Learn about barriers to market entry and local requirements, i.e., things to be aware of when entering the market for this country.
Economic and political uncertainty have been the main market challenge for Chile in 2022, as companies and consumers have consequently become more cautious with spending. Pending reforms or legislation affecting factors such as mining, water, and indigenous rights, as well as energy prices and corporate taxes, have prompted companies across several industries to postpone some major investments and modernization plans in the near term. Although government procurements initially slowed after the Boric Administration came on board in March 2022, several new projects are actively being planned, with tenders expected to be announced in the coming year.
In terms of market entry, perhaps the greatest challenge to a U.S. firm seeking to export to Chile is the high degree of competition and the relatively small market size. Even though Chile is a market with a population of just fewer than 19 million, its open trade and investment policy has attracted the attention of many foreign firms and it ranks as the 20th largest U.S. goods export market in the world. At the same time, the small market size has led some companies to overlook Chile, leaving interesting niche markets and solid opportunities for U.S. exports.
Despite Chile’s openness to new products and technology, Chilean businesspeople tend to be far more conservative and cautious than the average U.S. businessperson. U.S. companies should consider this when entering the market and adjust sales expectations accordingly. While the Chilean Government is committed to streamlining certain processes, U.S. companies will find that operating in Chile requires patience and a tolerance for delays associated with government-mandated paperwork and obtaining various approvals and permits.
A key to competing successfully is finding the right in-country partner. It is extremely difficult for a foreign entity to successfully do business in Chile without having either a direct presence in the market or a local partner. A good agent or distributor can use business and/or social connections to open doors and overcome regulatory, as well as cultural and language barriers.