Chile calls to foreign investors eager to discover Latin markets
Opinion 2 minute read

Chile calls to foreign investors eager to discover Latin markets

07 August 2014

Ahead of our webinar on doing business in Chile, our expert looks at the challenges and opportunities presented by the South American powerhouse.

Considered Chile as an entry point to the lucrative and growing South American markets? Though it’s economically advanced, attractive to talent, and with low levels of inflation and corruption, it can often be overlooked in favour of its bigger neighbours.

So why should you invest in Chile? There are four very compelling reasons:

  • Low inflation: Chile has an emerging and stable economy, with a small inflation rate which varies between 1 and 3% a year. Besides this, Chile has been evaluated as the best economy in Latin America and it is one of the most recognised at a global level, making it the most competitive in the region. 
  • Low corruption: Chile is one of the most corruption-free South American countries, according to the Corruption Perception Index 2013 of Transparency International. 
  • Desirable to live in: Chile has 15 regions with different climates and a variety of beautiful landscapes, modern architecture and social welfare. These characteristics, as a whole, make Chile one of the best countries to live in Latin America. 
  • Tax treaties: Chile keeps in force bi-lateral treaties to avoid double taxation with more than 20 countries, and its tax system is transparent, competitive and widely computerised.

But beware the challenges; like everywhere, Chile is not all smooth sailing for new business.

The different legal entities each have their own diligence processes and permissions. There are also several stringent and enforced monthly and annual tax procedures to comply with, including the Monthly Declaration and Concurrent Payment, Annual Income Tax, and the Stamp Tax Law on inheritances taxes, assignments and gifts. Non-compliance will see the Servicio de Impuestos Internos (SII) set upon you.

Employers also have a series of obligations to their hired workers, such as the payment of social security and health insurance taxes. The company is obliged to discount a percentage of the gross monthly remuneration of the worker, which is allocated to different institutions: Pension Funds (AFP); Social Security Institution (IPS); National Health Funds (FONASA) or a private health institution (Isapre).

To find out more about the benefits and challenges of investing in Chile, join our webinar on 10 September, the latest in our “Thinking of Expanding Overseas” series.

Written by

Dan Kragt

Former Interim Regional Head and Subregional Director

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