Thinking of stepping out of your comfort zone and making some entrepreneurial moves this year? You should consider starting a new business in Panama. While Panama may be most famous for its massive Canal, tropical beaches, and favorable banking industry, Panama is also a great place to make small business investments; and the climate is hot, so to speak, for big returns. Panama is an international business hub, and there are many favorable reasons to start a business there. It’s all about learning the best way to start, and doing your due diligence. Let us know if you want to learn more on how to start a Panama business, and we’d be happy to help you along the way.
In the meantime, here are 5 reasons why Panama is a great place to start a new business, and why you should do it:
- Labor Costs: If you want to start a new business, no matter where you are, calculating favorable labor costs is critical. Panama has a very low cost of living, and therefore, some of the most competitive labor costs around. It also has a surge of foreign and local workers, skilled or unskilled, that are populating the country in search of work. And there’s plenty of work these days. You can cut about 50-70% out of your labor costs when compared to N. America right off the bat, and that’s significant, especially to new businesses.
- The US Dollar: When you start a new business in a foreign country, currency is king, especially if you plan on doing international trade or business in the process. It’s also a sign of economic stability, and easier for international banking. Panama’s official currency (the Balboa) is pegged to the USD, and US currency is used in every aspect of the country’s business transactions. It also helps keep inflation down, which is another crucial benefit, especially in Latin America.
- Growing Economy: Panama has had unprecedented growth over the past ten years, and doesn’t show any sign of slowing down soon. This also means that it has a healthy, and growing marketplace. Whether it’s on a large or small scale, Panama has a large demand for new products and services. There’s also a growing middle class, meaning that people with disposable income are increasing throughout the country; and that’s a good sign if you’re looking to start a new business in Panama.
- Taxes: While Panama is trying to ditch the reputation as a “tax haven”, it still has significantly lower taxes than its neighbors in the Americas, as well as lots of incentives for small and large businesses. Panama is a business-forward country, and Panama taxes represent this. There are many incentives for new businesses, and favorable laws to help keep them sustainable through tax code enforcement.
- Location: Logistically speaking, Panama’s location is almost unparalleled globally, which is important if you’re looking to start a new business. Panama has Central America’s most active airport, with over 20 direct flights to the US, and nearly 100 to cities across Latin America and the Caribbean. It’s in either the Central or Eastern US timezone, depending on the time of year, which makes it ideal for businesses that operate on US business hours. Panama also has some of the world’s best, and convenient shipping options, as well as FTAs with a number of key countries, making it easy to import and export if needed.
Continue reading about the different business structures and requirements to starting a business in Panama.
