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CORELO IN ACTION: FLEEING FLORIDA
By Carter L. Clews
CaribPro Latin America Correspondent

Our December Special Edition, focusing on Corporate Relocation, has been an instant success with CaribPro readers who are now requesting more information and some actual accounts of companies and executives who have made the Corporate Relocation move. The following is an interview with Honduras Business Executive Dan Taylor, the owner and developer of Keyhole Bay on the Island of Roatan. His story is a fascinating read…..

CLC: Dan, five years ago, you were a successful Florida businessman, with a booming construction company, a lovely home, and a decades-long track record of success. Then, one day, you pick up roots, move to a relatively obscure Caribbean island, and began life anew. What prompted your decision?

DT: First of all, thank you Carter for the opportunity to visit with you and your readers and talk a little bit about the country of Honduras, the island of Roatan and the community of Keyhole Bay and its genesis. Now, in answer to your question; we did have a challenging and exciting business in Florida, building high-end commercial facilities, primarily in hospitals. We built invitro fertilization clinics, hospital operating rooms and clean rooms for businesses. Our niche was building places that had to be as close to perfect as possible.

Over time we became a bit frustrated with the legal and business climate that included rules and laws that didn’t make sense and seemed to even impede business. Carter, I’m not talking begrudging rules about creating and maintaining a safe working environment, I’m talking about doing silly reports that no one would ever read.

Our move south wasn’t a one day here and another day there type of move. My wife and I each had businesses in the US and we just started realizing that there might be a more comfortable business climate for entrepreneurs outside the US.

That started us thinking about what was important to us, proximity to family, climate, government stability, business climate, financial opportunity, among others. We then started looking around and we and took just over a year to compare a variety of places and decide to move. It was a big decision but we felt that the island of Roatan, off the coast of Honduras, was the right place for us to live and work.

DT: I’ve been in and out of the US for the last 35 years and I may not be the best person to answer this question. I’ve had the opportunity to own businesses in the US, and in a variety of countries and found only one country more difficult in which to operate than the US and that was in the Mediterranean.

I have always been able to find good and even great employees: loyal, dedicated to quality and motivated. But the governments in North America seem to increasingly be more interested in “process” than “production.” A company has to have a large administrative staff just to fill out all the regulatory forms and red tape.

Wages escalate everywhere that I have worked. But it is only in North America that I have seen the growth in the wages and the administrative load so heavy that the employees and the government actually put companies out of business.

It used to be that a small to medium sized company could operate with a small staff doing ‘process’ and the bulk of the effort being spent on “‘production’ – doing excellent work.” I think that the system is a little out of balance right now in many parts of North America. Sorry to get on my soap box there, but as you can see, you touched on an area that is an emotional issue for me.

CLC: Thanks for tackling that one head on. Now, on a more positive note: Out of all the choices you had in Central and South America, why Honduras?

DT: Well Carter, that one is easy. We looked at 113 places in Central and South America. Then we narrowed it down to 14 places and the visited each of those places. When we visited Roatan we felt comfortable. There was no concertina or barbed wire around the walls of homes.

Even better, the homes didn’t have walls around them like they do in many cities around the world. Young kids were walking to school without adults – no one was stealing kids. There was no car theft; we’re on an island, where are you going to take a stolen car? As I mentioned above, the business climate was friendly.

All of the senior business and government leaders are bi-lingual which made doing business a bit easier. The tax structure is straight forward and there are some nice tax incentives for doing business or relocating to the country. There are even more tax advantages in the islands.

There are probably two dozen flights a week to the US from the mainland and 8 – 10 direct flights from Roatan to North American cities such as Houston, Atlanta, Miami and Toronto. It is easy to be close to family. All-in-all, Roatan best met the criteria we set to be willing to leave North America.

CLC: You touched on taxes, and I know that’s always on every business executive’s mind. So, let me throw the whole enchilada -- that’s the extent of my Spanish, by the way -- at you now. Can you talk to us about corporate, income, and property taxes in Honduras? What’s your personal experience?

DT: Carter, this is really outside my realm of expertise. I can say that the Bay Islands (including Roatan) recently became a free trade zone. Qualified businesses now can import anything without paying any duties, which saves probably 14% - 25% of the cost of the goods. Employees and residents pay no income tax and the capital gains tax was dropped from 10% to 4%. As I said, this isn’t my specialty, but it sure is more favorable than the places I lived in North America.

CLC: All right, now I’m going to play some simple word association games with you. I’m going to give you a topic I know is on the mind of every business owner even thinking of relocation, and you take it from there. Makes my job easier. Fair enough?

DT: That depends on how much you’re being paid for this.

CLC: It’s a labor of love.

DT: Okay, in that case, fair enough. Shoot.

CLC: Let’s start with wages and benefits – what are they, and how do they impact a company’s ability to succeed in Latin America?

