Doing Business in Panama: Tips from an Expat Executive
Samantha Whay-Jenkins interviewed with me last month as part of my final Panama Expat interview series for 2016. This segment is part 3 of 3 in that series and focuses on doing business in Panama. You can find part one and part two here, if you are interested in following the entire conversation.
A Female Expat Executive in Panama
Sam is a female expat executive in Panama and is rounding the corner toward five years living in country. She originally hails from England, though the bulk of her professional life in Spain prior to moving to Panama. Below, we cover a really important topic – doing business in Panama.
This information is VITAL for anyone moving to Panama to start a business or to go to work for one of the multinational corporations already operating in Panama. It’s VITAL. In my eight years living in Panama, I can tell you – the lack of understanding of what Sam shares below is one of the main reasons expats in Panama (and their businesses) fail.
So, please, please, please, if you fall into one of those categories, read on.
Business Opportunity in Panama: What does it really mean?
JuliAnne: Sam, a lot of people read about all the business opportunity in Panama and doing business in Panama. Can you comment on that, from what you’re seeing now in 2016? What does that really mean?
Sam: In terms of business opportunity, I believe there’s a lot to be had. I say that because there are gaps in supply and demand for many types of products and services. I believe that companies working in Panama have budgets to spend on goods and services from local providers. But one barrier to that ‘business opportunity’ is that there’s a huge trust element. This is not a country of quick wins. In order to do business in Panama and succeed long-term, you need to form a relationship before you ever start doing business.
So, there’s a patience element involved. Panama is a long-term kind of market for business opportunity, not a short-term market. Having said that, I don’t think the country is particularly kind to small and mid-size businesses. Yes, a lot of pro-business laws exist here for multinational companies. But the labor law in Panama is quite difficult to maneuver and there are some questions about the neutrality of the justice system that may put some people off. I do think there’s a strong intention of changing that in the future, but that’s as it stands today.
Doing Business in Panama: Making Business Connections
JuliAnne: How do you recommend that a new foreign company coming to Panama (or doing business in Panama in general) make these important business connections?
Sam: U.K. citizens and companies are very fortunate because the British Embassy in Panama has a division of their trade and investment office right here in Panama, which can help them. For other countries, I recommend the person start with their country’s local Embassy to see what assistance they can offer. And, secondly, visit and join the local Chambers of Commerce. That’s something the British Chamber of Commerce is developing right now – a vehicle for incoming British companies to coordinate trade visits, organize appointments with local businesses and to have introductions made on their behalf. For me, these two things would be the first step.
JuliAnne: How did you personally find success in forging these business relationships when you were new to the country?
Sam: I credit a lot to the U.K. Trade and Investment back in London. They helped us get in the door – now, we paid for it, mind you – but those initial 40 interviews to introduce our company to the market – I think of it as a door opening. When most people come here representing a small business, no one in the local market has ever heard of that small business which is a challenge.
The key to all of this when you’re new to the market is to spend a lot of time asking the right questions and listening. When you come, the tendency is to tell everyone what you do. But if you can resist that temptation and talk to the people who are already here, who are established and successful, and listen to them, you can learn a lot.
JuliAnne: You mentioned Panama’s Camara de Comercio. Talk more about that.
Sam: It’s Panama’s local Chamber of Commerce and it’s a very strong organization. But there again, you get back to the importance of speaking Spanish. (Sam talks more about speaking Spanish in Panama as an expat in segment one of this interview series.)
JuliAnne: All of this is really helpful, Sam. Anything else as it relates to setting up business in Panama?
Sam: One thing that I think is important to keep in mind is that Panama is a really small place. Word of mouth works really well. So, when you come here and start doing business, do it right. Many small businesses are very happy to recommend you to their clients and to other new potential clients and to share contacts. But with that, you have the responsibility to conduct yourself and your business dealings in a proper way.
JuliAnne: What do you mean by that – in a proper way?
