In recent history there are several examples of projects of private for profit that sought to redifing the concept of governance and economic development combining libertarian, neoliberal and corporatist principles in the same cocktail shaker. Shenzhen, in China, began as a special economic zone in 1980 and grew from being a fishing village to a metropolis with a GDP of 482 billion dollars. And there we have Neom in Saudi Arabia, although it is about to see that this future is confirmed.
In any case, none as prosperous.
A radical experiment. Located on the island of Roatán, Honduras, Prospera was conceived as a libertarian city-state, with an independent fiscal and regulatory structure designed to attract investors, technological entrepreneurs and defenders of the free market.
Created by the Venezuelan Erick Brime, a former manager of Investment Funds, the community operates under its own legal code, minimum tax rates and a digital judicial system administered by Arizona’s retired judges. With a corporate tax rate of 1% and without capital gains taxes, the enclave was presented as an alternative to the Honduran system, seeking to demonstrate that the free market economy and the minimum government intervention can generate prosperity.
Millionaires to the race. As we said, since its foundation in 2017, the city attracted the interest of Silicon Valley investors. There, people like Brian Armstrong (CEO of Coinbase) and Peter Thiel, who saw in prosperous space for technological and financial innovation.
The community also became a meeting point for Biohackers and cryptocurrency, organizing conferences with the motto “Make Death Optional” and facilitating the installation of biotechnology and nuclear energy companies. However, the ambition of the project soon crashed with the political and social reality of Honduras, triggering a crisis that now threatens to dismantle its existence. Millionaires who look so happy do not know how to get out.
The collapse of the legal framework. The existence of Prospera was possible thanks to the Law on Employment and Economic Development Zones (Zedes), approved during the mandate of former president Juan Orlando Hernández. What happened? That Hernández was arrested and convicted in the United States for drug trafficking, and her successor, President Xiomara Castro, went on to qualify the project as a creation of a “narco-regime.” In 2024, the Supreme Court of Honduras declared unconstitutional the law of the Zedes, questioning the legality of Prospera.
Given this threat, Brime demanded Honduras for 11,000 million dollars before an international arbitration tribunal, claiming that the revocation of his special status constitutes an illegal expropriation. At the same time, hundreds of thousands of dollars have been spent in Lobby in the United States Congress seeking to press the Government to sanction Honduras if it does not protect foreign investment in Prospera.
The community is revealed. In addition, the problem for these “investors” was aggravated when the rejection of the central government of the “city” added local leaders and indigenous communities in Roatán. Moreover, the Crawfish Rock community, which borders Prospera, has denounced that the project represents a threat to its territory and way of life. Tensions about access to water and territorial expansion have resulted in clashes between prosperous employees and local residents.
A regulatory paradise. If you wonder why so many millionaires came to Brime, the answer is in one of the most controversial aspects of Prospera: their self -regulation model, where companies can choose between regulations from 36 different countries or even create their own regulations, provided they hire civil liability insurance.
Hence, it has become a refuge for high -tech and biomedicine sectors, including startups on extreme longevity and prohibited experimental therapies in the United States.
Who is it? Bloomberg had a few days ago in a special about the city that among the companies that have established operations in Prospera highlight OKLO, a startup backed by Sam Altman that develops small nuclear reactors, biotechnology companies, some dedicated to unregulated medical treatments, and a large number of investors in cryptocurrencies, attracted by the possibility of paying taxes with Bitcoin.
In any case, and despite its success attracting private capital, the lack of a clear tax framework has generated those friction with the local government. The mayor of Roatán, Ron McNab, has criticized that Prospera uses the infrastructure of the island without paying municipal taxes, which aggravates urban problems such as the lack of roads, drainage and safety.
Model expansion. As Prospera’s viability in Honduras has become more uncertain, Brime and businesswoman Magatte Wade have launched a new project: Prospera Africa, an attempt to replicate the model in African countries.
Apparently, Sub -Saharan Africa is seen as a fertile land for this type of projects due to its rapid urban growth and high demand for private investment. Of course, Wade has emphasized that his intention is to avoid mistakes made in Honduras and work in collaboration with local governments.
A libertarian utopia. Thus, which began as an experiment in self -government has evolved in a legal, political and social struggle with the Honduran government and the premises in “weapons” against this invented city. While Brime and his allies press for the international recognition of Prospera, local resistance and government actions have turned their dream and that of investors into a nightmare with a figure to resolve: 11,000 million dollars.
The curious thing about this story is that, far from trying to put an end, Prospera’s fate could be replicated in other places and, if necessary, determine the future of other autonomous cities worldwide. If you manage to survive and give you the right, a precedent will sit for many other similar projects. If it fails, it will reinforce skepticism about the viability of these libertarian enclaves in countries with fragile political and economic contexts.
What seems clear is that the confrontation between Prospera and Honduras is far from ending, exposing fundamental challenges of private cities: can a corporation replace a state? Or maybe the big question: how far does the right of a community come to self -govern?
Image | Zaha Hadid
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