• About Us
  • Contact Us
  • Privacy Policy
  • Terms
  • Unsubscribe
No Result
View All Result
Live and Invest Overseas
FREE REPORT
BEST PLACES TO RETIRE
*No spam: We will NEVER give your email address to anyone else.
  • HOME
  • COUNTRIES
    • Top Destinations
      • Portugal
      • Panama
      • Belize
      • France
      • Colombia
      • Dominican Republic
      • Thailand
      • Mexico
      • Spain
      • Argentina
    • Browse All Countries
    • Best For
      • Retire Overseas Index
      • Health Care
      • Cost of Living
      • Investing in Real Estate
      • Editor’s Picks For Retirement
      • Establishing Residency
      • Starting an Online Business
      • Single Women
      • Playing Golf
  • BUDGETS
    • Super Cheap ($)
      • Cuenca, Ecuador
      • Chiang Mai, Thailand
      • The Philippines
      • Las Tablas, Panama
      • Granada, Nicaragua
    • Cheap ($$)
      • Algarve, Portugal
      • Medellin, Colombia
      • Boquete, Panama
      • Carcassone, France
      • Buenos Aires, Argentina
    • Affordable ($$$)
      • Abruzzo, Italy
      • Barcelona, Spain
      • Las Terrenas, Dominican Republic
      • Puerto Vallarta, Mexico
      • Costa de Oro, Uruguay
    • Luxury On A Budget ($$$$)
      • Ambergris Caye, Belize
      • Paris, France
      • Panama City Beach Area
  • Real Estate
  • ARCHIVES
    • Living & Retiring Overseas
    • Raising A Family Abroad
    • Foreign Residency & Citizenship
    • Offshore Diversification
    • Our Latest On Coronavirus ⚠️
  • Making Money
    • International Real Estate
    • Banking
    • Employment
    • Investing
  • CONFERENCES
  • BOOKSTORE
Live and Invest Overseas
  • HOME
  • COUNTRIES
    • Top Destinations
      • Portugal
      • Panama
      • Belize
      • France
      • Colombia
      • Dominican Republic
      • Thailand
      • Mexico
      • Spain
      • Argentina
    • Browse All Countries
    • Best For
      • Retire Overseas Index
      • Health Care
      • Cost of Living
      • Investing in Real Estate
      • Editor’s Picks For Retirement
      • Establishing Residency
      • Starting an Online Business
      • Single Women
      • Playing Golf
  • BUDGETS
    • Super Cheap ($)
      • Cuenca, Ecuador
      • Chiang Mai, Thailand
      • The Philippines
      • Las Tablas, Panama
      • Granada, Nicaragua
    • Cheap ($$)
      • Algarve, Portugal
      • Medellin, Colombia
      • Boquete, Panama
      • Carcassone, France
      • Buenos Aires, Argentina
    • Affordable ($$$)
      • Abruzzo, Italy
      • Barcelona, Spain
      • Las Terrenas, Dominican Republic
      • Puerto Vallarta, Mexico
      • Costa de Oro, Uruguay
    • Luxury On A Budget ($$$$)
      • Ambergris Caye, Belize
      • Paris, France
      • Panama City Beach Area
  • Real Estate
  • ARCHIVES
    • Living & Retiring Overseas
    • Raising A Family Abroad
    • Foreign Residency & Citizenship
    • Offshore Diversification
    • Our Latest On Coronavirus ⚠️
  • Making Money
    • International Real Estate
    • Banking
    • Employment
    • Investing
  • CONFERENCES
  • BOOKSTORE
No Result
View All Result
Live and Invest Overseas
No Result
View All Result
Home Retirement/Living

Entrepreneurs Welcome—Why This Is The Best Place In Today’s World To Start A Business

Kathleen Peddicord by Kathleen Peddicord
Jul 21, 2009
in Retirement/Living
0
The Tax Advantages of Operating A Business Offshore can be plenty in a country like Panama.
208
SHARES
3k
VIEWS
Share on FacebookShare on Twitter

Entrepreneurs Welcome—Why This Is The Best Place In Today’s World To Start A Business

This day and age, you could start a business anywhere. Therefore, before you can determine where best you might indulge your entrepreneurial inclinations, be clear in your agenda. Are you moving to a new country to start a business? Or are you interested in retiring overseas and thinking that, once there, you’d like to find a productive (and maybe profitable) way to fill your days? Then, as important, will your business be local (perhaps retail) or international? Will you have a storefront or an office where customers or clients will visit, or are you thinking more along the lines of an Internet or consulting enterprise?

