Chile Country Facts

We provide comprehensive information regarding, Culture, Work life, Taxation, Visa’s & immigration, Labour Law, recruiting in your country of choice and employment contracts.

Global Expansion Made Easy for You

Expanding into Chile generally comes with challenges, however, partnering with us and using Employer of Record (EOR) eliminates the frustrations you could encounter.

Types of Work Visas and Permits for Taiwan

Companies and prospective employees looking to move into the country must understand the changing immigration process and the new immigration law called the ‘Immigration and Foreigner Law’ introduced in 2020/21 (No. 21,325) and other supporting decrees which were fully implemented by February 2022.

The new Temporary Residence Visa replaces all previous permits for work and residence, including the Work Contract Visa. It no longer operates through the Ministry of Foreign Affairs but has been transferred to the new National Migration Service (Servicio Nacional de Migraciones or SerMig), which aims to decrease visa waiting times and centralise the system mainly in the Santiago metropolitan area. However, there are also regional centres for support, and consulates abroad stamp the visas in passports.

Everyone wanting to enter Chile must apply for one of the following from their country of residence.

  • Permiso de Permanencia Transitoria (Transitory Stay). This is a temporary permit for applicants who are not moving to the country permanently, e.g., tourists. These should be processed online (if not visa-exempt).
  • Permiso de Residencia Temporal (Temporary Residence). A permit for those who move for a limited period, including for employment.
  • Permiso de Residencia Definitiva (Permanent Residence). For those wanting to live in Chile permanently. However, they will first need to apply for the ‘Residencia Temporal’ for a certain number of years and prove themselves compliant with this permit.

Also:

  • Official Residence. A permit for diplomats and officials.
  • Qualified Nationality. For people with family ties in Chile by marriage or through blood relation.

Process for Temporary Residence Permits

  • To have a job offer and employment contract with a legally established company registered in Chile. According to the Department of Labour, there are minimum requirements regarding an employment contract. Both parties should sign the contract before a notary.
  • To apply through the electronic portal of the SerMig (Immigration Service), where all the required documents can be uploaded. Keep the originals, as these may be required at a consulate (should there be any queries) or when employees are in Chile.
  • Professional staff and skilled technicians have to provide their degrees or qualifications, which have to be legalised in the home country.
  • Employees are required to take their passports to a consulate or embassy, and if approved, the fee should be paid, and the visa is stamped in the passport. Fees depend on the country the Work Visa is applied from.
  • This visa/permit can enter Chile within 90 days of receipt. However, even though the process has started, applicants have to have the visa before they can enter the country
  • For family members of work visa/permit holders, there is a Temporary Residence Permit for Dependents which can be granted to spouses/partners and children. Paid work can also be undertaken by adults of working age

Overview of Taxes in Chile

Income Tax (Second Category Tax): Monthly resident income tax withholdings (Second Category Tax) and annual tax (Global Complementary Tax, see below) have been recently modified to include a new higher tax bracket of 43% as of January 1, 2023. Taxable income bracket caps have been reduced, meaning an increase in income would be subject to higher taxation. The medium- to high-income brackets have been increased progressively in each bracket until reaching the new tax rate of 43%.

Global Complementary Tax: This can apply to Chilean-domiciled foreigners with income in addition to their salary income.

Capital Gains Tax: A new capital gains tax has been introduced, taxing Chilean securities. Prior, capital gains from listed securities that have a market presence in the Chilean stock market are not subject to tax. However, as of September 1, 2022, these gains are subject to a flat 10% tax (under Law N° 21.420 of February 2022). The reform proposes a further increase to this flat rate to 22% starting January 1, 2023.

Corporate Taxes: First Category Tax at 27% applies to an entity’s worldwide income, with 25% applying to SMEs, depending on specific qualifications.

Value Added Tax: 19% applies to goods and services, including digital services.

Customs and Excise Duties: Where Free Trade Agreements don’t apply, the rate is generally 6%. Excise duties range from 10% to 50% on alcoholic and some non-alcoholic beverages, tobacco and luxury items.

