Chile’s economy started 2023 on a positive note, surpassing the market’s poor forecasts. It has regained its place as the safest country to invest in Latin America, according to a recent Bloomberg press report.
As political turmoil continues in Peru, Colombia, Panama and Brazil, confidence in business investment in Chile has risen along with copper prices and the Chilean peso.
A new flow of foreign investment contributed to this recovery. InvestChile said it received US$17.105 billion last year.
Despite this positive news, Chile has yet to adopt its new constitution and faces ongoing inflation challenges. However, this positive economic start to the year positions Chile’s business investment environment as an attractive option in 2023.
Let’s explore the opportunities for foreign investment and how to set up a PEO payroll company in Chile.
Is it safe to invest in Chile?
Conditions look bright for Chilean business investment this year and beyond. In addition to Bloomberg declaring Chile the safest country to invest in Latin America, there are other strong reasons to trust the Chilean economy.
Here are five factors that help increase the security of any business investment in Chile in 2023.
- Low level of corruption
- Government support
- Stable financial rating
- Mining
- Talent and education
We examine each of these points in more detail below.
1 – Low level of corruption
Chile has one of the lowest corruption rates in the world. It was ranked 27th in the world in the 2022 Corruption Perceptions Index, behind only Uruguay in Latin America as the least corrupt country in the region.
In an area notorious for its political and economic corruption, Chile stands out as a leader in the fight against fraud and criminal business practices.
2 – Government support
The Chilean government encourages foreign business investment. In 2010, the government created Start-Up Chile to help promote investment in quality startups.
Since then, it has invested in thousands of different companies and helped globalize the Chilean entrepreneurial culture. Some companies can receive up to $40,000 to start up in Chile.
3 – Stable financial rating
In December 2022, Fitch Ratings affirmed Chile’s long-term foreign currency and local currency issuer ratings at A- with a stable rating outlook.
These ratings are supported by low public debt, flexible exchange rates and low inflation. Chile’s economy is forecast to grow 2.3 percent this year, above the Latin American average of 1.3 percent.
4 – Mining
Chile is the world’s number one copper producer, accounting for 29 percent of global copper production. It also accounts for 22 percent of global lithium production, making it the second largest producer of the mineral.
The mining sector remains a vital component of Chile’s economy, contributing 11 percent of the country’s GDP and accounting for more than half of its total exports. Mining remains Chile’s best business investment prospect.
5 – Talent and education
Chile has the highest-ranked university in Latin America. Pontificia Universidad Catolica de Chile is known for its business, engineering, health and medicine programs. It has innovation and technology collaborations with Stanford University and the University of Notre Dame in the US.
In the 2022 Global Talent Competitiveness Index, Santiago was ranked 118th out of 175 cities, ahead of Mexico City, Bogotá, Montevideo and Rio de Janeiro. The Index is a comprehensive annual benchmarking report that measures how countries and cities are growing, attracting and retaining talent.
Due to the growing tech talent in Chile, multinational giants such as Google, Microsoft, Oracle and IBM now have offices based there.
What is Chile’s business investment climate?
As the global economy struggles with high inflation and logistical problems, Chile remains a safe bet for business. It has a stable economy supported by a booming mining sector and low levels of corruption.
Economists predict that Chile’s inflation will fall this year, while the country’s new constitution is due to be ratified in the coming months, easing political tensions.
The expanding technology sector is one of the most promising sectors with high growth potential. There are more than 8,000 IT companies in Chile, a number expected to increase as the 5G telecommunications network expands.
Chile Digital 2035, a new strategy presented by the Chilean government in May 2022, aims to reduce the digital divide and promote the country’s digital transformation.
The main objectives of the strategy include promoting digital rights, developing digital infrastructure, enhancing cyber security and digitizing the public sector. As of 2022, 86 percent of public services are already digitized, and the government aims to reach 95 percent digitization by 2025 and 100 percent by 2035.
IT Chile’s business investment opportunities are in 5G network, data analytics, cloud computing, cyber security and artificial intelligence.
How to start a business in Chile?
Under legislation passed in 2013, you can create an online company in Chile within 24 hours. This makes Chile one of the easiest countries to start a business in.
However, Chilean business investment regulations and customs may differ from other countries. We recommend that you consult a local lawyer or attorney before starting any business activity.
The World Bank’s Doing Business guide outlines the steps needed to officially set up a company in Chile, which can be completed in 1-2 days, as follows:
- Register the company online and get an identification number.
- Notarize the company’s charter and digital signature by the notary.
- Obtain a RUT number by registering with the Internal Revenue Service (SII in Spanish).
- Print receipts/invoices at an authorized printing company.
- Seal accounting books and other documents with the IRS.
- Obtain a “patent municipal” work license from the municipality.
- Sign up for occupational accident insurance.
Biz Latin Hub is unrivaled in Chilean business investment support
Biz Latin Hub offers comprehensive market access and back office services in Chile, Latin America and the Caribbean.
Our extensive reach positions us as the perfect partner to facilitate Chilean business investment, company formation and corporate legal services.
Contact our team to learn more about how we can help you do business in Chile and the rest of Latin America.
