Cons about Panama from a business perspective.
Small labor pool - 1.5 million in the greater Panama City metro area. 3 million in the whole country.
Increasing demand for fluent english speakers in all areas. Very few English speakers here.
Increasing demand for techie labor, eg, webmasters, admins, etc.. Especially english speakers.
Small techie labor pool to begin with.
Socialist labor system heavily slanted towards the employee. Too many laws and regs that stifle growth; both for the business and the employee.
Costs for qualified, english speaking employees is skyrocketing as demand increases and supply drops off.
The competition for qualified employees is horrendous right now. When I first started over a year ago, I'd get 30 - 50 resumes within two weeks of posting a help wanted ad online. This last two weeks, I've posted ads for writers and html guys - 3 writer resumes and 5 html resumes. Terrible.
Bureacratic nightmare. Everything you do regarding establishing and operating a business requires a lawyer. Immigration is completely hosed up. The Ministry of Labor has pre-judicial power; the only way to reverse their decision is to take them to court. The various goverment departments don't communicate with other. Example: The Director of Immigration makes a change that requires a change at the Ministry of Labor. The Ministry of Labor never heard about the change. Labor says "No - you need the Immigration stamp first". Immigration says "No - you need the labor document first". Catch 22's are everywhere.
Corrupt, underpaid, understaffed police forces.
"Manana" attitude is prevalent. Getting things done takes 4 - 5 times as long as it should.
"Me First" attitude. Most Panamanians don't look towards the future - they want their dollar now.
Pros about Panama
Decent cost of living.
Labor is still cheap compared to the US/UK/Canada, etc - probably 20%.
Friendly people
Great banking and business privacy laws.
Good infrastructure. Internet access is plentiful and not terribly expensive. Power is expensive, but so far, extremely reliable. Water system is excellent - you can drink tap water with no worries. Roads and traffic are pretty bad.. but they are "working on it".
No taxes on income derived from offshore sources (ie, outside Panama).
Lots of hot chicks from Colombia
I enjoy Panama. If I was working on my own, this would be an OK place to live. Running an office here is.. well.. it could be better.
The Philippines seems to be the place to be for production work. I still like the banking and privacy laws here in Panama, though..