Common Challenges for Corporate Relocation




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The common challenges for corporate relocation include the reasons for considering to relocate and feasibility challenges.

There are cost driven reasons for corporate relocating including lower real estate costs, labor costs, utilities costs, transportation expenses, taxes, and consolidation effectiveness. The problems corporations face in their home countries are rising taxes, higher prices, increasing labor wages, and costly employee benefits. These costs can be mitigated by relocating to another country whose cost of living is a lot less.

Non-cost driven reasons for corporations relocating include customer proximity, air access, business risk mitigation, better staff recruitment, proximity to industry peers and support networks, avoiding unions, and an improved labor market. Most of these reasons keep the corporation inside the home country as relocating a corporation to another country will avoid unions but be further away for customer access and industry peers.

Whether to relocate the entire corporation to a new site or some departments moving to a new location or creating a hub with some departments at nearby locations is the first challenge. An entire new location offers complete consolidation where staff can easily interact with each other. A partial relocation of different departments to a new location may have advantages for customer service being closer to customers or production being closer to better distribution proximity to infrastructures. Creating a hub with different departments located in close proximity to the hub can have the advantage of relocating the departments to where their client base is or a seaport or air cargo airport for better distribution infrastructure.

Moving to Panama, or any foreign country for that matter, creates different challenges. Many U.S. and European corporations have relocated their production plants, customer services departments, and distribution centers to other countries to save money by paying less or no taxes, buying cheaper real estate, renting less costly office space, paying less wages, and dealing with less restrictive government regulations.

Many countries offer incentives for international corporate relocation by limiting taxes such as income, corporate, real property, import duties, and local taxes. They also offer easier immigration visas for employees and their families along with work permits.

Panama has unique laws encouraging corporate relocation for multinational corporations by allowing them to create a regional hub for Central and South America. These laws provide many benefits including reduced taxes as mentioned above. Another benefit is waiver of import duties for vehicles, furniture, and materials used for the business. A special office within the Panama immigration exists to help multinational companies with obtaining immigration visas for their foreign employees faster than normal application procedures.

Panama has other liberal immigration visa programs offering permanent residency to citizens of 48 friendly nations who can either purchase an existing Panama company or create a new one and to professionals who will work for a Panama company in a professional capacity.

We at POLS can assist with reducing the challenges of corporate relocation to Panama. From assisting with locating real estate to purchase or lease, selecting immigration residency programs, advising regarding Panama’s commercial and labor laws, creating Panama legal entities, and drafting contracts.

Contact Us for all of your Corporate Relocation and moving to Panama needs in Panama.

About Manoj Chatlani


Manoj Chatlani is a Senior Partner at POLS Attorneys, a full-service law firm in Panama City, Panama. Specializing in offshore services, including asset protection, estate planning, offshore banking, and offshore corporations, as well as Panama immigration and real estate transactions, Panama Offshore Legal Services offers clients a streamlined solution to all their Panama legal needs. Manoj is a Panamanian lawyer and holds a law degree from USMA and earned a Masters in Communication Law and Panama Tax law.

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One Comment

  1. corporate relocation

    Posted November 18, 2013 at 8:37 am | Permalink

    Panama absolutely has unique laws related to corporate relocation. When it regards to challenges, these laws can be used to erase any complexities when moving or relocating. Incredibly great!