Countries like the US and others that focus their lifestyles on capitalism are a great training tool to take with you abroad. Many “natives” of 3rd world countries lack the education, drive, ambition and money to take advantage fully of opportunities that lay ahead. Who would have thought that all that keeping up with the Jones’ would pay off?
When you travel to under-developed countries, you’ll see plenty of opportunities in front of you. Some will be as simple as starting a small part time business that provides a needed service that may be everywhere in the states, but lacking here. Others may be on a larger scale that may even directly help in the development in the country.
Before you put down the money on a new yacht from counting on all that profit you plan on making, there are quite a few things you need to know. Tidbits of information really, that will just make the little annoyances a little easier to understand once you are ready for them. We’ll break it down into two sections for your review. First, we’ll start with the real estate and setup side.
Our case example here is opening a restaurant in Panama. Nothing big, just a small commercial space, about 400 square feet. Now one thing to note is that there is really no commercial/residential/industrial/whatever designation in towns outside of Panama. You’ll see many “fondas” or small restaurants out of people’s homes. Their homes may be close to the main road, or could be a few blocks off. When they say ‘Home Cookin!” they mean it. Pulling the permit to operate the business is easy now with the governments new website (https://www.panamaemprende.gob.pa/).
We rented a location in La Chorrera, Panama, which is about 30 minutes from Panama City. Costs are higher here than other towns, mostly due to proximity to Panama City. That being said, our monthly rent for the restaurant is $250. Yup, $250 American dollars for a place that can be setup for retail frontage. There was no “for rent” sign on the property and no listing in any newspaper. It was all word of mouth, as most things are done here.
This price was negotiated from the original asking of $350, with a $350 deposit. Most people here in Panama receive their homes from previous generations, and therefore value is really up to the owner. There is no MLS system, and things are done by word of mouth as well as who knows who. If some dumb foreigner pays a high price for rent or real estate, all other land owners raise their price in accordance to try and bag the next big sucker. You have properties on the same street, same sizes that will go from 150k-250 in downtown La Chorrera.
If you walk in looking like you have lots of money, you can expect to be charged more. A wise proverb says, if you want the best deal in Panama…be born a Panamanian. I think it’s in the Bible…somewhere in the back.
Since we are not Panamanian, we just spoke the language and dressed nice but not extravagant and explained we were a new business and not sure how it would all go. A one year contract was signed with option to renew more years at $350.
Now came some of the preliminary headaches. Since we had a location and an idea of what business we wanted to run (a small taco shop) we needed to get our preliminary items done, such as permits and finish out. One thing you should know is that everything here involves a line, and often times an unmarked line that you don’t even know you are supposed to be in. It’s like every government office is run by the DMV on a bad day when most of the employees call in sick. First we’ll start with the permits:
In order to operate any business at a location you need a white form. That’s what it is called. It is the legal form that you must get at the local county register office and submit information, such as owner and type of business. There is one office that you must go to. You must get there early and expect to spend all day. Not doing anything productive, just waiting for you turn. Often there is only one person who has the authority to help you, and it may be their day off. There are no givens here, always ask if the person you need to speak with is available today.
Note: even though every place requires copies of everything, they will not copy them for you, and they still require that you bring your original, whether it be a passport or other form you are using. They will not tell you about the copies, and after waiting in line for a long time, you may have to leave the building and find a place that will make copies for you. You will have to go back and will not have a place saved in line.
Even after you go through and get your forms, you have to pay for these registrations in a separate line. Usually about $25-45 and then you have to go back to the person who helped you with the registration in the first line. You can wait again in line, or you can cut in front and show your receipt to get what you need without waiting. This will be for your operating permit and will be needed for your location. This form is what you need to show to the local fire brigade nearest your business. They will in turn use this to inspect the business before you are allowed to turn on the electricity.
Once you have electricity, you can work on getting the place ready.
Watch for part 2 coming soon.