Rental Income/Expenses Tax: As of January 1, 2023, all rental properties are subject to tax.  With the new tax reform, individuals can deduct from their annual taxable base rental expenses capped at CLP 450,000 (EUR 513 – USD 560) a month.

Tax Exemptions/Deductions: As of January 1, 2023, provided income caps are met, mortgage interest from Chilean properties can be deductible on only one mortgage loan. In cases where taxpayers have more than one mortgage, they can deduct interest on the loan in which the higher interest rate is paid. Under the proposed new rules, the deduction cap of approximately CLP 5,200,000 (EUR 5,935 – USD 6,473) per year remained the same.

Wealth Tax: Under the tax reform, a wealth tax has been introduced on assets held in Chile and abroad by Chilean tax residents. Assets worth between USD 4.9M and USD 14.7M would be subject to an annual wealth tax ranging from 1% to 1,8%.

Individual Tax Rules

  • The tax year is generally the calendar year.
  • Where an individual’s entire income is payroll from one employer, there is no need to file an annual return.
  • In other cases, returns are due by April 30 following the tax year if a balance is due or May 7 if a refund is due.
  • Employment income includes cost-of-living expenses, travel and car allowances, for example.
  • Individuals are tax residents if they reside in Chile for six months or more in a calendar year or more than six months, consecutive or not, over two calendar years.
  • Where a foreign individual is domiciled in Chile before becoming a resident, tax liability starts from when they entered Chile.

Chilean Individual Tax – Single Married

In July 2022, the Chilean government submitted to Congress tax reform proposals to come into effect from January 1, 2023. This reform affects individuals paying the Second Category Tax (income tax) and annual Global Complementary Tax, affecting higher earners with a new top rate of 43%. The General Treasury of the Chilean Republic (Tesoreía General de la Republica) collects taxes on behalf of the Treasury (Fisco). It is a separate legal entity from the Tax Administration (Servicio de Impuestos Internos, SII).

Figures are in Chilean pesos with euro and US dollar equivalents.

From | Not over | Percentage on excess
CLP 0 | CLP 777,000 (EUR 886 – USD 967) | 0%
CLP 777,001 | CLP 1,727,000 (EUR 1,970 – USD 2,149) | 4%
CLP 1,727,001 | CLP 2,878,000 (EUR 3,284 – USD 3,582) | 8%
CLP 2,878,001 | CLP 4,030,000 (EUR 4,599 – USD 5,015) | 13.5%
CLP 4,030,001 | CLP 5,181,000 (EUR 5,912 – USD 6,448) | 26%
CLP 5,181,001 | CLP 6,331,000 (EUR 7,225 – USD 7,879) | 35%
CLP 6,331,001 | CLP 8,057,000 (EUR 9,195 – USD 10,028) | 40%
CLP 8,057,001 | – | 43%

Note: The General Treasury of the Chilean Republic is also responsible for collecting other taxes, including Value Added Tax, corporate, capital gains, inheritance and wealth taxes, all of which could be affected by the proposed legislation.

Social Insurance Taxes (National Insurance)

Employees contribute around 20% of earnings calculated on a unique formula of unidades de foment (UF), with each UF representing a specific amount of Chilean pesos. The contribution, which is deducted by the employer and remitted to the tax authority, is computed on the monthly salary adjusted for inflation on a daily basis. Contributions are capped at 75.7 UF, approximately €2,995 or US$3,048. Employees contribute the bulk of the approximate 20%.

Heavy or hazardous work with an increased risk of injury may require a further 2% contribution from the employer and employee.

Setting up a subsidiary in a new territory is an option for international companies expanding their global profile beyond their own borders. Setting up a legal entity in Chile is the first step if the parent company intends to operate payroll for their employees.

Chile attracts considerable Foreign Direct Investment, drawn by the nation’s wealth of natural resources and a positive outlook to international trade. The World Bank identifies Chile as one of the fastest-growing high-income market economies in Latin and South America.

Opening a subsidiary is often the next ‘big step’ for foreign companies, and in Chile they usually take the form of a limited company operating under the Commercial and Civil Codes as a Sociedad de Responsabilidad Limitada, or SRL. However, what appears as a smart move can be a risky business venture and can be costly both in time and money. Also, it comes without any guarantee of success.

