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The World Bank Group’s Doing Business website ranks countries for ease of doing business. Panama ranks 81st out of 181 economies ranked. Within the Western Hemisphere Panama ranks 11th overall out of 31 countries. For employing workers Panama ranks 172nd.

Ease of Doing Business in Panama: the Numbers

Employing Workers in Panama

The Doing Business Website also lists a number of factors related to employment and severance of redundant workers. Factors that would seem to contribute to Panama’s low ranking in employing workers primarily relate to severance when workers are not needed.

For example, there is a requirement that a third party (government) must be notified and the employer must receive approval to terminate an unneeded (redundant) worker. There is also a mandatory severance of 44 weeks salary for a terminated, redundant 20 year worker.

The Doing Business website refers to rigidity in hiring and rigidity in firing as measures of ease of doing business where Panama ranks low.

Panama Real Estate Investment and Employing Workers in Panama

Panama is the country at the South end of Central America. As the narrowest spot in the Americas it is the location of the Panama Canal which connects Atlantic and Pacific. Panama’s central location between North and South America makes Panama a transportation hub and a place for business in transportation, repackaging and reshipping, and light assembly of parts. Panama has been a great place for starting a business for many investors. Its economy is booming and attracting the highest per capita foreign investment in Latin America.

Many have done very well investing in Panama and many have done well employing workers in Panama. However, for those used to doing business in less rigid employment environments Panama might be considered a thicket to avoid. An ideal way to take advantage of Panama’s prosperity and economic prospects is to leave the employing of workers to local business people. Investment in Panama real estate offers many opportunities to take advantage of Panama’s strengths without dealing too much with government red tape.

Panama real estate investment has done well in the last years as North Americans have bought second homes and often taken advantage of Panama’s residency laws to retire in the tropics. Panama real estate investment continues to do well as Panama is making investment in a number of mega projects such as the Panama Canal Expansion. These projects not only create jobs during construction but broaden Panama’s economic base providing the opportunity for more investment and wealth creation over time.

Again, the best way to avoid government red tape in employing workers in Panama is not to. Your best choice in Panama may well be to buy, develop, and lease real estate. An investment in Panama real estate will likely grow year by year and as Panama’s economy moves on your returns on investment will grow too. Having someone else start and run the business while you lease the real estate could let you reap the rewards of Panama’s economic boom with less worry. It is also reassuring that Panama ranks well in Latin America in measures of good governance so that your investment is protected by enforceable procedures and laws.

In starting an investment in real estate in a foreign country it is wise to obtain good advice. For more information on real estate investment in Panama contact us at ABPanama. We do business throughout Panama and have over 23 years experience managing real estate portfolios.