By Daniel Abrego
The big question is why LatAm? What is LatAm and its significance in the world today? And how is Panama the best place to establish a foothold in the region?
Latin America is generally understood to encompass the entire South America continent (comprising of South America, Central America, and the Caribbean). In total, 34 countries. Latin America, with over 600 million people, is considered the most urbanized continent with 80% of citizens living in cities.
LatAm countries have realized how important it is to be attractive for businesses. They are lowering taxes, offering labor incentives and extending benefits to foreign companies. The region is expected to achieve a 2% quarter-on-quarter growth this year. And you may find a similar market environment as Asia and the Far East, but without the intense competition from other companies.
Take Paraguay. Did you know Paraguay is the largest exporter of green energy in the world? Hydropower comprises nearly 100% of energy and with a surplus of freshwater reserves, their government is helping businesses save money by cutting the cost of energy.
Take Chile, the world’s largest exporter of traditional copper as well as lithium and known famously for its wine. Direct foreign investment is at an all time high, the legal framework is transparent and corruption is low, and it takes only one day to set up a company.
There’s Peru; another country boasting a wealth of natural resources. Peruvians used to dream of going north and pursuing the “American dream.” Now, there is a major cultural reversal. Professional Peruvians living abroad are returning home to work and enjoy living in one of the strongest economies of South America.
Geographically speaking, you can’t beat the location of Panama. Being Central means fantastic access to not only the rest of Latin America, but the United States as well. Not to mention that through triangulation, it’s the ideal spot for products also heading to East Asia and Europe.
Historically, with the Panama Canal dating back to 1914, Panama has always been a major logistics hub, and the ports are the most important pillars of its logistics sector. Two thirds of US ships pass through the Panama Canal, so it is a maritime hub where you will also find value-add services; everything from manufacturing, IT and labor support to late stage packaging and even retail services (ecommerce). You have access to markets across the Americas without having to open your own distribution center.
Besides being a maritime hub, the Panamanian government is extremely progressive when it comes to pursuing free trade agreements and establishing free trade zones that encourage foreign investment. Panama has well established free trade agreements with all countries in LatAm and you are assured of your certificates of origin being validated when passing through our free trade zones. Our constitution gives the President power to direct foreign policy, negotiate treaties and conventions, and President Varela has shown this in his most recent and quite speedy negotiations with Chinese President Xi Jinping.
Safety, economic stability, tax advantages and low inflation are synonymous with Panama’s economy. Companies only have to pay tax on income that is sourced within Panama. The country enjoys a highly stable business and economic environment. Panama has a service oriented outlook with the services sector accounting for 80% of our GDP and a third of the economy is dependent on the newly widened Panama Canal.
Get started with ILC:
ILC is located in Panama Pacifico. This free trade zone is a partnership between the Panamanian government and London & Regional Properties, the largest property developer in the United Kingdom. It is a zone so inclusive of diverse logistics services, Forbes called it the “most audacious real estate project in the world.”
Panama Pacifico boasts easy access to the Canal, ports and airports. Plus, we are supported by unique tax benefits, dollarisation (Panama was the first Latin American country to adopt the US currency), worker visas and special investor visas among immigration benefits, an on-site customs office available 24/7, and facilities for back office operations, manufacturing support, and transfer of goods and inventory services, to name a few.
ILC’s market entry consultants can give you more insight and guide newcomers on how to grow as a company in the region. Especially how to take advantage of the strategic location Panama has, to carry out goods delivery to both North and South. Our multimodal transport options help you reach end customers at a reasonable distribution cost. We invite you to become properly versed with the laws and regulations and areas of opportunity. This process should not take months and years but mere weeks (for example registering a company can be done within a month) and we advise on commercial representation, company formation, visa processing, accounting and taxation, due diligence, legal services and even recruitment and hiring services.
Our teams are versed in English and Spanish and are comprised of locals and foreigners to prevent any gaps in understanding cultural or regulatory differences. Most importantly we cover all your needs every step of the way, from market entry to back office operations to reaching your customer’s hands.
Finally, we do things differently at ILC. We’re not just about getting goods from point A to B, but also improving your business process and taking a multi layered approach to the supply chain. I don’t want to give you a truck to load goods and send it on its way. I want for you to reach remote places that you didn’t think were reachable, find new suppliers and customers who are waiting to meet you, in a nutshell broaden your customer base. We are keen for you to grow. Our vision for the longer term is clear; all parties must benefit.
Latin America is a massive region and culturally diverse, but you will find Panama a very business friendly country to establish a foothold in this part of the world to conquer all other markets and we at ILC are here to assist you in achieving your goals.
Mr. Daniel Abrego is CEO of Intercontinental Logistics Corp. He is an international logistics expert and business innovator.