Using an Agent or Distributor

In general, foreign suppliers enter the Chilean market by appointing an agent, distributor, or wholesaler, most of which are small-to-medium size firms. Several large firms handle different product lines and operate as wholesalers. Almost all firms have their main offices in Santiago. The larger ones have branch offices throughout the country, including the free-trade zones of Iquique and Punta Arenas. Agent/representative commissions normally range from five to ten percent, depending on the product. For contract requirements, see the section in this report on Local Professional Services.

Chile is a relatively small market where relationships in the business community are key to success. The selection of a Chilean agent or representative is an extremely important decision for U.S. exporters and merits a thorough review of possible candidates, their qualifications, and capabilities. U.S. companies are invited to make full use of various types of market entry and partner search services offered by the U.S. Department of Commerce U.S. Commercial Service, and for agricultural exports, the U.S. Department of Agriculture’s Foreign Agricultural Service.

Establishing an Office

Within the framework of Chilean law, business entities can choose between a variety of different corporate forms, each with different legal and tax implications. Since tax treatment of the various forms of businesses in Chile is like the United States, the choice of entity type is often guided by U.S. tax considerations. Special consideration should be given to the impact of the U.S.-Chile Bilateral Tax Treaty and accompanying protocol, which entered into force on December 19, 2023. With respect to taxes withheld at source, the treaty impacts amounts paid or credited on or after February 1, 2024. For more information, please see the chapter on Investment.

There are two ways to incorporate a business in Chile: via traditional means with a local law firm (for all corporations), or via self-service online. Companies may wish to seek legal and accounting advice to ensure that the incorporation of the company is carried out correctly and complies with all legal requirements. The process of working with an attorney to form a corporation is relatively inexpensive and takes about seven weeks. Direct costs range from $1,000 to approximately $1,700 for legal fees (depending on business sector) and around $750 for expenses such as notary public, commercial registry, and the official gazette publication. Chile has no minimum local participation requirement, and the inclusion of local partners is guided only by commercial considerations.

The Ministry of Economy maintains an online portal (https://www.registrodeempresasysociedades.cl/) to help individuals create a business in 24 hours. The portal provides information, facilitates procedures, and helps companies obtain certificates and benefits of the state. There is no charge to create a business via this portal. The only expenses are associated with the use of the Advanced Electronic Signature (FEA by the Spanish acronym). Those who do not have an FEA can sign electronically through a notary. The cost of obtaining the FEA ranges from $20 to $40 for a two-year period and the portal has a list of providers of this service.

There are several types of companies that can be registered: limited liability corporations, individual limited liability corporations, joint stock companies, public limited corporations, and reciprocal guaranty corporations.

Regardless of whether an entity works through an attorney or online, the first step for any U.S. citizen, corporation, or entity wishing to establish a business in Chile is to present a declaration of intent to invest at a Chilean Consulate. This intent form should state the nature of the business and the capital to be invested, while simultaneously requesting a Chilean Permanent Residence Visa.

The Investment Climate Statement (ICS) includes information on investment and business environments in foreign economies pertinent to establishing and operating an office and to hiring employees, visit the U.S. Department of State’s Investment Climate Statements website.

Franchising

As of 2024 (latest information available), there are approximately 320 franchises in Chile. Franchises are located primarily in the Santiago Metropolitan Region, with additional representation in the Valparaíso, Bío-Bío, and Antofagasta regions. The main percentage of franchises in Chile originate from six countries: Chile, the United States, Spain, Peru, Argentina, and Brazil. These franchises are distributed among five sectors: (1) the food industry, including restaurants, coffee shops, and ice cream shops; (2) services (the sector with the highest growth), including beauty, fitness centers, cleaning services, and pest control; (3) retail, including clothing, footwear, and pets; (4) healthcare, with strong growth in pharmacies; and (5) education, including technical institutes and test-prep institutes.

Chile continues to be an attractive market for international franchises due to its economic stability, legal and intellectual property protection, and clear tax regulations that allow brands to compete on a level playing field. Chile is also highly urbanized, has a largely digitalized and bank-based market, and has a consumer culture. In recent years, there has been significant growth in sectors such as specialized healthcare, beauty, wellness, pet care, and education.

Sector opportunities:

• Fast food and casual dining franchises: Especially those with innovative models, healthy offerings, and affordable prices for the middle-income socioeconomic segment.
• Health and wellness services: Beauty clinics, boutique gyms, sports medicine, manicures, massage therapies, and spas with various specialties have seen a boom.
• Education and technology: Models related to professional training and educational technology in in-person spaces designed for minors to reinforce subject matter are generating interest.
• Pets: Insurance and funeral services, training and education, art and design, gym and fitness, nutrition and dietetics, rehabilitation and physical therapy, socialization and day care, alternative therapies, luxury boarding, behavioral consulting, and healthy aging programs.

Limited Opportunities: 

• Franchises that are too traditional or lack clear differentiation in their value proposition
• Models with high initial costs or operating structures that are not well-adapted to the Chilean reality. Mainly, a lack of flexibility and connection with the local community

Chile does not have specific franchise laws. Franchise companies operating in Chile are subject to the same general Chilean trade laws as all companies. Royalties and fees are subject to a withholding tax ranging from 15 to 35 percent and contracts are usually for five to ten years. U.S. companies are encouraged to register their trademarks prior to entering the Chilean market. Chile does not have a franchise association; however, there is a franchise committee under the Santiago Chamber of Commerce.

