.
Did the opposing party get into power?
Yes.
And how are they now with regards to ZAs?
Against, completely against.
Again, it was a lot of misinformation.
A lot of people still don't understand how it works.
There's a lot of the word sovereignty being thrown around, and they are in the works of trying to repeal the law, and they've already started to do so.
However, Prospera and any other set in San Andres is already covered by a stability agreement signed with the previous government.
the set of law itself in its second to last article already establishes that in the case of
the repeal of the law it has to guarantee a 10-year transitional period where the acquired
rights have to be respected and then under CAFTA DR and the Kuwait treaties all the investment that
has already been done is protected to up to 50 years so we already have a 50-year umbrella to
keep operating whether the government likes the current setup or not it's something that about
acquire rights that they need to respect. So we're currently on the stage of the dialogue
with the government. So we are still in the point that we need that sit down with the government
to hash it out and say, these are the things that need to be respected. And these are the things
that we're willing to concede for you to feel comfortable as much as possible. So we are
approaching that specific moment in time where the government and the Ceres of Andres, there's three
through CETIS will have this conversation and I am betting that by early or maybe finishing the
first quarter of next year we'll already have a more clear panorama of what CETIS are going to be
going forwards for the next 50 years. Is that by any chance a left-right thing? Is it? And if it is
or not, are you confident that it's something you might be able to make diplomacy over?
So the current schematic is that, yes, there is a left and right, for sure.
We are pro-private property, pro-free market.
So that itself leans towards the right.
And the current government is openly talking about socialism and communism
and befriending the Venezuelan and Cuban governments.
So there is a clear polarization of the Honduran population right now.
People on the left and people on the right.
and this specific setting models are falling on the right side of it.
And that's kind of where things are clashing.
Do you think they do?
I see them quite in the middle, actually.
I see them as a...
Is that it?
Yeah.
They're quite in the middle because at the end of the day,
there's a lot of social protection.
Yeah, that's what I mean.
There's a lot of protection for human rights and private property.
So yes, they kind of fall in the middle,
but the public perception itself is that it's far right, which it's not.
it's just a thing of
misinformation and misconceptions and
But what how confident are you that there will be some
Olive branches to be thrown towards the current government then is it is there a do you see a future in Dialogue is it is it that ideologically opposed So regardless of ideology it a matter of the well of the country
So the full repeal and disrespect of the rights that have been acquired can only be of consequence to the country.
So right now, this is one of the safest laws you could have had invested in anywhere in the world.
It is secure for 50 years.
Like it's a rock solid protection that the setting model has.
What does it say to the world if a government that has a project that was so secured by international law, constitutional law, and even the organic law, and that still gets forgotten and thrown around?
like what does it said to the people from around the world and even in
Honduras is it's a government that doesn't respect its loss so therefore
investment probably and it's already fallen like we can already see a decrease
on foreign investment coming into Honduras because of the legal insecurity
and the atmosphere that this current government is is creating and I think
it's just a matter that this has been such a radical change from what we had
before to what we have now. That's a perception that it creates. I think that it's probably
going to improve through the years once the current government notices that they cannot
be so far opposed to most things that they still have to find a middle ground. So yes,
it's more of a pain for Honduras in regards to receiving that foreign investment and creation
of jobs if they do not respect the property rights acquired.
How about on a more micro level, the community around here?
What's the general sense of what's going on here, rightly or wrongly, and how's the feeling towards it?
I'm sure there's those in favor and those against.
Absolutely. So it depends on who you ask, of course.
As I was mentioning, people who have family members who work here at Prospera or who have been benefited by Prospera
can see that Prospera has never mean no harm.
Of course, you still have detractors and people who don't like it,
and they're just opposed because at some point politicians said,
no, this is wrong.
But then the community right next to us,
that is around 400 to 500 people in there,
I would say that most of it, it's in favor of Prospera.
And again, we are one of the biggest employers.
And one of the biggest fear factors that were created by politicians
during the campaign year was talks about expropriation.
So it's no secret or it's not uncommon for private projects
around the world to expropriate lands for their benefit.
It's not even something strange for Honduras.
It has happened before.
So that was the word that was thrown around quite a bunch,
expropriation, ancestral land being taken over by foreigners
and all these things.
so of course you can imagine that communities around the island who were basically adjacent
to the project feel scared that they might lose their land where they've lived for many generations
and once we tell them like hey we're friendly it was hard to like get on the good sides if
politicians said it every single day that no they're gonna take your land but after a whole
year after the election right now you go to the i can go safely into that community and talk to
people, most of those people have already seen me, know my face. I would feel no hostility towards
myself to just go down there and buy some food or go to a small market down there. A lot of the
misconceptions have been cleared out. Of course, ideologically, some people are still against,
but in regards of what reality is, the people who have been able to approach here and to learn more
by people who have been affected in a positive way by Prospera, because there's no one who has
been negatively affected are now basically becoming ambassadors and spreading the word of
these people are here to do good and nothing bad has happened. And to make matters more secure for
everybody, Prospera's council approved a regulation stating that we would never expropriate nor acquire
land that has ever been expropriated to make sure that the message is loud and clear. Prospera would
never expropriate is against its principles like how could you advocate for private property in its
respect and then you're just expropriating doesn't make any sense it just goes against what pros
beta stands for so we promulgated that regulation stating that we renounce any right we could ever
have of expropriating any land and now it's our job to make sure that we just create jobs create
a better regulatory environment and help the economy of the country i'm cognizant of time here
I saw you looking at your watch.
