So what’s it like to do business in Panamá? What are the costs and benefits of creating, building and operating a small business in Panamá? What are the opportunities for small business in Panamá? What are the risks for small business in Panamá? What’s it like for a foreigner (an extranjero to the locals) to create a business in Panamá?
Our experience as foreigners over the past five years is the basis of our response to those questions and serves as the foundation for our recommendations to people who either want to retire or to invest in Panamá. We’ve been fortunate to make friends with individuals who are natives who have spent time in the States living, working, and for many, getting an education. In our business we have met and worked with other foreigners who have been here for decades and have built successful businesses. The native people are pleasant and cooperative and the weather is wonderful. Panamá is a delightful place to live with a cost of living that permits a pensioner to live comfortably here. You can get the demographics elsewhere; here we’ll focus on business opportunities. Panamá has a rapidly evolving economy somewhere between 2nd world and global depending on the sector you look at and opportunities for entrepreneurial success are everywhere.
This is the first of 4 analyses of aspects that have a direct bearing on the creation, growth and success of small business in Panamá. The four articles deal with the following: the economy and infrastructure; the labor market; government bureaucracy, and finally some key recommendations for the best business opportunities.
The economy: Panamá has an economic engine – The Canal – unlike any other country in the world. The Canal will be expanded to accommodate the largest ships in the world and the 5+ Billion dollars is but one of several mega projects in the early phases. The Panamanians have met the challenge of managing this resource efficiently and effectively. There is nothing to indicate a bigger Canal will be any less effective. There was a celebration including a large planned explosion in lieu of the usual ‘shovel ground breaking’ to initiate the serious work on the new locks at the Pacific end of the canal and they plan to open the new expanded series of locks to commemorate the 100 year anniversary of the opening of the canal in 2014.
There is a new refinery planned near the Costa Rican border in Puerto Armuelles and expansion of the cross-isthmus pipeline to the Caribbean port of Chiriqui Grande. The country is in the midst of a real estate boom. The capital city skyline is dotted with gantry cranes that look like pterodactyls feeding. Very large international investors have made significant financial commitments to build first class residential and hotel facilities in the capital city.
The infrastructure is good and being improved. The Pan American highway that links the capital city to the Costa Rican border is nearly completely widened and resurfaced and resembles an American Interstate highway. This has opened the real estate options and expanded the opportunities for suburban residential development west of the capital city. The reverted military bases are slowly being put to good economic use and there are five international underwater fiber optic cables that cross under the former Clayton, now known as The City of Knowledge. Broadband high speed internet access is reliable and so are the electrical and water systems. Electricity rates are the most expensive utility in comparison to other countries in the region. But the real estate boom is going to put demands on the utilities and roadways that may overload the existing systems soon.
Traffic in the center of the capital city is difficult during the day due to a lack of off-street parking and an uncoordinated and haphazardly regulated public transportation sector. The government has announced plans to improve the beautiful bayside scenic route of Avenida Balboa in front of many new high rise apartment buildings and to alleviate the problems of a hundred years or so of storm drains emptying into the bay near Paitilla.
The Centennial Bridge over the Canal north of the Pedro Miquel Locks provides an interstate-like link from El Dorado to the Pan American Highway and reduces travel time from the suburbs of the city to the popular beaches along the Pacific coast by eliminating the need to drive through the city to get to the picturesque Bridge of the Americas. That famous old bridge is scheduled for some much needed surface repairs.
So what does this all mean for the exPat entrepreneur? It means that prices for property are escalating rapidly. It means that business opportunities in transportation and related services are expanding. It means that the capital city will continue to be an international hub of banking and financial services and that international communications are First-world class. Tourism is growing steadily and there are many opportunities for customer service oriented individuals to gain and hold a niche in a market that is often lacking in that area.
If you would like to comment or ask a question, please do so below. We hope this information is helpful. Let us know if there is some specific topic that we might have some expertise in which could be useful too and we’ll try to include it in the future.