Yves here. Sadly, with the possibility of breakdown of traditional governance looking all too imminent, libertarians have been attempting to square the circle of their anti-colllective-control beliefs with the need for things like infrastructure and security. The charter city approach sounds a bit too much like the Snow Crash Franchise-Organized Quasi-National Entities like Mr. Lee’s Greater Hong Kong for my taste.
This article focuses on charter cities set up in poor nations. But it does acknowledge that there have been some in America, such as ones sponsored by the Irvine Company. Oddly, there is no mention of the Disney-created town of Celebration. Perhaps things got better, but I know someone personally who invested there in the Disney years. It was not a happy experience.
By John P. Ruehl, an Australian-American journalist living in Washington, D.C., and a world affairs correspondent for the Independent Media Institute. He is a contributor to several foreign affairs publications, and his book, Budget Superpower: How Russia Challenges the West With an Economy Smaller Than Texas’, was published in December 2022
Since late 2022, Honduras Próspera Inc. (HPI), a Delaware-based developer of a semi-autonomous zone on a Honduran island, has been locked in a nearly $11 billion legal battle with the Honduran government. After having its project outlawed, HPI sought damages while continuing operations, and in February 2025, a tribunal allowed the case to proceed. The dispute has drawn some attention in the U.S., with 33 Democratic lawmakers urging Washington to intervene on behalf of Honduras against HPI in 2023. Meanwhile, both parties are trying to manage the situation, with Honduras wary of scaring off other investors by appearing hostile to business, and Próspera wanting to avoid accusations of neocolonialism and extortion.
Próspera promotes itself as a “pro-innovation governance framework,” and is one of the most visible modern attempts to build a charter city. It operates as a semiautonomous zone with its own tax, legal, and regulatory systems, and though its future is uncertain, the concept itself is not new. Colonies and frontier ports have long attracted settlers, capital, and trade through special legal privileges. Carthage, an ancient city-state established in North Africa, thrived from commercial and political experimentation, and medieval charter towns and Hanseatic cities like Lübeck and Danzig flourished under self-rule. Private enterprises have also played a role, such as the English East India Company establishing Kolkata in India to further its business interests.
The rise of centralized states and colonial empires diminished the independence of formerly autonomous cities over the last few centuries, but new versions resurfaced in the 20th century. American company towns offered one model of corporate-controlled living, while the Irvine Company’s master-planned communities in California showed the potential for private development (though most were largely absorbed by municipal governments). In 2005, Sandy Springs, Georgia, incorporated and initially outsourced most of the public services to private contractors, with mixed results. Globally, special economic zones (SEZs) became laboratories for economic and urban experimentation, with China paving the way for their evolution for decades.
Próspera and similar projects are making governance itself their focus. Designing tax, legal, and regulatory frameworks with limited oversight, they are drawing capital and curiosity and are tied to technologies like blockchain and digital identity systems. Many may collapse or remain unfinished, but they provide examples of a search for governmental and urban innovation when conventional models seem inadequate. Whether lasting alternatives or future historical footnotes, the push to build them continues worldwide.
Much of today’s charter city movement draws on the thinking of 20th-century economists. Ludwig von Mises and Friedrich Hayek argued that prosperity emerged from institutional competition and spontaneous order when existing rules fail. In 2009, Nobel laureate Paul Romer built on these ideas by reviving the charter city concept, proposing that struggling countries should set aside territory to be administered by a successful outside country with strong protections for property and individual rights, eventually leading to economic prosperity and the strengthening of human rights in the host country.
Parallel proposals emerged in tech circles, inspired by economists like Milton Friedman’s experiments with charter-style institutions. Curtis Yarvin outlined “neocameralism,” which imagined governments as joint stock corporations with shareholders choosing a CEO-like ruler in place of electoral democracy, viewed as “a refinement of royalism.” His writings, along with those of philosopher Nick Land, inspired the Dark Enlightenment, which rejects egalitarianism and democracy while promoting a “patchwork” of competitive, hierarchical city-states, attracting the interest of tech figures like PayPal co-founder Peter Thiel and Mosaic founder Marc Andreessen, and sees governance as a competitive good.
Not all charter city projects in the broader term embrace this ideology, and their variations are evident in the variety of labels they use: startup cities, free private cities, freedom cities, network states, and more. Yet all present themselves as alternatives to conventional governance, appealing primarily to libertarians, anarcho-capitalists, and related movements.
