Investing in Chile – What you need to know
Chile is sandwiched between the Andes and a long Pacific coastline at the bottom of South America, but it’s right at the top of the continent when it comes to investment and business. It sounds odd, but to really appreciate how Chile ranks as a place for investment, it’s almost better to avoid comparisons with its neighbours. Chile has long been the leader on many business and economic comparisons in South America, and the country’s leaders are more interested in catching Europe or America than staying ahead of other Latino countries. To be blunt, they’re more occupied with following Finland than beating Brazil. Just last month, Chile became the first South American country to be admitted to the OECD. While it’s only a forum, it’s still a prestigious organisation.
The numbers show Chile is already well ahead of its neighbours. The World Bank and the Economist newspaper rank it as the easiest or best place to do business in South America. It has one of the most stable economies in the region and one of the highest GDPs per capita. And there’s plenty of money coming in, too – in 2008 more than US$5 billion of foreign investment poured into Chile. So if Chile is such a popular place to invest, what’s to know?
Any foreigner who spends more than a day in Chile will realise the first priority to succeeding here is a simple one: learn Spanish. And by Spanish, we mean the Chilean, nuanced version, not the Iberian version. So get used to dropping the ‘s’ off the end of Spanish words, and you’re already on the way to success.
Hamish Wood, co-founder of the P4 consulting firm, has spent 12 years working in Chile and says language is not the only thing foreigners need to get a handle on. Patience is near the top of the list for Wood. For example, an initial meeting with a Chilean business contact may not lead to rapid action. “First up meetings in Chile tend to be very formal and serve as a first chance for your Chilean counterpart to check you over,” says Wood. At this stage they could be more interested in finding out about your family and background than talking business. And remember that religion can be important here – so that might get canvassed too. Wood says an American friend picked up on how many Chileans say “Thanks to God” when saying how well their family or business is doing. “And even though he had never attended church in his life, he started adding this phrase into his replies during business meetings – a great example of how easy it can be to fit in here.”
Wood says that setting up shop in Chile can be a long process and it’s vital that new entrants keep their cool. Chile is a relatively small and well-linked business community so any bad behaviour can strike a fatal blow to new reputations. “Which doesn’t mean you have to take all sorts of “vueltas” – you can still be firm in getting your point across; in fact strength while negotiating will be respected. Just remember to never throw all your toys out of the cot.” Wood says it also helps in Chile, like anywhere, to have good local advice to cope with legal or bureaucratic challenges. And businesses that follow this path are more likely to prosper here, he says. And don’t think that first meeting will set a pattern – Chileans are quick to relax and generally very welcoming of foreigners and the business they bring. “The many foreigners here are testament to that and a common theme that is emitted is how Chile has offered them so many more opportunities and rewards than in their native lands,” says Wood. And remember that while Chile is ahead of its neighbours, the Latin American market is only going to get bigger and bigger. And Chile’s position, and its network of free trade deals, makes it an ideal springboard into those countries.
More information on Doing Business in Chile
