Panama Panama Presented By: Kadell James Carl Krimminger Monica Washington

Panamanian Flag Coat of Arms Panama

Panama is often called the Funnel of World Commerce connecting North & South America It’s where cultures come together & the America’s meet

Demographics Capital: Panama City Official Language: Spanish Government: Constitutional Democracy In 2008, population 3,309,679. Capital: Panama City Pop. 451,000 Area: 29,157 sq mi Water about 2.9% of the total area GDP in 2008 $ billion Currency: Balboa and US dollars

Ethnic Groups 58.1% Mestizo 14% Black and Mulatto 6.7% Amerindian 8.6% White 5.5% Asian 7.1% other (2000) Religions: – Roman Catholic 85% – Protestant 15%

About 38% of the land is part of the Rain Forest. The Panama Canal is 50 miles long, dividing the country into eastern & western regions. And the once American territory was 5 miles on each side of the canal. The whole country is a little smaller than South Carolina surface wise.

Panama Firemen marching in a parade Tugboat being repaired in dry dock Occupations Shop owner – most were Hindu descent

Power Distance Index Panama: High PDI – inequalities of power and wealth have been allowed to grow within the society U.S: Low PDI – society de-emphasizes the differences between citizen's power and wealth Highest PDI of all Latin American countries

How PDI effects business… CharacteristicsTips High PDI (Panama)  Centralized companies.  Strong hierarchies.  Large gaps in compensation, authority, and respect.  Acknowledge a leader's power.  Be aware that you may need to go to the top for answers Low PDI (United States)  Flatter organizations.  Supervisors and employees are considered almost as equals.  Use teamwork  Involve as many people as possible in decision making. Source:

Individualism vs. Collectivism Panama: Collective – Strong group relationship – Loyalty very important U.S: Individualistic – Individuals and their immediate family

How individualism/collectivism effects business….. CharacteristicsTips High IDV (United States) High valuation on people's time and their need for freedom. An enjoyment of challenges, and an expectation of rewards for hard work. Respect for privacy. Acknowledge accomplishments. Don't ask for too much personal information. Encourage debate and expression of own ideas. Low IDV (Panama) Emphasis on building skills and becoming masters of something. Work for intrinsic rewards. Harmony more important than honesty. Show respect for age and wisdom. Suppress feelings and emotions to work in harmony. Respect traditions and introduce change slowly. Source:

Masculinity vs. Femininity Panama: Masculine/Feminine – Mixture of aggressiveness and sensitivity U.S: Masculine – Aggressiveness and assertiveness

How Masculinity/Femininity effects business… CharacteristicsTips High MAS (United States) Men are masculine and women are feminine. There is a well defined distinction between men's work and women's work. Be aware that people may expect male and female roles to be distinct. Advise men to avoid discussing emotions or making emotionally- based decisions or arguments. Low MAS A woman can do anything a man can do. Powerful and successful women are admired and respected. Avoid an "old boys' club" mentality. Ensure job design and practices are not discriminatory to either gender. Treat men and women equally. (Panama) Source:

Uncertainty Avoidance Panama: High UAI – Low tolerance for uncertainty and ambiguity Reasons – 94% Roman Catholic – Attitude: “There can only be one Truth and we have it” U.S: Average UAI – More accepting of change & opinions

How Uncertainty Avoidance effects business… CharacteristicsTips High UAI (Panama) Very formal business conduct with lots of rules and policies. Need and expect structure. Sense of nervousness spurns high levels of emotion and expression. Differences are avoided. Be clear and concise about your expectations and parameters. Plan and prepare, communicate often and early, provide detailed plans and focus on the tactical aspects of a job or project. Express your emotions through hands gestures and raised voices. Low UAI (United States) Informal business attitude. More concern with long term strategy than what is happening on a daily basis. Accepting of change and risk. Do not impose rules or structure unnecessarily. Minimize your emotional response by being calm and contemplating situations before speaking. Express curiosity when you discover differences. Source:

Final Business Tips…. Men’s Dress: conservative suits Women’s Dress: non-revealing dress or shirt and blouse Business cards: Spanish & English Dining: host at one end, guest of honor at other end Begin conversations with “small talk” Good conversation topics: family, sports, hobbies Bad conversation topics: race problems, Canal Zone, politics

Why Bring your money to Panama?

Why come Panama? Open door policy on foreign investment Economy based in U.S. dollar Low inflation rate No foreign exchange risk

Factors that Attract Business Government policies and ideas Colon Free Zone Panama Canal Tax Incentives and Labor Cost

Government Democratically operated – Lends itself to capitalism President Torroijos – Plans to expand Panama Canal and increase economic development Trade Liberization Program – Decreased tariff ceiling

Colon Free Trade Zone Re-Exports a wide variety of merchandise across Latin America and various areas No tariffs and quotas in “free zone” – no sales tax – no production tax – exemption on income derived from abroad – no tax duty on imports to re-exports from the free zone to foreign countries

Panama Canal Currently undergoing improvements to area that are estimated at about $1 billion Opportunity for hotels and tourism Business possibilities from canal expansion – Transportation systems – Ship owners, repairs, etc. – New residential construction

Panama Canal

Tax Incentives and Labor Minimum Wage $1.22 – $350 average monthly salary Labor force of 961,403 Investment Stability Law Special Tax Incentives for Tourism – 100% tax exemption on income and property for 15 years

Panama City

New construction in Panama City

Muchas Gracias, Alguna Pregunta?

References Hofstede, Geert (2005). Cultures and Organizations: Software of the Mind. 2 nd ed. Mitchell, Charles (2002). A Short Course in International Business Culture. 3 rd ed