Doing Business in Panama? A Good Idea, Says LBC

Looking to do business in Latin America? Panama and Chile have the best business climates in the entire region, says the Latin Business Chronicle (LBC).

The prestigious publication analyzes the business climate in 18 of the region’s countries every year. While Panama topped the index last year, the country is still going strong with a second place ranking this year, after Chile. Not surprisingly, Peru—a country I often compare to Panama thanks to its strong economy—came in third.

The LBC Business Index evaluates countries according to criteria such as percent GDP growth and inflation, taxes and tariffs, labor and political environment, and infrastructure.

The LBC says Chile’s superior corporate environment is to thank for the country’s number one ranking this year. The South American nation beat countries like Mexico and Colombia—top performers in this category—by a landslide.

Though Chile has the region’s best tax environment and economic freedom, it ranks fourth in ease of doing business. Mexico, Peru and Colombia, respectively, lead in that category.

Panama beats Chile in three out of five categories

Panama ranked first in three categories, beating Chile in macro environment, globalization and competitiveness, and infrastructure. Per the LBC that’s partly because the economy is growing so quickly. It’s also because the country has consistently led the region in terms of international banking, logistics and trade, and use of English as a business language.

Panama has an extremely high percentage of English speakers, particularly in important business and government sectors, from banking to trade.

English is widely taught in schools. That makes it easy for expats to start businesses, do their banking, obtain residency, and much more.

Companies like Dell, Caterpillar and 3M have set up everything from regional headquarters to call centers here. That’s in part because the government woos them with some of the region’s most attractive incentives…and partly because bilingual labor is easier to find here than in nearly any other Spanish-speaking country in the region.

As for infrastructure…we’ve been saying it for over 10 years. Panama surprises in the most pleasant way. Anyone who has traveled through the region can attest to Panama’s superior roads, unparalleled telecommunications, and unfailing power and water.

Panama ranks number one in the region when it comes to Internet penetration. I can’t remember the last time I went somewhere without high-speed Internet (and as International Living’s Panama correspondent, I’ve been traveling this country for five years).

Five of the world’s major fiber optic cables intersect here, in a place that is often called the “crossroads of the Americas.” Naturally, that nickname also refers to the Panama Canal, which helps make Panama a logistics and strategic dreamboat. No other country in the region can boast a better import-export location.

It’s no wonder winners like Panama and Chile continue to top the LBC Business Index. Another winner this year is Argentina. The nation showed the biggest improvement by coming up four spots to rank 13the in the index overall.

Says the LBC report: “The biggest losers were Ecuador, Honduras and Bolivia.” These countries fell two spots to rank 15th, 16th, and 17th, respectively. The biggest loser was, of course, Venezuela, lagging due to a weak macro environment and shrinking GDP. Unfortunately the LBC had to drop Haiti from the index this year, “due to insufficient data in all subcategories.”

Editor’s Note: Learn more about Panama and other countries in our daily postcard e-letter. Simply sign up for IL’s free postcards and we’ll send you a FREE REPORT — Panama: First World Convenience at Third World Prices. This special guide covers insider advice on real estate, retirement and more in Panama.

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