It might be a palapa bar on a white-sand beach, deep-sea fishing tours, a restaurant, a surf shop, importing t-bone steaks, teaching English, making cheese, exporting art work…
Whatever your idea, there’s a place overseas where you can make it a profitable reality. But readers ask us all the time: Where is best? That’s why we’ve put together International Living’s first-ever Business Index.
Some expat entrepreneurs say they had a niche in mind before they left home—a dream they brought with them overseas. Like 46-year-old Canadian, Daphne Newman. She took her passion for good food to a white-sand beach in Roatan, Honduras and opened her own restaurant there.
Other entrepreneurs say they’re inspired when they arrive in a new place and discover a need. Like Cole LaValley who didn’t have a particular business in mind when he arrived in Medellín, Colombia. But seeing an opportunity, he grabbed it.
Now he owns his own hostel. (See Cole’s full story here.) Still others purposefully seek a real life change. Lucky and Erin Ivy left their exhausting, 12-hours-a-day, six-days-a-week jobs to buy a small leave five-lane, bumperto-bumper traffic and adopt a bicycle as our primary means of transportation,” says Erin. “Culture shock? You bet…and we loved it. Instead of grabbing a Starbucks rushing out at 5:30am, we now linger over our coffee while gazing out at the exquisite Caribbean Sea, palm trees, and white-sand beach…It’s like being on vacation all of the time.”
In some places, just being from North America gives you an advantage. U.S-style services may not be well-developed in your new overseas home. Once you’re on the ground, you can spot the gaps—and they look a lot like opportunity.
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Alabaman Henry Guy, saw a gap in the lack of English-language training in Quito, Ecuador. He drafted a business plan in 1999…and today his school teaches 25,000 students a year. Jon Hurst wanted to continue “enjoying hammock time” in Panama, but he needed to make money. One day he realized you couldn’t get fresh bagels in Panama City.
Now you can—and Jon’s running the business that sells them. It doesn’t matter if you’re seasoned in business or if it’s your first time out—some markets are custom-made for entrepreneurs.
They’re places on the upswing. And here we’ve pinpointed the seven best. These are all destinations where doing business is relatively easy, opportunities abound, and the outlook is positive. You’ll notice no European nations on our list. Sure, it’s possible to find and occupy a profitable niche in Europe (just ask Sally Stone, whose story you’ll find here). But with its high taxes and well-developed bureaucracy, Europe is not the easiest place to get started.
You’ll find opportunities in Asia, too—but there you contend with notoriously restrictive business climates. So we’ve focused our attention closer to home, in places where we know a lot of our readers have their eyes. Latin America is emerging as a powerhouse region. In many markets, a growing middle class is clamouring for goods and services faster than businesses can provide them. Americans are retiring abroad in greater numbers than ever before, too. And those expats are looking for familiar goods and services as well.
The seven best places to start a business, which we profile here, are—importantly—all places you’ll want to live. In all of them, property is more affordable and you can easily afford a better quality of life.
So which country wins? Panama. You don’t need any special visas to get started. Just step off the plane and take a look around. Lots of expat communities exist, the tourism industry is growing fast and local services can barely keep up.
Panama City is a hub where you can find almost everything—but it’s growing so fast, there is room for more. In the popular tourist and expatriate hubs outside the city, plenty of niches have yet to be filled. Some restrictions exist when it comes to opening a retail space, but there are plenty of expats who have done it anyway, undeterred. Rents on commercial premises are reasonable and commercial leases are business friendly. With so many English-speaking attorneys, you won’t need Spanish to get started. The country’s business infrastructure is excellent, too, with Internet penetration among the best in the region.
And the local business community is open to, and welcoming toward, foreigners. While Panama scores well across the board, other countries score highly, too. For instance, third-place Ecuador actually scores better than Panama for ease of start-up. Expat David Morrill has run two businesses there over the last seven-and-a-half years. “It’s relatively easy for expats to get into business… Foreigners are treated the same as locals in starting businesses.
There are no restrictions on the type of business and no special visa is required. There’s no problem opening a bank account, no restrictions on employing staff or requirements of how many you need to hire. It is very important, however, that you have good legal and accounting counsel so he or she understands the laws and rules—these are enforced.”
Belize, our runner up, tops the list for ease of language. “The fact that Belize is English-speaking is the country’s biggest asset,” says U.S. expat Stewart Krohn, who’s been doing business in Belize for 38 years. And when it comes to doing business here, Stewart says, “If you are straight and patient, and apply the same common sense and due diligence you would in your own country, then you will not have any problems.”
In Colombia, Nicaragua, Ecuador and the Dominican Republic, knowing some Spanish or having a local partner is important if you are targeting locals and hiring local employees. If your target market is tourists and expats, then language will be less of an issue. And in places where English is not widely spoken, you can find serious potential.
In Medellín, Colombia, there is a strong demand for English-speaking tours and services. Over the last decade, international flights to Colombia have increased 120%. The number of tourists tripled between 2002 and 2009 and more and more expats come every month.
It’s not just in Colombia that the future is bright. “In Ecuador the outlook is good for small businesses, (properly researched) because of the rapid growth of expat communities,” says David Morrill.
Expat Toni Green, who runs a real estate business in the Dominican Republic, says the government is improving infrastructure and encouraging business development in Las Terrenas, an area home to a large international community of expats. But if you’re serious about setting up shop overseas, you should spend a few months in the country before launching your business. Do your research. Says David Morrill, “In Ecuador, the numbers do support some expat businesses…but not others. It’s a common mistake that expats overestimate the size of the expat community when they plan ‘bricks and mortar’ businesses.”
Also, think outside the box. For example, in Nicaragua “most of the tourist towns have more than enough B&Bs and small hotels, but a good restaurant is hard to find, and businesses that offer activities like surfing and fishing are rare,” says expat and local businesswoman Tuey Murdoch.
The most successful expat businesses usually appeal to the local market as well as to expats and tourists. Take the example of Eric and Stephanie Slater, who started their bakery in San Juan del Sur, Nicaragua, to cater to expats, but are now expanding because of demand from ordinary Nicaraguans.
Above all, says Toni, “Take advice from other expats who have traveled the road before you, do your homework, and remember, you can never ask too many questions!”
OUR BUSINESS INDEX: HOW IT WORKS
To top our Business Index, Panama scores well in all eight crucial categories. Access to capital, ease of start-up, market opportunities, future outlook, rents and leases on commercial premises, language, business infrastructure and the local business culture.
To evaluate our seven countries we consulted seasoned entrepreneurs who’ve made the move and learned the ropes, as well as experienced in-country attorneys. We asked them about visa requirements, financing, and how easy it was to set up a bank account. In some countries there are restrictions on the businesses a foreigner can set up, in others, anything goes. They told us about local taxes, business expenses, gaps in the market and the potential for expanding or creating new businesses.
Then we asked our experts to rank their country overall for each category from one to 10, with one being terrible and 10 being excellent. The numbers they gave resulted in the Index, and the answers they gave to the questions backed up the numbers, as well as giving us loads of good information on setting up businesses in each country.
You’ll find all that information, as well as further resources and contacts here. And for a list of business ideas and niches waiting to be filled, see here.
Editor’s Note: If you’d like to learn more about ways you can pay for your life or travels overseas, sign up for Fund Your Life Overseas, a free e-letter from International Living. Sign up here and we’ll send you a free report: Fund Your New Life Overseas With These 6 Portable Careers.