How To Have A Great Home Business

Like anything else, starting your own home business is easier than you think if you have the right advice. There are many tips in this article to help you start your home business.

You should make your office easy to get around in and easy to work in. If your office furniture is uncomfortable or incorrectly positioned, it can cause pain or even serious damage to your joints. Spend a good amount of money on your desk chair if you spend a lot time of sitting in it. The same is true of your keyboard, mouse and mouse pad, lighting fixtures and so on. However, even a small budget can be stretched a long way.

Have a means of communication that is available to your customers. This may be a phone number, email or mailing address. A list of products purchased after questions have been answered should be kept. Perhaps your answer influenced their decisions: find out what you did right and do it again.

Include a banner bar for your site. This will give you the ability to trade your banner links with the businesses in which you stay in contact. Utilizing a banner page will increase your search engine rankings and help your audience find your site and products easily.

Understand what your business will require before you starting selling your products. You should look at all of the issues that come with a home business opportunity.

Spend time in a business forum on the Internet. This allows you to find others who are in similar situations. You can commiserate with people who understand what you’re going through.

As a sole business owner, be sure you control all financial decisions. Consider the choice to hand out your company credit card carefully, as your ability to include purchases in a tax write off may be negatively influenced.

Be brief when writing the objective of your business. This allows you to provide an explanation about your business and where you intend for it to go. In just a few sentences, you should be able to describe your company’s objective and unique qualities.

Seek opinions about your business, products and marketing materials. You can get this information from reviews, asking others or searching for yourself. This feedback, whether negative or positive, will give you priceless insight on moving your business to where you want it to be.

A well-developed business plan is essential to your business success. Even though you may not be planning for investors or applying for loans in order to raise capital, consider creating a business plan in any case. Business plans are useful because they allow you to organize your goals, strategy, and deadlines.

If you must take clients out, you can itemize these expenses. A dinner business meeting is a legitimate cost of doing business. Be very careful, however, that such meetings are with paying or potential clients, because otherwise meals and entertainment are not tax-deductible expenses.

Find resources online, such as a forum or a discussion group. If you search the internet, there are hundreds of sources of great information. Blogs are a wonderful source of information.

Business travel has many valuable benefits. Trips of a business nature often can offer deductions from your yearly taxes. You can take a vacation and business trip in one if you are lucky enough to find a valuable business conference in your niche that is also located in a great tourist destination. By doing so, you will also be able to take a tax deduction without worrying about raising eyebrows at the IRS.

There are a lot of people that want to launch a business from their homes. You cannot succeed if you don’t have good information and knowledge on hand before you start a home business.

Small Business Start-Up – How to Choose the Best Location

Even when you are starting up or thinking about starting up a business there are a number of practical considerations both short-term and long-term that are worth having in mind. They may not be hugely relevant when drawing plans up or making plans for the business, but they are issues that will very quickly develop and which some forethought will help you prepare for.

One of the questions very simply will be where is your business to be located. This raises the question of whether the business will be located in your own home or in a separate location where you will need business premises of some sort. Either situation is fine, but knowing what your needs are will help you prepare. It may be that you intend to start off the business or service based from home, with a view to moving into premises once the business is established. The value of thinking this through beforehand will enable you to prepare effectively so that when the situation arises you will be able to deal with it without having to spend a lot of time and effort researching it. There are many questions about what type of premises you need, but they will depend to a large extent on what type of business it is you’re running. There are many government and local funding schemes available to business start-ups that may be of help when deciding what type promises to have.

The other question to have at the back of your mind at a very practical level is whether you are going to or want to employ other people and if so how many. Maybe if your business grows very quickly you will suddenly have a need to employ other people. You do not want to be in a position where you have to turn down business simply because there is too much of it for yourself to do on your own. Equally you don’t want to say yes to everything because you’re afraid of turning business down, which results in either you not being able to do the work or doing the work and not doing very well thereby damaging the reputation. The question of using other staff needs to be at the back of your mind in terms of how you plan to proceed if that becomes a reality. With that in mind think about whether you want to employ other people, use subcontractors or freelance staff, whether you want to employee trainees or an apprentice. Another alternative is to get to know other contractors whom you would be able to share the business with and possibly get reciprocal business from them as well.

