Freiburg was founded in 1120 with a chartered market right, and the name says it all: the free castle, the free town. Anyone who moved to such a town back then was buying into a different legal order from the one that applied out in the countryside. That is pretty much exactly what is sold today under the label of the free private city.
That is why I react to the subject differently from most people. I do not find the idea absurd. Historically it worked. Titus Gebel, who formulated the idea in its modern form, has been a guest on our podcast, and he is no crank: a lawyer with a doctorate, founder of the listed company Deutsche Rohstoff AG, for years chairman of the Free Cities Foundation. His book is soundly argued.
And yet every time I look into it, I end up in the same place. Not with the idea. With how it is carried out.
What a free private city is meant to be
The model is quickly explained. A private company runs a defined territory as a provider of government services. It delivers security, infrastructure, a legal and regulatory system and independent dispute resolution. You pay a fee fixed by contract for this, not a tax set at political discretion. Your relationship with the operator is a contract, not that of a subject. If you do not like it, you leave.
The appeal for our readers is obvious. No election campaign in which your wealth is put to a vote. No rule that changes next year because a coalition has reshuffled. A price written into the contract.
That is the theory. Now to the only place where it has been seriously built.
The test case is Honduras
Honduras amended its constitution in 2013 to allow special zones with their own law, their own courts, their own taxes and their own administration. Three came out of it: Próspera, Ciudad Morazán and Orquídea.
Próspera on the island of Roatán is the flagship. Its own registries, its own financial regulator, 10% income tax, company formation online in a few minutes, a free choice between different rulebooks. The operator reports more than 1,700 registered residents from more than 40 countries. Peter Thiel and Marc Andreessen back the project through the Pronomos fund, and since January 2025 so has Coinbase's venture capital arm.
Ciudad Morazán is something completely different and is almost always overlooked in the debate. It lies on the mainland near Choloma, is aimed at Honduran industrial workers and was planned for 9,000 residents. Gebel's strongest answer to the charge that the whole thing is a playground for the rich rests on this project: in Morazán practically all residents are ordinary, often poor Hondurans, and in Próspera a Honduran pays an annual fee in the low hundreds of dollars. That is a fair point, and it is true.
But Morazán has stayed small. In 2023 around 200 people lived there.
Why the model breaks exactly where it is needed
This is the part that decides everything.
In 2022 the Honduran Congress repealed the law for these special zones. In September 2024 the Supreme Court declared their legal basis unconstitutional, and did so retroactively, as if it had never applied. Próspera has carried on regardless, relies on a promise of 50 years of legal stability and is suing Honduras for USD 10.775 billion. That is roughly a third of the country's economic output.
Then politics turned again. Since 27 January 2026 Nasry Asfura has been president, from the same party that once created the zones. In March 2026 Honduras signed back up to the convention of the international arbitration centre the previous government had left, and after depositing its ratification it is a member again from 16 August 2026. Próspera has expanded its territory to about 4% of Roatán's land area and is planning sites on the mainland. On 5 August 2026 state television promoted the project for more than two hours.
In short: the zone is operating in practice and growing. Legally its basis is null and void. The difference between the two is one election.
And this is where Freiburg comes back to mind. The medieval free town had a charter too. But it was not the charter that held. What held were the town walls, the merchants' money, the town's own militia and an emperor who needed the towns more urgently than they needed him. The freedom rested on a balance of power; the document was only the receipt for it.
The modern free private cities have the receipt and none of the balance. Their autonomy is a concession from the very state whose failure they are meant to get around. That is why the model is structurally weakest exactly where it is most urgently needed: in countries with weak institutions. A country with stable institutions does not need a private city. A country that needs one cannot guarantee it.
Próspera's answer to a hostile state is an arbitration case in Washington. That may protect the investors' capital. It does not protect the city.
One detail that says more than any brochure
In the way Próspera's crypto community describes itself, there is a sentence that is easy to skim past. Because Honduran banks withdrew from the zone under political pressure, residents were left to choose between cumbersome foreign banks and crypto. That is why the zone became so crypto-friendly.
