Thread: Is Panama really the most business-friendly country?

I think the fact that it uses the US dollar helps a lot, especially for businesses from the United States.

Originally Posted by lee

Yes I do think so.... because:

1. It has the US Dollar as national currency!
2. A good infrastructure.
3. About 200 different banks to choose from (maybe more).
4. High standard of living at relative low cost.
5. Most hotels and apartments have high speed internet.
6. It's friendly towards foreigners and not overly corrupt towards them.
7. A large EXPAT Community.
8. Many speak/understand English. Banks and shops have English speaking employees.
9. English book shops!
10. Low crime.

Erk. Thanks lee for that list. I need to think again if i need to bring my son here. Good or not its also depend on our money. I think i need to think again our budget.

200 different banks? That's a lot! How many banks are there in other countries?

Yeah the use of the USD is one of the most attractive aspects followed by the low cost of living.

Countries that don't use the USD tend to be seem less business friendly. Also the low crime rate is another good factor since what good is it to have a lot of money if your at risk of being robbed/killed? Which is why various other countries that offer a low cost of living are unattractive since their crime rates are much higher.

Originally Posted by lee

Yes I do think so.... because:

1. It has the US Dollar as national currency!
2. A good infrastructure.
3. About 200 different banks to choose from (maybe more).
4. High standard of living at relative low cost.
5. Most hotels and apartments have high speed internet.
6. It's friendly towards foreigners and not overly corrupt towards them.
7. A large EXPAT Community.
8. Many speak/understand English. Banks and shops have English speaking employees.
9. English book shops!
10. Low crime.

Thanks for posting some of what Panama is like, I'm going to go to Panama sometime in the future for business related issues and i can't speak Spanish although now that you've mentioned that the majority of them can speak English it makes me abit happier ;P.

What kind of business is more suitable and well known over there? How's the buying power over there and also piracy and stuff.

Originally Posted by lee

Yes I do think so.... because:

1. It has the US Dollar as national currency!
2. A good infrastructure.
3. About 200 different banks to choose from (maybe more).
4. High standard of living at relative low cost.
5. Most hotels and apartments have high speed internet.
6. It's friendly towards foreigners and not overly corrupt towards them.
7. A large EXPAT Community.
8. Many speak/understand English. Banks and shops have English speaking employees.
9. English book shops!
10. Low crime.

Are you sure there are 200 different banks in Panama ??
Not overly corrupt but corrupted to a huge extent such that we can bribe the cops??

Actually I think allot of banks merged so it actually maybe only 100 now. As far as bribing police outright, it is pretty common practice in many countries and pretty standard throughout Latin America. Once again the police here are pretty friendly towards the tourists, no problem.

I guess some business which deal with illegal things like pirated software or such can take this opportunity to bribe but I find that's not gonna be good for other businesses which are doing the legal way.

Well, I'm not sure if Panama is THE MOST business friendly country in LatAm, but certainly it offers a lot of incentives to doing business compared to other countries in the region, such as the Colon Free Trade zone, corp tax advantages (0% from income originated off-shore), oil free trade zone, call centers incentives, city of knowledge, etc.
Depending on the focus of the business you will develop in Panama, you can maximize the use of these incentives. On the other hand, there's scarcity for well-educated resources if you want to setup a high-tech or sofisticated services company. For that purpose Chile, Argentina, and Uruguay are more competitive than Panama.
In terms of qualified cheap labor, I think Panama ranks fairly poor compared to Mexico, El Salvador or Nicaragua to setup a "maquiladora" business.

In summary, if you want to setup a business for the solely purpose of lowering your current off-shore corporate income tax expenses or to do export/import from Colon, then Panama is a good choice. But if your business will need high-level skills and qualified human resources at competitive costs I suggest to look elsewhere.

On regards to the banks, in reality there's a list of about 75 banks active now (listed in this forum), but only some of them are foreign-friendly, oriented to corporations, and with acceptable service levels, which reduces your options to a bunch of 5 or 7.