Supplies are a really important question and issue for any business, especially one that is starting up. If you are promising a business or service to someone, then it is key that you are able to deliver when you say you will. If your service or product is dependent on third party suppliers you need to know they are going to be reliable and deliver what they say they will when they will. No customer is going to be impressed by you saying it is someone else’s fault. Knowing what supplies you need, where you can get them from, and whether you need to carry stock of your own to guard against any delays from suppliers are important considerations. Carrying stock of your own supplies of your own is a good idea, but again dependent on you having premises available to keep stock, and also realising that it is essentially money tied up in stock that you may or may not be able to afford.

One of the questions running through all of this is how much you plan at the beginning and how much you plan as you go through the course of setting up the business. It is a good idea to have both a short and long-term plan at the beginning. This will give you a frame of reference to be aware of things as they develop or are likely to develop, and you will have a good idea as to what course of action you intend to take. Being aware of potential problems such as supplies or lack of supplies gives you the knowledge to plan ahead, and make plans for any contingency that may arise.

How To Start a Business in Panama


Hundreds of foreigners residing here are starting up new businesses in Panama every year.

Panama offers many opportunities for business entrepreneurs. You can start a bar, restaurant, retail shop, hotel, bed & breakfast, provide tour-guides or professional services.

Maybe you are thinking about opening a new business full time? Or, you are retired and thinking of passing the time by engaging in a part-time business.

Whichever you do, Panamanian laws must be understood and complied with. That’s why the following information will be useful for every reader who is thinking about starting a business in Panama.

Your first consideration is to decide what type of business structure to use.

There are 3 normal business entities here in Panama:
Sole Proprietor where you and your spouse & family operate a business as sole owners.

Partnership is when you team up with one or more persons in running the business.

Corporation is when you register with the government as a company issuing stocks, having a Board of Directors and corporate officers.

While a sole proprietorship can be an oral agreement between close family members, the other two entities need the assistance of a Panamanian lawyer. That’s because legal documents need to be prepared forming a Partnership or Corporation. If they are wrongly prepared, they will be legally null and void causing a business legal nightmare for its members.

Let’s examine the different legal structures here in Panama:

Corporation (Sociedad Anonima)
Corporations are formed under the Law No. 32 of 1927 and the Commercial Code (Decree-Law No. 5 of 1997, Article 5).

A Panamanian corporation is formed by two persons (called Subscribers) or Nominees (who act on behalf of absent foreigners) who execute legal documents called the Articles of Incorporation. Those documents are filed with the Panama Public Registry office. After the corporation is formed, only one shareholder will be required.
Corporate shares are issued which can be of various classes, can have par value or not, may be officially registered, or can be discreet Bearer shares.

The corporation must have a resident Registered Agent (Panamanian lawyer).

There must be at least three Directors whose names must be in the Articles of Incorporation. Any changes of Directors must also be filed with the Public Registry. Unless the Articles are changed or the corporation merges or dissolves there will be no other filing requirements.

Foreign Corporation
If you already have a corporation in another country, it can do business in Panama by filing the following documents at the Public Registry Office:

1. A notarized Spanish translation of the Articles of Incorporation;

2. Board of Directors minutes authorizing the Panamanian registration;

3. Copies of the most recent financial statements;

4. A certificate from a Panamanian Consul confirming that the company is organized according to the laws of its place of incorporation;

5. Notification of the transfer of capital to the Panamanian operation.

General Partnership
General Partnerships are permitted in Panama. As in most countries, the partners will have unlimited civil liability. That means every partner can be sued even if only one of them commits an error in the course of business.

Limited Partnership
Limited Partnerships (called Sociedad de Responsibilidad) are also permitted in Panama. They are governed by the Commercial Code and Law No. 24 of 1966.