Oh, no, I haven't.
Okay, sorry.
Okay, because I'm fascinated.
I'd quite like to go on, if that's right.
I can go all day, as Captain America said.
I've got so many questions.
What do you think is the most, the biggest hurdle you have ahead of you
with regards to local communities, say?
Well, to be honest, I think that we are already crossing that hurdle,
And I think the hurdle was public perception.
Like right now, as we are increasingly growing and helping the economy of the island, I think that more and more people are noticing that we've never been here to do any wrong.
As I've told you before, the community right next to us in Crawfish Rock, they are increasingly getting hired by us.
They're getting a lot of benefits from us as well from school buses being provided because you could see like this is a small community.
And you saw the road.
It's a long way to the main road.
And you would see people just leave here with a small SUV crammed with 10 kids that are trying to go to school.
So we have a social program called Prospera Foundation, which essentially is made to help people around the island and catalyze that prosperity that we're already generating inside of here and spreading it around.
So through those efforts, we've provided school buses that go on different times of day to take the kids to school back and forth.
and we're charging a bare minimum to each parents which is probably like around 3.5 dollars
which could be probably around 3.2 euros per kid a month so it's already super cheap like it's
cheaper than ever so we're helping those kids get to school and helping the parents not have to
go through that burden so we're showing how the prosperity we're generating here is leaking out
to the rest of the island that is not just inside of Prospera but everybody else we're buying from
local businesses as much as we can. We are looking for people from across the island to hire them and
give them better job opportunities. And we're also implementing educational programs to help people
learn and achieve the skills they need to eventually apply for jobs here. So that hurdle of public
perception is already being worked on. And I see us in a year probably on a very good standing with
the rest of the community. As of now, even with the municipality, we've been invited by them
to go and offer jobs at the job fair.
So it's already been getting better.
I haven't seen the village myself,
but what do people do normally prior to Prospera being here?
What do most people do in a small road and village?
I would love to tell you more about that.
I think Virginia could answer that question better
since she is from the community.
but this specific community as far as I know
it's more of a fishing village
they survive on fishing and regular
commerce
they go for jobs outside of the village
go into the main part of the islands
but
Virginia would be able to tell you much more about that
Great, we're talking to Virginia after this
so, excellent
Right
I've got
so many questions
that I think
you're noticing I'm not covering here? Because this is a very, very new subject to me.
I think that this is an organic conversation that it's just going anywhere it needs to go.
So I think that as of now, we are going on a good path.
You think so?
Yeah.
Okay, good. Because I'm piecing together my own version of what this is all about.
And I think that's good for the audience, because a lot of people in the audience probably were on
the same standing as you were so hearing it hearing you ask questions they probably already
have it's good for me to just go ahead sure yeah i mean i i would say i come i'm ideologically
aligned with this this is the sort of place i would come from but i'm very interested to know
how this all works out in practice and a few of the things i'm like one of the things that's
standing out to me is it seems like everyone involved is super up for the challenge and
ideologically aligned and wants it to work. If this idea spreads and the idea of ZAs becomes
more ubiquitous, how does it not end up being a victim of its own success in the same way that I
imagine um you know many systems have like what's the what what how do you all right or try this one
how do you see this say in a hundred years if according to what you believe in where where does
this end up like what's what does Honduras and the rest of Central America look like if this
kind of model of self-governance and um you know economic zones if it proceeds in the along the
same trajectory that you feel it would what does it look like it is very hard for me to think
negative negatively about this because as an insider as with and someone who has worked from
the outside for quite a while i see this just as an improvement that is going to keep improving
so in 100 years i could say central america has achieved that development stage quicker than it
could have under this system so increasingly more people are looking into what we're doing here
as a bar of success and say okay i want to keep my eye on that to see how that goes and the way
this is going and say that we already have our final discussions with the government and we're
allowed to operate as is and we continue to grow and expand and do what we're doing here
i believe that more and more countries are going to start doing it themselves
and my expectancy is that the government itself is going to take note and say we need to become
more competitive to the point that the flexibility that the governments have in Central America is
going to become more and more flexible so in 100 years I would expect that better practices are
just implemented and not be jealous of oh it was not made here but rather like if we import everything
from any other country what's the problem with importing good regulation so i think that more
countries are going to adapt to that and have you seen yourself um former expatriate hondurans
hearing about these kind of ideas and coming back is that something that's a thing yes uh as a matter
of fact that as again i'm part of the business development efforts and i get emails every week
like a lot and some of those emails are literally people from the us saying like hey i've been
hearing about Prospera quite a lot and I left because of lack of employment or my husband had
to leave because crime rates were too high no job opportunities and whatnot and we've heard about
Prospera and we're interested in seeing if this is a way back so like I saw it myself and I came
running and as quickly as we're succeeding I am seeing already people saying I want to go there
like I said I don't want to leave like I want to go live in Roatan or I want to come back
and live there in Rolata and at Prospera
because it seems to be like a place where opportunities do exist
and not only in the U.S.
