In fact, almost everyone we know who has come to retire in Panama has capitalized on the opportunities here, and many have begun businesses of some sort…guesthouses, property developments, resorts, eco-tourism projects, forestation projects, charter dive operations—even boat repair outfits.

If your plans in 2010 and beyond include starting a business—look to a Panama Business. If you don’t yet have a good business idea of your own, Simon Black, below, shares some of his.

Panama Business Opportunities

By Simon Black

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.
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–Recommended Reading –

Do you know about the “No-Savings Retirement Plan”?

Thousands of Americans are now retiring luxuriously… even though they didn’t save ‘enough’ during their working years.

They are using a Retirement Plan that Fortune Magazine claims is “a way to double your retirement dollar… trade up to a larger house, get a pool, hire servants – and guarantee visits from your kids.”

Here’s how you can Retire in Paradise on $30 a Day
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Why?

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% 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.

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This contributes to the safety of Panama and continues to make it the Best Place to Retire.
A preliminary agreement on the bases was reached recently in New York between Panamanian President Ricardo Martinelli and US Secretary of State Hillary Clinton.

A final treaty is expected to be inked in the coming days, reported Panama’s La Prensa newspaper, according to Russia’s RIA Novosti.

“The US and Panama will sign before October 30 an agreement on the deployment of two naval bases on the pacific coast of our country to fight international drug-trafficking,” Minister of Government and Justice Jose Raul Mulino said Sunday.

“One of the bases will be located in Bahia Pina…450 kilometers [280 miles] east of the capital, Panama City, and another one – in Punta Coca about 350 km [217 miles] west of the capital,” Mulino added.

The US dismantled all its bases in Panama and withdrew its military forces from the country at the end of 1999 in accordance with the Panama Canal treaties.

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If you can do it properly, the time to buy may be now. Recognized as one of the Cheapest Places to Live and Best Place to retire Boquete Real Estate just got better.

The new government is committed to giving occupants title to their land protecting their rights and creating a stable environment for investment. President Ricardo Martinelli said in his inauguration address that “We will begin a massive land titling program, so what I can tell everyone who’s listening who has possessory rights, prepare these rights because you’re going to have your piece of land titled.”

The new governments first attempt at improving the titling process, Law 23, 2009, is a promising piece of legislation that equitably accounts for the needs of residents, investorsand government. Even if it isn’t implemented as well as it’s conceived, it’s only a matter of time before all ROP land is titled.

Purchasing Panama ROP Real Estate can pose  Challenges

Some of the best Panama property is claimed under the confusing ROP system instead of being fully titled. The best deals will be for land that isn’t fully titled. This is one thing that makes Boquete Panama one of the Cheapest Places to Live and Best Place to retire. Once titled, the competition for prime Panamanian properties will be much greater and the price much higher, but the risk will be much lower.

Under the ROP system, it is quite possible to find several conflicting claims to a plot of land, both registered and unregistered. This can cause a situation where the person selling the ROP may not actually be in a position to sell. The difficulties that some developers have had with ROP has scared a number of potential investors, but it has also educated people about the risks so they can now do something about them. There isn’t much Boquete Real Estate that falls into this category but there is plenty of property on the Caribbean Coast that does.

Trick to Investing in Panama ROP Real Estate

All it takes to discover these problems is a little investigation. Competing claims typically come from family members and neighbors so it is fairly straightforward to send investigators in to a potential land purchase to interview and get signed affidavits from  the family and neighbors.

Even with the recent correction in real estate prices, Panamanian vacation and retirement properties have a lot of promise. Tourism continues to grow and so do the number of foreigners looking to buy a holiday property in Panama and Boquete Panama in particular. It’s possible to buy ROP land quite safely with a little knowledge and effort and soon those ROP holdings will be fully titled.

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Boquete Panama is a unique colony in the remote western mountains of Panama about thirty minutes north of David Panama in Chiriqui Provence. The climate is temperate, the population a mixture of ethnic groups from around the planet. Many were drawn to Boquete known as one of the top places to retire and Cheapest Places to Live.

As the world economy has melted down I was curious about how it has effected the Boquete Panama real estate market. This week I met with Janeth Gomez-Suarez of Casa Solution. Casa Solution is the most visible real estate brokerage in Boquete.

I asked Janeth if houses and properties are selling and if the price structure has dropped as the US and Panama City markets have lowered. I was surprised to hear the Real Estate business in Boquete is alive and well. People are coming to Boquete and shopping for houses. Most sales are in the two to three hundred thousand dollar range for homes. Sellers are a bit more open to offers and some will take less than asking prices. Most sellers are under no pressure to sell so although prices are not increasing, properties are not offered or sold at fire sale prices.

In addition there are many perspective buyers waiting to sell in the US so they can move As the resale housing market in the US recovers this market is set to boom.

The obvious question is why. There are several groups of buyers coming to Boquete. People who are politically disaffected, people who are economic realists and people who just want to change their lives. The politically disaffected come in cycles as the politics in US changes and many current residents left the US under G. W. Bush, the new group dislike the current administration.

A more interesting group are those baby boomers who realize they now have less. Less equity in their homes, less in their retirement savings, less need to consume and a desire to chance a change in exchange for a different life at a lower cost.

Boquete homes and properties are not the least expensive in Panama. The cultural and environmental aspects along with a new pro-investment government are becoming encouraging indicators of future growth. The crystal ball on Boquete seems pretty clear, growth is happening now, growth will continue and accelerate.

In July Business Week called Panama the “New Florida”, their reasoning is a mirror of mine and a harbinger of a bright future for Boquete.