Having a minimum of five full-time permanent employees is one of the requirements that companies must meet in order to obtain a Regional Offices of Multinational Corporations license, if a bill from the Varela administration succeeds.
The bill presented by the Ministry of Commerce and Industries (Mici) to the National Assembly contemplates, among other things, the new conditions that must be met by companies seeking to obtain a license as Regional Offices of Multinational Corporations (SEM by their initials in Spanish).In addition, it details a proposed law reform, under which companies must generate annual operating expenses in the country of at least $500,000.
The average time for the region is 28 days and the average cost is 48% of GDP per capita, a far cry from OECD average time and costs which are 9 days and 3.4% of GDP per capita.
Using data from the Regional Economic Report 2015, an article on Prensa.com outlines that "... Of all the countries in Central America Panama is the place where starting a business requires the least paperwork, time and cost.
The feeling of owning your company can not be understood "until you finally experience it: an exquisite satisfaction, seasoned with spicy uncertainty, dressed in the joy of vertigo."
A young businesswoman puts on paper her journey of running her own company, with the conviction of one who knows she has found her way in life.
'...I start the day unexpectedly with a tingling in my hands or an unanswered question.
It is the longest amount of time in the entire Central American region for formalizing a new business.
Laprensa.com.ni reports: "While in Panama it takes five days to open a business, in the case of Nicaragua 36 days are needed, the longest in all of Central America, according to the Doing Business Report 2014, by the World Bank (WB) ... ".
The report reveals that although Nicaragua is a country with the fewest amount of procedures needed to start a business, "the bottleneck" is in the process of obtaining permits for electricity, construction, property registration and other things.
The 12 steps and 60 days that it took to start a business a year ago, have now been reduced to 9 steps that can be done within 24 days.
Nacion.com reports: "This improvement in opening a business is part of the actions undertaken by the Government to facilitate procedures and which has earned the country a jump of seven places in the ranks of the Doing Business 2014 report ...".
Employers point to the thick web of paperwork that must be traversed in Costa Rica if you want to start a new business.
From a press release issued by the Costa Rican Union of Chambers and Associations in the Private Business Sector (UCCAEP):
Most entrepreneurs, according to the latest data from the Survey "Business Pulse" by the Costa Rican Union of Chambers and Associations of Private Business Sector (UCCAEP) indicate that in Costa Rica there are a number of constraints to the initiation of a new business in the country.
In the first five months of 2012, 4.271 new company registrations were received.
A press release from the Ministry of Economy and Finance in Panama reads:
The Authority for Micro, Small and Medium Enterprises (AMPYME) reported that in the first five months of 2012, 4.271 new company records were received, highlights a report from the Economic and Social Analysis Unit of the Ministry of Economy and Finance (MEF), according to figures provided by AMPYME.
The Youth Entrepreneurship program in partnership with Junior Achievement is taking shape with the formation of 74 companies by young entrepreneurs.
Over twenty years, the program has trained and supported more than 38,556 young technicians. Today, it demonstrates results with the formation of 74 companies and 16 others that are in process.
The chairman of the program, which is run by the Nicaraguan Development Institute (Inde) said, "Our dream was to grow opportunities for young people through a program of personal and business growth and development."
As a result of the economic dynamism, there is a constant arrival or creation of companies offering products and services to the Panamanian market.
La Chorrera, Arraiján, San Miguelito and Panama City are the areas where announcement of start of operations are being made, the basic procedure for starting a business.
In an article in Martesfinanciero.com Virgil Sousa, national director of the Ministry of Commerce Trade and Industry (Mici), notes that "the areas where there have been the most announcements for operations registered are Chorrera, Arraiján, San Miguelito and the capital. This is due to the construction of new shopping centers in these development points. "
Nicaraguan industrialists have asked the Government to reduce the red tape involved in the establishment and operation of a business.
Mario Amador, president of the Chamber of Industry of Nicaragua (Cadin) believes that although there have been advances, such as the creation of the One Stop Investment Center for Exports (Cetrex), much remains be done.
The Ministry of Economy in Guatemala has presented "Ventanilla Ágil Plus" (Agile Counter Plus), which will reduce the time for registering a business.
From a press release from the Ministry of Economy of Guatemala (Mineco):
- 30 steps to register companies eliminated reducing the process from 47 to 17 days.
- Also removed, 17 steps for registration of individual traders reducing the process from 4 days to one and a half.
The Government of El Salvador has announced an initiative called "MiEmpresa.gob.sv" which from next May will reduced from five to one the number of forms required for filing and commencement of operations of a company.
A press release from the Ministry of Economy of El Salvador reads:
As part of efforts being made in the country to improve the business climate, the Government of El Salvador announced today an initiative called "MiEmpresa.gob.sv" which from next May will reduce the number of forms required for filing and commencement of operations of a company from five to only one. This is the result of joint work carried out by 8 institutions of government and some local governments.
A Notice of Operations is the only process required in order to start up a commercial or industrial activity in the territory of the Republic of Panama.
During the first quarter of this year the Panamanian system recorded 7,396 such notices, which is about 404 less than in the same period in 2011. But exceeded the 7,043 notices during the first quarter of 2010.
The website http://guatemala.eregulations.org/ has been created to publicise legal requirements, streamline the time it takes to register a company and encourage formal employment.
"Today it takes at least 19 different interactions with 6 different public institutions in order to formalize a business (in other countries it requires only 10), 500,000 new businesses open in Guatemala and only 5 percent are formally registered", reports Elperiodico.com.gt.
Latin America is barely ahead of Africa in quality standards and conditions affecting local businesses.
As a region, Central America, is located in the second half of the list entitled ‘Doing Business 2012’.
Doing Business 2012, a report by the World Bank this year added a new area of analysis, which is the ease of obtaining an electrical connection, along with the traditional items which include: ease of starting a business, management of construction permits, registering property , getting credit, protecting investors, paying taxes, cross border trade, enforcing contracts, and insolvency resolution.
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