Panama – The perfect place for your hightech/software company (5)

Why Panama – Immigration and IRS

These are the 2 issues non-US citizens should be most concerned about when considering The Valley as their business location. Seriously.

First, getting a green card or visa or citizenship really means some effort and is time-consuming. This why even cruise ships are considered, out in the North Pacific Ocean, to accommodate workforce and work around the immigration problem.

Once you’ve got your immigration status, you’ll become a US tax resident, even with a non-resident visa under circumstances. The rules are complicated and execution appears to be harsh.

Based on that, US citizens and even visa holders are not welcome in banks around the globe anymore, meaning special non-preferred treatment and extra costs.

With a permanent visa or as US citizen, you’ll never stop reporting to Uncle Sam your world-wide income, every year to come.  Think about it.

 

How does it work in Panama? Tranquilo!

 

007passportphotos

Source: 007passportcopies.com

There are some ways to get a residency in Panama:

  • proof of solvency by investing $300,000 into bank deposit or real estate,
  • Invest even less into reforestation,
  • being a citizen of one of 44 countries, considered in a friendly relationship with Panama, and willing to establish/run a small business.

As long as you are doing business with customers outside of Panama, you don’t have to report anything tax-wise to anybody.

When you employ workforce in Panama or do business within the country, then get established in one of 2 special economic zones. Find out where your business fits in.

Both zones offer favorable immigration and tax arrangements.

For software and other hightech stuff there is the City of Knowledge.

 

laopinionwebhostcompa

Source: laopinion.webhost.com.pa

For logistics, aviation etc. there is Panama Pacifico.

 

prlogorg

Source: prlog.org

Now it’s up to you to take a closer look at these essential issues. Don’t forget: it will influence your personal and business conditions in a significant way. So better be careful.

Panama: The perfect place for your high-tech/software company (4)

Why Panama – No natural hazards

As Panama is located between oceans and continents, it is luckily located outside any areas of natural hazards.

Hurricanes happen in the Caribbean, but don’t reach Panama.

Earthquakes happening in Colombia, Chile, Guatemala are sometimes felt, but have never hit Panama hard. Looking at the tectonic plates, Panama is placed in a sweet spot, right between, not inside active zones.

Look at California, which is in a very different position, literally.

Here’s the San Andreas fault, crossing the state from Southeast to Northwest, building tension for The Big One.

 

earthquake

(Source: Wikipedia)

Crossing the San Francisco Bay area, nobody knows when it will happen, but it will. Even a Small One will disrupt business and everyday routines for weeks. And a Plan B will not avoid this, possibly minimize consequences.

I still remember years ago, when Texas-based hosting provider Rackspace Inc. made the case for having their data centers in regions far away from earthquake-prone regions, like California. They’ve got a reason.

Data are precious, human lifes even more.

Conclusion: Building your business in Panama instead of California means that a Plan B for natural hazards is not necessary.

Get some peace of mind.     

Panama: The perfect place for your high-tech/software company (3)

Panama – Country Quick Facts

Located in Central America, between Costa Rica and Colombia, separated by the latter through the Darien jungle, the Republic of Panama is geographically and politically stable. There is not even an army, as there is none in neighbouring Costa Rica.

 

worldview

Source: geology.com

 

It is most famous for the Panama Canal, connecting two oceans. Built 100 years ago, extended recently, handling 4% of global trade, making the country a logistics hub.

The Canal extension means a lot more business to be built around. Beside the 2nd largest free zone after Hongkong, in Colon, there are 2 more Special Economic Zones:

  • City of Knowledge, home of software and other hi-tech companies.
  • Panama Pacifico, for logistics, warehousing etc.   

Panama has become a preferred offshore business and finance center. Financial crisis since 2008 have had no influence in Panama, solid annual growth between 6 and 10%.

By far most ships globally are registered here. Incorporating and running offshore firms is therefore an everyday affair. Accordingly, Panama has successfully signed bi-lateral treaties to not be considered a tax haven by the OECD.  

cropped-dsc_0649

Source: anuvito

Panama City ’s skyline and infrastructure are impressive and GDP per capita has become #2 in Latin America ($21,800 in 2015). Middle class is growing, accumulating wealth. The country is a bit smaller than South Carolina, has a population of 3.6 mio, a coastline of 2,490 km, hundreds of islands in both oceans.

Half of the country is covered by tropical rainforest, including the Central American mountain range, reaching up to 3,475m (Volcano Baru). Thus there are several different climate zones to live in, and providing ideal conditions for tropical fruits, coffee and vegetables.

