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The Honduran supreme court ruled over the weekend that legislation allowing the creation of special economic zones exempt from local laws and taxes is unconstitutional, prompting concern among foreign investors and workers operating in those areas, Reuters reported.

The Central American nation is home to a small number of Zones for Employment and Economic Development (ZEDEs) that were established about a decade ago by former conservative President Porfirio Lobo Sosa.

The special zones were granted a 50-year concession, including so-called start-up cities that enjoy a degree of autonomy. ZEDEs have drawn foreign investors with their offer of low taxes and light regulation, with officials hailing the semi-autonomous entities’ ability to increase investment and job creation.

The most well-known of the ZEDEs is Prospera, located on the island of Roatán, which has mainly attracted investors from the United States.

But leftist President Xiomara Castro has called for these zones to be abolished, warning that they were compromising the country’s sovereignty.

The top court found that the provisions laying out the terms for the creation of ZEDEs violated articles of the country’s charter “written in stone.”

The ruling prohibits the creation of new ZEDEs. However, the legal status of existing ZEDEs remains unclear, with court representatives saying that they will publish an “explanatory addendum” laying out their ultimate fate.

Before the verdict, Prospera representatives warned that declaring the zones unconstitutional would “create a climate of insecurity and uncertainty for investors and employees” and undermine ties between Honduras and the US.

They added that the decision could cause “visas to be canceled, the suspension of support and even a disruption in the flow of remittances.”