The incorporation process is complicated and companies undertaking the procedure themselves must cope with strict set-up procedures. In addition, there will be issues involving hiring employees, running payroll and complying with tax laws and employment legislation. Coping with this long list will cost time as you try to focus on building your business in a new territory.

Or … you could take a faster route into the Chilean economy. Bradford Jacobs has the expertise to deal with these potential issues and delays. Our Professional Employer Organisation (PEO) specialists and Employer of Record (EOR) consultants will point you in the right direction – from recruiting the staff to managing every legal aspect of compliance. Instead of waiting weeks or months, you can be up-and-running in days … with your employees always under your operational control.

How to set up a Chile Subsidiary

As applies to a foreign parent company opening a limited liability subsidiary.

  • Check availability of unique company name with the Registry of Commerce
  • Register company with the internal revenue service, the Servicio de Impuestos Internos, SII and obtain the company’s tax identification number, the Rol Unico Tributario (RUT) from the SII
  • Create a public deed containing the company’s bylaws and lodge the public deed with the Registry of Commerce. This must be published in the Official Gazette within 60 days of issuing the public deed
  • Provide Memorandum and Articles of Association for the Registry of Commerce along with the company bylaws
  • Register a Chilean citizen to represent the company with the SII. In addition, all shareholders, local and foreign, must be registered with the SII
  • Register a minimum of two, maximum 50 shareholders, members or partners for the limited liability subsidiary
  • Register with the Ministry of Labour and Social Security (Minsterio del Trabajo y Previsiόn Social) in order to make employees’ contributions to the authorities

What are the Benefits of setting up a Subsidiary in Chile?

The subsidiary operates in Chile as an independent legal entity from the parent company, which is generally protected from responsibility for any debts or liabilities, including legal issues. Shareholders are liable only to the extent of their contribution to the subsidiary or as laid down in the company bylaws.

Through its subsidiary the parent company has the chance to test the market by pursuing different business opportunities and entering into agreements with other Chilean-registered companies. Also, the subsidiary has greater credibility with clients and suppliers compared with branches.

Taking the step of setting up a subsidiary is still a long way from finding the most efficient and financially sensible route to setting up operations in Chile.

Bradford Jacobs will find the perfect fit and brightest talent for your company in Chile through our in-country Professional Employer Organisation (PEO) specialists. Employees can be working at their desk in days … not weeks or even longer. All concerns regarding employment laws and compliance will be removed by our Employer of Record (EOR) teams. We handle the hassle … while you have day-to-day operational control over your workforce.

Subsidiary Regulations in Chile

As applying to a private limited company which incorporates under the Commercial and Civil Codes of Chile.

Registration and Documentation:

  • Register unique company name after checking availability with the Registry of Commerce
  • Create the company deed including the bylaws by which it will operate
  • Lodge the public deed with the Registry of Commerce for publication in the Official Gazette, which must be done within 60 days of issuing the deed
  • Provide Articles of Memorandum of Association and the company bylaws for the Registry of Commerce
  • Register with the Ministry of Labour and Social Security (Minsterio del Trabajo y Previsiόn Social) in order to make employees’ contributions to the authorities

Accounts and Taxation:

  • For taxation purposes, register the company with the Tax Administration (Servicio de Impuestos Internos, SII) and obtain the company’s tax identification number (Rol Unico Tributario, RUT)
  • A Chilean citizen must be registered with the SII to represent the company in taxation and accounting matters
  • Financial statements need not be published
  • Tax returns must be filed monthly and annually

Management:

  • A minimum of two shareholders/partners/members and maximum of 50
  • All shareholders/partners/members, local and foreign, must be registered with the SII
  • They are generally liable only to the share of their contribution or as laid down by the company bylaws
  • There is no legal requirement for annual meetings of members etc, with requirements for board of directors’ meetings set out in the bylaws.

International companies entering the economy of the Republic of Chile will be moving into a spectacular and diverse landscape, with a geography that is among the most distinctive on the planet. Chile’s narrow ribbon of land stretches for 2,700 miles down the west coast of South America alongside the Pacific Ocean. Although in places only 110 miles across, Chile has a larger land area than any European country, bar Russia.