Local options can be restricted in some jurisdictions. In Panama, for example, retail is protected, meaning foreigners can’t buy or open a retail business. And Europe in general is a challenging place to try to be a small retail business owner. For the most part, though, you could open a dive shop, a coffee house, a gift shop, or a bed and breakfast most places in the world.

If this is your idea, to pursue a hobby-business dream you’ve maybe harbored for years, you should make your destination decision independent of your entrepreneur agenda. Retire where you want to retire. Then, once there, see what kind of entrepreneurial mischief you can get up to. You could open an art gallery or start a small school (a friend did this in San Jose, Costa Rica); you could buy a small existing business or become a local service provider (set yourself up as a construction consultant, for example; there is a big demand for this in emerging markets where local construction standards, for everything from bathrooms to swimming pools, are not what the growing volumes of developed-world buyers demand).

Anyone reared, schooled, and trained in the First World has a serious leg up on the local competition in a developing nation. Growing up in the United States or Britain, for example, you’ve encountered innumerable business ideas. You’ve had the opportunity to watch some grow and others fail. You understand why some enterprises succeed while others do not. You bring that experience and judgment with you overseas. On the other hand, note that, to compete locally, you’ll need strong local language skills.

The underlying point, though, is not to allow a secondary, local business agenda to determine what should be a bigger-picture decision. Retire where you want to retire and allow the business agenda to follow organically.

If, however, you’re moving for the purpose of starting a business, then put the business requirements first. The ease and the costs of incorporating; tax rates; and the infrastructure, these things become top priorities.

It’s not difficult or costly to incorporate in most countries, and, if you’re running a non-local business, you shouldn’t need a business license. Most countries do not tax foreign-source income, so tax planning is available just about anywhere, to greater and lesser degrees.

Infrastructure–that is, reliable Internet and electricity–is key for any business, for a business that can’t communicate with clients and customers isn’t in business very long. Panama and Malaysia sit at top of the best infrastructure list outside Europe, followed by Uruguay and Argentina. The Dominican Republic, Nicaragua, and Ecuador fall short here.

Local labor is the sticky wicket. If your international operation will not require any, then your choices for where to base yourself remain wide-open. If you don’t need local staff, you could operate anywhere. I have a friend, self-employed in an international business that requires no employees. He likes the Cayman Islands. The Cayman Islands is not a budget destination, but cost of living is not an issue for my friend, so he’s moving, with his business, to the Caymans. He’s delighted. He’s managed to find a way to pursue his income objectives in the place where he wants to spend his time.

If yours, though, is an international business that requires local staffing, then the decision-making process becomes all about things like employment laws; labor costs; and employer taxes and social charges you would be liable for.

The most important thing to understand about employment law is that nowhere in the world does it favor the employer as much as it does in the United States. I ran a division of an international publishing company for about 23 years, the first 13 Stateside. Then I moved, with that business, to Ireland, where I came face-to-face for the first time with non-U.S. labor law. My most important lesson: In a jurisdiction like Ireland (the rest of Europe also qualifies), it’s not possible to fire someone.

The in-house attorney for the company I worked for in the States reminded managers regularly that that business operated on a hire-at-will, fire-at-will basis. “You can fire someone because you don’t like the color of the tie he wears to work one day,” he’d joke. Depending on the state where you’re doing business, it can, in fact, be almost that easy to disengage a U.S. employee.

In Ireland, the rest of Europe, and much of the world, I learned, mostly the hard way, not only can you not fire at will, often, you can’t fire at all. In France, super-small owner- and family-run enterprises are common, because people are afraid to take on employees. In this country, when you hire someone, you hire him for life. That employee becomes your very long-term liability.