Próspera
The rise of Próspera shows the opportunism and fragility of charter city projects. In Honduras, a 2009 coup tacitly supported by Washington brought a more business-friendly government. By 2013, the country passed a law allowing for Zones for Employment and Economic Development, known by their Spanish acronym ZEDEs, autonomous areas with their own political, judicial, and economic systems.
Honduras’ weak institutions and high corruption made it an early candidate for experiments, and Paul Romer initially worked with Honduran officials to shape the ZEDE model, but later distanced himselffrom the project in 2012 stating that “he had not been given the powers and information necessary to fulfil his role as chairman of the transparency commission, which is meant to ensure governance of the new development zones,” according to the Guardian. Romer had originally envisioned administration by foreign governments such as Switzerland, but sovereignty concerns and a lack of willing partners shifted the model to private developers, aiming to make good governance profitable.
Honduras Próspera Inc. became the first ZEDE in 2017. Erick A. Brimen is the founder and CEO of HPI, and he earlier launched NeWay Capital, a “social impact investing” corporation focusing on Latin America. With backing from investors including Pronomos Capital, a venture fund created in 2019 to build charter cities worldwide, Próspera became Pronomos’s flagship project. Pronomos envisions “crowd choice in governance providers,” startup societies sanctioned by existing states, and eventually new settlements in international waters or even outer space. Its aim is to create a model “where the city is the product.”
Próspera is also linked to the Seasteading Institute, which sought floating charter cities in international waters. Patri Friedman, who founded the institute and is the grandson of Milton Friedman, helped shape Pronomos with support from entrepreneurs like Peter Thiel, Marc Andreessen, Naval Ravikant, and Balaji Srinivasan. Próspera markets itself as an alternative to weak state institutions, offering Hondurans and foreigners the option of voluntarily accepting Próspera’s rules for more reliable governance and economic opportunity.
Próspera’s governance is outlined in its code of laws and includes some democratic regulations. In high-density areas (35 or more inhabitants per square kilometer), residents can elect a technical secretary and vice technical secretary through majority vote. Candidates are nominated by the Próspera Council and submitted to the national oversight body (CAMP). While residents can vote for some positions, ultimate control over laws remains with the private corporation.
The zone writes its own regulations, zoning codes, and tax structures, and though criminal law remains under Honduran jurisdiction, Próspera sets its own civil and commercial law centered on arbitration. Parties signing contracts may choose their arbitrator or default to the Próspera Arbitration Center.
Residents sign an “Agreement of Coexistence,” a social contract recognizing Próspera’s authority. They have to pay a platform fee of 7.5 percent of income or business revenue, plus an annual membership fee—$260 for Hondurans and $1,300 for foreigners, with higher rates for corporations. The city also offers “e-residency,” inspired by a 2014 Estonian initiative, allowing virtual residents to register companies. HPI even recruited Ott Vatter, former head of Estonia’s e-residency project, to design its initiative, before his accidental death in 2024.
The city has promoted innovative 3D property rights, modular construction, and medical reciprocity laws. Próspera’s leadership even emphasizes internal competition. Chief of staff Trey Goff explained in an interview that communities can adopt their own “interest declarations,” displacing Próspera’s administration within their boundaries (similar to homeowners’ associations). These enclaves would establish their own rules, provided they are consistent with overarching statutes, allowing groups to test alternative models.
Related Projects
Próspera’s survival is far from certain. Its population remains well below the short-term target of 10,000, and its territory is still just a little more than 1,000 acres. Tensions with the Honduran government since 2022 have added uncertainty, with the company turning to the Investor-State Dispute Settlement (ISDS) under the World Bank, claiming protections under the Honduras-Kuwait Treaty of Reciprocal Investment, and that the treaty preserves ZEDE law for 50 years. The UN has meanwhile criticized Honduras’ regime for ceding excessive sovereignty to private investors. “In 2021, the United Nations expressed strong concern over Honduran ZEDEs, stating that they posed a potential threat to human rights in Honduras. The UN estimated that ZEDEs could wind up controlling approximately 35 percent of the country’s territory,” stated a 2024 Foreign Policy article.
