Chile is a beautiful country that boasts strong family values, great freedom of expression, superb health care system, low-tax living, little government interference, and plenty of opportunities for business entrepreneurs.
For expats, or anyone else for that matter, interested in starting a business in Chile, here is a step-by-step guide:
Permanent Residency & Citizenship
It’s best to become citizen of Chile to start a new business venture – a process that takes five years. Being a citizen allows you to enjoy the same rights as Chileans, including being able to apply for loans and having access to a bank account with credit.
Obtaining Chilean citizenship requires you to register with the international police, apply for an ID card and reside in Chile for a minimum of five years. To obtain permanent residency in Chile, you will need to first become a temporary resident (for at least a year) and then apply.
It is advised to apply for a temporary visa before traveling to Chile by requesting an official birth certificate from your country or state (if you were born in the U.S.) and have the birth certificate translated and then legalized at your nearest Chilean consulate.
Registering a Business
To start a business in Chile, you need to create a limited liability company (LLC).
Doing so used to cost US$700 and take three to five weeks. However, as of early 2013, the Chilean government passed a new law that makes it much easier for Chilean entrepreneurs to create a company in Chile online and free of charge (Start a Business in Chile in One Day: The Details).
The online form to create a company in Chile can be accessed via Chile’s Ministry of Economy (Ministerio de Economía de Chile) website. Then, it is a simple case of following the form stages, inputting the required information and signing the form. Because it is all done electronically, there is no need for third-party mediation, which means you save hundreds of dollars in lawyer and notary’s fees.
Once you fill out the form, it is then automatically sent to Chile’s tax collection department – Servicio de Impuestos Internos (SII) – which will assign you with a tax ID number or Rol Unico Tributario (RUT).
Opening a Merchant Account
In order to send and receive payments, you will need to get an e-commerce merchant account and choose a payment gateway option, such as PayPal, Webpay or DineroMail.
What you choose is up to you, but keep in mind that Chileans are generally more familiar with Webpay and DineroMail. It’s best to use PayPal for English-speaking customers.
Chilean laws are ever changing and can be complicated to understand at times. Therefore, hiring a local account and lawyer who are familiar with local laws is a must for the smooth running of your business.
A lawyer will keep you out of legal trouble, while an accountant will help in the day-to-day running of your business. An account can help you to pay less tax, get the right tax structure (business income tax is set at 17%), and keep a history of your invoices.
Applying for a Business Working License
In order to legally do business in Chile, you will need a working license (patente municipal), which is renewed every year. The fee for the business working license is based on how much you earn that year (typically 0.40% of your total revenue).
As a business owner, it is mandatory that you get either public or private insurance to cover any work-related accidents and diseases.
You can publicly get insurance from the Instituto de Seguridad Laboral (ISL) or privately with one of Chile’s main private insurers, including the Chilean Safety Association (ACHS), the Chilean Chamber of Construction (CCHC) and the Institute for Occupational Safety (IST).
A Final Note
As a prospective entrepreneur in Chile, you will glad to know that Chile welcomes foreign business startups with open arms. In fact, the Chilean government offers incentives for people who officially set up a business in the country.