Originally Posted by lee

Yes I do think so.... because:

1. It has the US Dollar as national currency!
2. A good infrastructure.
3. About 200 different banks to choose from (maybe more).
4. High standard of living at relative low cost.
5. Most hotels and apartments have high speed internet.
6. It's friendly towards foreigners and not overly corrupt towards them.
7. A large EXPAT Community.
8. Many speak/understand English. Banks and shops have English speaking employees.
9. English book shops!
10. Low crime.

I doubt it has low crime maybe compared to other countries.

I saw on the U.S embassy they show some heavy crime. Their was one report of guys with Mercedes they chop off someones head and was walking with it around town.

So I am not sure if the crime is low or not.

Just sharing what I found.

For some real data on this question, go to Home - Doing Business - The World Bank Group and download the (free) 4.7MB PDF report, "Doing Business 2009." Although Panama has made some reforms, it is very far from the easiest place in the world to do business. (The report ranks it #81, which is somewhere in the middle of all countries studied.)

What are the basis to be the most friendly country?

Panama - 10th *worst* country in the world for paying business taxes

Paying Taxes - The Global Picture - Doing Business - The World Bank Group▼
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Originally Posted by exilio

Panama - 10th *worst* country in the world for paying business taxes

Paying Taxes - The Global Picture - Doing Business - The World Bank Group▼
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Oww...That's too bad to hear

For people with LOTS of money and an on-retainer crew of lawyers and accountants, I'm sure that Panama has advantages. E.g., if it's good enough for the scoundrels at AIG and HSBC, it must have something going for it. There are also some business incentives for large companies that are willing to create HQs in Panama; e.g., Caterpillar. It also can be a good location for companies that do a lot of import/export. But for us ordinary, law-abiding plebes, the tax advantages are slim to none. E.g., all this talk about setting up a corporation to protect your personal assets: You can do exactly the same thing in the US. Or, another example: You can put all your money in Panama real estate, and the IRS won't tax the capital gains when you sell -- *IF* you make a profit -- but Panama will. And as far as getting what you pay for: I've subsidized Medicaire, via my US taxes, for a few decades now, but that coverage is useless in Panama. If I want to claim those benefits I've already paid for, I have to move back to the US.
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you even have to pay capital gains on a house or property when you sell it in Panama, which is tax free in my home country of Canada

True also in the US, if it is your home. There's a limit; it was $500K gain when I left, don't know what it is now. In Panama, anything above $30K is taxed.

Now, there are many people in Panama who evade this, by recording one price and selling at another -- but it is illegal to do so. It's just another example of the fact that if you're willing to lie and cheat, there are lots of way to avoid taxes -- not my MO. And if you do get caught, it's much better to be in a US jail than one in Panama. :-)

"And if you do get caught, it's much better to be in a US jail than one in Panama. :-)"

heheheh That was funny, I once seen a jail in the Philippines, and believe me, that was a nasty little
place...

---------- Post added at 03:53 AM ---------- Previous post was at 03:32 AM ----------

"Now, there are many people in Panama who evade this, by recording one price and selling at another -- but it is illegal to do so."

How is this done in Panama, is your selling and buying price not recorded on the title or deed? Or maybe they get the house appraised each time it sell, or how does this work?

If a person built a house themselves wholesale for like $200,000 but was $250,000 retail when it was done, and you sell it 3 years latter for $300,000, what is the real gain I wonder?

Speaking of taxes, I have heard on forums of several foreigners being audited for taxes for both property sales and also income taxes in Panama... Even on this forum....

So people moving just for a tax haven reason, will be in for a shock when the Panama tax guys instead of the IRS guys, Comes knocking on their door.

Darryl

Originally Posted by hockey97

I doubt it has low crime maybe compared to other countries.

I saw on the U.S embassy they show some heavy crime. Their was one report of guys with Mercedes they chop off someones head and was walking with it around town.

So I am not sure if the crime is low or not.

Just sharing what I found.

I personally think Panama has a high crime rate. Just pick up a newspaper... actually right now I think its even worse because of the elections. There are alot of kidnappings and alot people are getting robbed/killed in taxi cabs. Im not saying this to scare anybody, but its a sad reality because the law isnt as strict on crime like the states. so I suggest keeping your eyes open and if you have to use a ATM please us it inside a super market or outside a bank where there is security.