Tag Archives: growth

Panama: The perfect place for your high-tech/software company (2)

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Why Panama – Your business’ bottom line

This is the most important issue for any great owner of a small business.

Let us look at your personal income situation now and assume you’re making $100,000 per year. (http://www.tax-rates.org/California/income-tax)

                                 California                        Panama

Income                    $100,000                         $100,000

Tax                            $32,000                            $0 *  

Subtotal                  $68,000                            $100,000

Condo rent            $36,000                            $18,000                                                                                                                    (www.zillow.com)          2/2 with 130 m²

Cost of living        $30,000                            $15,000  **

Total                       $2,000                              $67,000

Suggestion: This amount of $67,000 re-invested in Panama, buys ⅙ ownership/8 weeks occupancy in a 2/2 oceanview condo 130m², fully equipped and with concierge service.  (www.oceanview42.com)

* Having your company registered in Panama, charging foreign businesses only, there is no obligation to report anything. No tax declaration whatsoever. Call it freedom.  

** The cost of living numbers appear low. However, in our example, the Californian cannot spend more and we assume that cost of living in Panama is roughly half of California.

To grow a small business, having money left over after tax is essential. Working without other people’s money in early stage means independence, keeping control. Selling shares not before the company has some value, means to make more money, just later.

Conclusion: Having a global business based in Panama is best for your business’ bottom line.

 

supermoney

Disclaimer: We are not a financial or tax advisor. Information given is based on public Website information everybody can find. It may change or have already changed. No guarantees. Do your own math and research. (Picture: supermoney.com)

 

 

 

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

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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?

 

The famous Silicon Valley

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Being an IT person for ever, I know and admire this place, the people, the business, the spirit. This has brought so much progress into our lifes, and is still going on and on.

Have been in Austin for some time when the VC scene was going crazy there as well, around 2000, and know that NYC is doing a lot to catch up, but nobody so far has beaten the original. Congratulations, guys. I am really impressed.

However, nothing lasts for ever and sometimes you have to destroy your business yourself before somebody else does it, right? Creative destruction or so.

The success of the valley comes with some side effects that haven’t been so visible for long but are popping up now and won’t just go away:

(1) There is heavy competition between companies for talents. And it’s hurting as past silent agreements between the big guns have shown.

(2) Some talented people from all over the world may not want to end up under the IRS regime for the rest of their life.

(3) And, as the Valley is a wealth-creating beast, the number of millionaires, of rich and well-paid employees is going up steadily. Which is good. But this means, of course, that demand goes up and prices go up. And after some time this makes many people outside the industry unhappy, even creates social unrest, unfortunately. It already does.

I think it is the time to let the Valley grow another leg, in a place where overall conditions are even better.

Guess where?

When the U.S. had given the Panama Canal into the hands of Panama, this has been a jumpstart for this country. And now imagine what will happen when part of the spirit of the Valley is being transferred to Panama too.

In my next posts I will describe in detail, why this makes a lot of sense, will be a win for everybody involved.

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