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The best of 2010: Business opportunities in Panama

December 30, 2010
Santiago, Chile

I left Argentina last night by plane– I decided to skip out on the drive through Patagonia for now so that I can get on more quickly with the business of scouting locations for our sustainable community. I have a few leads that I’m excited about and didn’t want to waste any time.

There are a lot of reasons why Chile is the right place for this community… one key reason is that Chile is the land of opportunity, and I’ll describe that much more in future letters.

While Chile does have a lot of advantages, though, it is certainly not alone– There are opportunities everywhere for people who are willing to see, and as I was looking back over this year’s letters, I came across this one from Panama in which I described several business concepts that could be very promising.

** Editor’s note: Premium subscribers are reminded of our monthly conference call, today, December 30th at 2pm Eastern.

From February 2, 2010 in Panama City, Panama:

I see a lot of opportunity in Panama right now for entrepreneurs and small businesses; in fact, I see more opportunity here than in just about every other country in the western hemisphere with few exceptions. [editor’s note: Chile, Colombia, Peru]


Panama has two strong emerging consumer markets.

The first is the obvious low hanging fruit: foreigners. Their ranks in Panama are growing by the day, swelling the country with their capital and their consumer demands. Simply put, they are accustomed to certain products and services, not all of which are available in Panama. That spells opportunity.

Sure, there are droves of foreigners here already posing as real estate agents trying to sell the next expat on an overpriced, generic condo in Panama City… but that business model is dead for now. There are better options.

One possibility is a professional property management company. There are thousands of new condo units in the city whose owners might only visit a few times a year. During the vacant periods, there are bills to be paid, maintenance to be performed, and in many cases, tenants to be found and managed.

Only a few companies in Panama focus on this business model, and they’re completely slammed. The market could use some competition, especially considering all the new construction coming online in the next 12-months.

Another consumer demand that needs to be addressed is high-end storage.  Panama’s heat and humidity can be disastrous for sensitive belongings like wine, paintings, and antiques; thus, a high-end self-storage facility would likely do quite well here, and it would be fairly inexpensive to start up.

One idea that I have been considering myself is providing services for companies involved in Panama’s two major construction engines right now– the Canal expansion project, and the Panama Pacifico redevelopment project.

(Panama Pacifico is a $1 billion mixed use commercial/residential development on the former Howard Air Force base just outside of the city near the Canal.)

These two projects are attracting a myriad of foreign companies, and right now there are limited options available for corporate services, especially lodging for business travelers.

Nearly every reasonable hotel in Panama province is tucked inside the city, making for an unreasonable commute, and the first business class hotels outside of the city aren’t due to be rolled out until 2016. A well-located existing structure could be renovated, marketed, and profitable as a business-class hotel within 12-months.

The second consumer market worthy of an entrepreneur’s attention in Panama is its emerging middle class, and this is another group that is growing by the day thanks to the income effect of Panama’s growing economy.

The wealth of most developing countries is concentrated in the hands of the few, leaving the remainder of the population living on scraps; these types of markets should generally be avoided by smaller enterprises.

The mark of any well-developed country is a solid middle class– roughly 60 to 80 percent of the population that earns enough to provide a comfortable standard of living, savings, and discretionary spending.

Panama is clearly moving in this direction; middle class households earn between $800 and $1,500 per month, which is enough for them to buy a house and car while having plenty of money left over for savings and mindless consumption.

One clear opportunity is the current shortage of housing units for middle class Panamanians, which fall in the range of $60,000 to $80,000. The government projects that roughly 70,000 units are needed just in the area around Panama City; existing approvals show only around 8,000 in various stages of planning or development.

Retail opportunities also exist; by nature, Panamanians are a consumptive group– as a culture, if they have money, they’ll spend it. It seems like everyone has a new car these days, and given how poorly everyone drives here, there’s opportunity for maintenance and body shops.

Assisted living facilities and elderly care is also a fantastic opportunity, particularly when targeting the Panamanian middle class; for the first time ever, this group now has the income to outsource the care for their elders, and they’re starting to do it.  The few facilities that offer this service in Panama are booked solid.

These are just a few small business ideas in Panama that I’ve noticed recently; if you spend much time on the ground here you will probably come up with several more on your own.

One thing I would caution you about is running any employee-intensive business; Panamanian labor laws, while relatively relaxed in comparison to the rest of Latin America, clearly favor the employee.

Between the mandatory “13th month” annual bonus, 40+ days off, increasing minimum wage, and Byzantine termination rules, it’s in your best interest to keep the workforce slim and/or temporary.

If you find yourself truly interested in launching one of these ideas (or a better one of your own) and have a legitimate business plan worked out, feel free to drop me a  comment  if you’re looking for startup capital. I may be interested in investing if the deal is right, and there are probably some fellow subscribers who are interested as well.

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About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

Comments on this entry are closed.

  • Iggy

    Now that Panama has become the 51st. State as a result of the MartinelliTele-DEA Revelations from Wikileaks; Panama has dropped way down the list of possible alternatives.

