Can a Billionaire Start a Country With Its Own Laws?

On 19 June 1946, the British House of Lords was discussing a deal involving the British North Borneo Company. The government had agreed to acquire the company’s rights and assets in Southeast Asia. Compensation would be determined by arbitration, and shareholders were due to vote on the proposed agreement the following week.

Viscount Cranborne had a question. A colonial official had assured the government that the people of North Borneo would welcome the change. How did he know? Had he actually consulted them?

Lord Winster, answering for the government, replied:

I am not in a position to say upon what conversations or consultations the Chief Civil Affairs Officer in North Borneo has based his opinion.

The exchange is there in Hansard, columns 1008–1010. Winster added that representatives from Borneo visiting Britain had supported the official’s assessment. What he couldn’t establish was how the views of the wider population had been obtained.

The shareholders had a meeting scheduled. The inhabitants had an assurance made on their behalf.

And this wasn’t an ordinary corporate acquisition. Britain was negotiating the transfer of powers to govern a territory.

For anyone wondering whether a wealthy entrepreneur can create a country with its own laws, North Borneo offers a rather inconvenient precedent.

The company that could make laws

Today, the territory is principally Sabah, a Malaysian state. In the nineteenth century, it was home to diverse communities, existing local authorities and overlapping territorial claims.

Alfred Dent, a British businessman, and his associates negotiated grants from the rulers of Brunei and Sulu in 1877 and 1878. They later secured a royal charter for the British North Borneo Company.

The 1881 charter is quite a document.

It records separate annual payments of $4,000 and $6,000 under two of the Brunei grants. These were obligations attached to particular territories, not a single price for an entire country. The legal character of the original concessions, especially the Sulu agreement, remains disputed.

The charter also recounts the political powers that the rulers purported to confer: making laws, levying taxes, issuing money and raising an army or navy. The Brunei commission described in the charter went further, claiming authority over the lives and deaths of inhabitants.

Queen Victoria incorporated the company by royal charter in November 1881. Seven years later, Britain signed a protectorate agreement with it.

The agreement of 12 May 1888 described the company-administered territory as an independent State.

Britain nevertheless controlled foreign relations, provided external protection and restricted the company’s dealings with other states. Independence meant something different in this imperial arrangement from what it generally means today.

Within those limits, the company appointed officials, collected taxes, ran courts and maintained security forces.

It also found a distinctive source of revenue.

Economic research on North Borneo describes a system of monopoly licences for gambling, spirits, opium and pawnbroking. Private operators bid for the rights, and the company government collected the fees. Such licences brought in money when agricultural and mining ventures disappointed investors.

A company-run country with its own gambling licences.

But the power to make laws was not accepted everywhere the company claimed to govern.

Mat Salleh, a local leader with his own following and political ambitions, became one of its most formidable opponents. Disputes involving taxation, territorial authority and the rights of local chiefs developed into armed conflict.

On 9 July 1897, his followers attacked the company’s station on Gaya Island. The settlement was burned.

The company responded with military expeditions, although the struggle also included periods of negotiation and attempted accommodation. The interests of Mat Salleh, other local leaders and the communities involved were not always the same.

By January 1900, company forces were besieging his fort at Tambunan. They diverted its water supply and bombarded it for several days. Mat Salleh was killed on 31 January. Resistance continued under other leaders.

The charter’s military powers had ceased to be words on parchment. They were being used to establish and defend the company’s authority over people who disputed it.

After Japanese occupation during the Second World War, North Borneo was devastated. The company lacked the resources for reconstruction, and the British government negotiated a transfer of its rights.

The agreement was signed on 26 June 1946. The North Borneo Cession Order confirms that the transfer took effect on 15 July, when the territory became a British Crown colony.

The company was to receive compensation. Its rights to govern, accumulated through concessions and imperial agreements, were transferred to the Crown.

The shareholders had something to sell.

SpaceX buys a neighbourhood

The modern route to political power looks quite different.

Take Boca Chica, on the southern Texas coast. Before SpaceX transformed the area into a rocket-development complex, it was a small residential community where people valued the isolation.

Maria Pointer thought she would spend the rest of her life there.

“I really thought I would be able to stay until my last days,” she told the Los Angeles Times in 2019, after SpaceX began offering to buy local homes.

Her husband Rayford was reluctant to sell. The couple eventually negotiated an agreement and moved away. Other residents made their own decisions as the launch facility expanded.

By May 2025, SpaceX and its employees owned 237 of the 247 lots with residential dwellings inside the proposed City of Starbase. The figure comes from property documents examined by the Houston Chronicle.

A substantial part of the old community had changed hands.

Then came an election.

On 3 May 2025, voters approved incorporating Starbase as a Texas municipality by 212 votes to six, with five additional ballots recording no vote on the question. There were 283 registered voters. More than three in five were SpaceX employees, according to reporting by The Texas Newsroom.

The inaugural mayor, Bobby Peden, was also a SpaceX vice-president.

The new city subsequently adopted ordinances establishing a municipal court and police department. By October 2026, it also had a role in decisions about access to Boca Chica Beach and State Highway 4 during spaceflight operations.

Texas legislation enacted in 2025 allows the Texas Space Commission to authorise specified temporary closures with municipal approval. Starbase published an order implementing such a closure on 25 October 2026.

Before incorporation, SpaceX could control access to its own facilities. The city now participated in decisions affecting a public highway and beach.

Texas law had provided a route to public authority without creating an independent country.

For SpaceX, that may be more useful than a flag.

