Próspera: How a Libertarian Techno-Utopia on the Paradise Island of Roatán Turned into a $10.8 Billion Lawsuit

The Próspera Project — Roatán Island, Honduras

Roatán is a Caribbean island in the Islas de la Bahía archipelago, situated approximately 65 km off the coast of Honduras. White sandy beaches, the coral reefs of the world’s second-largest barrier reef, and tropical jungle — a popular destination for diving and cruise tourism. In 2017, an experiment was launched there that was meant to transform the way a city could be governed — the ambitious Próspera project, a “city of the future” for entrepreneurs, investors, and technology startups.

The project was established under the special legal regime of ZEDE (Zonas de Empleo y Desarrollo Económico — Zones of Employment and Economic Development), provided for by Honduran legislation. By design, Próspera is a so-called charter city — a city operating under a legal charter and its own regulatory rules, with unprecedented administrative autonomy. Companies registered in Próspera can operate under regulatory regimes borrowed from other countries or propose their own, subject to approval by Próspera’s governing body.

From the moment of its launch, the project found itself at the centre of an acute political confrontation — between investors and the state, proponents of institutional experimentation and local residents who accused Próspera of neo-colonialism — charting a course from flagship reform initiative in Honduras to an attempted full dismantling following the change of government and the repeal of ZEDE in 2022.

Próspera currently continues to operate under conditions of administrative blockade. Despite the repeal of the ZEDE law, the city continues to register new companies, challenging the government’s actions through international arbitration.

The most heated debates around the project are linked to its liberal regulation of licensed activities — above all medical and biohacking experiments, frequently accompanied by deliberately provocative public rhetoric. At the same time, Próspera constitutes a fully formed urban environment: a territory comparable to a small municipality, residential and office development, basic urban infrastructure, private clinics and research spaces, as well as a major resort cluster with a golf course. Próspera regularly serves as a venue for events hosted by the crypto and AI communities.

2026 promises to be a decisive year for the project’s development. With the inauguration on 27 January of President Nasry Asfura of the National Party — the very party that adopted the ZEDE law in 2013 and championed charter cities — a new chapter opens in Próspera’s story.

The National Party’s policy towards autonomous cities aligns with the position of key international partners: Donald Trump publicly backed Asfura during the election and had previously spoken in favour of the Freedom Cities concept — cities with expanded autonomy and minimal regulation. This combination of domestic and external support creates a favourable political backdrop for Próspera: the project may receive a new impetus for growth and become a model for the launch of similar cities in other developing countries. Alternatively, under state pressure, if the ZEDE law is not reinstated, and amid local protests, the project may enter a phase of stagnation — though this appears unlikely given the current political landscape.

The Genesis of the Idea: Free Economic Zones and Charter Cities

The Próspera project became the embodiment of the charter cities idea, proposed in 2009 by Nobel Prize-winning economist Paul Romer. His concept was simple and radical: if poor countries cannot develop because of weak institutions and corruption, why not create “islands” of good governance within those countries? The philosophy held that deep reforms at the national level are virtually impossible due to institutional inertia and political obstacles, yet special zones can transform entire regions through the introduction of effective governance practices. Hong Kong, Shenzhen, Dubai, and Singapore were cited as examples.

Romer proposed replicating this model on a voluntary basis: developing countries could allocate territories for the creation of zones with improved governance.

The academic community was sceptical, pointing to risks of neo-colonialism and violations of sovereignty. However, in Silicon Valley’s libertarian circles, the concept found support.

Creating the ZEDE Legal Framework (Zones of Employment and Economic Development)

Honduras in the early 2010s presented a suitable environment for legislative experiments with special zones. In 2009, a coup d’état took place: President Manuel Zelaya, a left-wing populist, was forcibly removed from the country by the military and deported to Costa Rica.

The National Party came to power. Juan Orlando Hernández, who held the position of Speaker of Congress in 2012, actively promoted the idea of special economic zones and became president in 2014. Publicly, Hernández positioned himself as a champion of the fight against organised crime, received significant American aid for combating drug cartels, and extradited dozens of drug lords to the United States. Details that would emerge later radically altered this picture. But in those years, Hernández was perceived by international partners as a politician ready for reform and open to cooperation with foreign investors.

In 2012, the Honduran Congress passed the first version of the charter cities law. The country’s Supreme Court ruled the law unconstitutional — four justices voted against it. Hernández, then Speaker of Congress, convened an extraordinary parliamentary session and organised a vote to dismiss all four justices who had opposed the law. The vote succeeded.