DT: I’ll try to stay off the soap box. We are very fortunate to have fairly comprehensive labor laws here in Honduras. In the past, some large North American fruit companies abused the working poor in the country. A body of law has been developed to counter that situation.

Wages are not very high and the benefits all together probably add 30% to the actual wages. Your first reaction is ‘wow, that is high,’ but you have to keep it in context. If I am paying a laborer with almost no training $10 per day in wages, the total cost of that guy is $13 per day. I’m not sure, but I think that I pay my senior electrician, a guy with 15 years experience, a total of $110 per day or $13 per hour, fully burdened. That compares very nicely to the cost of labor in North America.

But, the real benefit comes from the fact that the overhead bureaucracy is very low. I have an operating permit, environmental permit and maybe one more. We have about 185 folks on site and only four of them are tied up with ‘process.’ The efforts of all the rest are directly resulting in ‘production.’ I’m not saying that there is no red tape, but a part time attorney and a part time accountant stay ahead of it.

CLC: How skilled are the laborers?

DT: That is a tough question Carter; it depends on the job. In the construction business for example, the quality of the work is impeccable. The cabinet makers and marble and stone masons do work that is phenomenal. I have found the population, the work force, to be motivated and willing to learn anything. The carpenters that we used initially did super work using hammers and hand saws.

Now they are using air-nailers and chop saws; doing super work more efficiently. I haven’t seen a lot of specialization. For example, there isn’t a union of plumbers. A lot of the members of the labor force are generalists – a carpenter one day and a plumber the next. This is changing though.

The management team is young in the country, whether in business or government. I am always in awe of the levels of responsibility that are handled by a lot of young folks here in Honduras. The good news is that they have all been to the University, either in Central America or the US. The bad news is that they are young and don’t have a lot of experience. This keeps the senior leaders in the constant position of growing and developing the middle management team.

CLC: Safety and security. Many business owners relocating are going to want to bring their families. In the US, we hear a lot about crime in Central America. What’s your experience?

DT: I can’t speak for all of Central America, but I know that in the municipality of Roatan we have about 65,000 people and the crime is lower than any city one-fourth its size in North America. I can count the number of violent crimes, murder, rape, kidnapping, etc that occur during an entire year on Roatan on one hand. There are that many of those crimes every month in many cities this size elsewhere in the world. We don’t have very many bars per capita and almost no absenteeism at work. I can’t think of a place that I shouldn’t be after dark here on Roatan; I can’t say that for any other city of its size that I know of.

CLC: Health care.

DT: Unfortunately, I can speak to this. This last year I had some heart issues and pneumonia. My local doctor on the island identified the problem and sent the results of an EKG and chest X-ray to CEMESA, a hospital on the mainland. I hopped on one of the local commuter airlines (we probably have 8 – 10 flights a day to the mainland) and in about an hour I was in the Emergency Room at one of the best regional hospitals in Central America.

It was clean and the staff was professional. The head of trauma and emergency care did her training at Bellevue Hospital in New York City. One of the docs that subsequently took care of me did his studies at the Mayo Clinic, another at the Cleveland Clinic and another at Stanford – I was amazed! I was in the cardiac ICU for three days and the regular hospital for another three. I was well taken care of and the prices were unbelievably low.

It was so low that it wasn’t worthwhile filing all the insurance paperwork for reimbursement. All of the public hospitals don’t have access to the same numbers and types of equipment and medications that the private ones have, but they will get you the testing and prescribe the medications that you need. To be honest, I had a nagging concern about health care when I moved here – but no more.

CLC: All right, here’s a topic that’s on the mind of every single person I talk to who’s even thinking of relocating – themselves or their company – to Honduras: the government. Let me put it bluntly: Do you worry about the government of Honduras taking over your companies and tossing you out?

DT: Not for a second. In my lifetime there has been nationalization of assets in both in South America and up in North America, in Mexico, but never here. The government of Honduras is a young yet stable democracy. They are so serious about not allowing confiscation of property that they even put prohibitions against confiscation in their national constitution. The government here, like North American governments, is authorized to take land for “eminent domain” reasons such as to get the land for dams and major highways.

As far as taking a business though, there is no incentive to take the business that is creating jobs and producing tax revenues. The populace is very concerned about government becoming too oppressive and wouldn’t tolerate it. I know of a case where a communications company was operating illegally and the government confiscated their equipment, but that was because they were breaking the law. I would be much more concerned about the taxing agencies in North America, such as the IRS, confiscating property and closing business than I would here.

CLC: Fair enough. How about the people of Honduras, in general? You’ve worked with them closely at every level. How have you found them?

DT: As I said earlier, I’ve had the opportunity to live in about 12 countries around the world - I choose to live here in Honduras instead of anywhere else. I have never found a warmer and genuinely kind culture of people anywhere else. They have opened their heart to us, invited us into their homes, and become very good friends. I have more people that I call “friend” here than in any six other countries I’ve lived in - all combined.

