Honduras’ “lawless city” Prospera sparks global debate over sovereignty, innovation

An experimental libertarian enclave has emerged off the coast of Honduras, where the semi-autonomous city of Prospera operates under its own rules with minimal taxation and regulation.

The project was founded in 2017 and functions as a Zone for Employment and Economic Development (ZEDE), Daily Mail writes.

Residents can register companies in hours, pay only 5% income tax and 1% corporate tax, and pursue bold projects ranging from biotech to digital consciousness uploads.

The initiative has drawn investors, entrepreneurs, and futurists alike.

In 2024, the Honduran government declared ZEDEs unconstitutional, with President Xiomara Castro calling them a “sale of territory and privatisation of sovereignty.” Despite this, the city continues to operate, with its founder suing the government and claiming to generate thousands of jobs and millions in foreign investment. The idea of privately run, semi-autonomous cities has gained attention worldwide as governments and investors explore alternative models of governance and economic growth.

Prospera is one of several high-profile “charter city” initiatives inspired by libertarian ideals, where minimal taxation and light regulation are seen as drivers of innovation.

However, such projects have often faced criticism for undermining national sovereignty, creating legal gray zones, and privileging foreign investors over local communities.

By Khagan Isayev