To the east, Chile is separated from Bolivia and Argentina by the Andes mountain range, ‘La Cordillera de los Andes. Ojos del Salado, the world’s highest volcano, which is dormant, is Chile’s tallest mountain and second highest in the Andes.

Chile’s diversity comes from four distinct regions. In the far south there are fjords, glaciers and archipelagos and Chile’s wedge-shaped neighbour to Antarctica, Tierra del Fuego. Lakes and forests cover the land farther north leading to fertile plains of the Central Valley, where most of the population live and work. Northernmost Chile includes an arid desert, the Norte Grande, which covers a quarter of the land mass and is one of the Earth’s most barren regions. Some areas have never had rainfall.

Around 90% of Chile’s population of over 19 million live in urban areas, principally the capital, Santiago, and Valparaiso. Castellano, a Spanish dialect, is the official language.

Starting your business in Chile

International companies investigating the options for expansion into new territories, must follow strict guidelines when starting their business in Chile. The first decision will be deciding whether to open a legal entity in Chile as a subsidiary of the parent company. This is a typical route for gaining a foothold in a new territory, but it is not straightforward in Chile, which applies exhaustive incorporation and registration procedures.

Following incorporation, more demands come thick and fast. High up on the ‘to do’ list are opening a business bank account, deciding where in Chile to locate the business and where to find lines of support, such as distributors.

This is the point at which the wise move is to link with a Professional Employer Organisation (PEO) and Employer of Record (EOR) such as Bradford Jacobs. Recruitment, onboarding, payroll … and much more, are all taken care of while you focus on building your business in a new territory.

Incorporation procedures:

The typical choice for international companies setting up a subsidiary in Chile is the limited liability company, known as a Sociedad de Responsabilidad Limitada, or SRL. The company operates according to the Commercial and Civil Codes, although with a great deal of flexibility in corporate organisation. Generally, the liability of shareholders, partners or members is limited to their share contribution, or as specified in the company bylaws.

Incorporation procedures for an SRL include:

  • Check availability of unique company name with the Registry of Commerce, which can also be verified via the Ministry of Economy, Development and Tourism
  • Register company with the internal revenue service, the Servicio de Impuestos Internos, SII
  • Obtain the company’s tax identification number, the Rol Unico Tributario,RUT, from the SII
  • Create a public deed containing the company’s bylaws
  • Lodge the public deed with the Registry of Commerce, to be published in the Official Gazette within 60 days of issuing the public deed
  • Provide Memorandum and Articles of Association for the Registry of Commerce
  • Register a Chilean citizen to represent the company with the SII. In addition, all shareholders, local and foreign, must be registered with the SII
  • Register a minimum of two, maximum 50 shareholders or partners
  • Register with the Ministry of Labour and Social Security (Minsterio del Trabajo y Previsiόn Social) in order to make employees’ contributions to the authorities

Expanding your business into Chile

The Republic of Chile has become a significant player in the world economy, largely due to being the largest producer of copper globally, accounting for 30% of supplies, and the second largest producer of lithium, of which it holds 50% of world supplies. Additionally, a strong manufacturing base and growth of Small and Medium Enterprises (SMEs) have added to the attraction for Foreign Direct Investment (FDI).

This is clear from foreign involvement in the mining sector, with companies from Europe, Asia, Canada, the US and Australia owning 70% of operating companies. The Santiago-Valparaiso region is the main industrial area along with the industrial complex based around Concepciόn.

The opportunities are waiting … but it is essential that companies eyeing expansion into Chile have a clear focus on which regional location is best suited to their business plans.

Advantages and Challenges when entering the Chile Market

Some Advantages:

  • Rich in natural resources for the mining industry, plus agriculture, forestry and fisheries
  • Flexible fiscal policies and stable financial institutions
  • Many international trade agreements and international memberships, including the Organisation for Economic Cooperation and Development
  • Improving its footprint as a digital hub for the region, to rival Brazil

Some Challenges:

  • Heavily dependent on international demand for copper and other mining commodities such as lithium, potassium nitrate and sodium
  • Dealing with inflationary pressures as the government borrows to finance economic development
  • The World Bank cited concerns over corporate governance, protecting minority investors, resolving bankruptcy and obtaining credit

Under the Labour Code, there does not have to be a written contract for the employment relationship to be valid, although written employment contracts are the norm. In any case, the details of the employment relationship must be given to the employee in writing within 15 days of starting work or five days if the employment agreement is for no more than 30 days.

