Over the past years, the Chilean market has emerged as a great destination for businesses seeking international expansion, mainly due to its attractive business environment and economic growth. But before entering this country's market, you must consider its key challenges and opportunities.
Opportunities for expanding your business into chilean market
According to the World Bank, the economic growth in Chile has been one of the fastest in Latin America during the last decades, which allowed to reduce poverty in the country considerably . This scenario has helped the country to stay competitive and stable as an emerging economy.
Economic Stability and Competitiveness
Furthermore, in Latin America, Chile is also considered as the most competitive country by ranking 33rd (out of 140 economies evaluated). This report highlights its:
- Stable macroeconomic conditions.
- Well-developed infrastructure.
- Product market with less complex tariffs and opportunities in the wholesale trade.
Other advantages of investing in Chile come with political stability and a low unemployment rate.
If you want to access global markets, Chile offers a great advantage in trading expansion. It has 26 trade agreements with a total of 64 markets, such as the United States, South Korea, Mexico, Japan, Colombia, the European Union, New Zealand, China, Brazil, and many others.
In addition, Chiles' trade agreements represent 86.3 percent of the global gross domestic product (GDP).
Among Latin American countries, Chile has the most business transparency environment as it ranked 27 out of 180 countries around the world. Making it an attractive country for businessmen and entrepreneurs.
Challenges of doing business in Chile an open market
One of the main challenges of doing business in Chile is its highly competitive market and small population compared to other Latin American countries, such as Mexico and Brazil. As Chile's trading agreements have attracted many foreign investors, there are more struggles in positioning into the market.
Processes Delays in Taxes and Regulations
When it comes to taxes and any other obligations, businesses must invest more time and effort to fulfill every process. For example, it can take an average of 296 hours per year for enterprises to comply with their tax responsibilities, in comparison with the approximate 159 hours that OECD countries managed.
Finding Country Partners
Entering the Chilean market can be extremely complicated if you don't have the right local partners that can help you overcome the cultural, regulatory, and language barriers. So, establishing reliable relationships in the country will give you the opportunity of creating connections and acquire the confidence of investors and, above all, your workforce.
Also, you must acknowledge every socio-economic aspect related to your workforce in Chile. For example, the average working hours that Chileans spend per year is equivalent to 1,941; placing it as the 6th country with the longest workweek hours.
That's why an International PEO can be an alternative for entering in the Chilean Market.
How will an international PEO be helpful?
As with any other international expansion, there will be some risks and advantages that you will face while doing business in Chile, especially when talking about employment requirements.
And with the help of International PEO (a co-employment partner), you can obtain the local support you need; such as saving resources and time as PEO partners' control every Human Resources process, from preparing job descriptions to managing payrolls. Everything is done following the Chilean labor requirements.
Although expanding your business in Chile can be challenging, you can find more advantages of investing in this country with an international PEO partner like SERVIAP.