Founder Erick Brimen, however, insists Próspera is not a location, but a “platform that delivers governance.” Alongside its presence on the island of Roatán, Próspera has already annexed a port near La Ceiba in Honduras for its “first satellite” community with plans for expansion along the country’s north coast. It is also exploring possibilities in Guatemala, the Dominican Republic, and Haiti (despite none authorizing ZEDEs). As of mid-2025, it was also in talks with dozens of African governments for a 750-1,000 hectares zone, primarily focused on reforming commercial laws.
Other ZEDEs in Honduras include Ciudad Morazán, run by Centro American Consulting & Capital. Pop-up cities like Vitalia, which Próspera hosted on Roatán in 2024, and its predecessor Zuzalu, function as temporary micro-communities for testing new ways of governing. Pronomos has also backed Itana (formerly Talent City) in Nigeria, a planned community outside Lagos with government support.
Other experiments are developing globally. Praxis (originally Bluebook Cities) envisions a full breakaway state, raising $525 million from investors including Peter Thiel, Alameda Research, and Winklevoss Capital. Billing itself as the “world’s first network state” and drawing inspiration from tech entrepreneur Balaji Srinivasan, Praxis claims to have more than 87,000 digital “Praxians,” and has floated possible locations from the Mediterranean to Greenland.
Another Thiel-backed startup explored creating an eco-industrial city in Bhutan; however, the government “disavowed the startup’s project and plans to announce its own mindfulness-focused ‘megacity’ instead,” stated the startup news website Dash Startup. The Charter Cities Institute, a non-profit based in Washington, D.C., has plans for a Specialty City in Zambia, while Babson Global Inc., the commercial arm of Babson College, unveiled a plan for a global network of charter cities in 2013.
In the U.S., ventures like Elon Musk’s Starbase are pushing the boundaries of urban creation nearly a century after company towns faded. Billionaire and former Walmart CEO Marc Lore is meanwhile bankrolling Telosa, a planned private city the size of Manhattan in the American west, scheduled for completion by 2050 for 5 million people. Trump has shown his support for freedom cities initiatives during his second term, while the Charter Cities Institute proposed using Guantanamo Bay to pilot a charter city, leveraging the region’s unique legal status.
The European Union has largely restricted charter cities and SEZs, with existing versions tending to focus on industry or logistics instead of mixed-use urban development. The continent’s denser populations, strong municipal governance, strict property laws, and historical labor struggles have limited experimentation. However, eco-villages and smart city projects have gained renewed interestin recent years.
Outside the EU, other European efforts exist. In the UK, Paul Romer advised on charter city-style “freeports” under Rishi Sunak’s government, though enthusiasm waned eventually. Russia maintains “closed cities” for military and nuclear development (a Soviet legacy), allowing limited economic autonomy with some experiencing limited revival, alongside SEZs. Switzerland’s Zug, or Crypto Valley, has attracted global investment through flexible governance and emerging technologies.
And even on the EU’s borders, libertarian experiments have also emerged: in 2015, Czech politician Vít Jedlička attempted to create the “crypto-state” of Liberland on disputed land between Croatia and Serbia, but both countries blocked it. Despite setbacks, it has received traction among global libertarian movements.
Próspera Roatán has only acquired roughly 1,000 acres of unoccupied land at market prices, yet its presence is a symbol of charter cities’ challenges to national and political sovereignty. That sensitivity is especially acute in Honduras, once branded the first “Banana Republic” under U.S. corporations in the 20th century. Since 2007, Honduras has been marred by cases like Randy Jorgensen’s resorts, which displaced Garifuna communities through violence and coercion. Fears over Próspera flared early on, when Próspera connected a nearby town to its water supply until villagers attempted to restore its old system following pricing complaints.
Critics fear that charter cities and SEZs could siphon investment away from social democracies and toward corporate enclaves with little oversight. Defenders counter that these are co-development projects, not secessions, with mechanisms like revenue sharing to ensure host nations benefit, and that poor countries need room to experiment as urbanization and population growth continue. German economist Titus Gebel, a major proponent of ZEDEs, wrote in 2018 about how the city-states in Hong Kong, Singapore, and Monaco thrived while benefiting the surrounding areas.
The recent track record of new city projects is mixed and has proven difficult even with state support. South Korea’s Sejong City was planned as a new administrative and entrepreneurial city when it started in the early 2000s, but struggled to attract agencies and businesses, limiting its appeal. Other projects, like Malaysia’s Forest City, have disappointed investors. Hong Kong’s autonomy has been largely erased since 2020, while Chinese and Gulf states zones remain tightly controlled outside of looser financial regulations. In weaker states like Honduras, autonomous ventures find more space but are vulnerable to political swings.