In 2013, a revised version was adopted — the ZEDE law (Zonas de Empleo y Desarrollo Económico). This time, the changes were incorporated directly into the Honduran Constitution. ZEDEs were granted an unprecedented set of powers:

• The right to establish their own laws, create a police force, introduce currencies, and form a tax system
• The ability to choose regulatory norms from dozens of international jurisdictions
• Guarantees of legal regime stability for investors for a period of 50 years
• The right to incorporate geographically dispersed parcels of land into the jurisdiction with the voluntary consent of landowners

This was not the creation of a classic free economic zone with tax incentives. The ZEDE law became the basis for the transfer of a significant portion of sovereign state functions to private operators on a contractual basis.

2017: The Birth of the Próspera Project

In 2017, Venezuelan-American entrepreneur Erick Brimen, founder of investment firm NeWay Capital, began searching for a jurisdiction in which to realise a project for a private city with minimal regulation and near-complete autonomy from the state. Together with Stephen Moore, who would later become Donald Trump’s economic adviser and one of the co-authors of Project 2025, Brimen had attempted to advance the idea of autonomous zones within the United States. American legislators were unwilling to allow private jurisdictions removed from federal control.

Brimen then turned his attention to Honduras — a country with weakened institutions, political instability, and an already existing legal framework for experimental development zones.

On 29 December 2017, CAMP (Committee for the Adoption of Best Practices), appointed by President Hernández, officially approved the creation of the Próspera project on Roatán Island. The experiment had begun.

Próspera attracted venture capital and technology entrepreneurs interested in experiments with autonomous cities. Among the publicly known figures are Peter Thiel, Marc Andreessen, Balaji Srinivasan, and Sam Altman. The majority of investors remain anonymous, and their stakes and roles are not disclosed, which only fuels interest in the project. The official website states that total investment exceeds $100 million; according to Director and Founder Erick Brimen, the figure surpasses $170 million.

In practical terms, Próspera is an autonomous jurisdiction in which a significant portion of functions typically belonging to the state have been transferred to a private management entity, Próspera Inc., incorporated in the state of Delaware, USA.

It operates under its own regulatory regimes, a system of arbitration-based dispute resolution, independent labour law, and a tax model that is barely integrated into the national fiscal system. The zone is managed not through Honduran institutions but through corporate bodies established by the project operator.

The Governance-as-a-Service Platform, Regulation, and Próspera’s Territories

Erick Brimen explains that the Próspera project is not merely a city in Honduras but a platform that enables the launch of multiple charter cities, providing them with a governance system (Governance-as-a-Service).

Brimen’s vision is to scale this model globally. He dreams of creating several dozen cities around the world, each with its own distinctive features, but all operating on the unified Próspera platform with a common legal system, efficient dispute resolution, and entrepreneur-friendly regulation.

In Próspera, individuals pay a 5% tax; businesses pay 1% of gross revenue. Governance is carried out by a nine-member council: five are elected (at the early stage, partly by landowners with votes proportional to land area), and four are appointed by Honduras Próspera Inc.

In Honduras, Próspera consists of several hubs totalling approximately 400 hectares. The main hub, located on Roatán Island, includes residential development, offices, a Bitcoin District, medical clinics, and the Pristine Bay golf resort. The mainland portion in the Satuyá area was intended to become a manufacturing and logistics centre; however, its development was significantly hampered by political disagreements.

According to Erick Brimen, as of the end of 2025, approximately 3,000 e-residents from more than 40 countries are registered in Próspera. The overwhelming majority do not reside on the island permanently: under normal conditions, approximately 10% of e-residents are physically present on Próspera’s territory. During conferences and major events, the number of people on site can temporarily rise to a thousand or more participants.

Próspera’s permanent population thus stands at approximately 300 people, excluding staff. Próspera’s territory occupies about 3% of Roatán Island, and the key constraint on growth at the current stage remains the shortage of built real estate — residential and office space needed to scale physical presence.

Operating within Próspera are companies for which the absence of traditional regulatory constraints is critical — primarily in medicine, biotechnology, and crypto payments. Próspera is actively developing a Bitcoin District — a zone featuring a Bitcoin Center, cafés, a cryptocurrency education academy, and offices for blockchain startups. Notably, the Central Bank of Honduras does not recognise cryptocurrencies and has prohibited banks from transacting in them, while Próspera calls itself “one of the most Bitcoin-friendly jurisdictions in the world.”

One of Próspera’s most provocative ideas is its “Regulatory Choice” system. Companies can select the laws of whichever jurisdiction they wish to operate under, or propose their own regulatory framework.

