Doing Business in Panama – Good or Bad?

Doing Business in Panama – Good or Bad?

Failing Business in Panama

Starting a business in Panama?
Principles of doing business in Panama

From Bocas Del Toro, to David, to Puerto Armuelles….  business in Panama was not exactly booming.  In fact, most of what I saw for business in Panama was not holding up well at all.  In all fairness, this is not including Panama City or some of the other current economic hotspots.  These areas do include tourist hotspots and retirement havens.  From the drugged up hippie selling bracelets to the retiree trying to supplement their retirement income, it seemed that everyone was trying to open a business in Panama.

While there were some people that were making it work or working hard to make it, I did notice some trends that seemed stable.  This is not all inclusive but should give some idea of the problems faced.

 

The Customer

The vast majority of people in this region of Panama could be broken into four general categories.  First, the Indigenous.  These are the people we would call Native Americans or Indians back home.  They have no money and sure aren’t going to waste what they have on whatever you’re selling.

Next, we have the local population.  These would be Panamanians that you would get to know.  They aren’t as dirt poor as the indigenous but they still aren’t likely to splurge in any way that is going to keep an American investor happy.  There are some relatively wealthy locals running around, but most of them have made their money working for the government and taking bribes, so they’re much more likely to try to extort you than pay.

Then we have the young traveler.  You know, the kid who went out surfing and sold his surf board for cocaine.  Or the kid who just graduated college and has rushed out to spread his new found communist ideology.  Or the backpacker who truly wants to see the world before he has any responsibilities in life.  Essentially the average hostel-ite.  These travelers have varying budgets usually ranging from slim to none.

[pullquote]make the garlic bread or find another job[/pullquote]

Finally we have the retiree.  These people have probably chosen this area of Panama because they are on a fixed budget.  These are also the people normally starting said business and some of the people who had recently or were considering shutting the doors.

The Product

One of the primary items being sold in this area was land.  There was a saying that I heard everywhere I went: Everything is for sale in (insert town name).  From unfinished commercial buildings and hotels in Boquette, to beachfront land on the Pacific.  There was no shortage of Americans who had purchased this land certain that business was coming to this region and they’ll be happy to sell it to you for 20 X what they paid for it.  It seems as though there are plenty of people who see business coming to the region and want to put their money there, but few who want to do the work.  Be aware, unless it’s titled land (which it usually is not) Panama does support squatters’ rights.  I’m not entirely sure the title will help you if someone squats on your land while you’re away.

Most of the other markets for business in Panama seemed to be flooded.  There were a few business men and women stepping out of the norm to take on new challenges and I certainly wish them luck.  On such establishment is the Hooked on Panama fishing resort.  This is one of the few businesses actually bringing people into the region rather than trying to nickel and dime the people who just show up.  The Watering Hole is a restaurant stepping up the game by providing a classy atmosphere that caters to locals as much if not more than to visitors.  These brave souls are taking new paths to their futures, but they have certainly had some challenges to overcome.

Employees

As someone who considers the people to be the heart of any establishment, I think the employees can make or break business in Panama.  Most of Central America gets a big “thumbs up” from me on the matter of employees, but this region does not.  I spoke with countless employers about the difficulties they have finding quality employees.  While some have been very happy, the trend is not very encouraging.

Walking by a restaurant in Bocas Del Toro one evening I noticed lasagna with garlic bread as the evening special.  Of course fatty had to try it!  When my plate came out with some inedible bread, I questioned the American manager.  She informed me that her cook refused to make garlic bread because she said it did not go with lasagna.  She had to explain this to three tables full of disappointed customers before she finally flipped and told the cook to

make the garlic bread or find another job.

Another owner of a small business in Panama recited a story of going through six waitresses before finding one that would show up for work on time.  Last time we talked, that girl had called in sick to go to the club.

Opening a Business in Panama

While these are certainly not the only considerations, they may be some that you won’t get elsewhere.  During my trip I met many people who had come down looking for a new place to live and to invest their life’s savings.  Two of those people chose this region to set up shop.  One had a drastically different approach and I look forward to seeing what he comes up with.  The other just loved the area and let his emotions over-ride his senses.  Either way, if you’re considering doing business in Panama, keep your mind open.

2 Responses to Doing Business in Panama – Good or Bad?

  1. I am seriously considering Bocas del TOro to relocate/ I am an entrepreneur, I am an artist, an interior designer, a home stager, a cook, a singer/guitar player, and a painter,I have owned my own business for about 17 years. I need to know, where are the best places to set up a tourist based business. What are the average rents? What are tourists lacking or asking for?
    I really appreciate your help! Thanks, Martha

    • Sorry for the delay Martha,

      I really thought I had responded to this question already. Maybe I just read it and decided to think about it and forgot to answer.

      The truth is that I can’t answer this for you. Setting up a business really depends on the local needs. Here in Colombia, we have a lot of entrepreneurs in the tech business. There are certainly needs that could be filled, but they are going to be completely different than the needs of a place like Bocas Del Toro.

      The only real way to know is to find a place you like and live there long enough to figure out what the needs are. You can bypass some of this by just meeting with the other expats and seeing what niche they might be missing, but you have to understand that a lot of times there’s a reason that niche hasn’t been filled.

      Best of Luck,

      Jason

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