2012

Panama

[Escribir el nombre de la compaa]

31/01/2012

Introduction
If a countries culture can be define as the state of intellectual development
among a people, the business culture might be had to be the state of commercial
development in a country. But business culture is not made by the commercial
development alone; attitudes, values and norms define and make part of a business
culture in a country. (Hart) Taking into consideration all of the characteristics and
costumes of a countries culture will help you understand and do business with
enterprises and make your negotiations much easier.
Most people believe there is a single homogenous Latin American business culture
which is an erroneous idea. Each country has their own culture and rules of doing
business. On this report there will be tips and rules on how to do business in Panama as
a foreign partner in order to achieve success when working with Panamanians.

General information
The Republic of Panama is the southernmost country of Central America.
Panama connects the both continents South and North America. Panama borders Costa
Rica and Colombia, it also has access to the Pacific Ocean and the Caribbean Sea. Since
it is connecting both North and South America some schools teach that it forms part of
South America and others that it is part of Central America. The capital of Panama is
Panama City. The population of Panama is approximately three million five hundred
thousand. The total area is 29,157 sq miles almost the size of the state of South
Carolina.

Panama was territory of Spain until the 1821 when they declared their
independence. With time the US government aided Panama to secede from Colombia
and to build and manage what today is known as the Panama Canal. The Panama Canal
is a canal that crosses from Atlantic to Pacific, making it possible for anyone to trade
with Asia and America and Europe. Most of Panamas GDP is composed by the revenue
from the canal tolls and fees. Due to the canal and FDI, it is the fastest growing
economy and largest per capital consumer in Central America. The total GDP as in for
2010 is estimated to be $26,778 million, per capita it is $7,592.
There are nine provinces that divide Panama. It holds the most diversity of all the
countries of Central America. There are nearly 500 rivers in Panama.

Demographics
Demographics of Panama is composed by a 70% of mestizo (mix of whit and Indian),
14% is white, and 10 % is Ameriandian. Most of the influences in Panama come from
Spanish influences and the rest from Caribbean cultures. The official language is
Spanish, almost 95% speak it. The predominant religion is Roman Catholicism and the
rest is Jewish and Bahai Faith religion.

Economics and Government

Panama is ranked 29 of 183 economies on the starting a business. The rankings for
comparator economies and the regional average ranking provide other useful
information for assessing how easy it is for an entrepreneur in Panama to start a
business.(The world bank).

Figure 2.3 is graphic representing the amount of procedures needed in order to start a business in
Panama. In the past 4 years there has been a slight change. Due to bureaucracy and corruption the
process is lengthy. It takes approximately 6 procedures (paperwork and permissions) in order to get
start the business.

Panama is a democratic republic. The president of Panama is the head of both the state
and government. The actual president is Ricardo Martinelli. Panamas currency is
Balboa, but they also use the US dollar which facilitates business with US companies.

Business Practices
Punctuality and Appointments
Each country has its own rules and expectations of punctuality and protocol. In
Panama punctuality is not strictly adhered to in daily living. But it is expected for
foreigners to be punctual and on time. Even though you see that when they do business
between Panamanians, they might be late to meetings or deliver their products on
another time than what was accorded. Its very important to be aware of the order in
which they write the date, first comes the day then the month then the year. This could
cause you a huge mistake in business if its not in the correct format or you get
confused, its recommended to ask verbally to avoid future mistakes Although
Panamanians are familiar and aware of this variances due to the amount of international
business they do every day.
When making appointments be sure to make them as far in advance of your
arrival to Panama, its recommended to confirm your arrival via phone at least one week
ahead of time. Since the majority of its population is catholic be sure you are not
making any appointments or important meetings near or on any religious or national
breaks, they will even take on or two more days of vacations.

If you are invited to a

party or any social event its recommended to not be on time. In case you are invited to a
dinner at a house, its better if you arrive thirty to 50 minutes late.

Negotiating
A very important aspect of doing business with Panamanians is that you must
understand that they will be very slow paced and patience will be required in every
transaction. Be patient with delays, as mentioned before with punctuality you will see
they deliver late and take long time with their decisions between them but they expect
different from the foreign investor or partner. Usually they dont like to wait a long time
for answers but they do take their time to make those decisions.
Friendship is very important and almost necessary in order to do business in
Panama. Its critical for you to spend time establishing a relationship with your
counterpart before jumping into business discussions. Trust is a big factor that will
make the difference, instead of focusing only on the logical bottom line emphasize on
the personal compatibility of the two companies and develop a high level of trust.
Whenever you turn in paperwork, or any type of information (including your business
cards) have them printed in English and Spanish. This helps the negotiation process to
go faster and avoid mistakes.
When negotiating with Panamanians organizations or entities be aware that tend
to be status conscious. This means that they preferred or will feel safer to negotiate if
there is a at least one member of high level of management present during the meetings.
Like most Latin American countries Panamanians will bargain, so be prepared and its
recommend to adjust your starting price to allow a margin for bargaining.

If you are about to close a deal be aware of some language variations that might
confuse you. Panamanians do not like to disagree in public to avoid embarrassment.
Therefore they may tell you yes when they actually are not sure; they just want to be
polite. Some of them might say maybe.we will see which are polite ways to say no.
Business Entertainment

Friendship is very important for any Panamanian before they do any type of business,
therefore be ready to spend some time on restaurants and other entertainment activities
before you close a deal.

They want get to know you better and like most Latin

American countries they are very friendly and people cultures. Always stay at the best
hotels and entertain your guests at premier restaurants in the case they go to your
headquarters or country or you visit theirs. If you have no idea of whats good around
the area you can even ask your clients secretary about any preferences. In the case you
are a business women, you should always include spouses in invitation to business
dinners you may be hosting.
They tend to do a lot of small talk before any meeting or lunch, some good
topics of conversation include sports, travel, and local cultural events. Its recommended
to stay away from the management of the Canal or any history regarding the US having
control over the Panama Canal. Also avoid talking about Politics and any topic that has
to do with illegal drugs.

Protocol

Greetings/Forms of Address/Gestures
Nicolas Sparks mentioned in a book of his It's the first impression and will
either open the door or close it. It's that important, so don't mess it up. Greetings most
times is universal, in Panama men usually shake hands and women will often pat each
other on the right forearm. In the case there is already a type of friendship you might
encounter a hug or a kiss in each others cheeks (men never kiss each others cheeks).
If you are going to any social event or party make sure you greet and shake hands with
everyone in the room. When you greet any person you must say the title. Titles are
extremely important, it is vital that you mention it when addressing to a partner or
anyone (just mention the title alone do not include the last name example: Doctor,
Ingeniero). Do not get it mixed up its better to just say Senor or Senora and the last
name than getting their title wrong. The title Licenciado is used for anyone with a
bachelors degree. Almost every American gesture and insult will be understood in
Panama due to the period that America had control over the Canal.
Gifts and Dress
In Panama gift giving is not required or expected. But it is recommended to give a gift
from back home, such as a local craft or liquor. They are appropriate when you are
invited over for dinner to a Panamanian home. Since gifts are not expected a way you
could show your appreciation is by inviting them to a meal in return.

As mentioned at the introduction Panama is humid. Therefore most businessmen tend to

wear a conservative light business suit. Businesswomen should wear a skirt and blouse
or a dress. Its best to ask your business partner where are you going and what type of
climate to expect in order to wear the appropriate apparel.