Eduardo Bastitta walks across a 515-hectare plot, roughly 737 manzanas (the traditional Guatemalan land measure), on the shore of the Río de la Plata, outside Colonia del Sacramento. Across the water, an hour away by boat, lies Buenos Aires. Bastitta is an Argentine businessman who founded Plaza Logística, a network of warehouse parks across the Southern Cone, and was an adviser to Javier Milei. His father bought the land almost forty years ago, and he wants to build a new city there. He had two paths. The first: ask the State for a zone with its own rules, taxes, and procedures. He described it himself in order to reject it: “That concept of me setting up and asking the State to bring me tax benefits and privileges is the least libertarian thing there is.” The second was to build under the rules Uruguay already has for everyone. He chose the second.
On September 22, Praxis, an international community of technology entrepreneurs and investors, announced that it will mobilize US$1 billion in that project over three years, and that its first residents will arrive in mid-2027. That is more than half of all the foreign investment Guatemala received in 2025. Why did Uruguay land that money without creating a special zone?
The answer is in the announcement and in a law from 1998. The announcement says the community will operate “within the constitutional, legal, and democratic framework of Uruguay”: there is no free-trade zone and no separate statute. The law is 16.906, and the principle in its Article 2 fits in one line: “The regime for the admission and treatment of investments made by foreign investors shall be the same as that granted to national investors.” Article 19 adds the backing: the State guarantees the benefits for the promised period “under liability for damages.”
That doesn’t mean there are no incentives. Bastitta designed the project to take advantage of the investment-promotion and housing regimes that Uruguay offers to anyone who meets the same conditions. There are tax benefits, but they don’t depend on whether the capital is Uruguayan or foreign. Nobody had to write an exception with a name on it. Bastitta put it best: “If there’s anything less libertarian than charging high taxes, it’s charging them high only to some.”
Uruguay is not an isolated case. In the Heritage Foundation’s 2026 Index of Economic Freedom, it ranks third in Latin America and the Caribbean, behind Chile and Barbados. Next come Costa Rica, Jamaica, Saint Lucia, Paraguay, Peru, the Bahamas, Panama, Belize, and the Dominican Republic. All of them produce more per capita than Guatemala. Uruguay produces four times as much: US$19,375 versus US$4,688, in constant 2015 dollars. Guatemala comes right after that list. In general terms, we can observe that economic freedom expands the opportunities to generate wealth. And that freedom needs clear rules and respect for contracts and property.
Honduras took another path. In 2013 its Congress approved the Organic Law of the Zones for Employment and Economic Development, the ZEDEs: a special legal, regulatory, and fiscal regime, open to those who chose to operate within it. On the island of Roatán, Próspera was born this way. Nordelta in Argentina, +Colonia in Uruguay, and Próspera in Honduras are urban developments driven by private capital, but under different models: the first two are built under their countries’ general rules; Próspera was born inside a special regime created by law. It was not an exception written for Próspera: the same rules were open to anyone who met the conditions to enter. And the law knew that the government could change. Its Article 45 established a minimum ten-year transition if the regime were ever repealed.
But the protection went much further. The investment treaty between Honduras and Kuwait guaranteed the stability of the ZEDE regime for no less than fifty years. And most-favored-nation clauses gave grounds to claim that better treatment under other investment treaties. The promise, therefore, was not simply that the rules would last ten years. There was a legal architecture built precisely to protect the investment from whichever government came next.
In April 2022 Congress changed its mind. It repealed the ZEDE Law and prohibited the creation of new zones. The decision looked forward: no newcomers could enter, and the law itself had provided a transition for those already there. But the constitutional reform that would have completed the repeal was never ratified. On September 20, 2024, the Supreme Court resolved the matter by another route: it declared the regime that created the ZEDEs unconstitutional from its origin. The effect was to annul it retroactively. And the Constitution itself declares in Article 96 that “the law has no retroactive effect.” Here is what should worry anyone who risks their capital, inside or outside Honduras: if a ruling can annul, looking backward, the rule under which someone invested, then no investment, local or international, is safe. There is no need to characterize the ruling; it is enough to measure its consequences. Grave from every point of view, in Honduras, Uruguay, Guatemala, or anywhere. And those who ultimately suffer are the citizens of the country that broke the conditions it had granted.
Uruguay and Honduras tried different paths to compete for investment. Uruguay offered general rules, equal for nationals and foreigners. Honduras created a special regime that those who chose to enter could opt into. One bet on uniform rules; the other, on allowing different rules within the same country. But both depended on exactly the same thing: that whoever risked their money believed the rules accepted today would still be in force tomorrow.
An investor may prefer a general regime or a special one. What he will hardly choose is a place where today’s promise can vanish tomorrow. What decides is the promise, not the regime.
And Guatemala? Guatemala chose a third possibility: it promises stability, but only to some. In September 2022 Congress approved Decree 46-2022, the Law for the Promotion of Foreign Capital Investment. To anyone investing from 800,000 investment units, about Q95 million at this year’s minimum wage, it offers special treatment for three to ten years, depending on the amount. During that period, the investor “will maintain the legal position constituted,” even if certain tax rules change. But the door has two bolts. The law applies only to foreign individuals or legal entities with capital of foreign origin. And it expressly excludes the mining and energy sectors.