Still, billions of dollars are flowing into charter city projects, especially from tech firms that no longer want to merely influence governance but actively run it. Governmental experimentation is normal, and Italian city-states showed how diverse and innovative governance systems during the Renaissance allowed them to thrive while many other European states stagnated. It is still unclear whether modern charter cities will create flourishing alternatives or new forms of exploitation. The risk lies in allowing a single ideology or group to dominate their expansion and development as the concept gains public attention.
Mr Lee’s Lesser Reichsburgs
(And thank you for the excellent detailed article)
Interesting–sounds like Atlas shrugging. One doesn’t want to seem too obsessed with the ME but a parallel seems apparent with Zionism which sought to plop a kind of charter country in the middle of all those Arabs (and then call the objectors terrorists). Trump wants to create his own sub version in Gaza, run by the US–but don’t call it a colony.
I have some familiarity with Sandy Springs, Georgia which shares Fulton County with the City of Atlanta but always sought to avoid incorporation with all those poor people and their tax supported needs. Indeed Atlanta is surrounded by “edge cities” that were part of the mid 20th white flight to suburbia. In the 21st a “new urbanism” movement has sent many back into the center city to escape the strip mall dullness of the suburbs and in an ecommerce world the temple of commerce shopping malls are struggling (at least here in SC).
Perhaps one should call these new city states what they are: secession. As with our Confederacy the motives behind it can be less than savory. Universality can be costly for the privileged and they want an escape hatch.
I agree with your comparison to Israel. Gaza should offer a strong cautionary tale to nations considering ceding sovereignty for near term profits. How long before that glittering island of commerce casts its predatory gaze upon the mainland? Prospera indeed.
“strip mall dullness” nails something real sad. Hope you’re right about escape hatches, and it’s not just that manors are needed for them to lord [even more] over.
Here is a comment on this phenomenon
https://aeon.co/essays/like-start-ups-most-intentional-communities-fail-why
It is funny how these cities are sold as “products”. What does that make their citizens? You are not only a consumer because you are part of the product? Are you a labour or capital input or a slave to the techlords wanting to rule their little fiefdoms?
I’ve always thought of Randian libertarians as wanting to be respectable slave owners.
Excellent link. Thanks. Is NC a “shadow community”?
(I was marginally involved with some utopian communities in the 70’s. The article describes the defeating issues in every one of them.)
‘Who knows what evil lurks in the hearts of men? The NC Shadow knows!’
A country giving up a chunk of of its territory and handing over sovereignty to a corporation strikes me as a really bad idea. For Embassies, yeah. But for Libertarians not so much. And as I say, scratch a Libertarian and you will find a Fascist. Those semi-autonomous zones are actually beach-heads that will expand over time and may even attempt to take over a country if its government is weak – or has been weakened. That one in Honduras has already taken over a port and they may be using the Israeli model of Settlements to expand. A big tell would be if those zones bring in mercs for “protection” and “self-defense.” If you lived in one of those zones you would never be a citizen. You would be more a resource to be exploited. What “rights” you have would be determined by how much wealth that you had because at the end of the day, this whole idea of these zones is all about wealthy people not wanting to pay taxes or to obey laws that they themselves did not write. I take some satisfaction in knowing that most of them will fail over time as not having a solid base to draw upon.
If the definition is a planned community run by a private enterprise and with some degree of exemption from local laws and/or insulation from broader society (either officially or de facto) then the author missed some other examples: the sugar worker towns in places like Cuba and the Dominican Republic, and many examples of company towns in Africa. Permanent military bases have some of the same characteristics as well, except for the private enterprise part.
Those are the real world examples. The ones proposed here generally have some level of libertarian fantasy to them. Some are more fantastical than others – ‘The Line’ in Saudi Arabia is one of the loopier examples, and even a cursory look shows that it’s never going to happen. In general, these things need a reason to exist in order to be sustainable, and if that reason goes away, so does the community (the sudden closures of company towns due to resource exhaustion or changing economics). The ones that are wish fulfilment for some billionaire or other are likely to be ongoing money sinks, and if said billionaire ever loses interest then they will collapse pretty fast.
