Chile's economy has started 2023 on a positive note, beating poor market forecasts. It has reclaimed its place as the safest country to invest in Latin America, according to a recent Bloomberg press report.
As political unrest continues in Peru, Colombia, Panama and Brazil, confidence in Chile has boosted corporate investment along with copper prices and the Chilean peso.
This recovery has been helped by a new flow of foreign investment, InvestChile announced US$17.105 billion received last year.
Despite this positive news, Chile has yet to approve its new constitution and faces ongoing inflationary challenges. But this positive economic start to the year makes Chile's business investment environment an attractive option in 2023.
Let's dive into what opportunities exist for foreign investment and how to create one PEO payroll company in Chile.
Is it safe to invest in Chile?
The conditions for Chile business investment looks bright this year and beyond. In addition to Bloomberg announcing Chile as the safest country to invest in Latin America, there are other strong reasons to trust Chile's economy.
Here are five factors that help increase the security of all Chile business investments in 2023.
- Low level of corruption
- Government support
- Stable financial ratings
- Robust mining industry
- Talent and education
Below we explore each of these points in more detail:
1 – Low level of corruption
Chile has one of the lowest corruption rates in the world. It was ranked 27th globally in Corruption Index 2022second only to Uruguay in Latin America as the least corrupt country in the region.
In an area notorious for its political and economic corruption, Chile emerges as a leader in the fight against fraud and criminal business practices.
2 – State aid
The Chilean government encourages foreign business investment. In 2010, the government created Start-up Chile to help increase investment for qualified startups.
Since then, it has invested in thousands of different companies and helped globalize the Chilean entrepreneurial culture. Some companies can get up to $40,000 for launching in Chile.
3 – Stable financial ratings
In December 2022, Fitch Ratings affirmed Chile's long-term foreign and local currency credit ratings at A- with a stable credit outlook.
These ratings are supported by low government debt, flexible exchange rates and reduced inflation. Chile's economy is forecast to grow 2.3 percent this year, above the Latin American average of 1.3 percent.
4 – Robust mining industry
Chile is the largest 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 an important part 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's corporate investment.
5 – Talent and Education
Chile has the highest 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 it 2022 Global Talent Competitiveness Index, Santiago was ranked 118 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 such as Google, Microsoft, Oracle and IBM now have offices there.
What does the environment look like for Chile's corporate investment?
As the global economy struggles with high inflation and logistics problems, Chile remains a safe bet for businesses. It has a stable economy supported by the booming mining sector and low corruption.
Economists predict Chile's inflation will ease this year, while the country's new constitution should 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 over 8,000 IT companies in Chile with this number set to increase as the 5G telecommunications network expands.
Chile Digital 2035, a new strategy introduced by the Chilean government in May 2022, aims to reduce digital inequality and promote the digital transformation of the country.
The main goals of the strategy are to promote digital rights, develop digital infrastructure, strengthen cyber security and digitize the public sector. As of 2022, 86 percent of public services are already digitized and the government aims to achieve 95 percent digitization by 2025 and 100 percent by 2035.
IT Chile business investment opportunities lie in the 5G network, data analytics, cloud computing, cyber security 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's corporate investment rules and customs may vary compared to other countries. We recommend that you consult with a local attorney or legal expert before starting any business activity.
The World Bank's Doing Business Guide describes the necessary steps to officially establish a company in Chile, which can be completed within 1-2 days, as follows:
- Register the company online and get an authentication number.
- Notarize the company statutes and have them digitally signed by a notary public.
- Obtain a RUT number by registering with the Internal Revenue Service (SII in Spanish.)
- Print receipts/invoices at an authorized printer.
- Seal accounting books and other documents with the IRS.
- Obtain a “patent municipal” work license from the municipality.
- Sign up for work-related accident insurance.
Biz Latin Hub is unmatched in Chile support for business investment
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's business investment, business 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.
#Chile #Business #Investment #safe #transparent #regulatory #environment