Picture two identical plants, side by side in an industrial park in Escuintla, with the same investment and the same number of employees. The one with foreign capital receives the promise. The one owned by a Guatemalan does not. Uruguay wrote exactly the opposite in 1998.
And the two sectors the law leaves out are precisely two that we need in order to compete. In July of this year Guatemala imported 172.55 GWh of electricity, almost all of it from Mexico, and exported 106.28 GWh to Central America. Mexican electricity averaged US$38.67 per megawatt-hour, less than a third of the Guatemalan spot price. And the Dominican province where the Pueblo Viejo mine is located exported US$2,294 million in gold in 2025, almost 50% more than the US$1,544 million Guatemala exported in apparel, our main export product. Yet energy and mining are precisely the two sectors that our law excludes from the guarantee it offers to everyone else.
What would US$1 billion mean here? In 2021 the Ministry of Economy reported US$201 million in foreign investment and 1,500 direct jobs. If US$1 billion generated employment in a similar proportion, that would be about 7,500 jobs. To put it in perspective, that is nearly a third of all formal construction workers in Guatemala. Seven thousand five hundred families with a salary they don’t have today. Perhaps that of a son or daughter of yours who finishes university this year.
What I propose fits in two lines of a law that already exists. Let Congress strike from Article 2 of Decree 46-2022 the requirement of being foreign and the exclusion of mining and energy. There is no need to invent another regime: it is enough to open the one Guatemala has already created to anyone who meets the same conditions. That way, the promise that the rules won’t be changed on you would hold for anyone investing the same amount, whether they come from Chimaltenango or Chicago, whether they make shirts, extract minerals, or generate energy. Nothing is taken from the foreign investor; the Guatemalan gains access to the same guarantee. It asks for no new money and doesn’t touch the Constitution. The reform can be measured with a single question: does the Guatemalan who invests Q95 million in a new plant receive the same guarantee as the foreigner?
Bastitta didn’t ask Uruguay for separate treatment. It was enough for him that the rule was the same for him as for any Uruguayan, and to trust that tomorrow today’s rule would still be in force. With that, the US$1 billion came. How much could change for you if we started by changing those two lines, so that next time investors with US$1 billion can choose Guatemala too?
Ramiro Bolaños, PhD. / President of the Centro de Pensamiento y Acción Factoría Libertatis
References
- Asamblea General de la República Oriental del Uruguay, Ley 16.906 de Interés Nacional, Promoción y Protección de Inversiones, January 7, 1998, arts. 1, 2, and 19.
- Banco Mundial, World Development Indicators, “GDP per capita (constant 2015 US$),” code NY.GDP.PCAP.KD, 2024–2025 [accessed September 29, 2026].
- Congreso de la República de Guatemala, Ley de Fomento de Inversión de Capital Extranjero, Decreto 46-2022, Diario de Centro América, September 19, 2022.
- Congreso Nacional de Honduras, Ley Orgánica de las Zonas de Empleo y Desarrollo Económico, Decreto 120-2013, Diario Oficial La Gaceta, no. 33,222, September 6, 2013, arts. 32 and 45.
- Congreso Nacional de Honduras, Decreto 33-2022, repealing the Ley Orgánica de las Zonas de Empleo y Desarrollo Económico.
- República de Honduras y Estado de Kuwait, Acuerdo para la Promoción y Protección Recíproca de Inversiones, art. 16(4).
- Tratado de Libre Comercio República Dominicana-Centroamérica-Estados Unidos (CAFTA-DR), ch. 10, art. 10.4, “Most-Favored-Nation Treatment.”
- DataExport, “Guatemala compra electricidad a México: ¿por qué si genera más?,” September 1, 2026.
- Heritage Foundation, 2026 Index of Economic Freedom, country profiles for Uruguay and Guatemala.
- CIAR Global, “Honduras declara inconstitucional la Ley ZEDE con efecto retroactivo,” September 2024.
- Infobae, “La producción de oro en República Dominicana consolida al país en el sector minero internacional,” February 9, 2026.
- Ministerio de Economía de Guatemala, Informe Económico Semanal, May 4, 2026.
- Ministerio de Economía, “Se registra más de 200 millones de dólares en proyectos de inversión y reinversión,” Agencia Guatemalteca de Noticias, March 15, 2021.
- iProfesional, “Praxis eligió Colonia y proyecta invertir u$s1.000 millones en su primera ciudad física,” September 23, 2026.
- Praxis, Praxis Uruguay Announcement, September 22, 2026.
- Prensa Libre, “Qué productos exportó más Guatemala en el 2025,” February 14, 2026.
- La Nación, “De Silicon Valley a Uruguay: el proyecto para construir una ciudad desde cero frente a Buenos Aires,” September 22, 2026.
- Montevideo Portal, “+Colonia: comenzó la construcción del distrito Génesis,” August 2023.
