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9 things to know about doing business in Chile

Thinking about doing business in Chile? Here is some information to get you started.

  1. The United States is the single largest direct investor in Chile, accounting for 24.2 percent of all net foreign direct investment from 1974 to 2010, the most recent year for which data are available. The U.S.-Chile Free Trade Agreement, implemented in 2004, authorized increased economic partnership between the two countries. As of 2007, 97 percent of U.S. exports to Chile do not include tariffs. By 2015, trade between the countries is expected to be tariff-free.
  2. Chile’s population of about 17 million means the market is relatively small, but it is also competitive. Interested U.S. companies need to establish a Chilean business partner to help them develop contacts and overcome potential cultural and language barriers.
  3. Leading sectors for U.S. export and investment include agricultural machinery and equipment, construction, electric power equipment, food processing and packaging, health care, mining equipment, safety and security, telecommunication, travel and tourism, and water resources equipment. Within the agricultural sector, there are opportunities in areas such as food processing, red meat and poultry, edible fish and seafood products, prepared fruit and vegetables, oilseed products, confectionary products, baked products, snack food, nonalcoholic and alcoholic beverages, dried goods and condiments, and specialized food ingredients.
  4. U.S. citizens must have a valid passport for their length of stay. Those traveling for recreation, tourism, business or academic conferences do not need a visa and will receive a tourist card valid for up to 90 days, which must be presented when exiting the country. Those who want to work, live or study in Chile must apply for a visa at the Embassy of Chile in Washington, D.C., or a consulate.
  5. Chilean incorporation takes about three weeks and is fairly simple and inexpensive. U.S. businesses must provide a declaration of intent to invest to a Chilean consulate and request a permanent residence visa. There are several corporate arrangements; Chile and the United States handle taxes similarly, so U.S. tax laws most often determine corporate setup. Chile and the United States do not have a tax treaty.
  6. Chile generally provides the same protections and conditions to foreign firms as it does to local firms; however, some exceptions apply. In agriculture, for instance, the country approves imported processed food products discretionally. Importers must speak to the health service officer at the port of entry, who will test the products to ensure they comply with local health regulations. Check with the embassy of Chile or a consulate if you are unsure about protections and conditions.
  7. The peso is the currency of Chile. Often, Chileans will pay foreigners with an irrevocable letter of credit from a Chilean bank, which is a quick and easy method of payment. The country has no restrictions on foreign currency, and exchange transactions can take place in the open market.
  8. Business practices in Chile are similar to those of the United States. Most Chilean business professionals speak English, although there are some who do not, especially at the small or mid levels. Knowledge of the Spanish language is highly encouraged, and many marketing and written materials will be in Spanish. Attire is generally formal, with suits and ties for men, and business suits for women.
  9. U.S. trademarks and patents are not protected in Chile. Patent and trademark registration is on a first-come, first-served basis, and companies should apply for these before selling products or services. The burden is generally on the intellectual property owner to register, protect and enforce its rights.