The #1 Place To Start A Business Overseas? (It’s Panama!🤫)

Chapter 1: Intro

Panama is probably one of the best places in the world to start a business. Here’s why.

All right. So first, a little bit of background. In 2008, Live And Invest Overseas was founded by Kathleen Peddicord in Panama. Before that, though, she had been living in Paris and after quickly getting bored of an early retirement that she wasn’t really ready for, she decided to start a new business. Basically, a new version of the thing that she had been doing for 25 years prior. And to do that, she, her husband, and co-founder Lief Simon needed to get out of France. After managing businesses in eight countries, they both knew that Panama was the most business- and entrepreneur-friendly country out there.

The infrastructure in Panama City is the best in the region, in part thanks to the decades-long U.S. military presence here. While the Americans ran the Panama Canal.

Panama as a whole is a very safe, stable, and affordable country that uses the U.S. dollar as its currency, which means there’s no exchange rate risk, which is a big deal if you’re an expat looking to go overseas, or even more so if you’re a business owner or an entrepreneur looking to start a business. The standard of living here is very comfortable.

It’s international standard, frankly. If your budget stretches to allow it. Those things, though, are true for many other places that could also make sense for would-be entrepreneur, including in Latin America, but also in Europe and Asia.

So, what made Panama stand out? The trump card is the approach Panama

Chapter 2: A Bit Of Background

takes to taxation, both personal and corporate. It’s possible to live and run a business that you own in Panama, paying little in taxes even if you’re an American. The list of places around the world where that is true is very short. The tax advantages in Panama put at the top of the list for the “Where should I locate my new business? List.”

And the second reason for choosing Panama, specifically Panama City, the capital, was the labor pool. So, in the past 20, even 30 years, Panama City has evolved into a global melting pot. The cream of the regional labor crop has migrated to Panama City from all over the region. People who recognized that they could get better jobs and make more money in Panama City than they could anywhere else in Central America.

That was back in 2008. Then in 2012, Panama’s president created a new visa pathway that meant that overnight, Panama was targeted by eager, educated, English-speaking 20 and 30-somethings from all over the world, including North America and Europe, in search of employment opportunities. Nearly two decades later, Live And Invest Overseas is a successful and continually growing business. But what have these years of focused effort in Panama taught us? Several things. All right. Panama entrepreneur tip number one. Panama City has a bigger and better-educated

Chapter 3: What Makes Panama Stand Out?

pool of English-speaking labor than anywhere else in Central America. However, a sizable percentage is what you might think of as accidental labor.

So, as Panama continues to be an easy place to establish legal residency and get a job, kids from all over the world, North America, Europe, they did just that.

Not all of them were so interested in building a career or even working at all. To be perfectly honest. Some are on walkabouts. This is the post-graduation equivalent of a gap year. Basically, they’re wandering around the world to see what they might see and experience what they might experience. See if they want to continue down in the given pathway. Panama makes a lot of sense for them.

They can get jobs, earn a little money, refill their coffers before setting out on their next stage of their adventure. So, at Live And Invest Overseas, we have hired 20-somethings from all over the world. Every country, every region you could imagine.

And some of them have only worked for six months or so long enough to save up some money and buy a plane ticket to their next location, just as we’ve trained them.

They have bugged out. On the other hand, we have also hired 20-somethings from North America, across Europe and beyond who have been with us for more than a decade and who are now fully fledged world-class professionals. Helping to push the Live And Invest Overseas business to our next levels.

So, entrepreneurship tip number two for Panama. Something to note. Panama celebrates three independence days, and they all take place in November,

Chapter 4: Panama Entrepreneur Tip 1

plus 11 other national holidays per year. So, almost everyone extends every holiday to include at least one day before or after. Officially or unofficially makes a bridge between the holiday and the nearest weekend. In addition, Panama labor law calls for four weeks of paid vacation every year, starting from year one of employment.

To Americans, that sounds crazy. And it stipulates that employees earn into a sick leave fund, that allows for up to 18 sick days per year, as long as you have a signed doctor’s note. By the by, we’ve been told by many, many, many people, including our own attorneys in Panama, that a signed doctor’s letter could be bought on any street corner for about five bucks.

Chapter 5: Panama Entrepreneur Tip 2

So, entrepreneur tip number three in Panama. Be prepared for the culture shock. And some of that goes back to point number two, those holidays and those work norms that you’re not used to. Basically, Panama has a booming economy, and all the foreign investment in the country can give you this impression that it’s a real-world business culture. And in some ways, it is or can be at least. I will say it is much more so today than it was 20 years ago when we began doing business in Panama full-time.

But still, this is not the United States when it comes to getting things done. There is still a mentality of siestas and mañanas. And for most people, working business isn’t a priority in building a career or a vacation. That’s not the priority. Your work is just a way to pay the rent. And so, you’ll encounter exceptions, of course. But you should be prepared for this kind of typical Panamanian perspective on the employer-employee relationship. Entrepreneur tip number four in Panama.

Chapter 6: Panama Entrepreneur Tip 3

Panama labor law, like most everywhere in the world outside of the United States, favors the employee, not the employer. You need a very good reason. And a lot of documentation to fire anybody. So, no matter how good the reason you have is, you’ll be required to pay what might be considered an overly generous liquidation or severance, depending on how long that person worked for you. In addition, Panama labor law equates to some particular landmines that we would have done better to have known from the jump.

So, for example, if you have any doubt about somebody’s long-term potential or value to your company or your business, make the decision early, to remove them from the business before their two-year anniversary. It is always tough and costly to fire someone here, but after that two-year mark, it gets much tougher and much more costly.

I recommend hiring somebody who is very well versed in Panama labor law to manage your HR for you. While you learn the ropes and the rules and maybe forever after. All right. Entrepreneur tip number five.

Chapter 7: Panama Entrepreneur Tip 4

The most popular options for forming an offshore company in Panama are corporations and LLCs, limited liability companies. In the case of a corporation, an attorney drafts the documents, including a list of subscribers and bylaws, and then records it in the registry.

After that, you’ll need an RUC or a tax ID and a Social Security employer’s number if you intend to hire staff. Number six. Minimum wage in Panama varies much

Chapter 8: Panama Entrepreneur Tip 5

depending on economic activity, business size and region in the country. So, the median monthly wage is around $1,288 U.S., with significant regional variations. So, the minimum wage for household help, for example, is $350 a month. It’s a big step down from nearly $1,300.

Plus, there is what’s called the 13th bonus month. So, it’s the decimo tercer mes, the third month. And it’s paid to workers, but it’s split out over three annual payments. So, Social Security is paid at a rate of 12.25% by employer and 9.75% by the employee.

Worker’s comp is 0.98%, depending on the risk of the job.

Day shifts work up to 48 hour weeks and are paid an additional 25% for overtime thereafter.

So, knowing these little details, they may mean nothing to you while you’re watching this video, but as soon as you go to actually try and implement, these things will start to make sense. And these are things that even if you don’t understand the details, the specifics of it right now, these are things that you need to keep in mind and go into with a clear head.

So, you have to know that there are all of these extra payments, these social payments that are required by law. That there are specific ways of setting up your company that are better than others. And that you don’t know what you don’t know. So, hiring people, firing people, it will not be like it was wherever you’re coming from, it will be specific to Panama or whatever new country you decide to start a business in.

So, be aware, be educated.

Panama’s time in the spotlight has certainly arrived, and it’s time to see for yourself why this little country with Pacific and Caribbean coastlines is becoming so popular.