Disney discovers who really owns the government

Walt Disney World spent decades inside Florida’s Reedy Creek Improvement District, established in 1967. The district maintained roads and utilities, provided fire protection, issued debt and collected taxes. Disney’s landholdings gave it substantial influence over the governing board.

The arrangement lasted more than half a century.

In 2022, Disney publicly opposed a controversial Florida education law, provoking a political confrontation with Governor Ron DeSantis and state legislators.

The following year, Florida replaced the district’s old governance arrangements with a governor-appointed board.

Disney continued operating its resorts. The district kept providing services. In 2024, the restructured board approved an agreement contemplating as much as $17 billion in future Disney investment over 10 to 20 years.

Disney could carry on running the Magic Kingdom. Florida had changed the arrangements for governing the territory around it.

The economic relationship survived. Disney’s previous control over the district’s government did not.

In Honduras, people have already moved in

Próspera, on the Honduran island of Roatán, has attracted residents and businesses with an unusually autonomous legal and regulatory framework. ABC News reported in August 2026 that roughly 200 people lived there permanently, although that was not an independently audited census.

Rich Lee, an American entrepreneur working with human-augmentation technology, moved there because he believed the regulatory environment would allow him to pursue projects that were harder to develop elsewhere.

A short distance away is Crawfish Rock, a fishing community that was already there.

Venessa Cardenas Woods, whose family has lived in the village for five generations, acknowledged to ABC that Próspera had brought jobs. She also described growing distrust between neighbours who welcomed the employment and those who worried about the project’s effects on their community.

The legal experiment has become a national political dispute.

Próspera was established under Honduras’s special-zone legislation. In 2024, the Supreme Court ruled against the constitutional foundations of the ZEDE framework. What that means for existing arrangements remains contested.

Three companies associated with Próspera are pursuing international investment arbitration against Honduras.

The case initially attracted attention for a claim valued at $10.775 billion, roughly one-third of Honduras’s 2023 GDP. By October 2025, the companies were seeking restoration of the rights they claimed or approximately $1.63 billion in damages as an alternative. Neither amount had been awarded as of October 2026.

One of the claimants is Próspera Arbitration Center LLC. The same centre describes itself as the default provider for private arbitration within the zone unless parties agree otherwise. That institutional overlap is documented; it does not establish bias in a particular arbitration.

There are questions for homeowners as well. Próspera’s published residency agreement offers legal-stability protections but contains conditional provisions affecting continued residence and property transfers. A separate September 2026 disclosure seeks to limit certain liabilities of specified organisations to an aggregate $100, subject to exceptions.

That figure is not the value of anyone’s home, and we found no verified instance of the property-transfer provisions being enforced against an unwilling owner.

Honduras’s politics continued to change. Nasry Asfura became president in January 2026, and the country returned to the ICSID Convention in August. The investment dispute remained unresolved.

The people living next to Próspera also sought to be heard in the arbitration.

In September 2026, the tribunal admitted seven representatives of Crawfish Rock, including Cardenas Woods, along with the Garífuna organisation OFRANEH, the Cato Institute and an independent researcher.

Each admitted participant or group could submit a written brief of up to 15 pages. None acquired party status or permission to participate in hearings. The tribunal had previously rejected applications from organisations supporting Próspera at an earlier stage.

An army doesn’t settle everything either

Somaliland declared independence from Somalia in 1991. It established its own government, security forces and electoral institutions and has exercised substantial authority over territory in the Horn of Africa, although some areas remain contested.

An opposition candidate won its presidential election in 2024. Yet Somaliland waited until 26 December 2025 for Israel to become the first United Nations member state formally to recognise its independence. Most other governments and regional organisations continued to support Somalia’s territorial integrity.

Somaliland is not a billionaire’s experiment. Its history is rooted in conflict and claims to self-government. But it offers a revealing contrast.

North Borneo had an imperial power willing to recognise and protect a company-administered state. Somaliland maintained its own institutions and security forces for decades without broad diplomatic recognition.

Running a territory is one achievement. Persuading other states to recognise it is another.

The price of making your own rules

Yes, a company can govern a territory. North Borneo proves that much. What it cannot guarantee is the right to go on governing it.

The British North Borneo Company obtained concessions from existing rulers, received a royal charter and operated under British protection. It administered territory, raised revenue and used armed force to maintain authority. In 1946, its governing rights passed to the Crown under an agreement.

Modern entrepreneurs can acquire land, develop communities and sometimes obtain significant public powers. Starbase became a municipality under Texas law. Disney exercised unusual influence over a public district for decades. Próspera was created under legislation promising a distinctive degree of autonomy.

The political arrangements behind those powers can change. Florida reorganised Disney’s district even as the state’s economic relationship with the company continued. Honduran courts challenged the legal foundations of Próspera. Texas authorised public powers that Starbase could exercise within state law.

Owning the buildings is one thing. Holding the authority to govern is another.

In June 1946, the directors of the British North Borneo Company had shareholders to consult about the transfer of its rights. When Cranborne asked how the inhabitants’ views had been obtained, the government could offer only an official’s assurance.

Eighty years later, the Pointers negotiated a price for their home and left Boca Chica before its residents voted to establish Starbase. Rich Lee moved to Próspera for rules he wanted to live under, although their future is contested. Venessa Cardenas Woods and six other representatives of Crawfish Rock were granted fifteen pages between them to submit their community’s perspective to an international tribunal.

When your new country finally has people living in it, will it still be yours to rule?