This is sold as innovation. It is a symptom. A zone that cannot do normal banking in its own host country does not have the payment system of the future, it has a workaround.
Bitcoin City: the city that was never built
El Salvador announced a geothermally powered Bitcoin City at the foot of the Conchagua volcano in 2021, to be financed through bonds. It was never built. In early 2025 bitcoin lost its status as legal tender again as part of an agreement with the International Monetary Fund.
What actually emerged is far less spectacular and far more useful for our clients: a regulated framework for digital assets with its own supervisory authority and no capital gains tax on crypto gains. The city was the headline. The rulebook is the product. More on this in our guide Moving to El Salvador and on our El Salvador country page.
CryptoCity on Isla Margarita
The third project is the one we are asked about most often, because it is aimed squarely at entrepreneurs from the German-speaking countries.
CryptoCity is a private development on the Venezuelan island of Margarita, initiated by Tim Stern. Ground was broken in March 2024. The plan announces 300 plots on 40 hectares, managed through a decentralised organisation in which the tokens issued with each plot purchase serve as voting rights. Through this structure the residents are meant to invest jointly in hotels, restaurants and leisure facilities. The project volume is given as around EUR 30 million, with the housing scheduled for the end of 2027. Earlier reporting spoke of 100 plots.
Two things about it deserve a clear-eyed look, and both can be checked.
First, the special economic zone. The project points out that the site has recently come to lie within a special economic zone. That is true. The zone was created by decree in November 2023, it covers all eleven municipalities of the state of Nueva Esparta plus the island of Coche, so practically the whole island and not this plot, and it is run by a single authority appointed from Caracas. In its tax analysis of the underlying law, the Venezuelan-American Chamber of Commerce explicitly notes that it grants no tax benefit whatsoever: no exemption, no reduced rate, no credit. It has nothing in common with a Honduran special zone. There is no separate law, no separate courts, no separate tax system. Venezuelan law applies in full.
Second, the token. What sits on the blockchain is a membership in the organisation. Ownership of land in Venezuela is created by registration in the Venezuelan property registry and nowhere else.
Then there is the country itself. In January 2026 US forces intervened in Venezuela, Nicolás Maduro was arrested and taken out of the country, and since then his former vice president Delcy Rodríguez has been running the government. That is not a completed transition but an open situation. Anyone who buys a plot there is buying a bet on a political outcome that nobody currently knows.
One more point, which I do not aim at this project but at the category: a publicly advertised, geographically concentrated group of wealthy foreigners who are known to hold their own crypto is a security problem of its own kind in a region with a working kidnapping industry. Anyone who joins such a project should have priced that in.
You can find the project itself at cryptocity.land; the target group is stated openly, and anyone can look at the documents for themselves.
What you would need to check before buying anywhere
This applies to all three projects and to every one still to come.
If a project can answer all six points clearly, it is a good project, and it will happily tell you so. These questions are not an attack, they are the minimum you ask with any property purchase abroad.
The unspectacular alternative
What almost everyone overlooks: what the free private city promises has long been available in Latin America. Just not as a story.
You get territorial taxation, meaning no tax on foreign income, in Panama, Paraguay and Costa Rica. Uruguay offers a calm, predictable legal order with a European character. All four have courts that will still exist in 2035, banks that accept transfers from Europe and North America, and land registries with your name in them. What that looks like in practice is in the Paraguay guide and in the Uruguay reality check.
And it is worth saying once more: Titus Gebel, who formulated the idea of the competing private city most clearly, lives in Monaco. That is no contradiction and no hypocrisy. It is the answer. A small, functioning jurisdiction that already exists beats a promised one.
If you still want to look at the idea for yourself, do it. Go there, look at it, talk to people who live there. I consider the movement intellectually more serious than its critics admit. I just would not stake my residence, my wealth and my family on a legal promise whose foundation a constitutional court has already struck down.
If you want to know which Latin American country actually fits your situation, talk to us. We have been building this for clients for years, and we will also tell you when the answer is: none of them. Book a consultation with Harley.
Carpe Diem. Life is short and fleeting. One shot. Make it count.