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Ways to Work in Panama

Panama At Your Service E-Letter

June 30, 2009

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Dear Panama E-Letter Subscribers:

Ways to Work in Panama

By Matt Atlee

At the moment it’s very hard to find a job in Panama because it’s harder to get the immigration status you need in order to get a work permit. And you need a work permit to pay pay-roll taxes and if you don’t pay your pay-roll taxes you’ll be illegal and that will get you deported from Panama.

Permanent Residency

So if you are thinking of moving to and working in Panama, then you need the correct immigration status. There are three ways to get permanent residency – which is what you need to get a work permit. The first is to marry a Panamanian. This is complicated and not something people should do on a whim. The second is to have a business or institution sponsor you as someone they want to bring into the country to work. The third way is to invest or buy property. No matter which route you take it will be a long process, normally 6 months to one year before your papers are approved. After 10 years you can get a permanent work permit as long as you can prove your time in the country.

Pay

If you are able to get a work permit, then you need to find a job, which is relatively easy as a foreigner.  But finding a job in Panama that pays well is something all together more difficult. My biggest complaint about living in Latin America over the last 15 years is that people just don’t pay very much for your work. And if prices go up, you can be sure that your pay won’t. So if you are thinking of working in Panama, then you need to realize that you won’t be paid much for your efforts. Not only will you not be paid much, you’ll also find that if you are given a job that there will be very little room for upward mobility. There are many great things about living in Latin America, but few happen in the work place.  Minimum wage in Panama is just $285/month and even management level salaries rarely exceed $1000/month.

Start Your Own Business

The only way to make real money in Panama as a foreigner is to start your own business. For operating a business, Panama is better than most Latin American countries because corporations, bank accounts, and basic types of business licenses are relatively easily to set up. On the down side, Panama has all kinds of labor laws that make it very difficult and expensive to fire workers. The labor laws in Panama are part of the military legacy: the progressive labor code is a popular legacy of the leftist military dictatorship that came to power in 1968; it was the dictatorship that wrote the 1972 constitution, which is still more or less the constitution that is in place today in Panama.

Local Partner

But if you have a business idea, and if that business idea is connected to tourism, real estate or expat living, then you might do very well for yourself in Panama. One rule of doing business in Panama is that the bigger your business idea the more you will need a local partner to cut red tape. Almost all the large American franchises in Panama are connected to a local business partner: this makes the whole process of setting up a business much more hassle free.

Other Employment Options

But what if you don’t want to start a business? Let’s say you just want to come to Panama to work. In this case you need to take advantage of your English skills and there are many ways in which you can do that. Here are a few:

Education

Teaching in Panama is one way to make money. If you really worked at it you could make somewhere between $1500 to $2000 a month teaching English. You would teach classes from seven in the morning to ten in the morning, then tutor for a few hours and come back and teach classes from five-thirty to nine or ten at night. The most money you can make teaching English is $20 to $25 an hour. Also, remember, wealthy Panamanians will pay well to educate their kids, especially if you can prepare their kids for tests like the SAT.  Like most things in Panama, education has slowly moved from the public to the private sphere. Education is not for the masses in Panama so people will pay to have it.

Real Estate

Another way you might be able to use your English to make money in Panama is to become involved in Real Estate sales. There are a lot of foreigners who are helping Panamanian real estate companies sell real estate to foreigners who want to live in Panama. I’ve heard of people making something like a $100,000 a year or more in real estate sales. What about a work permit? Many foreigners who are involved in real estate sales work as professional service providers – not directly for any Panamanian company. How do they become professional service providers?  They normally create a Panamanian shell company that has a bank account. On paper the shell company is paid the real estate commissions; the commission monies are put into the corporation’s bank account. The key is can you get a local bank account?  Also, the real estate market is getting tougher in Panama so don’t think you can just come in and make reams of money.

Translation and Interpretation

Another possible route would be as an English translator. There are many companies that need translators. If you speak Spanish and English, then you will have little problem finding a translating job in Panama. There are many, many call centers locating in Panama, and almost all of them are starving for English speakers. How much will you earn at a call center?  Well, you could earn somewhere between $600 to $900 a month; again, remember you will never make it in Panama or Latin America if you are planning on being solely a wage-earner; have a wage as your base, but you will need some sort of business to generate money for fun.

In closing, I would say that the opportunities for foreigners to work in Panama have increased over the last five years, but there are still two problems for the foreign worker: getting a wage that will sustain you, and laying your hands on working papers.

Written By Matt Atlee.

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