  • Cwarner

    Opportunities in Panama- I am currently involved with a group attempting to raise seed capital for a tidal energy project in the Perlas Islands- a viable option to conventional hydro power, especially considering the growing resistance to development of new hydro facilities in Panama. We currently have a proposal before Senacyt. If you are interested in reviewing our prospectus, please contact me.

  • Expat in Ecuador

    Simon – yesterday you posted a repeat of your experience in Ecuador titled, “The best of 2010: Finding paradise in Ecuador”. I’m curious why Ecuador is not on your short list as a possible place for the community?

    • max reason

      Ecuador is/was on my short list. But it was at the bottom of that list because the attitude and stability of government is less predictable. For me personally, the only parts of Ecuador (or Peru) that might work are extreme boonies in the high Andes, where humidity is less extreme. Anywhere near a significant size city or town is out.

      The primary and best form of security when the world economy crashes is “out of sight, out of mind”… which means “far, far out in the boonies”. Better to hang out with the original native people who settled the high Andes tens of thousands of years ago, and still know how to live a complete lifetime without ever owning or spending a penny.

      Those reasons put Ecuador at the bottom of my short list.

  • Chilean Perfect Weather


    I have done extensive weather data research to find worldwide locations that I consider to have “Eternal Spring” weather. I have found over 200 such city locations worldwide and hope to one day incorporate my findings into a book. One day, I plan to move to one as well. Thought I would relay my findings on Chile.

    Chile is a country that is blessed with such eternal spring weather on the upper 2/3rds of the country’s coastline. From the “data” I have analyzed, the “sweet spot for year round springlike weather” is about halfway between Chanaral and Coquimbo. Three coastal towns in this area are Carrizal Bajo, Huasco and Caleta Sarco… they are west of Vallenar, a city on national highway 5.

    You might also check out “Isla de Juan Fernandex”, an island with perfect weather according to my data.

    Of course all my weather data research on Chile is from my computer chair, I certainly have not been there. It would be interesting to know what you see on the ground.

    The Chilean coast has such great weather due to the consistent cold water currents from antarctic. Regions with similar climates are: Southern California, Sydney and four other places plus a few secluded islands.

    Ron Mauldin
    Bedford, TX

  • nomadictreprenuer


    I thoroughly enjoy reading your work. My wife and I hunkered down in Panama City a few years back escaping the horrendous winter weather. The immediate thing that struck me upon arriving was the blistering pace of condo development. I agree, with you on the property management model. We were close to purchasing a property but backed out the last minute, because of property management concerns. Another great business would be, although you disagree with employee intensive business, is pizza. There is only one dominant pizza merchant in all of the city and quite frankly its not even that good. I met some eastern european entrepreneurs that were feverishly opening up european style bakeries and pasta eateries. It was nice to see real culinary skill being imported into Panama. As you know, generally Panamanian food is rather bland.

  • Sean OLeary

    Simon, you’ve blown your cover completely by saying:

    I remarked on why freer markets (and less interventionism),
    strong property rights, low corruption, privatization,
    private social security, good private health care, and
    first world living have been responsible for Chile’s rise.

    You’re a promoter of the Rothschilds and their ilk!

    • max reason

      How’s that?

  • Mark

    ironic that you would skip patagonia in your haste to find a location for the sustainable community…a small town about 2hrs south of bariloche is probably the ‘sustainable community’ center of south america…

  • Sisyphus

    Chile’s labour laws are not that different. 18 days vacation/year @ 1.5 days per month worked (irrelevant how many days, you can be absent the whole month), Saturdays are paid, whether worked or not (not the worker’s fault that there is no work on Saturday– according to the Marxist bureaucrat at the Inspección de Trabajo), necessity to carry signed in attendance book or you are fined, all holidays are paid, 45 hour work week, agricultural workers are paid if it rains and they cannot work providing they have worked the day previous etc. etc.
    At least firing is fairly easy for absenteeism…

  • Stuart C. Ashley

    Simon Black;
    We visited/rented in Costa Rica for four years, starting in 1986. Having gotten to know the place, somewhat, we bought property in San Rapheal de Heredia in 1990. We spent 5 mos/yr. there and 7 mos./yr. in Anchorage, AK for a period of 8 years, followed by full time for 2 yrs.
    In 2001 we sold and moved to the State of WA, for reasons of aging parents. This requirement may end at any time, and we would be interested in your findings re another location from which to observe the crazy world self destructing. We think Costa Rica may be passe. Do you plan on producing a report on your findings?
    Cheers! Stu.

  • dan

    I notice you mention Colombia as a country with possibilities in Latin America. Since my wife is from Colombia I’m interested in finding opportunities there. I had heard that it was still somewhat dangerous, especially for Americans. Not true?

  • Danielle

    How easy is it to find work as an English woman? I will be moving there in the next few months and wanted to know if there are sufficient jobs for expatriates? Please email me at Danielle@spencerstories.com – thank you

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