Why Invest in Chile?
Chile stands out as one of the most reliable investment destinations in Latin America thanks to its stable legal system, strong economy, and international trade agreements. The country also offers a wide range of tax benefits and financial incentives designed to attract and support foreign investors.
VAT Exemption on Capital Goods
Chile grants a VAT exemption on the import of capital goods (machinery, vehicles, equipment).
✅ Applies to projects of at least USD 5 million
✅ Assets must have a minimum useful life of 3 years
✅ Requests are filed with the Ministry of Finance before importation
This measure significantly reduces initial investment costs and facilitates the start of operations.
Tax Benefits in Special Zones
To boost development in remote and strategic regions, Chile offers additional incentives:
– Tax credits of 10%–40% depending on project location and size
– 20% subsidies for SME investments
– Wage subsidies covering up to 17% of salaries for local workers
– Free Trade Zones with exemptions on VAT, customs duties, and corporate tax
These benefits apply in Arica, Tarapacá, Aysén, Magallanes, Chiloé, and Palena.
Research & Development (R&D) Incentives
Through the R&D Law (N°20.241), companies can access:
– 35% tax credit on certified R&D contracts approved by CORFO
– Deduction of the remaining 65% as an expense for tax purposes
– Annual benefit capped at 15,000 UTM (approx. USD 1 million)
This incentive strengthens Chile’s role as a regional innovation hub.
Profit Repatriation and Tax Requirements
Foreign investors have the right to freely repatriate profits and capital once taxes are paid.
– Corporate Income Tax: 27%
– Withholding Tax on dividends: 35% (often reduced under tax treaties)
– Investments over USD 10,000 must go through the formal foreign exchange market
Chile’s system ensures transparency and legal certainty for international investors.
Foreign Investor Certificate
The Foreign Investor Certificate, issued by InvestChile, provides official recognition and access to benefits.
– Granted within 15 business days
– Requires a minimum project of USD 5 million
– Facilitates procedures with public institutions
National Network for Entrepreneurship and Innovation
Chile’s government actively supports business growth through a national ecosystem of public institutions:
– CORFO: innovation & financing programs
– SERCOTEC: support for SMEs and entrepreneurs
– SENCE: training and labor development
– ProChile: export promotion
– Start-Up Chile: world-class accelerator for entrepreneurs
This ecosystem makes Chile not only a safe place to invest but also a launchpad for regional expansion.
Legal Stability and Equal Treatment
Chile’s Law 20.848 ensures equal treatment for foreign and local investors, prohibiting arbitrary discrimination.
Restrictions apply only in strategic areas such as defense, nuclear energy, lithium, cabotage, and telecoms. In all other sectors, foreign investment is fully open.
Final Thoughts
Chile combines economic stability, attractive tax incentives, and a robust innovation ecosystem, making it one of the most promising destinations for international investors in Latin America.
Whether through VAT exemptions, R&D tax credits, or regional investment incentives, Chile provides not only legal certainty but also concrete opportunities for growth and profitability.
Are you considering expanding your investment portfolio into Chile?
At Produncan Lands, we specialize in guiding foreign investors through the Chilean market, ensuring a smooth and profitable entry.
