Are you looking to expand your business globally and considering Chile as your next destination? Chile is a promising market for foreign businesses, with its strong economy and stable political environment. In this guide, we will provide you with a complete overview of how to expand your business to Chile, including the use of Employer of Record (EOR) and Global PEO services.
Why you need to be interested in expanding into Chile
Chile has one of the most stable and prosperous economies in South America, with a GDP growth rate of 4% in 2019. The country also has a skilled workforce, with a high level of education and proficiency in English. Additionally, Chile has free trade agreements with over 60 countries, making it an attractive destination for foreign investors. Expanding your business to Chile can provide you with access to new markets, increase your brand awareness, and provide cost-effective ways to do business.
Employer of Record Chile: how it works
Employer of Record (EOR) is a service that allows foreign companies to expand their business without setting up a legal entity in the foreign country. The EOR company acts as the legal employer of the employees, and the foreign company manages their daily work activities. This allows the foreign company to focus on their core business activities while the EOR takes care of the compliance, payroll, and legal responsibilities.
In Chile, the EOR company will take care of registering your company with the relevant government authorities, managing payroll, and ensuring that your employees are compliant with local laws and regulations. The EOR company will also handle all the legal and administrative tasks related to your employees, including contracts, benefits, and taxes.
The process of Employer of Record step by step
The process of setting up an EOR in Chile is relatively straightforward. Here are the steps involved:
- Choose an EOR provider: There are several EOR providers in Chile, and it’s important to choose one that fits your business needs.
- Sign a contract: Once you have chosen an EOR provider, you will need to sign a contract with them.
- Provide employee information: You will need to provide the EOR company with the necessary information about your employees, including their salaries, benefits, and start dates.
- Employee onboarding: The EOR company will handle all the administrative tasks related to employee onboarding, including contract signing, setting up bank accounts, and registering employees with the relevant government authorities.
- Payroll and compliance: The EOR company will handle all payroll and compliance-related tasks, including tax withholding, social security payments, and employment contracts.
Advantages of Employer of Record
Using an EOR in Chile has several advantages for foreign companies, including:
- No need to set up a legal entity: Setting up a legal entity in a foreign country can be costly and time-consuming. Using an EOR allows you to expand your business without having to set up a legal entity in Chile.
- Compliance: The EOR company will ensure that your employees are compliant with local laws and regulations, reducing the risk of legal and financial penalties.
- Cost-effective: Using an EOR is often more cost-effective than setting up a legal entity, as you do not need to invest in infrastructure, office space, or hiring a local team.
Another alternative: Global PEO
Another option for foreign companies looking to expand to Chile is to use a Global PEO. Global PEO is a service that allows foreign companies to hire employees in a foreign country without setting up a legal entity. The Global PEO acts as the employer of record, handling all compliance, legal, and administrative tasks related to the employees.
The main difference between using an EOR and Global PEO is that with Global PEO, the foreign company is responsible for managing the daily work activities of their employees, while the Global PEO handles all the legal and administrative tasks.
Using a Global PEO in Chile can provide several benefits, including:
- Flexibility: Global PEO allows you to hire employees in Chile on a short-term or long-term basis, giving you more flexibility to adapt to changing business needs.
- Reduced risk: Global PEO reduces the risk of non-compliance with local laws and regulations, as the Global PEO is responsible for ensuring that all legal and administrative tasks are completed.
- Cost-effective: Using a Global PEO is often more cost-effective than setting up a legal entity, as you do not need to invest in infrastructure, office space, or hiring a local team.
Incorporating a company
If you decide to set up a legal entity in Chile, there are several steps you will need to take:
- Choose a legal structure: There are several legal structures to choose from, including a corporation, limited liability company, or branch office.
- Register your company: You will need to register your company with the relevant government authorities, including the Tax Authority, Chamber of Commerce, and Labor Department.
- Obtain a tax ID number: You will need to obtain a tax ID number for your company from the Tax Authority.
- Open a bank account: You will need to open a local bank account for your company to conduct business in Chile.
- Register for social security: You will need to register your employees for social security with the relevant government authorities.
Recruitment in Chile
If you decide to expand your business to Chile, you will need to recruit local talent. Here are some tips for recruiting in Chile:
- Use local job boards: There are several local job boards in Chile, including Trabajando and Laborum, which can help you find local talent.
- Consider working with a local recruiter: Working with a local recruiter can help you navigate the local job market and find qualified candidates.
- Understand local employment laws: It’s important to understand local employment laws and regulations when hiring employees in Chile.
Expanding your business to Chile can provide you with access to new markets, increase your brand awareness, and provide cost-effective ways to do business. Using an EOR or Global PEO can help you expand your business without setting up a legal entity, while setting up a legal entity can provide you with more control over your business operations. When recruiting in Chile, it’s important to use local job boards, work with local recruiters, and understand local employment laws and regulations. By following this complete guide, you’ll be well on your way to expanding your business to Chile.