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Tips for doing business in Chile

Doing business in Chile

Chile has been a strong trading partner and export market for U.S. companies.

By Jennifer Nelson

Even the most serious executive traveler can be easily distracted by Chile’s natural beauty. With more than 1,300 volcanoes – many still active – and one of the longest coastlines in the world at 6500 km, Chile is a visual marvel. But don’t let the country’s natural wonders fool you. Chile, and its mostly urban population of 17 million people, means business.

Chile has been a strong trading partner and export market for U.S. companies. A combination of open market policies, zero tariffs, a stable government and minimal corruption have fueled GDP growth of about 5 percent over the last 30 years. However, the Chilean economy has slowed recently – reporting just 1.9 percent growth reported in 2014 and 2.1 percent in 2015 – thanks in large part to the depressed market for copper, which accounts for 55 percent of exports.

The U.S. and Chile enjoy the Chile Free Trade Agreement (FTA), which has been in place for more than a decade. Copper, wine and salmon are Chile’s largest exports. Both macroeconomic stability and growing integration with international capital markets has earned Chile an A+ credit rating – the highest in Latin America – which makes Chile a top business destination.

 

The Language

Spanish is the national language. Though many executive-level employees of large companies speak English, especially in urban areas like the capital, Santiago. Being able to speak a little Spanish is generally preferable in business relationships.

 

Business Climate

Chile’s business climate differs somewhat from the United States. Patience is more of a virtue as typically time is not of the essence in South America. For instance, meetings last as long as they need to rather than run on tightly scheduled timeframes.

When you arrive on time for an appointment you will likely be kept waiting. The cultural norm is that Chileans appear quite busy and in demand. The more important the person, the longer you may wait. However, large international companies have somewhat dispensed with this practice.

Business meetings begin with a handshake (regardless of gender) and once business relationships are established, it’s not uncommon for Chileans to become more demonstrative — embracing men, kissing women on the cheek.

Business cards are exchanged after handshakes on initial meeting. It’s customary to spend a few seconds admiring one’s card and is considered rude to immediately shove it into a pocket or wallet. Chilean culture uses two surnames on business cards – the father’s first and then the mother’s. When addressing someone, use only the father’s surname. If no title exists, then simply use “Señor” (male) or “Señora” (female) followed by the surname.

Chileans typically start business with polite social chat and inquire about family. There’s is a slightly more personable business culture here than in the U.S. Showing that you know or have learned something about Chile — wine, topography, soccer – is appreciated during conversation. Once you have formed a business relationship, gifts are also appreciated. Leather appointment books, pens or liquor are popular choices.

When it comes to personal space, Chileans stand closer than do North Americans when conversing. Be warned, it’s considered rude to back away from someone during conversation.

January and February are holiday months; executives will often be away for some period during these months, so it’s not the best time to schedule meetings.

 

Business Meals

Business lunches or dinners are usually long and are held in restaurants, hotels or residences. There are no separate checks in Chile. The inviter pays for the meal. You will also not be presented with a bill in a Chilean restaurant until you ask for it.

 

Work Environment

Chileans work some of the longest hours in the world. A law was passed a few years ago to make the work week 45 hours instead of its previous 48. Many high-level executives work much longer hours than these and rushing home at the end of a work day is not common practice. Most business hours are 8:30 a.m. to 6 p.m. Banking hours are 9 a.m. to 2 p.m. Lunch breaks are typically an hour, though high-level executives may take two.

 

Dress Code

Business dress leans toward conservative – suit and tie for men and a skirt or trousers and blazer for women.  Dark colors — navy and grays – are the norm. Some companies have adopted a causal Friday with slightly more relaxed attire.

 

Women in business

Women make up about 30 percent of the labor force. Chile is more woman-friendly than other parts of South America, where the machismo culture is often prevalent.

 

In general, Chileans are patriotic, formal people with a high amount of personal honor in business. There is a definite hierarchical order in which the most senior person is deferred to. But women are well respected in general and will not find it too difficult to conduct business in Chile, especially with large international companies or in the largest urban cities.