How NOT to do Business in Panama
Thursday, December 10 2009 @ 01:30 PM EST
Contributed by: Don Winner
The Panama Rep Didn't Steal A Dime: You should know that in this deal the person who was here on the ground in Panama who was supposed to be running the show (my friend) did nothing wrong. When it became apparent that the guys from the states intended to remove him from the company (at the urging of the unscrupulous Panamanian lawyer) they did so illegally, and in a manner inconsistent with the documents of incorporation for the Panamanian company. They basically did it from one day to the next without giving the other partner ten days notice as required. But most importantly, my friend here on the ground in Panama did absolutely nothing untoward, and the only reason the US investors got nervous was because the real crook was whispering in their ears. In fact, these idiots turned on the guy they should have been trusting, in favor of the guy who is now about to screw them over by the numbers. In that respect I can only say they now deserve everything they have coming to them, and more. They got stupid, made mistakes, and now it's going to bite them in the ass, hard.
A Man's Word Still Means Something: I do business here in Panama on a handshake and on verbal commitments all the time - mostly with other gringos. If a serious business owner tells me they will do something then I take them for their word and follow through. They do their part, I do my part, and everyone is happy. However in some rare cases, sometimes happens feeling of mutual trust and confidence begins to melt away for whatever reason. Normally if that happens then I'm the first one to walk the other way - I don't want to do business with anyone I can't trust. If I feel like I have to nail someone down with a contract to ensure their performance, then why am I doing business with them in the first place? Business arrangements should be mutually beneficial, and if one side or the other is no longer happy or comfortable then it's best to do something else. Life's too short.
Get A Second Opinion: If you are about to write a check to a lawyer to embark on some kind of a large legal battle here in Panama, I would always recommend that you seek and obtain a second opinion form someone who is not a lawyer first. I don't mean to get a legal opinion from a non-lawyer, I mean get a common sense opinion from someone who is not going to make a whole lot of money if you take your case to court. Obviously lawyers get paid when there's conflict. If there were no courts or legal battles then the lawyers would all starve to death and become cab drivers (or politicians.) Many times your best strategy would be to avoid legal battles at all cost and to settle out of court and over a cup of coffee, as honorable men, with the agreement sealed with a handshake. Lawyers don't get paid for handshakes - so they are not very likely to steer you down that path. They will start the same conversation with "well, we can open a criminal case, and a civil case, and an administrative case," etc. Make sure you bring your checkbook to that meeting.
Don't Get Me Wrong: If you're in Panama you're going to be needing a lawyer. There are things you will be doing such as immigration and real estate deals that will require their services. If you are entering into a business transaction then you'll need lawyers to establish corporations. review contracts, and to do other things. However if you're going to open a legal action against someone, it almost always makes the most sense economically speaking to see if you can work things out first. I'm not saying that all lawyers are bad people - on the contrary. Most of them are just doing their jobs, and of course they work for pay. But I do have a real problem with lawyers who steer their clients INTO bad land deals, for example, knowing that they will be able to charge legal fees for ten years as the cases work their way through the courts.
Hopefully It Will Work Out: As I wrote this article I purposefully left out the names of the people involved in this case, hoping my friend will be able to send this to the (idiots) who are about to self-destruct, by taking the advice of a bad lawyer who is leading them astray. The US investors (idiots) have already made so many legal (criminal) and technical (civil, administrative) mistakes they are almost certainly guaranteed to lose everything here in Panama if it does go through the court system. In the end the only person who is guaranteed a payday is the lawyer, and the courts will decide the damages and who gets what. But here's my point - none of this is necessary, at all. Actually, thanks to the (dumb) actions of the US investors, who are acting on the advice of their unscrupulous Panamanian lawyer, they have basically laid all of their assets on a silver platter for my friend. But of course they don't know that, they can't see it, and because they have decided to believe everything their Panamanian lawyer tells them, they think they are in the cat-bird seat. As I sat there listening to this whole thing, I just hung my head in disbelief, wondering how anyone who considers themselves to be smart and worldly could be so flat-out stupid. Amazing. If you're going to do business in Panama, this is not the path to follow.
Copyright 2009 by Don Winner for Panama-Guide.com. Go ahead and use whatever you like as long as you credit the source. Salud.