For example, a stem cell clinic may operate under the medical protocols of Panama or Mexico rather than under FDA oversight. In construction, the use of robotics, new materials, and engineering methods not yet codified in traditional building codes is permitted, provided an independent safety assessment is passed. In crypto-finance, real estate transactions may be structured as NFTs and accounting conducted in bitcoin.

The key question: who verifies compliance? Próspera’s answer: private insurance companies. Instead of state regulators, a company is required to carry liability insurance. The insurer becomes the de facto supervisory body — if the activity is risky, insurance will be expensive or unavailable.

The Life Extension Experiment: Bryan Johnson and Gene Therapy

One of the most illustrative cases is the story of Bryan Johnson, a technology entrepreneur and proponent of radical life extension methods. In September 2023, he flew to Próspera to undergo experimental follistatin gene therapy. Johnson spends approximately $2 million per year on anti-ageing practices and is developing the Blueprint project — a program of total biomonitoring with daily medical measurements supervised by a team of several dozen physicians.

In Próspera, Johnson received an injection from the startup Minicircle, costing approximately $25,000. The therapy is designed to suppress the protein myostatin and, in theory, should increase muscle mass. In mouse experiments, similar interventions extended lifespan by approximately 30%; however, for humans, their efficacy and safety remain unverified. No follistatin therapy has been approved by the FDA. In Próspera, no such approval is required.

Johnson’s visit coincided with the conference Death Is Optional — an event that brought together transhumanists, biohackers, and crypto entrepreneurs to discuss the abolition of ageing as a biological program.

This case vividly demonstrates how Próspera functions as a jurisdictional laboratory in which practices impossible or prohibited under traditional legal systems are permitted, and where the boundaries of the permissible are defined not by the state but by a combination of private expertise, insurance, and the participants’ willingness to assume risk.

Próspera’s Social Initiatives and the Conflict with the Local Population

Erick Brimen makes no secret of the fact that his motivation for creating Próspera is deeply personal. He grew up in Venezuela — a country rich in natural resources but mired in poverty and corruption. He is convinced that the root of the problem is not a lack of resources but poor governance. “Education, healthcare — it all goes to waste if there is no effective governance,” he says. “That is exactly why we do what we do.”

Próspera claims the following tangible benefits for the local population:

Employment. 90% of Próspera’s employees are Honduran citizens. Average wages are significantly higher than the national average.

Education. Próspera invests in the construction of English-language schools for local children. Access to cryptocurrency and technology education programs through the Bitcoin Academy is also provided.

Infrastructure. Assistance in developing roads, water supply, and electrification for neighbouring communities.

“Honduras is the country with the highest number of illegal immigrants in the United States,” says Brimen. “Every year, thousands of people risk their lives trying to cross the border. We are creating conditions so that they have the opportunity to stay home and earn a decent living.”

12% of all Próspera’s tax revenues go into a trust for the development of Honduras — without any operational obligations on the government’s part. This is pure revenue for the state. However, critics point out that these taxes do not go to Roatán’s local budget, even though Próspera’s residents make use of the island’s infrastructure — roads, electricity, the landfill, the airport.

A few hundred metres from Próspera’s futuristic buildings lies Crawfish Rock — an Afro-Caribbean fishing village that has existed for decades. Its residents are the descendants of fishermen and builders whose families created the island’s infrastructure with their own hands.

For them, Próspera is not an opportunity but a threat.

A closed territory. Próspera functions as a gated community. Entry is permitted only with authorisation. Armed security at the checkpoint issues temporary tourist passes, requiring visitors to sign a document agreeing to Próspera’s legal code.

Part of Crawfish Rock’s territory has been legally incorporated into the Próspera zone as incorporated land. Residents discovered blueprints for future expansion affecting their village on the project’s website.

Right next to Crawfish Rock rises Duna Residences — a 14-storey luxury residential tower built within Próspera. It is nearly twice the height permitted by Roatán’s local building code. Local residents see this as proof: the rules do not apply to Próspera. If the project can ignore height restrictions, what is to stop it from expanding onto their land?

Próspera insists that it has no plans for expropriation, holds public meetings, and publishes notices of its plans. But for the residents of Crawfish Rock, the very fact that their land is legally within a foreign jurisdiction where they have no voice already constitutes a loss of sovereignty.

