In a small pan over medium heat, boil water and sugar together, stirring occasionally, until it gently boils and becomes an amber color.
In a blender, mix together eggs, condensed milk, evaporated milk, vanilla, salt, and sugar together until well blended.
Put caramel into an 8x8 pan, gently shift the pan side to side to cover the whole bottom of the pan with caramel.
Gently add in the blended mixture over the caramel. Sprinkle lemon zest over the flan mixture. Put the 8x8 pan into a larger oven pan and add water to the larger pan to give it a water bath.
Bake for 35-40 minutes or until a toothpick comes out clean from center of flan.
Remove from heat and allow to cool completely before gently flipping flan onto a large flat platter.