If the employer fails to comply, courts will decide that the employee’s version of the agreement is valid, and the Labour Inspectorate will likely fine the employer.

The Code requires the contract must detail the following: the employee’s date of birth and nationality; the contract’s start date and where it was signed; the type of contract, whether indefinite or fixed-term, for example; location and description of the job; remuneration and payment schedule. Offer letters are permitted, but these must still comply with all statutory provisions as required by the Code.

Contracts may be drafted in any language, but the Labour Directorate insists that every contract should have a Spanish version in case of legal issues.

Types of Employment Contracts in Chile

The Labour Code recognises these main contract types:

Indefinite Employment Contracts: These are the usual contract type, with a start date but no end date. They remain in force until the resignation or retirement of the employee or unless terminated per Labour Code requirements.

Fixed-Term Employment Contracts: The contract’s start and end dates are specified. Generally, for one year, professionals or senior personnel with higher education qualifications can be for two years. Fixed-term contracts can be renewed only once, and any subsequent renewal will make it indefinite. The contract also becomes indefinite if the employer asks the employee to continue working after the end date. If employers terminate the agreement prematurely, they may be liable to pay the agreed salary for the remainder in full.

Probation Periods: Legally, these do not exist in Chile. Employers typically use a short fixed-term contract as a de facto probationary period but must beware as this gives the employee some legal protection in the case of termination.

Collective Bargaining Agreements (CBAs): These play a limited role and generally apply at the company level, except in areas such as mining, construction and logistics infrastructure, where they can be applied industry-wide.

Overview of Employee Benefits in Chile

The Labour Code and supplementary legislation apply minimum standards to employment benefits and entitlements in various categories, including:

National Minimum Wage: In August 2022, the monthly minimum wage for workers aged 18 to 65 was increased to CLP 400,000 (EUR 456 – USD 497). The increase for under-18s and over-65s was raised to CLP 298,391 (EUR 340 – USD 371).

Working Hours and Breaks: Under the Labour Code, the maximum working week is limited to 45 hours spread over five consecutive days and no more than six. The working day must be split into sections, separated by a break of at least 30 minutes which is not considered part of the working day. Under Article 22 of the Code, these limits need not apply to managers, administrators, directors or those employed without direct supervision, such as homeworkers. Total daily hours cannot exceed 12, including any overtime. Employers must keep daily records of their employees’ working hours, including overtime.

Rest Days: There should be a minimum of 11 hours between working shifts and at least one rest day a week comprising a minimum of 24 consecutive hours, generally on Sunday, except in sectors such as retail or hospitality where flexibility applies. Where employees must work on a Sunday or holiday due to the demands of the job, they must be given a compensatory rest day.

Overtime: Hours exceeding the standard nine or ten a day, as agreed between employer and employee, are compensated at 150% of the employee’s regular hourly wage. Overtime can be agreed upon only temporarily and cannot be employed for more than three consecutive months. This does not apply to managers, administrators, directors or homeworkers. The Ministry of Labour applies financial penalties for non-compliance.

Discrimination: Under the Chilean Constitution and the Law Prohibiting Discrimination, employees are entitled to protection against discrimination on grounds including colour and ethnicity; religious or political beliefs; gender and sexual orientation; origin and nationality; civil status; union memberships.

Health and Safety: Chile has a comprehensive and detailed approach to guaranteeing the health and safety of workers. It is based on the Decree on Occupational Accidents and Diseases, supplemented by other decrees detailed in the Labour Code. These cover using machinery and equipment; evaluating workplace accidents and illnesses; sanitary and environmental conditions in the workplace; child labour, and pregnant workers. Employers’ duties include providing and maintaining protective gear as required, training employees in their use, and providing sufficient pharmaceutical and medical care in case of accidents.

