Chile’s economy has begun 2023 on a positive note, surpassing poor market forecasts. It has reclaimed its place as the safest country to invest in Latina America, according to a recent Bloomberg press report.
As political turmoil continues in Peru, Colombia, Panama, and Brazil confidence in Chile business investment has grown alongside copper prices and the Chilean peso.
This recovery has been helped by a fresh flow of foreign investment, InvestChile announcing US$17,105 billion received last year.
Despite this positive news, Chile is yet to pass its new constitution and faces ongoing inflation challenges. However, this positive economic start to the year places the Chile business investment environment as an attractive option in 2023.
Let’s dive into what opportunities there are for foreign investment and how to set up a PEO payroll company in Chile.
Is it safe to invest in Chile?
The conditions for Chile business Investment are looking bright this year and beyond. Aside from Bloomberg announcing Chile as the safest country to invest in Latin America, there are other strong reasons to trust the Chile economy.
Here are five factors that help increase the security of any Chile business investment in 2023.
- Low corruption rate
- Government support
- Stable financial rating
- Robust mining industry
- Talent and education
Below we explore each of these points in more detail:
1 – Low corruption rate
Chile has one of the lowest corruption rates in the world. It was ranked 27th globally in the 2022 Corruption Index, trailing only Uruguay in Latin America as the least corrupt country in the region.
In an area infamous 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 boost investments for qualified startups.
Since then, it has invested in thousands of different companies and helped globalize the Chilean entrepreneurship culture. Some companies can receive up to USD $40,000 to launch in Chile.
3 – Stable financial rating
In December 2022, Fitch Ratings confirmed Chile’s long-term foreign currency and local-currency issuer ratings at A- with a stable rating outlook.
These ratings are supported by low government debt, flexible exchange rates, and lowering inflation. Chile’s economy is predicted to grow at 2.3 percent this year, above the Latin America average of 1.3 percent.
4 – Robust mining industry
Chile is the number one copper producer in the world with 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 to the country’s GDP and accounting for more than half of its total exports. The mining industry remains the best prospect for Chile business investment.
5 – Talent and education
Chile has the top-ranked university in Latin America. ‘Pontificia Universidad Catolica de Chile’ is well-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 United States.
In the 2022 Global Talent Competitiveness Index, Santiago ranked 118th out of 175 cities, ahead of Mexico City, Bogota, Montevideo, and Rio de Janeiro. The index is a comprehensive annual benchmarking report that measures how countries and cities grow, attract and retain talent.
Due to the growing tech talent in Chile, multinational giants like Google, Microsoft, Oracle, and IBM now have offices based there.
What is the environment for Chile business investment?
As the global economy struggles with high inflation and logistics issues, Chile remains a safe bet for business. It has a stable economy supported by the booming mining sector and low corruption rates.
Economists forecast Chile’s inflation to decrease this year, while the country’s new constitution should be ratified in the coming months, easing political tensions.
The expanding tech sector is one of the most promising sectors with high growth potential. There are over 8,000 IT companies in Chile with this number set to increase as the 5G telecommunications network widens.
Chile Digital 2035, a new strategy introduced by the Chilean government in May 2022, aims to reduce digital inequality and foster the digital transformation of the country.
The strategy’s key objectives include promoting digital rights, developing digital infrastructure, enhancing cybersecurity, and digitalizing the public sector. As of 2022, 86 percent of public services are already digitalized, and the government aims to achieve 95 percent digitalization by 2025 and 100 percent by 2035.
IT Chile business investment opportunities lie in the 5G network, data analytics, cloud computing, cybersecurity, and artificial intelligence.
How to start a business in Chile?
Due to legislation passed in 2013, you can form a company online in Chile within 24 hours. This makes Chile one of the easiest countries to start a business in.
However, Chile business investment regulations and customs may vary compared to other countries. We recommended consulting with a local lawyer or legal expert before initiating any business activities.
The World Bank’s Doing Business Guide outlines the necessary steps for officially establishing a company in Chile, which can be completed within 1-2 days, as follows:
- Register the company online and obtain an authentication number.
- Notarize company statutes and have them signed digitally 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.
- Acquire a “patente municipal” working license from the municipality.
- Register for labor-related accident insurance.
Biz Latin Hub is unrivaled in Chile business investment support
Biz Latin Hub offers comprehensive market entry and back-office services in Chile, Latin America, and the Caribbean.
Our extensive reach positions us as the perfect partner to facilitate Chile 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.
