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As the cost of doing business in the US continues to rise, US-based companies are increasingly looking to outsource work to other countries. Panama is an enticing choice for corporations, as they work with the US dollar, encourage free trade agreements, and have a low international unemployment rate.
This article will explore everything you need to know to understand the human capital potential in Panama.
SERVIAP can help with your global expansion needs. Contact us today to learn how you can expand your business with PEO in Panama.
Tech Graduates & Workforce
Panama is one of many Central American countries working to increase their number of tech graduates and support technological talents wherever they may be. Their efforts have bolstered the embrace of technology and education for the young population.
- Communications: Panama boasts a state-of-the-art telecommunications system, where cell phone connections account for 90% of users.
- Broadband coverage: Additionally, the government has piloted a new program to improve internet infrastructure, ensuring broadband coverage for the area.
- Agenda Digital Panama program: This program educates residents about technology and seeks to further integrate technological developments into Panamanian culture.
These efforts will lead to a workforce of residents who have grown up with a profound understanding of technology.
Key Sectors for Local Activity
Outside the technological realm, Panama has some thriving businesses in other sectors. Here’s a quick overview of what they have to offer:
- Finance: Panama is set up to be one of many financial hubs in Latin America. It’s less expensive for US clients to do business in Panama since they both use the US dollar as currency, and the overall minimum wage in the country is lower than that of the US.
- Real Estate: As ex-pats from all over the world relocate to Panama, the government is aiding infrastructure expansion. Investments in better public transport make Panama an ideal place to host workers.
- Agriculture: The agriculture industry is a healthy investment market. The local climate makes Panama an ideal location for growing a variety of produce, and its highly profitable exports range from coffee to fish.
Key Sectors for Outsourcing
Panama boasts a sophisticated shipping and logistics sector, which is attractive to overseas clients. Panama is the home of the famous Panama Canal, a shipping lane used often by the US in shipping and trade. As authorities recently expanded this canal in 2016, the business opportunities have skyrocketed.
Additionally, the wealth brought to the area by the shipping opportunities has trickled into other business sectors, making Panama a more attractive home for your business.
Though Spanish is Panama’s first language, English is spoken by roughly 14% of the population. Many professionals working in business or international markets speak English in addition to Spanish.
As more call centers are being outsourced overseas, the demand for English speakers in Latin American countries has increased. As such, more English is being taught as part of mandatory schooling in Panama.
Expected wages in Panama are generally lower than wages in the US. Despite this, Panama has one of the highest average salaries in Latin America, with a monthly average salary of $800 USD in 2021.
Though salary minimums differ based on professions, the minimum salary in Panama is roughly $450 USD per month or $5400 per year. Compared with US minimums of over $15,000 a year, companies looking to save money should consider looking at Panama’s workforce.
Prominent Cities for Business
Panama has many large, culturally significant cities on the island that are ideal for setting up a business center. Some of these include:
- Panama City: Located on the Pacific coast, this city offers its residents the many conveniences of a major capital, such as broadband, public transportation, and exciting nightlife.
- Chitre: A smaller city 3.5 hours from Panama City, Chitre has housing options to fit most budget options.
- Santiago: A vital city on the Pan American Highway that hosts services not available to surrounding areas. Its location makes it an important shipping node.
Turnover tends to be higher in tech in the US, but this doesn’t seem to be the case in Panama. Tech jobs are highly sought after in the area, as this business sector is rapidly expanding, with those lucky enough to land jobs typically staying in them for a while.
Keep in mind that turnover rates can be higher in smaller Latin American countries than in other areas.
Is Panama Right for Your Business?
SERVIAP is a leading Professional Employer Organization (PEO) ready to help your business expand operations throughout the Western Hemisphere. PEO is a model of co-employment, where we assume total responsibility for your talent, allowing you to focus on the strategic activities of your organization. Contact us today to learn more about how you can expand your business in Panama.