Why establishing a Contact Center in Pan

Why establishing a Contact Center in Panama.

Large corporations and governments of industrialized nations are increasingly relocating their contact centers to Latin America, a practice commonly referred to as “Offshore Outsourcing Contact center”. It is estimated that by 2015, the contact center industry will generate over 3 million jobs in our region.

By relocating their contact centers to our region, businesses take advantage of lower labor costs in Latin America vis-#-vis their home countries, usually the United States and/or Europe. Businesses are now offering customers the same quality of service from their contact centers at a much-reduced cost thus obtaining significant economic benefits.

Contact centers in Panama? Today.

You may have wondered how Dell, NARS, Language Line Services, Sitel, Global Commerce Systems & Client Logic successfully erected the appropriate infrastructure for their contact centers in Panama. These companies received excellent legal assistance and took their time in structuring corporations to conform to Panama’s Telecommunication laws.

Since 2001, the government of Panama has promoted the establishment of contact centers within the country by providing incentives (Legislation 54 of 2001 and Legislation 25 with corresponding amendments) to foreign and domestic corporations. Today there are over 24 contact center licenses awarded by the Public Services Regulator (government entity responsible for such affairs). Panama’s economy is already realizing significant benefits from the legislation. Contact centers in Panama have generated approximately 7,000 new jobs for the local economy and substantial income for banks, utilities, and telecom providers, among others. The resulting economic expansion prompted Panama’s government to continue pursuing incentives designed to attract contact centers. The most appealing of which is the creation of a special economic area for the Pacific Rim, named “Technology Park”. This concept, which is still in its infancy, offers flexible labor rules, low taxes, and an excellent communication networks. The Technology Park creates a favorable investment climate for businesses desiring to outsource contact centers.

What are benefits of Panama?

Panama is the crossing point of major fiber optic networks in the Americas (Arcos 1, Maya 1, PAC MAC and Pan American) and boasts a state-of-the-art telecommunications infrastructure with many prominent telecom service providers. In addition, the country is not prone to natural disasters, features a
dollarized economy since 1904, and enjoys a strong financial services industry with the presence of well-recognized international banks and financial services firms.

Aside from the abovementioned benefits, Panama’s convenient tax laws are the primary advantage over its closest competitors (El Salvador, Costa Rica, Argentina and Chile). Panama’s tax legislation states that every company located within Panama’s borders (i.e. contact centers) that generates foreign income is exempt from local duties on such income. This act was ratified for contact centers in the local registry of Panama’s Ministry of Commerce, which is responsible for determining exemptions of fiscal levies on income, dividends and trade. This act also exempts Panama-based contact centers from custom duties on their imported equipment. By taking advantage of Panama’s fiscal benefits, foreign corporations with the appropriate legal structure can lower their worldwide tax expenses.

Contact centers are by its very nature labor intensive and represent a significant labor overhead. Panama’s low labor costs provide another significant economic benefit for contact centers located within its borders. The average monthly salary for contact center personnel ranges from $400 to $550 monthly, compared to $15/hr. in the US and $25/hr. in Europe is a significant cost advantage. For example, an American-based 500 employee contact center would have a monthly payroll of $1,680,000 vs. $240.000 for a similar contact center based in Panama, a savings $1,440,000 per month.

In addition to all these, for American companies Panama is not an offshore location. Panama is a near-shore location. Only 2 # hours from Miami, 3 hours from Atlanta, 5 # hours from New York City, 6 hours from Boston, 5 # hours from Los Angeles and 5 hours from Dallas.

How to establish a contact center in Panama?

For the other part, we have seen other companies desist in their interest in Panama because of a lack of a “logical order” in the creation and registry process. In the practice we have observe a need of “certain logical legal steps”
for a contact center to properly establish in the short term in Panama, and receive all its benefits. Such steps include registry and acknowledgement of Governmental institutions, proper creation of companies, contract of providers, and the acquisition of real state among other necessities.