There may be from 2 to 20 partners with no restrictions as to their nationalities or domicile. Their Capital must be at least $2,000 up to $500,000. The names of the partners must be registered with the Public Registry Office including the amount of Capital each contributed. Each partner’s civil liability for the Partnership’s debts is limited to the amount subscribed to but unpaid. If the Partnership appoints an independent administrator, his/her name must also be registered. No meetings are required if the Partnership has 5 members or less. Otherwise, a meeting must be held at least once a year. There are no requirements for annual returns or filing of any accountings.

An alternative to a Sole Proprietorship is to create an Individual Limited Proprietorship (Empressa Individual de Responsibilidad Limitada). This is set up in the same manner as a Limited Partnership except having only one member. The individual transfers his/her assets to the business. Business civil liability is limited to the amount of the committed assets.

Civil Partnership
A Civil Partnership (Sociedad Civil) is allowed by the Commercial Code and Law No. 24 of 1966. The liability of the partners is unlimited. This type of partnership is often selected by professionals such as lawyers and accountants.

Commandite Company
The Commandite Company (Sociedad en Commandite) is a hybrid partnership and corporation also governed by the Commercial Code and Law No. 24 of 1966. At least one partner must have unlimited liability, while the liability of the limited partners is limited to the amount of capital subscribed. This type of legal structure is seldom used in Panama.

Once you have either formed a Panamanian Corporation, or a Partnership, or are acting as a Sole Proprietor, you will need to register your business with the government before opening for business.

The 6 steps provided below are the requirements for registering your business with the national and local governments:

1. Income Tax Registry
This is called “Registro Fiscal” with the Panamanian government.
The Panamanian government has a website explaining what is necessary to register in Spanish.
This is the government Revenue (Tax) Service where your company receives its income tax id number called the Direccion General de Ingresos.

You will need to keep records of income and expenses and file an annual income tax (or corporate tax) return and pay any taxes owed.

2. Commercial License
Another Panama government website will give you information regarding getting a commercial license in Spanish at:
This Ministry is called the MINISTERIO de COMERCIO e INDUSTRIAS, translated as the Ministry of Commerce & Industry.
This is otherwise known as your Business License. Every business in Panama is required to have one.

3. Municipal Taxes
After getting your Panamanian government licenses, you need to register with your local municipality in order to pay your municipal taxes.

4. Social Security Number
Then you must go to the Registro Patronal de la Caja de Seguro Social (CSS) to get a Social Security number for your business and for yourself.

5. Sanitary Permit
If your business deals with food or beverages, you will need to get Permisos Sanitarios with the Ministerio de Salud.
That translates as a Health Certificate from the Ministry of Health for permission to operate a sanitary business.
Every employee (including owners & management) who prepare or serve food or beverages (or are in the vicinity of food or beverage preparation or service) must obtain two different Permits. One requires a medical & dental examination at a public hospital. The other is issued after attending a two day health & safety course.

6. Fumigation Certificate
Every business which is open to the public must be fumigated. You will need to hire a private fumigation company every four months to fumigate against ants, roaches, and other bugs.

You must then present a receipt from the fumigation company and obtain a Fumigation Certificate from your local municipality. This must be publicly displayed at your business entrance.

Hiring Employees
Now that you have obtained all of the required government permits and licenses, you are now ready to hire employees.
For those of you thinking of hiring your expat buddies, Panama limits a company’s work force to a maximum of 10% foreigners (non-Panamanian). Panamanian laws require that 90% of a company’s employees be Panamanian citizens, or married to a Panamanian, or foreign persons residing here for at least 10 years.

But, there are exceptions:

1. Required technical or specialized staff unavailable in Panama increases your quota to 15% foreigners. You can also petition the Ministry of Labor for a higher quota.

2. Companies having less than 10 employees can employ 1 foreigner.

3. Companies can employ foreign Managers and Supervisors when the company does business abroad from Panama with prior approval by the Ministry of Labor.

You must obtain a work permit from the Ministry of Labor for every foreign worker.

Panama’s Labor Laws
The Labor Code of 1971 deals with Labor Relations including the rights and duties of employers and employees. “Subordination” is the key concept of the law. Subordination is defined as a relationship where one person is subordinate to another. It makes no difference whether the relationship is or is not described as “employment”.