Franchises with low initial investments (in the range of $100,000-200,000) have stronger market potential compared to concepts requiring larger investments ($500,000 or more).

For more information, please contact the U.S. Commercial Service Chile Commercial Specialist Macarena Marin.

Direct Marketing

In 2024, marketing trends in Chile showcased a combination of traditional and digital channels, with strong growth in e-commerce and the need to adapt to new technologies and trends. Another noteworthy trend was responsible consumption, emphasized through the concept of “slow marketing.” This approach centered on advocating for consuming less but with a greater emphasis on quality. The wellness sector also gained prominence, prompting brands to show how their products promote healthy habits to attain better physical and mental health outcomes. Sustainability also plays a crucial role in the marketing landscape, with consumers becoming increasingly conscious of the environmental impact of various products.

Exchanging or refunding products in Chile can be complicated due to value added tax (VAT) considerations. Most store policies will provide store credit, rather than cash refunds, with exchanges within a certain time period. The larger department and grocery store chains do provide cash refunds. According to Statista, credit card penetration in Chile has grown in the past few years, with 7.53 million users. According to InvestChile 90 percent of people over 18 years of age are debit card holders, issued by a bank or store.

Joint Venture/Licensing

In Chile, joint ventures and licensing arrangements require the participation of a legally-established local partner who can be responsible for Chilean legal and tax obligations. The various administrative, commercial, profit distribution, and other issues involved in the association are established in contracts drawn up between the partners in accordance with Chilean law and tax regulations.

Chilean law affords substantial flexibility in the structuring and implementation of joint ventures (JV). They can be structured as a contractual JV or a corporate JV, whether a company or partnership, and the parties may enter into one or more contracts to further structure their relationship.

While purely contractual, JVs are legally possible. The parties typically form a new legal entity, become partners or shareholders in an existing legal entity, or a combination of both.

The types of legal entities most used in JVs are closely held corporations (sociedades anónimas, SA) or stock companies (sociedades por acciones, SpA).

Express Delivery

Express delivery services between the United States and Chile facilitate swift and efficient transportation of goods, fostering international trade and economic cooperation. When shipping from the United States to Chile, express delivery options such as FedEx, UPS, and DHL offer reliable and expedited shipping solutions. This is especially crucial for businesses looking to export products, as well as individuals sending time-sensitive parcels or documents. These services often provide tracking capabilities, ensuring that senders and recipients can monitor the progress of their shipments in real-time, as well as customs clearance assistance.

One of the key advantages of express delivery between the United States and Chile is the reduced transit time, with packages often arriving within a matter of days. This rapid turnaround time is especially beneficial for e-commerce companies looking to expand their customer base across borders, as it enables them to offer competitive shipping options.

In Chile, ChileExpress is the leading private company in the courier market and express shipping services. Customers can send products and documents to the United States with door-to-door service with transit times starting from three days. Weight restrictions exist for document and parcel services.

Chile uses the Harmonized System (HS) and requires a complete description for all shipments entering the country. The description must include the value of each commodity and the HS number. Most customs entries are submitted by a customs broker, either electronically or by submitting copies of the required documents. However, those who import non-commercial goods valued at less than $ 4,050, FOB, and commercial goods valued at less than $1000 can complete customs entry without a broker. Commercial forms issued to both local importers and exporters are as follows: commercial invoice, certificate of origin, bill of lading, freight insurance, and packing list.

Certain imported goods require pre-arrival licenses to enter Chile successfully. These include firearms, alcohol, written or audiovisual martial arts material intended for teaching, plant and animal products, fertilizers, pesticides, food items, pharmaceutical, narcotic drugs, hazardous substances for health, and more. For a more comprehensive list, please visit the Aduanas website.

If the product qualifies, companies must apply for the appropriate permits with the relevant authorities. For example, food and alcohol products must contact the Servicio Agrícola y Ganadero. The licensing process will vary depending on the type of good being imported.

Imports are subject to duties and taxes which must be paid in order for Customs to release the goods. An ad valorem customs tariff is imposed on most goods and “specific” duties (based on the quantity) are imposed on specific types of goods. The uniform ad valorem tariff of six percent applies to most goods. However, alcoholic beverages, pyrotechnics, and tobacco products are subjected to different tariffs. Imported automobiles are also subject to a luxury tax. Regarding import taxes, a value added tax of 19 percent is assessed on the value of the imported goods plus the customs duty.

Any merchandise can be imported, except those that are expressly prohibited by current legislation, such as used vehicles and motorcycles, asbestos in any of its forms, pornography, and toxic industrial waste.

The product to be imported, due to its nature, may be subject to approval, authorization, or control by the Chilean customs; therefore, it is necessary to obtain the approval in advance from the respective agency.

Further details of these limits and restrictions for customs can be found on delivery firm’s websites.

Due Diligence

Due diligence is a recommended step as part of any decision to engage in business with a foreign company. U.S. exporters may want to consider the International Company Profile (ICP) service offered by the U.S. Commercial Service to request background on a prospective business partner. Information on this and other U.S. Commercial Service services is available on the U.S. Commercial Service website.