Furthermore, that employee (like all employees in France) assumes that the employer is the bad guy. In all Europe, the burden is on the employer to take care of his employees, but, in France, the relationship is more tense. It’s not so much parent and child as it is Mean Mister Capitalist and Victim. If you want to start a business that will require local hires, don’t move to France. In fact, I’d steer clear of Europe altogether. Otherwise, you’re creating additional and costly challenges and headaches, stacking the deck against your chances of success.

In Panama and elsewhere in Latin America, too, labor laws favor the employee, though not nearly as aggressively as in Europe. In Panama, for example, it is possible to fire someone when you want to. You’re responsible to make a severance payout according to legislated formulas. As in Europe, the amount of the payout is predicated on the employee’s salary, meaning that, in the Americas, severance payments aren’t typically enough to break a business’ back, as they can be in Euro-land.

As an employer anywhere outside the States, you’re also liable for social benefits charges and fees, comparable to though often more onerous than Social Security in the States. Again, though, these fees are predicated on salary, meaning that, in Latin America, while, as percentages they can seem burdensome, as whole numbers, they’re manageable.

This gets to one of the key benefits of doing business in Latin America: the cost of labor. It’s low. I’m right now having flood damage repaired in a house I own in Granada, Nicaragua. The roof was blown off in a storm, and I was negligent in having it repaired. Meantime, the rains came, and, over months, the wood moldings around the windows and the doors rotted away. This is a two-story, 2,300-square foot house with many large windows. I’ve just had a quote for the cost of the labor required to tear our and replace all the rotted window and door frames. The quote is for $450.

Again, labor costs in this part of the world are one big advantage of doing business here.

Note, though, that, depending on the type of business you want to run, your labor costs may be higher than average. I’m sure the carpenter being called in to replace the rotted wood in my house in Nicaragua doesn’t speak English. English-speaking labor, if you require it, comes at a premium in this part of the world.

Taking all these issues into account, where should you think about basing your international business if it requires staffing? Panama. It checks every box you need checked. The IT infrastructure is First World and reliable. The time zone is convenient if your clients, customers, or vendors are based in the United States or in Europe. The educated and English-speaking labor pool is big, and it comes at an affordable cost; the current minimum wage in Panama City is US$3.25 per hour (it’s less outside the capital city). An English-speaking mid-level manager makes US$1,500 a month; you can hire an English-speaking personal assistant for US$800 a month.

There is little red tape or interference from local authorities in day-to-day business activity, making Panama one of the freest economies in the world. Panama’s is also a stable economy with low inflation (less than 2% per year). The country has used the U.S. dollar as its currency since 1903, meaning Americans have no exchange-rate risk. Panama boasts a developed banking sector, the largest south of Miami. And it encourages free enterprise. Depending on the type of business you launch, you could qualify for important tax and employer benefits and incentives.

I’ve started and operated businesses in eight countries. If I were to launch an international business today that did not require any local employees, I’d move back to Paris. For me, this city offers the world’s greatest quality of life. However, the international publishing company I’m running does need local staff, which is one of the primary reasons we’re in Panama rather than Paris right now. If my business required hundreds of employees, maybe I’d have to find a bigger city with a bigger labor pool. But, for a small- to medium-size international operation, Panama’s the place.

Kathleen Peddicord

P.S. Moving to a new country to launch a new business is no easy thing. Over the years, doing this again and again, in eight jurisdictions now, I’ve been uncertain, nervous, intimidated, afraid, lonely, confused… Yet I’ve continued to pursue this life as part of the laptop-toting expat entrepreneur revolution, because it comes with serious advantages. As an entrepreneur abroad, you have complete freedom and flexibility, independence and autonomy. You’re able to take what you want to do, what you love to do, and convert it into an income that allows you to live where you want to live. You live where you want, how you want, all the while having the adventure of your lifetime.

Tags: starting a business in panama
Share83Tweet52
Previous Post

Retirement Living In Morelia, Mexico

Next Post

International Politics And The Expat Retiree

Kathleen Peddicord

Kathleen Peddicord

Kathleen Peddicord has covered the live, retire, and do business overseas beat for more than 30 years and is considered the world's foremost authority on these subjects. She has traveled to more than 75 countries, invested in real estate in 21, established businesses in 7, renovated historic properties in 6, and educated her children in 4.

