If you are seeking to establish a presence in the Chilean market, there are some key aspects you should acknowledge before entering.
Why Should You Start Doing Business in Chile?
In recent decades, Chile has been recognized as one of the fastest emerging markets, not only in Latin America but globally. Oxford Economics expects an average growth rate for this country in 2.6 percent GDP.
Moreover, the country was voted the 56th best country in the ease of doing business, according to the World Bank 2019 report —which compared 190 economies from all around the world—.
Certainly, Chile represents an opportunity for investors thanks to the country's consistent and dynamic macroeconomic growth and openness to foreign trade with a total of 26 multinational trade agreements with 64 different markets.
Which are the Chilean Institutions you must Know?
For incorporating and establishing your company in Chile, you need to learn about the next institutions.
- Chilean Tax Service (Servicio de Impuestos Internos, SII) – This institution will grant you a Tax Identification Number or RUT (Rol Único Tributario) to start your business activities. It will also supervise, control, and regulate anything related to taxes.
- Conservador de Bienes Raíces / Registro de Comercio – The registration of your company is executed in the Registro de Comercio by a legal representative.
- Ministry of the Interior and Public Security / Official Gazzette – Companies, must publish their company relevant information (public deed) in the Official Gazette before incorporation.
- Ministry for the Economy, Development, and Tourism – One of the main institutions in charge of promoting business-centered projects. For example, the online system initiative named “Tu Empresa en un Día" —translated as “Your Company in One Day"—, which facilitates the process of registering a business.
- Labour Office Department – Everything regarding the Chilean labor laws compliance.
- The Financial Market Commission (CMF) – It supervises the financial stability and development of legal entities, from statutes to laws.
- Department of Foreign Affairs – As a foreign investor in Chile, this institution co-ordinates your legal residency in the country.
- Chilean Banks – As you need to open a local bank account to incorporate your business, you will need to choose between the different financial institutions within the country.
Relevant Labor Laws in Chile
According to the Chilean labor laws, an employment relationship can be established by settling an agreement between the employer and employee, either written or not.
The main specified terms in an employment contract are:
- Maximum hours of work: 45 hours per week / 10 hours per day.
- Employees have the right to a daily break of 30 minutes (for full-time workers).
- Minimum monthly salary: 411 EUR.
- Overtime hours are restricted to no more than two.
- Access to mandatory profit sharing.
- Legal right to 15 days paid vacation for employees who have been working for more than a year.
Most Common Legal Entities in Chile
- Individual Limited Liability Company (EIRL)
- Limited Liability Company (Sociedad de Responsabilidad Limitada or SRL)
- Corporation (Sociedad Anónima or S.A.)
- Shared Company (Sociedad por Acciones or SpA)
Despite the easiness of doing business in Chile —due to its well-supported legal practices—, it is advisable to collaborate with a local partner. This will help you to determine which are the best strategies for your company when entering the Chilean market, especially in terms of labor and employment compliance.
In this sense, with an International Professional Employer Organization or PEO, you will have direct assistance concerning local labor laws. From preparing an employment contract to payroll taxes.