because a lot of people just leave illegally, sadly.
It's very hard on any Honduran to think that most people just leave
because there's no opportunities here.
But it really brightens my day whenever I see people who say,
I'm thinking of going back to Honduras to find an opportunity in Prospera
because that's what we are all about.
And that's the sense of Prospera, a place where people don't have to leave their country to be successful, to be prosper.
And what about the education part of it?
Presumably, if you want to start up here and you want employees, they need to say if you want coders, for example, for your startup.
There's not much of a talent pool, I would imagine, in Honduras of coders yet, let's say, compared to somewhere else, like say America.
so how does the education side of it fit in like do you have to do that yourself here or is that
something that's um you know so it's it's funny you say that because we do have a good amount of
coders in andres and they're pretty good they're pretty good coders um and there's also a bunch of
continued continued education programs that teach people who have already graduated from any xyz or
have never graduated from anything like hey this is how you code we have a lot of continued
education programs that teach coding and we are betting on those we're inviting them in
as a matter of fact literally a week ago we had the edtech summit and some of these
education technology companies are literally bringing people to the island to teach them
how to code and that would eventually open up their doors to work here so we don't want to do
everything like prospera doesn't just want to own every building own every business or own everything
no prospera it's about creating the platform and my memory is killing me right now but someone said
build it and they will come right so that's what we're doing we're creating the platform for people
to say i want to go and do this at prospera so once we designed duna the tower we have here
we had a mainland developer who emailed us once a week asking us hey i want to work with you guys
i want to do something over there i want to build over there what can i do and once we had the
design ready was like here you go do you want it he was like hell yes i want to do this i want to
develop that building for you guys so we started joint venture with him to have that building set
up and that's what we're expecting for all other industries hospitals universities schools we don't
want to own them we want to show people the opportunities there and they can come
and do it themselves and we're gonna make it as easy as possible for them to
set it up so they can become part of that ecosystem and that that is part of
the essence of as they take government model is it it's bottom up yeah so it's
it's a startup city basically we're and the startup managing a city with of
course a lot of experts and and counsel but it is a startup and the city is
starting up itself with the help of other startups and other renowned
companies right I'm getting it I'm getting it straight in my mind thank you
very much I think we do have to stop now yeah I can see people saying five I've
I've got one final question for you, and this is a question that we ask all our guests.
And I'm interested to know what your answer is.
It goes along the lines of something like this.
You have a year sabbatical from your life during which you have a patron who will fund you.
They won't give you the money for your project, but they will make your life.
They will pay for your life and you can do anything you want.
What are you doing that year?
I mean it could be exactly what you're doing now by the way but do you have do you have a
something you would do yeah probably so one of the things that I enjoy the most is essentially
educating I had the ambition to become a college professor sometime and as an attorney most of what
we do is educate clients and one of my biggest passions has been to educate startups and as you
can imagine it's not necessarily the most lucrative endeavor however it's my passion to teach people
how to do things in a way that it can become economically free or at least self-sufficient
or self-employed so if it was up to me and say i have a sponsor that's going to keep me alive for
a year and i don't have to worry about money i would most definitely start conferencing all
across the country helping people say yes it is possible yes you can do it and this is the way
forwards this is how you can start up a business from a legal and business
standpoint right that's that's obviously something that could easily happen here
and probably already it's basically what I'm already doing I'm not giving that
much of conference as much as I would like but yes that's sort of my job right
now it's it's teaching people yes you can do it and you can come over here and
get it done and you have the governance model for it it seems that's quite right
So I think it made a lot of sense for me coming from a startup attorney background to eventually pivot into business development and actually say, I know everything legal inside of Prospera.
Come over.
I'll teach you the ways.
Fantastic.
Well, thank you very much indeed for talking.
I certainly feel a lot wiser for it.
Yeah, great.
Thanks for your time.
I thank you for the time and the space.
Of course, again, this is my passion.
This is what I love to do.
I am available and at your service if you have any questions further in the future.
Great. Thank you.