I’m not talking about people that smile at you to your face because you are bringing money to the economy, I’m talking about people that ask “how are you” when you greet each other and then wait for the answer. These are humans and as such there are good and bad in every group but there are more good people here than I have found anywhere else I have lived – and that is why I am still here.

CLC: Now, let me throw you a curve. Most companies that relocate, especially for manufacturing, are not going to come to the island of Roatan, despite how beautiful it is. So, where would you suggest such a company consider setting up shop?

DT: I am not a manufacturer so I don’t know all that they might need, but I can imagine that such a firm would want a large workforce (trainable, trained, and educated), stable wages, a satisfied populace (no rioting and unrest), I would probably want inexpensive utilities and major transportation routes to the rest of the world. If this is correct, I think that San Pedro Sula, the major commerce center for the country, might be the best choice here. In the Port of Cortez, just up the road, it has what is probably the best, deep water port north of the Panama Canal.

For surface movement, San Pedro Sula has the new super highway leading to La Union in El Salvador and the Pan American highway. There are flights from the airport to major international destinations every couple of hours. I think that there are 4 or 5 colleges and universities in the city and it boasts a comprehensive and well attended education system. My guess, Carter, is that San Pedro Sula would get high marks in the categories I mentioned.

CLC:: All right, I threw you a curve, and you handled it adeptly. So, let me finish up with a nice big softball, waist-high and down the middle: No matter where a company relocates, why should the owner buy a luxury condominium at beautiful Keyhole Bay?

DT: Of course this is the question I was waiting for. Keyhole Bay is a residential community on a resort island. It is an intimate community on the ocean, facing the mainland of Honduras. From their yards and balconies, our owners can see the 8,000 foot tall mountains on the mainland only 15 minutes away. In every area of endeavor there are a variety of players and only one is the “best” – in community development on Roatan, we enjoy that honor.

We will never be huge; we are a 20 acre community of 23 single family homes and 45 condominiums. The homes are on quarter acre lots and the condos are designed to prevent that “cookie cutter” look and feel. The condos range in size from 1,500 to 4,000 square feet in size. The owners have experienced and enjoyed some double and even some triple digit appreciation of their properties in less than three years. The price per square foot is among the lowest in the Caribbean. An executive from Hilton recently described the finishes at Keyhole Bay as the best he had seen in Latin America.

CLC: Wow, that is high praise from people who know quality.

DT: It sure is, and we are very proud of it. The owners in Keyhole Bay are accomplished people from around the world, though most are from North America. These are people who value their privacy, insist on the highest quality in products and services, and people who want to sit at the bar or around the pool with equally educated and accomplished people.

The team that designed and continues to build Keyhole Bay are the most accomplished and respected group from as far north as Georgia, all the way to Argentina.

For example, the organization that did our Master Plan is EDSA, an international firm with offices around the world. You might know of the amazing resort in the Bahamas by the name of Atlantis, Paradise Island?

CLC: Of course, Atlantis is a 2,000 room, magnificent resort! And they did your master plan for Keyhole Bay?

DT: Yes, we are proud to say that they did. Our entire team is of that quality. We are putting together an internationally recognized community for a few discriminating buyers. We have won two national Environmental Innovation awards and have installed the state-of-the-art infrastructure. My wife and I are building our dream home here as well and we plan to live out our days here on the island, at Keyhole Bay.

CLC: I understand that you are building a commercial center or mall as well.

DT: You are correct. We recently broke ground on Keyhole Village which is a 150,000 square foot commercial center adjacent to Keyhole Bay. We will have underground parking on the first level. There will be a nice sit-down restaurant, a food court, and twenty some retail stores on the next level. On the third level will be professional commercial spaces including doctor offices, banks, attorneys, and engineering and design firms. On the next level we will have some very nice condominiums and on the top floor will be a 5,000 square foot gym and spa. We plan to complete the facility in less than two years.

CLC: It sounds great. Thanks, Dan.

DT: Thank you Carter. It is my pleasure to have the opportunity to talk about this country, the island we love and community we call home.


PLEASE NOTE: Dan Taylor will be a featured speaker at the Caribpro.com Corporate Relocation Conference in Honduras, May 6 & 7, 2008. Make sure to get your reservations in early.

If you wish to be put on our Corporate
Relocation Alert List to register your interest,
Click Here

AUTHOR: Carter L. Clews began his career in marketing as Director of Public Relations for the National Right to Work Committee in Washington, after which he became Director of Communications for the U.S. Senate Conference of the Majority. Following his years in Washington, Mr. Clews became Creative Director for Inphomation, Inc, the company responsible for several of the top infomercials in recent history, including Making Love Work, The Psychic Friends Network, and The Helicopter Lure. Mr. Clews has won numerous writing awards, including the Best Scriptwriter of the Year Award from the Electronic Retail Association. He now lives at Keyhole Bay on Roatan in the beautiful Bay Islands.

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