Establishing a Business in Chile

Chile is one of the best places in South America to live as an expatriate, invest money, own Real Estate and start a business. The following article is intended to inspire and guide expatriates on the process and requirements needed to start a business in Chile:

1. Recognize a Niche

Before setting your mind on what business to start up in Chile, consider the following:

Research how competitive the market is
Get to know the expat community
Build trust with local people that will be of help to your business (i.e. electricians, builders, etc)
Learn the local culture and customs
Learn Spanish

Also, when identifying a business niche, it is important that the business will be of benefit or interest to the expat and local communities. Always keep in mind how your new business will impact (help) the local people, and develop a good healthy relationship with the locals.

Whichever business niche you pick, make sure it is something you are actually interested in or are passionate about.

2. Business Niches Ideas

Here it is some business ideas to start a business in Chile that targets the expatriate and local communities:

Restaurant
Physiotherapy
Massage Therapy
Import Business (i.e. coffee, cars, etc)
Specialty Shops
Aromatherapy
Surf Shop
Hostel
Scholarship Programs
Yoga, Pilates or Gym Class
Winery
Fishing Tours
Coffee Shop
Care Taker
Teaching English
Tour-Transport Business

A couple of good examples of expat businesses and why they are successful overseas are “PURE Gym and Spa” in Nicaragua and Kelly’s Expat Shop in the Netherlands.

"Pure Gym and Spa" is based in Granada, Nicaragua and stands out from the local competition by offering a spa, gym, yoga classes and a scholarship program for local mothers.

Kelly’s Expat Shop is based in The Hague and appeals to the English and American expat community because the shop sells favorite brands of products that English and American expats would recognize back home.

3. Starting a Company

Chile has, without a doubt, been one of the easiest and cheapest places in Latin America to start a business. Typically it takes 3-5 weeks to start a company at a cost of roughly $650.

However, as of early last year the Chilean government passed down a new law which cut-down much of the bureaucracy associated with a starting a business in Chile, which means you can now start a new business online at no cost.

The online form to start a business in Chile can be accessed via Chile’s Ministry of Economy (Ministerio de Economía de Chile) website.

4. Reaching out to the Expatriates

Aside from relying on word of mouth referrals, an advertising campaign will be an important part of your business strategy.

You will need to identify ways to reach the expatriate community in Chile, which typically includes retirees, young office workers, backpackers, students and corporate managers from places such as America, Britain, Germany, Canada, Spain, France and Argentina.

Whether the expat community is predominantly English speaking or not, you can still promote your business by reaching directly to them at the places where expats meet in Santiago de Chile.

You can also promote your business thru online websites such as International Living and The Santiago Times, which is an English language daily digest of Chilean news.

5. Get an Accountant & Lawyer

Chilean laws are ever-changing and can be complicated to understand. Therefore, hiring a local account and lawyer who are familiar with the laws in Chile is a must whether you plan to start a physical business or an internet-based one.

A lawyer will keep you out of legal trouble, while an accountant will help with every aspect of setting up and running your business such as:

Reducing your tax bill
Getting the best tax structure for your business
Keeping track of invoices
Registering with the tax office - Servicio de Impuestos Internos (SII).
Getting a working license from the municipality
Applying for licenses
Zoning laws

6. Apply for a Permanent Residency Visa

Before starting up a new business venture, you will want to become a Chilean resident first so you can enjoy the same benefits and rights as a Chilean citizen, which include:

Being able to apply for loans and mortgages
Being allowed to drive a car
Having access to a bank account and credit
RUT ( a.k.a. tax payer ID)
Not being deported if you break the law
Vote (only after 5 years of residency)

Investment Opportunities in Chile

Mining

Chile accounts for 28% of global copper reserves (USGS).
It is the world’s principal producer of copper (32%), nitrates (100%), iodine (58%) and lithium (45%) and the sixth largest silver producer.
Mining companies plan to invest US$104,000 million in Chile over the next eight years.
Mining companies spent over US$21,000 million in Chile in 2011.
Chile has some 4,000 mining suppliers who include world-class companies.

Energy

Chile has an installed capacity (net power) of 17.6 GW. In 2012, gross electricity generation in the SIC and SING (the two main transmission systems) reached a total of 65,547 GWh, up by 5.8% on 2011.
In 2012, hydroelectricity (excluding mini-plants of less than 20 MW) accounted for 29.3% of generation, coal for 41%, gas for 19%, diesel for 5.9% and alternative renewable energies (ARE) for 4.8%. As a result, 65.9% of the country’s electricity was generated from fossil fuels.
The country’s projected economic growth implies increased demand for electricity which is forecast to rise by around 5% a year through to 2020, creating opportunities for investment in generation and transmission.

Infrastructure

Over the past thirty years, Chile has achieved an important leap forward in connectivity. This is largely the result of public efforts accompanied by the private sector’s participation through the Concessions System created in 1991.
Chile’s Concessions System has become a reference internationally, offering 71 tenders of which 66 have already been awarded.
The concession company builds and operates the infrastructure.

Tourism

3,554,279 overseas tourists visited Chile in 2012, up by 13.2% on 2011.
Spending by overseas tourists in Chile rose by 17.1% to US$2,712.6 million.
In the last ten years, the portfolio of investment projects in the sector reached US$528 million (2003-2013 according to FDI Markets).
Chile ranks 57^th internationally (out of 139 countries) on tourism competitiveness (WEF, 2013) and second in South America after Brazil.

Food Industry

In 2012, agribusiness exports reached US$13,775 million, with foods accounting for more than 17% of the country’s total exports.
Chile has a range of advantages for food production:
- Its location permits counter-season supply of the large consumer markets of the Northern Hemisphere.

Chile contains one of the world’s only five macro zones with a Mediterranean climate, offering excellent conditions for fruit growing. In addition, the country’s length and diversity of climates permit year-round production as well as supporting the different forms of animal and vegetable life that underpin the diversity of its agricultural industry.
It is a pest-free country thanks to the natural barriers that protect it and transform it into a phytosanitary and zoosanitary island – the Atacama Desert in the north, the Andes Mountains to the east, the Pacific Ocean to the west, and the ice fields of the south.
A coastline that stretches for over 4,300 km offers a variety of conditions for aquaculture, including Chile’s emblematic salmon of which it is the world’s second largest producer.