Doing Business in Chile

Chile stands out in Latin America as one of the most stable and transparent destinations for domestic and foreign investment. The Chilean government actively promotes economic growth through free market policies (with a GDP growth of 3.1% in 2024), legal certainty, and incentives that encourage significant investment in multiple sectors.

Chile's Constitution, Article 19 No. 2, guarantees equality before the law, but understanding cultural and linguistic barriers can be essential to building successful local relationships. Thanks to its strategic location in the Pacific, its extensive trade agreements, and its favorable business environment, Chile remains a competitive gateway for companies seeking to expand in the region.

The private sector drives the majority of Chile's GDP, supported by clear regulations and competitive conditions that attract local and international investors.

Investment Opportunities in Chile

Chile offers a wide range of investment opportunities, supported by sustained GDP growth and a stable business environment. While often considered a small market compared to other Latin American economies, favorable market conditions and strong institutions make it attractive for long-term projects.

For companies managing cross-border taxation and seeking to understand the benefits of treaties, H&CO's article on the US-Chile Tax Treaty offers practical information on withholding rate reductions and double taxation protections. Also, to explore how Chilean SMEs are leveraging digital distribution, the article on multi-channel integration with SAP Business One illustrates modern strategies for multi-channel operations in Chile.

Market entrance

Successful market entry often requires adapting to local regulations, understanding business culture, and taking advantage of Chile's strategic position as a gateway to the Pacific.

• Legal framework: Foreign Investment Promotion Law (Law 20.848).

Good agent

Finding a good local agent or partner is often crucial to effectively managing regulations, cultural nuances, and distribution channels.

Numerous foreign companies

With a stable business climate, Chile attracts numerous foreign companies operating in diverse sectors, such as mining and financial technology, which benefit from transparent legal frameworks and efficient logistics. For example, Chile is a leader in mining (copper, lithium) and an emerging player in fintech.

Agriculture

Chile's agricultural sector, responsible for approximately 4.7% of GDP, is a world leader in high-value agricultural products such as fruits, wine, and salmon. A significant portion of farms (over 60%) currently use advanced technology, such as remote sensing and the Internet of Things (IoT), to improve accuracy and yield. By 2024, agricultural exports will exceed $23 billion, with projections showing continued growth. These trends indicate significant opportunities in both traditional and technological agribusiness.

Services and technology

For doing business in Chile, the services sector dominates the economy, accounting for nearly 57% of GDP. In particular, the technology and IT outsourcing sectors are expanding rapidly. IT outsourcing revenue is expected to reach $720 million by 2024, with total technology investment projected at $4.3 billion, along with job creation and the expansion of digital infrastructure. Chile is increasingly considered a regional technology hub, attracting global companies and offering access to Latin America and the Asia-Pacific.

Chilean political and economic system

• Population: 19.8 million inhabitants with an urbanization rate of nearly 88%.

• Official language: Spanish

• Currency: Chilean Peso (CLP)

• Political system: It is a unitary democratic presidential republic. The president serves as head of state and government for a four-year term. The bicameral National Congress, composed of the Senate (50 members) and the Chamber of Deputies (155 members), exercises legislative power. The judiciary, presided over by the Supreme Court, is independent.
• Economic System: Chile operates a mixed market economy, characterized by economic freedom, a strong private sector, and efficient public institutions. The country ranks highly in economic freedom indices and combines private enterprise with a modest public sector (public employment is around 13%).

Doing business in Chile offers solid opportunities for international investors thanks to its stable macroeconomic framework, strong institutions, and transparent market practices. While new foreign entrants must navigate regulatory procedures and government documentation, especially when starting operations or at fiscal year-end, these processes are generally predictable and supported by efficient online systems.

The country's economic development has been driven by both large economic groups and a dynamic network of SMEs, where Chilean entrepreneurs tend to value long-term relationships and trust in partnerships. Structural reforms, such as adjustments to the pension system, continue to shape the business climate, presenting both challenges and incentives for market entry.

Legal and regulatory framework

The country offers a transparent and investor-friendly legal environment, supported by strong protection of property rights and clear commercial legislation. Commercial activities are regulated by the Commercial Code, the Civil Code, and sectoral legislation, and the Constitution guarantees equal treatment between foreign and local investors. The Foreign Investment Promotion Law (Law 20,848) guarantees the free transfer of capital, non-discrimination, and access to international arbitration.

Corporate Taxes

Chile's corporate tax framework seeks to balance revenue collection with investment incentives, offering competitive rates, benefits derived from tax treaties, and special regimes for SMEs. The following table summarizes the main aspects of corporate taxation relevant to foreign and domestic companies operating in the country.

Tax credits and incentives

As of January 1, 2017, the tax credit for taxes paid abroad is attributable to Chilean-source income, since foreign-source income is considered Chilean-source income once it is included in the taxpayer's net taxable income and is taxed in Chile.

The main investment incentives are the following:

1. Tax benefits and other incentives for companies operating in the northernmost and southernmost regions of the country.

2. Tax benefits for forestry companies, contracts for oil operations, and operations involving nuclear materials.

3. Tax benefits for SMEs.

4. Tax benefits for R&D.

Investment landscape: niche opportunities and business context

Chile offers attractive and interesting market niches in agrotechnology, green hydrogen, and specialized services, sectors ripe for foreign investors seeking strategic entry points. While the goods export market has traditionally been dominated by raw materials such as copper, the country is progressively diversifying its export base toward high-value agricultural products and technology services.
Importantly, as the World Bank notes, companies should adjust their sales expectations to reflect the smaller scale and local dynamics of the Chilean market, even as opportunities increase with digital transformation and regional integration.

The World Bank highlights the soundness of Chile's macroeconomic framework and institutions, while warning of recent limitations on investment growth, which could force investors to adjust their earnings projections. Public data from InvestChile indicates that 65% of goods exports and 85% of services exports involve foreign capital, demonstrating how niche markets are increasingly supported by international partners.

Chilean business culture

Chilean business culture emphasizes personal relationships and trust. First meetings usually involve getting to know people. Business conversation often comes first. Arriving on time demonstrates respect and professionalism.

Hierarchies

Chilean companies have clear hierarchies. People deeply respect authority, seniority, and titles. Senior members often lead meetings. Their knowledge is valued. Employees show respect for managers and senior leaders.

Communication styles in Chile

Chileans often speak with emotion, avoiding direct criticism to protect the dignity of others. Humor is welcome in discussions if it remains appropriate. A polychronic work style is common; this means people manage multiple tasks.

Best neighborhoods in Santiago for business

Known as "Sanhattan," La Condes is Santiago's modern financial epicenter, home to high-rise offices, luxury hotels, and first-class shopping. It's ideal for visitors who prioritize efficiency and proximity to major business centers. Another notable neighborhood is Providencia, a cosmopolitan mix of business and leisure, near the Costanera Center (the tallest building in Latin America), with excellent subway connectivity, restaurants, and coworking spaces.

Restaurantes

Ideal for professional meetings with a friendly atmosphere, convenient location, and quality cuisine, the following restaurants are notable: Estró Santiago (Las Condes), Chef Papillote, and Nolita, the latter a refined Italian restaurant known for its fast, high-quality service. It's especially convenient for business travelers looking for quality food with minimal delays.

Embassies and consulates

The Las Condes district is home to a significant number of embassies and consulates, including those of the United States, the United Kingdom, Taiwan, and Switzerland, among others. It is part of the city's financial and commercial center, commonly known as Sanhattan, and boasts excellent infrastructure and security.