Martha Wells, a sci fi/fantasy author, actually explored this idea a bit in one of her fantasy books, featuring a city built on the back of a giant aquatic creature (like fantasy illustrators love to draw). The story dug into the implications a little: they had no natural resources to speak of and few exports, so there were few ways to make a living and everything was really expensive; the whole thing had taken a great deal of power and capital to set up, which meant that there was a leadership class that retained absolute power and control, with most residents almost completely dependent on them; and so on. Take away the fantasy elements and you’re probably not too far off the challenges that the sea-steading projects would face.
Regarding security/self defense: It seems like these proposals always implicitly assume they exist within a larger, more-or-less functional modern society to provide a basic level of peace and security so that (for example) ‘hiring’ mercs is even possible and they won’t just decide to pillage your community and steal your stuff instead. I never see anybody proposing one for Libya or the Horn of Africa, for example.
These types of things have been tried in the past. One group borrowed directly from Ayn Rand and actually called their development Galt’s Gulch Chile. It ended exactly how you might think a project designed by a bunch of greedy libertarians all out for themselves would – Atlas Mugged: How a Libertarian Paradise in Chile Fell Apart.
While looking for the link above, I also stumbled across this one from The Nation from a few years ago which is an interview with a guy who wrote a book on the history of these types of projects – https://www.thenation.com/article/politics/the-myth-of-libertarian-exit/
Thanks. There have been would be socialist Utopias as well such as 19th c Brook Farm or all those hippie communes. They never seem to last.
https://en.wikipedia.org/wiki/Brook_Farm
We had one right here, right here in rivers city!
https://en.wikipedia.org/wiki/Kaweah_Colony
There was also the Oneida community in the 19th century, which was a “free love” colony before it petered out. I first read out it in Sarah Vowell’s book Assassination Vacation where she noted that Garfield’s assassin, Charles Guiteau, had lived there for a time but was extremely unpopular and considered creepy by the other residents. She made some crack to the effect that if one couldn’t get lucky in a free love commune, it may just drive that person to want to murder someone.
There is still a remnant of that colony today – the Oneida dishware that you can still buy today for your kitchen originally came out of that commune.
last i looked, Wavy Gravy’s Hog Farm was still a going concern, and still doing good works.
and i am connected to 3 ongoing former hippie communes here in texas that are still more or less going on the way they have since the 70’s…altho i admittedly have withdrawn from the world, and lost contact with even all that.
i have a soft spot for personal secession.
after i moved out here…and the Republic of Texas craziness ensued not 40 miles to my west…and out of utter disgust with both Texas and the USAempire in toto, i have been saying that, if Texas seceded from the union, i would immediately secede from texas.
but i dont have a billion dollars,lol.
ive voted libertarian in the past, but only in protest…and due o their advocacy of weed, and arguments against war(see:Ron Paul)…but im much closer to anarchists like Rojalva(in Kurdistan).
and i do support the efforts of folks like the old Free State Project, and even that Catholic Enclave somewhere in the south that went all Benedict Option 10 or 15 years ago.
i support those efforts even though i disagree almost totally with the religion and ideology of those doing them.
and I’ll cite the Declaration of Independence to support these claims.
I remain unrepresented, harassed and harried by “my” government(s), and subject to displacement at the whim of whatever predatory sand mining conglomerate casts its eye on that ancient beach just to my north.
the only problem i have with the actual subjects of this article is who those people are,lol…and just how bad they have proven themselves to be.
i mean, mencius moldbug?
this is not, it seems, about “Freedom”, nor “innovation”, at all…its about escaping the remnants of the new deal regulatory and taxation regime.
it would be fine to have a few galt’s gulches scattered about, if we could also have a few Bookchin Enclaves to balance them out.
but i suspect that the Galts Gulchers would object to that…”experimentation” can only go to the right, after all…
Yup Hog Farm is still a thing, and so is Stephen Gaskins The Farm Community, which I actually did a report on in High School in the 70s for a social science class called Utopian Societies. Maybe exceptions that prove the rule, but it does show that however difficult, it can be done….. but you’d want to keep Silicon Valley denizens out of it.
Agreed. Having gone to college with Patri F of the seasteading institute at a small school, I’m extremely skeptical of anything he’s connected with.
This one is just a few miles west of my alma mater. I understand it is one of Iowa’s top tourist attractions.
https://en.wikipedia.org/wiki/Amana_Colonies