Doing Business in Central America | How-to Guides for running your business from Business.com

The countries of Central America are emerging from decades of also-ran small economies to becoming an increasingly vital source of raw materials, labor and even innovation. The recently signed free trade deal known as Cafta-DR, which includes all the major economies in the region but Panama and adds the Dominican Republic, represents the No. 2 destinations for U.S. goods in Latin America after Mexico, at $15 billion a year.

Selling into and sourcing from the isthmus will only increase in relevance to U.S. business as near-shore labor and materials sourcing rises with the implementation of Cafta-DR, creating a two-way trading relationship that should make new opportunities for U.S. companies while lifting millions of Central Americans out of poverty and into the global workforce.

Action Steps
The best contacts and resources to help you get it done

Learn the basics of free trade

The U.S. government does not operate in a vacuum. Its free trade agenda is heavily informed by big businesses that seek a way to compete in an increasingly global world economy. Finding where your small business fits is vital.

I recommend: Export.gov provides fairly straightforward details on trade deals around the globe, including the Cafta-DR deal. If you want to dive deep, say, get the latest agreements in writing, see the U.S.. Trade Representative's topic page on trade agreements.

Find out more about each country, step by step

Although often talked about as if a single country -- such is the myopia of big corporations -- lumping Guatemala with Costa Rica or Panama is a mistake.

I recommend: Doing Business, a World Bank site, offers helpful apples-to-apples stats, like days to start a business, to hire and fire, get a license or close down. Michigan State University's globalEDGE site, too, offers concise, factual and free (with registration) mini-course modules on doing business country by country.

Find friends who know the ropes

Getting going on business in the region is first a matter of find the opportunities that are real and actionable.

I recommend: The U.S. Commercial Service has just this mission. You can find an American Chamber of Commerce, known as AmCham, in nearly every country in the world. Their members are often domestic businesses with an interest in importing, exporting or foreign investment.

Get to know the agencies in-country

Most countries operate foreign-investment offices that seek to find companies interested in doing business in the country and with domestic companies.

I recommend: In El Salvador, it's Proesa. In Guatemala, contact Invest in Guatemala. For Costa Rica, see CINDE. The Honduran version is the government's Secretaría de Industria y Comercio. Panama has Business Panama, a private consultancy. For Nicaragua, it's best to start with the Ministry of Industry and Trade Promotion, Mific. Often overlooked is English-speaking Belize. The association of private business chambers across the isthmus is Fecamco.

Tips & Tactics
Helpful advice for making the most of this Guide

Central America only recently threw off the shackles of years of drug-fueled civil strife, and the Cold War was not kind to institutions there, either. Yet huge companies, among them HP and Intel, are buying in because of high education levels and willing workers.
The big advantage of Central America labor is found in part in its relatively nearness to U.S. shores. Goods can be at a southern port in days, not weeks, and communications are in U.S. time zones.
Try working through development banks like the Inter-American Development Bank, the World Bank and the International Finance Corporation, all of which work to identify opportunities, then provide cash for ready partners.