The Inter-American Highway is the backbone of the country, stretching over 775 km from the Costa Rican border until Yaviza. The Darien jungle is a natural boarder. Traffic to Colombia must use a ferry from Colon to Cartagena.

Panama City’s Tocumen International is named the “Hub of the Americas”, with numerous destinations between Montreal and Vancouver in the North, to Buenos Aires and Santiago de Chile in the South.

Conveniently, the currency is the USD, officially named as Balboa, the first European looking at the Pacific Ocean,  although there are no Balboa bills.

 

 

Panama: The perfect place for your high-tech/software company (1)

If you as an entrepreneur are confident to build the next unicorn, a start-up with 1b market capitalization, then go ahead and settle in the Silicon Valley. Best choice.

If not, there is a better place to start and run your business, to live and to invest.

Why Panama? Living here for 8 years already, let me present my thoughts in a series of posts. 

 

 

Conditions have changed significantly.

“The Valley” began as a center for the capital-intense semiconductor and computer industry, followed by Internet software developers and service providers in the late 90s.

Renting an office, hiring staff, setting up servers and workstations, purchasing software licenses was expensive and Venture Capital was a necessity to take off or to grow.  

These days are over. However, it has established a concentration of ideas and capital there as nowhere else in the world, now focusing to solve the big problems of mankind.   

Your ambitions are a bit smaller? Then you don’t have to pay the ridiculous price of living and working there.

Establishing a business nowadays is much easier than a decade ago.

No fancy office, desks and chairs.

No permament hires, beside a core staff, people work project-based.

No hardware investments, but BYOD.

No software licenses, get everything cloud-based.

No expensive marketing. Win followers by early release of a good-enough product.

Conclusion: The capital demand for new endavours is low, as are entry barriers. So who needs VCs anyway anymore?

 

Imaging Panama as a hightech hotspot

It has been a while since I suggested to develop Panama as a “Second Home & Bootcamp Facility” for Silicon Valley corporations.

As time goes by and things in tech are changing as fast a never before, my views have changed as well. Having seen how other places have tried to copy the Valley unsuccessfully, this place should move up in its own way.

Coder courses, accelerators, VC firms – there is nothing that can’t be done here. What has to be created and nurtured is the mindset to go for top achievements.

Despite the Panama Papers fuss, this country still has the best conditions to establish and run a business, not to forget essential soft factors, like quality of life and vast investment opportunities. See here

Few weeks only until the Panama Canal extension goes live. Time to seek a new challenge for the country connecting North with South America, the Atlantic and the Pacific Ocean.

newgatunlockspano

Source: ACP

 

 

 

 

 

Why Panama does not have to copy the Silicon Valley to succeed

In an interesting blogpost, Peter Diamandis explained the success of the valley with the arrival of new-type coffee shops as place to gather and network, then with the high density of tech people, reducing the risk of failing, as there are many more positions and opportunities waiting.

Based on that, the other ingredients – contributors, culture, capital – grew organically, cumulating innovation power, delivering success along the road.

All this has been and is happening despite some harsh conditions, like climate, immigration and tax rules. How much easier should it be to achieve such success under Panama’s tropical living conditions, in its relaxed business, immigration and tax environment?

SkylineTrumpFerryWeit_9656

Leaving Panana City on express ferry, heading Las Perlas Archipelago, 35 nautical miles off the coast. Sea water temperature 28C/87F

Being a successful entrepreneur in Panama appears to be much more attractive then up there. Lifestyle, costs of living, investment opportunities, to mention a few.

Becoming a successful entrepreneur in Panama must not be more difficult.

Creating perfect conditions to attract entrepreneurs to start and thrive their high-tech business here in Panama is the task at hand.   

What Panama has to offer Silicon Valley companies, benefitting both

Upcoming countries, like Panama, have to figure out how to become and stay competitive in the future.

The Panama Canal with logistics, a solid financial sector, mining and tourism are already in place and growing. Starting a business is easy to do.

facebook.com/canaldepanama

facebook.com/canaldepanama

But how about high tech and a way to prepare the younger generation? Panama should seriously consider high-tech initiatives.

Of course, there is no way to copy something like the “Valley”. It has been tried already. But Panama is ideal to become a SECOND HOME & BOOTCAMP FACILITY for SV companies. And a super-affordable springboard for hightech startups anyway.

City of Knowledge, a special economic zone at the banks of the Panama Canal, only 15 minutes from downtown PanamaCity, is the right place to begin with.

City of Knowledge PTY

City of Knowledge PTY

Stay tuned how this project goes along.