Sam: As an example, when we first came, we were asked to do some training that we normally don’t do. It was tempting to do it because it would have created almost instant revenue for the new business unit. But, we chose not to do it because it was not something we were experts in. So, I say that because it’s proven that honesty and integrity in this market is key to your long-term reputation is key. If you choose to play hard and fast with the rules and your business dealings here, those types of things can come back really quickly and bite you in the bum. Again, it’s a small country and people hear about these things.
JuliAnne: Sam, I had the pleasure of working with you on the board of directors for the Panama British Chamber a few years back. What are you doing with them now?
Sam: In January of this year (2016), I was elected to the position of President of the board for term of two years.
Prior to that, I served on the Marketing and Communications Committee and on the board as a director since 2013.
JuliAnne: The Panama British Chamber of Commerce is an excellent resource for anyone coming to the country, whether or not they are from the U.K. I’m glad to hear you have taken on the leadership role there. Congratulations.
Sam: Thank you.
Tips for Foreigners Moving to Panama
JuliAnne: Sam, any closing comments you feel led to share, as we wrap up?
Sam: I do have a couple, yes.
First, it is quite important for incoming foreigners to remember that Panama is a Catholic country. There are a lot of people here who are very religious. That commitment to faith often bleeds over and impacts business life. For example, when we work with people, we often hear comments of appreciation that you might otherwise not encounter in other places that are less religious than Panama. Things like ‘God bless you’, ‘We’re so blessed that God sent you to do this training’, that type of thing.
Also, when you have local hires – which every local company has to, in order to be legal – when you manage them, it’s important to keep this in mind. Because there are considerations when it comes to working with the local population in order to be respectful of their customs and their beliefs.
JuliAnne: That’s great advice, Sam. It reminds me when I lived in Panama, the gentleman who drove for us would take off a full day once a year to go and join the parade in his home town honoring his patron saint. That was not something I’d never heard of, prior to moving here.
Sam: Right. Things like that. Exactly.
How Diverse is Panama?
Sam: Furthermore, I think it’s really interesting how diverse Panamanians are, as a whole. For example, people from the Atlantic or Caribbean side of the country from Colon are completely different from those that were born and raised in the city of Panama, and both are very different from the Comarca Guna Indians of San Blas. There’s a real richness of DNA in the Panamanian people – a huge richness – and I find that very interesting to talk about with the various locals with whom I have contact. Depending on where your business is located, this will have its own idiosyncrasies and impacts on your day-to-day operations. But overall, on a personal level, I find it interesting and rich.
JuliAnne: It is such a diverse place in terms of the native-born population.
Sam: But overall, the balance for me of living in Panama, overall, has been positive. Challenging, frustrating, fascinating, yes, but overall, the balance is positive.
JuliAnne: What a pleasure to speak with you, Sam. Really, thank you so much. I’d like to thank you again for taking the time to share with me and with the Panama Gringo Guide readership about your experiences in Panama. My very best to you and to your continued success in Panama!
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Ending note: For more on establishing credibility and the day-to-day realities of doing business in Panama, see chapter 6 of my second book, The Gringo Guide to Panama: More to Know Before You Go, an Amazon bestseller.
Get in Touch with Sam about her Business Consulting
Sam spoke about her position with Kings Training Panama in segment one of this interview series. If you’d like more information about the corporate training and business consulting she and her team do in Panama, please contact Samantha directly via email at: Samantha.firstname.lastname@example.org. There’s no doubt they make doing business in Panama easier and more efficient.
The Panama Gringo Guide Bestselling Books about Panama
If you’re just discovering the Panama Gringo Guide blog for the first time, welcome! I’ve been writing and blogging about Panama now for five years, and authored two bestselling books about Panama on Amazon – The Gringo Guide to Panama: What to Know Before You Go (2012, updated in 2016) and The Gringo Guide to Panama II: More to Know Before You Go (2014, updated in 2016). Feel free to check them out if you are considering moving to Panama, retiring in Panama or simply visiting Panama with an eye on working in-country.