There are certain basic employee rights which must be followed:

1. Written Employment Contract

2. Minimum Wage

3. Maximum Hours

4. Paid Vacation Time

5. Firing Employees

Employee Contracts
You must have your employees sign a written employment contract called an Inscripcion Contratos con trabajadores.

You must file two copies of the contract with the Ministerio de Trabajo y Desarrollo Laboral.

Employers can easily terminate the employee during the first two years. After that, employees have greater protection under the law.

The law lists “just causes” for dismissal. Unlawful dismissals can result in minimal compensation payments. Both parties can contract for “fixed terms”.

Minimum wage levels vary according to the employee’s seniority.

Vacations: There are 11 public holidays per year. In addition, employees are entitled to a 30 day vacation every year.

13th Month: The law also requires a 30 day paid bonus every year which is known as “the 13th month”. This bonus is estimated at one-salary day for every 11 days of work. The 13 month bonus is paid in 3 equal installments: April 15th, August 15th, and December 15th every year.

Unions are allowed in Panama. Unions can collectively negotiate on behalf of the employees. Strikes are lawful under defined circumstances after a majority vote of the member employees.

Conciliation is mandatory before a strike can occur. However, only around 11% of the private sector employees are unionized.

Leasing Office or Business Premises
Panama’s laws regarding leasing commercial space is similar to most English speaking countries.

1. It needs to be in Writing.

2. It needs to properly describe the location of the premises.

3. It needs to address the amount and frequency of the lease payments, length of the lease period, whether there is a Security and/or Damage deposit, which pays for gas, water, electricity, and repairs. It will also contain provisions for late rent payments, tenant property damage, and renewal of the lease term.

4. It must be signed by the property owners (or legally authorized representatives) and the tenants.

5. All signatures must be Notarized before a Notary Public.

There are many more terms and conditions which should be included in a standard commercial lease which is why you should consult with a Panamanian attorney before signing one prepared by your landlord.

Business Bank Account
Even if you are a sole proprietor, you should never co-mingle your personal funds with business monies. That is why you’ll need to open a bank account for your business.

Partnerships and Corporations definitely need to open separate Business or Corporate Bank Accounts.

When you open an account for a corporation, partnership, or a business most banks require the following information and documentation:

1. Most banks require a personal interview, while some banks may allow a telephone interview.

2. A clear copy of the account’s Signatory and each corporate Director’s Passport (must include the photo & personal information page, and Panama entry stamp page).

3. A clear copy of a second photo id (such as a driver’s license or national id card).

4. Two bank references for each Director and account Signatory. These references must entail the satisfactory conduct of the account holder and that the banking relationship had been ongoing for a minimum of 2 years. It would be helpful if the references also confirm the person’s residential address. Many Panamanian banks require the references be specifically addressed to that bank’s branch. Some banks may accept only one bank reference letter (especially if you have done all of your banking with only one bank).

5. Two professional references for each Director and account Signatory. These references may be written by one’s accountant, lawyer, stock broker, insurance broker, real estate broker, or employer. They should be written on their company letterhead. These must include the duration and nature of their business relationship with the applicant. Only an Original letter will be accepted.

6. Proof of Address: You must provide a copy of a utility bill (phone, water, electricity, cable TV, or Internet service) which contains your name and address.

7. A “Company Profile” letter must be submitted which briefly describes the type of business the account holder will engage in. This will include the location of the business, the products or services you are selling, the nature and expected volume of business, the origin of the funds to be deposited, an estimate of the monthly or annual amount of funds to be deposited, and the reason for opening a bank account in Panama.

It will help if your Panamanian lawyer accompanies you to the bank in order to make sure the process goes smoothly.

Once all of these documents have been received, they will be forwarded to the bank’s Compliance Officer who reviews the entire application to insure no money laundering will occur.

This process will go smoother and may have less required documents if you first go to the Panamanian bank where you already have a personal account as they already know you.

Now that you are licensed, moved into your commercial space, hired employees and have a bank account; you need to worry about taxes.