According to Tom’s analysis, the legislation is pretty far-reaching. Inside the “Zonas de Empleo y Desarrollo Económico” (aka, ZEDE) a presidentially-appointed “Committee on the Adoption of Best Practices” replaces the old Transparency Commission. A “Technical Secretary,” selected by the Committee, runs the place. It then gets to opt-out of the existing Honduran tax system. (I do not if that includes social security taxes.) It also gets tariff-free status.
Not quite a charter city under the original conception: no foreigners running anything, except possibly on the Committee. (I do not know if Committee members or the Technical Secretary have to be Honduran.) Foreign courts can be used, but as far as I can tell only if the parties to the dispute agree.
Nor is opting out of Honduran taxes particularly beneficial: Honduran income tax rates top out at 25%, corporate dividends are expensed and evasion is easy. (To be fair, the Honduran state does not operate very well, so those taxes do not provide as many public goods as in say, Nicaragua.) Even if you believe that low taxes would attract investment and generate growth, we do not know how low taxes will be: there is a requirement that the charter city provide “adequate education, health care, social services, labor rights, and environmental protections” and the cities will need to kick up 12% of their revenue to the central government.
In other words, it seems like a free trade zone in which democratic governance is suspended. (Moreover, a free trade zone in a country that already enjoys free trade with the United States.) That seems not like a recipe for growth. What am I missing?