Social Insurance: The Social Security Administration  (SSA) administrates the system, which covers wage earners, salaried personnel and self-employed persons who must satisfy specific criteria. The system is based on compulsory contributions from employers and employees into individual accounts of the Sistema de Capitalizaciόn Individual, established in 1981 and covers most Chilean workers. The SSA operates under the Ministry of Labour and Social Welfare (Ministerio del Trabajo y Previsiόn Social).

Paid Vacations: The mandatory minimum is 15 working days for employees who have worked for a least one year. At least ten days must be consecutive, and the balance can be taken on the agreement between employer and employee. Holiday pay is based on the previous three months’ average, including any bonuses or commissions. Workers in the Aysén, Magallanes and Palena regions receive 20 days. After ten years of continuous employment with one or more employers, the entitlement is one extra day for every additional three years.

Sick Leave and Benefit: To qualify, employers must give their employer a medical certificate within two days of starting leave, then the employer has three days to forward the certificate to the relevant health insurance fund (FONASA or SAPRE), who pays the benefit, which may be subject to caps depending on salary. No benefit is paid if leave is less than three days.

Maternity / Paternity / Parental Leave and Benefit: The mandatory maternity leave is 18 weeks, comprising six weeks pre-natal and 12 weeks after birth. After completing the 12 weeks of post-natal leave, first-time mothers can request a further 12 weeks of leave. The employee’s health fund pays the benefit, calculated on the average salary for the three months before leave begins. The employer pays for five days of mandatory paid paternity leave for the father. There is no statutory requirement for parental leave.

Pension System: Since 1980, Chile’s PAYGO system has been replaced by a fully-capitalized scheme run by funds from the private sector into mandatory individual accounts. Employees contribute 10% of their salary towards their retirement, disability and survivors’ benefits. The retirement age is 65 for men and 60 for women. However, a government bill to reform the pension system will be set before parliament in 2023.

Private Health Insurance: Chile has a hybrid healthcare system with the Fondo Nacional de Salud (FONASA) in the public sector and the Insitutiones Salud Previsional (SAPRE) in the private sector. Chile has among the highest healthcare standards in South America and is ranked above the United States and Denmark by the World Health Organization. The Ministry of Health oversees all healthcare facilities. Around 20% of the population opt for private healthcare with shorter waiting times than the public sector, multilingual staff and newer facilities. Foreign companies operating in Chile include Allianz, BUPA, AXA and Cigna.

13th Month Salary:  There is no legal requirement for a specific ‘13th-month salary’, but bonuses are commonly paid and should be part of the employment contract.

International companies moving into a new territory and needing to recruit staff there, inevitably find the process wrapped in red tape and bureaucracy. This certainly applies in the Republic of Chile, where the Labour Code dictates strict regulations on drawing up contracts.

Finding the best talent to boost your company’s global profile is only the first of a long list of procedures, especially if trying to recruit staff in Chile from home base. Once recruited and onboarded, employers face strictly-applied employment legislation that spells out the responsibilities and obligations of employers and the legal rights of their staff.

These demands add up to a considerable workload. There is a better option. The straightforward, fast and cost-effective alternative will have your new staff operational in a matter of days … and without having to unravel any red tape.

Bradford Jacobs has the expertise that is essential to provide the smoothest route for your journey into the Chilean economy. Our Professional Employer Organisation (PEO) networks have global reach to find the right staff. Then, through our Employer of Record (EOR) platforms we will have your new employees at their desks and screens in the shortest time. This guide highlights everything you need to understand about recruitment and onboarding processes in Chile. You can trust Bradford Jacobs to put the brightest talent in place for your company.

Recruiting in Chile

Companies entering the Chilean employment market will find a relatively young workforce, with 32% of the population aged under 25 years. This is a demographic that sits well with some areas of Chile’s economy, such as its development as a digital hub for the region and the growth of Information Communications Technology. These are also areas where employers are searching for staff, along with sourcing the highly qualified for the medical and chemicals sectors.

Chile’s wealth of natural resources underpins its mining industry, which is hugely important to the country’s economy and exports. The requirement for geologists and civil engineers is always high on the recruitment list for employers.