Kathleen has moved children, staff, enterprises, household goods, and pets across three continents, from the East Coast of the United States to Waterford, Ireland... then to Paris, France... next to Panama City, where she has based her Live and Invest Overseas business. Most recently, Kathleen and her husband Lief Simon are dividing their time between Panama and Paris.

Kathleen was a partner with Agora Publishing’s International Living group for 23 years. In that capacity, she opened her first office overseas, in Waterford, Ireland, where she managed a staff of up to 30 employees for more than 10 years. Kathleen also opened, staffed, and operated International Living publishing and real estate marketing offices in Panama City, Panama; Granada, Nicaragua; Roatan, Honduras; San Miguel de Allende, Mexico; Quito, Ecuador; and Paris, France.

Kathleen moved on from her role with Agora in 2007 and launched her Live and Invest Overseas group in 2008. In the years since, she has built Live and Invest Overseas into a successful, recognized, and respected multi-million-dollar business that employs a staff of 35 in Panama City and dozens of writers and other resources around the world.

Kathleen has been quoted by The New York Times, Money magazine, MSNBC, Yahoo Finance, the AARP, and beyond. She has appeared often on radio and television (including Bloomberg and CNBC) and speaks regularly on topics to do with living, retiring, investing, and doing business around the world.

In addition to her own daily e-letter, the Overseas Opportunity Letter, with a circulation of more than 300,000 readers, Kathleen writes regularly for U.S. News & World Report and Forbes.

Her newest book, "How to Retire Overseas: Everything You Need to Know to Live Well (for Less) Abroad," published by Penguin Random House, is the culmination of decades of personal experience living and investing around the world.

Related Posts

Thai style garden located in Royal Park Rajapruek, Chiang Mai, Thailand.
Investing

The Best Way To Beat Inflation For Retirees

by Kathleen Peddicord
June 26, 2022
0

Inflation is running at better than 8%... the greatest rate in more than 40 years. Your weekly grocery shop is...

Read more
Guanajuato, scenic city lookout near Pipila

How To Love Your Life Abroad After The Honeymoon Period Is Over

June 24, 2022
Taipei's City Skyline at sunset with the famous Taipei 101

The Top Affordable Places To Retire In Asia And Live Well

June 19, 2022
A grid with several Latin American countries

Finding The Best Places To Live In Latin America

June 9, 2022
Palms and beach at Caye Caulker island, Belize

Choose The Lifestyle You Want In Belize

June 6, 2022
People enjoying a tropical Caribbean beach with white sands and clear waters

Move To Latin America And Retire In Style Without Compromise

May 25, 2022
Exotic wooden huts on the water, Maldives

How To Move Overseas Despite A Pandemic

May 24, 2022
Next Post
Live and Invest Overseas Readers are Retiring Abroad

International Politics And The Expat Retiree

Start Your New Life Today, Overseas

A world full of fun, adventure, and profit awaits! Sign up for our free daily e-letter, Overseas Opportunity Letter, and we’ll send you a FREE report on the 10 Best Places To Retire In Style Overseas Today.







LIOS Resources


  • New To LIOS
  • Ask An Expert
  • Media Center
  • Contact Us
  • FAQs

Quick Links


  • Best Places To Live
  • Best Places To Retire
  • Finding A Job Overseas
  • Real Estate

Sign up for our free daily e-letter, Overseas Opportunity Letter, and get your FREE report: The 10 Best Places To Retire Overseas In 2022

  • About Us
  • Contact Us
  • Privacy Policy
  • Terms
  • Unsubscribe

© 2008-2021 - Live and Invest Overseas - All Rights Reserved.

No Result
View All Result
  • Home
  • Countries
  • Budgets
  • Archives
  • News
  • Events
  • Bookstore
  • Newsletters
  • About Us
  • Members Area
  • Contact Us

© 2008-2021 - Live and Invest Overseas - All Rights Reserved.

Sign up for FREE and learn how to live the good life on a modest budget, find bargain property, and more. Plus, check out our free report on the 10 BEST PLACES TO RETIRE.

RETIRE OVERSEAS AND LIVE LIKE ROYALTY

The World’s Best Places To Be In 2022?

Discover Them Here…