The Arrest of Juan Hernández and His 45-Year Prison Sentence

On 15 February 2022, Juan Orlando Hernández — former President of Honduras, architect of the ZEDE legal framework, and a key figure in the establishment of Próspera — was arrested at the request of the United States. The charges: orchestrating the transport of more than 400 tonnes of cocaine to the United States, receiving millions of dollars in bribes from drug cartels, and using the Honduran armed forces to protect drug trafficking. In June 2024, a New York court sentenced Hernández to 45 years in prison.

For Próspera, this was a reputational blow. A project created under the government of a convicted drug trafficker became associated with corruption and backroom deals.

Xiomara Castro Repeals ZEDE

On 27 January 2022, Xiomara Castro came to power in Honduras — the country’s first female president, leader of the left-wing LIBRE party, and wife of Manuel Zelaya, who was overthrown in 2009. One of her key pledges was the repeal of ZEDE. In her inaugural address, she called ZEDE “an international project that was selling off our territory piece by piece as spoils to international capital.”

On 21 April 2022, the National Congress of Honduras voted unanimously to repeal the ZEDE law, calling it a violation of national sovereignty.

On 20 September 2024, the Supreme Court of Honduras issued its final ruling: the ZEDE law was declared unconstitutional. The experiment with special economic zones in the country was officially over.

$10.8 Billion: The Lawsuit That Could Bankrupt a Country

On 20 December 2022, after the new Honduran government led by President Xiomara Castro repealed the ZEDE law and declared ZEDEs unconstitutional, Próspera filed a claim with ICSID (International Centre for Settlement of Investment Disputes) at the World Bank.

The amount claimed is nearly $10.8 billion (the precise figure is $10.775 billion).

Próspera contends that the repeal of ZEDE breaches guarantees given to investors for 50 years under the DR-CAFTA trade agreement (Dominican Republic–Central America Free Trade Agreement).

Próspera is seeking compensation for lost profits based on financial projections from a project in which $170 million was invested. The claim is 63 times the amount invested. Critics call it a demand to pay for hypothetical future profits that might have materialised had the country not changed course. In essence, it is a demand to pay for a country’s sovereign right to change its own laws.

On 25 August 2024, Honduras took a significant step: the country withdrew from ICSID in an attempt to escape the jurisdiction of international arbitration. However, legal experts note that this does not halt claims already filed — they will be adjudicated under the rules in effect at the time of filing.

If Próspera prevails, Honduras will face a choice: pay a sum capable of bankrupting the country, or face international sanctions, the freezing of assets abroad, and loss of access to international credit.

The 2025 Elections: The Return of the National Party

On 30 November 2025, Honduras held presidential elections that proved to be among the most controversial in the country’s history. Two days before the vote, Donald Trump publicly endorsed Nasry Asfura — the candidate of the National Party, the very party that created ZEDE. The results showed Asfura with a slim lead. On 2 December 2025, while votes were being counted, Trump accused Honduras of attempting to falsify the election results. The official website of the electoral council, CNE, went down due to “technical issues.” The count was suspended several times. International observers documented irregularities.

On 1 December 2025, Trump pardoned Juan Orlando Hernández — the former president of Honduras serving a 45-year sentence for drug trafficking. Political analysts linked the decision to support for the National Party in the elections.

On 27 January 2026, Nasry Asfura was inaugurated as President of Honduras. The National Party’s return to power opened the door to a potential reinstatement of the ZEDE mandate.

The Fate of the Project in 2026

The story of Próspera is a collision of libertarian faith in the free market with state sovereignty, of technological optimism with political reality, of global capital with local communities.

Can a new model of governance be created that is more effective than the state? Can the free market build institutions that surpass traditional ones? Próspera demonstrates that private governance is technically feasible, but it also shows that there are things money cannot buy: political legitimacy, the trust of the local population, and institutional stability.

In 2026, the fate of the project will depend on the ability of Honduras’s new government to balance international obligations, domestic sovereignty, and economic interests. Próspera may become either a model for the future of governance, or a costly lesson and a reminder to investors that the most ambitious ideas require not only capital but also political wisdom, social responsibility, and a deep understanding of context.

Sources

Próspera Official Website

How Do You Build a New Singapore? Inside Próspera’s Bet on Private Governance (Erick Brimen)

Paul Romer: Why the world needs charter cities (TED Talk)

$10.775 Billion Claim Filed Against Government of Honduras

Bloomberg Law

Hernández Pardon by Trump — FactCheck.org

Honduras Elections 2025 — Wikipedia

Nasry Asfura Wins Honduras Election — Al Jazeera

Xiomara Castro Government Analysis — CSIS

ZEDE Law in Honduras — Latin America Working Group

Prosperity for Whom? — Liberation News

Freedom Cities — Wikipedia