With around 90% of the population living in urban areas, the capital, Santiago, is Chile’s financial and commercial centre and home to scores of multinationals and a rich hunting ground for jobseekers. Employers put high value on educational qualifications, particularly degrees from UK and US universities.

However, in the same way that Chileans prefer to do business with people they know or with whom they have mutual contacts, personal relationships are also key in recruiting. Networking is vital for jobseekers as many vacancies are not advertised.

Employees’ pre-hire checks in Chile

In general, employers are barred from making any background checks that violate an individual’s rights under Chile’s anti-discrimination legislation, including for example pregnancy checks. At interview, candidates cannot be questioned on such as race or gender, religious or political beliefs, social status or union memberships. Applications cannot be refused on any grounds related to these considerations.

Employers must verify that candidates have correct visa and permits to legally reside and work in Chile.

  • Financial, health, drug/alcohol, criminal records: These can be checked only if such issues are directly related to the position being applied for

Basic facts when recruiting in Chile

Employers must comply with basic requirements of the Labour Code and the Chilean Constitution when recruiting in Chile, where they cover the relationship with their employees; in general, however, they do not cover foreign workers. Where the Labour Code applies, it protects employees’ rights to benefits and entitlements and spells out the obligations of employers to their staff.

The Code is supplemented by other laws and decrees and employers cannot risk fines or other sanctions for failing to comply. When recruiting staff, basic requirements include:

  • Although written contracts are not mandatory, they are the norm
  • Basic details of the employment relationship must be given to the employee in writing within 15 days of starting work, or within five days if the agreement is for fewer than 30 days
  • Employees can be given a contract in any language, but the Labour Inspectorate requires a Spanish version is filed in case of disputes
  • If employers fail to give employees the basic written details of their agreement, courts will decide in favour of the employee’s version and the employer risks fines from the Labour Inspectorate
  • Employers are permitted to issue an ‘offer letter’ giving basic details of the arrangement, but these must still comply with all regulations of the Labour Code

Hierarchy: Senior individuals will make key decisions at the top of the company’s vertical structure; always aim to have contact with the top level from the start. Creating a ‘face-to-face’ relationship is essential to progress and is always preferable to phone calls and emails.

Introductions/Greetings: A firm handshake, friendly smile and eye contact start proceedings, with initial introductions based on title and surname. At first, Chileans quickly relaxed into friendly mode; however, guests should not switch to using first names until invited.

Gift Giving: Avoid expensive offerings as these could be misinterpreted. Play safe with small corporate items from your company, such as pens, leather-bound notepads, and desk accessories.

Business Cards: Exchanged at the start of the meeting and treated with respect. Have one side printed in Spanish and present that side face-up.

Dress Code: Being well dressed will create the right impression as Chileans take pride in their appearance. Smart, conservative suits for men and elegant equivalents for women, with jackets, skirts or trousers.

Out of Hours: Business lunches can be long and a further negotiation opportunity, but expect general chat to continue once the meal is over. Whoever issues the invitation picks up the bill.

Punctuality: Arrive at the specified time, but do not be surprised if the other team are late or if the meeting has no rigid structure or pre-set cut-off time.

Negotiations and Meetings: Building trust is key, and the first meeting will be a process of getting to know each other. If you know family or friends of members of the opposite team, this will be useful to mention. An agenda may be set but not adhered to. Chileans like to deal with issues as they arise, so do not expect the meeting to follow a rigid structure. Interruptions are usual, displaying enthusiasm for the topic rather than disrespect. Do not expect decisions to be taken, as the negotiations gather all the information for the decision-makers. Avoid using the ‘hard sell’ technique … it will seldom work … and be prepared to compromise.

Agreements: Obtain written confirmation of verbal agreements, do not sign drafts and final contracts should be notarised.

Language: While English is commonly spoken at senior levels, middle management typically conducts business in Spanish. If not fluent, check whether an interpreter is required.

Taboo(s): Politics, human rights and comparisons with the US.

Contact Us

Join Our Newsletter

Stay up to date with latest service offerings while receiving tips and strategies for making your next remote hire.

JOIN US