Outsourcing back office services in Panama is a popular option among foreign companies entering the market for the first time or planning on doing business in the country for a short period. Because when you outsource back office services, not only do you benefit from the local understanding of the outsourcing provider, but you also enjoy the benefits of being able to quickly expand, reduce, or end your presence in the market.
While some back office services providers are focused on one type of service — such legal services or accounting — others will be able to offer a complete portfolio of support options, with packages tailored to your individual needs and executed by teams of professionals with a comprehensive understanding of the likes corporate law in Panama, guaranteeing that your business will remain in good standing with local authorities.
With a gross domestic product (GDP) of $68.5 billion (all figures in USD), Panama has experienced continuous and exponential economic growth since the turn of the century. That has been met with a concomitant rise in general prosperity, as measured by gross national income (GNI), which reached $14,950 that same year.
According to the UN’s 2020 World Investment Report, the Central American country is the largest recipient of foreign direct investment in the sub-region, reaching $6.07 billion of FDI inflows in 2019. Panama is also considered one of the best countries to do business globally, as highlighted by the World Bank’s Doing Business 2020 report, in which it obtained a high score of 92.0.
A major factor in Panama’s economic success is its strategic geographic location, not only as the meeting point between North and South America, but also as the home of the Panama Canal — an artificial waterway that connects the Atlantic Ocean with the Caribbean Sea, and sees close to 14,000 cargo ships transit through it each year, which directly generates more than 2% of the country’s GDP per year. Another contributing factor is the country’s famously secure banking sector and favorable tax arrangements for investors.
Whether you are considering expansion into the Panamanian market or have already established a commercial presence in the country, read on to understand how outsourcing back office services in Panama could be beneficial to your business. Or go ahead and reach out to us now to discuss your business options.
What are corporate support services?
Corporate support services, or back office services, comprise a variety of administrative activities that are essential for the proper functioning of a company. Back office support includes the likes of legal and accounting, commercial representation, and human resources, as well as other additional services that can contribute to the success of your business strategy.
Although many companies have their own teams in place to handle back office activities, it is common for expanding businesses and organizations planning a limited-scale or shorter-term operation to outsource such support services. In other instances, companies seek to outsource back office services while getting familiar with a new market, in order to limit their commitment until they are certain they want to make a deeper investment.
By outsourcing back office services in Panama, your company will count on the support of a specialized team with extensive experience in the local market and ample knowledge of the country’s regulatory framework, giving you the peace of mind that your business will be fully compliant with all norms and avoid any sort of legal complications.
Which back office services are commonly outsourced?
While almost any back office service can be outsourced, the following are particularly popular, especially among foreign investors entering a new market.
When you are entering a new market for the first time, it can be highly advantageous to outsource your commercial representation to a firm with a local presence and a deep understanding of the market. Not only will you be able to access their established local network, making contacts that could be potentially beneficial to your business down the line, but you will enjoy the advantage of working with a provider who understands and knows best how to avoid common administrative obstacles.
That means that you can expect your company formation to be completed in the shortest time possible, and ongoing interactions with authorities and stakeholders to run smoothly.
Accounting and taxation
A reliable back office services provider will be able to provide professional accounting and taxation support to keep your financial records and books up to date, as well as to handle all reporting that must be made to local tax authorities.
In addition, your provider should be able to offer you specialized advice related to tax law and help you with your tax planning strategy, to ensure that your company is maximizing its potential profits while complying with all local and international accounting regulations.
Your provider of back office services in Panama will be able to offer a host of standard corporate legal services, including advice in relation to local commercial and labor law. In some instances, they will also be able to provide more specialized advice related to specific areas, such as mining and tax law.
Services you can expect to receive from your provider include:
- Specialized advice to choose the legal structure that best suits your business goals
- Support in the completion of the required forms to obtain the authorization to sell a product in Panama
- Legal representation before government entities
- Defense in case of legal problem with employees or other organizations
- Drafting of legal documents to meet all corporate regulations
Recruitment and hiring
Finding the right staff in a new market can be tough. A back office services provider that offers hiring & PEO services will have an established recruitment network, as well as being aware of the best educational institutions and programes on offer in the country when considering and presenting you with candidates for available roles.
Where that provider offers professional employer organization (PEO) services, they will also be able to hire staff on your behalf, so that you do not even have to establish a legal entity in the country. That can be particularly advantageous to companies that only want to hire a small number of staff, wish to hire staff in more than one new jurisdiction, or who are planning to only establish a team in the country for a short time.
The advantages of outsourcing back office services in Panama
Rapid market entry: Your provider of back office services in Panama will have significant experience with past clients undertaking the services you require, so will be aware of common pitfalls and hold-ups in administrative processes, and therefore be well prepared to avoid them.
Expert local knowledge: Your back office services provider will hold expert knowledge that will be beneficial to you in a wide variety of areas, including when dealing with your taxes, in your relationship with local authorities, and when seeking out new staff.
Lower operational costs: While you will have to pay a fee for any back office services you contract a provider for, those costs can be significantly lower than hiring and maintaining your own in-house team.
Guaranteed regulatory compliance: Your back office services provider will have a deep understanding of the local regulatory regime and be aware of any pending changes that could affect business operations, offering you the guarantee that you will be in full compliance at all times.
Biz Latin Hub can provide back office services in Panama
At Biz Latin Hub, we offer a complete portfolio of back office solutions to guarantee the success of your company formation and ensure the good performance of your commercial operations. Through our high-quality legal, accounting, and recruitment services, we are equipped to be your single point of contact to establish and manage your business in Panama, or any of the other 15 markets across Latin America and the Caribbean where we have a presence.
Contact us now for personalized assistance or a free quote.
Or learn more about our team of expert authors.