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flag Chile Chile: Operating a business

In this page: Legal Forms of Companies | The Active Population in Figures | Working Conditions | The Cost of Labour | Management of Human Resources

 

Legal Forms of Companies

Empresa Individual de Responsabilidad Limitada (EIRL) is a Sole Propietorship company
Number of partners: One natural person.
Capital (max/min): No minimum capital.
Shareholders and liability: Liability is limited to the amount contributed.
Sociedad de Responsabilidad Limitada (LTDA) is a Private Limited Company.
Number of partners: Minimum 2 partners, maximum 50 partners, who have property rights.
Capital (max/min): No minimum capital.
Shareholders and liability: Liability is limited to the amount contributed.
Sociedad Anonima (SA) is a Public Limited Company. Can be public or private.
Number of partners: Minimum 2 partners.
Capital (max/min): No minimum capital. One-third of the capital must be paid at the creation of the company and the remainder within three years.
Shareholders and liability: Liability is limited to the amount contributed.
Sociedad en Commandita is a Limited Partnership.
Number of partners: Minimum 2 to a maximum of 50 partners. Two types of partners: active partners and silent partners.
Capital (max/min): No minimum capital.
Shareholders and liability: Liability is limited to the amount contributed for the silent partners, and unlimited for the active partners.
Company Directories
Mercantil.com, Business portal
 

Business Setup Procedures

Setting Up a Company Chile Latin America & Caribbean
Procedures (number) 6.00 8.00
Time (days) 4.00 25.22

Source: Doing Business - Latest available data.

 
For Further Information
Consult the Doing Business Website, to know about procedures to start a business in Chile.
The Competent Organisation
All businesses from foreign capital must be registered with the Chilean committee for foreign investments.
 

Recovery Procedures

Principle
An amendment to the previous Bankrupcy Law of 1982 - which is considered out-dated, ineffective and discouraging constructive solutions that would prevent backrupcy - is currently being examined by the Congress. The new law would encourage, among other things, a quicker reorganisation of the business, renegotiation of debt and liquidation of assets. For more details, please consult the Ministry of Economy, Development and Tourism (in Spanish) webstie.
Minimum Debt-to-Capital Ratio Triggering Liquidation
An amendment to the previous Bankrupcy Law of 1982 - which is considered out-dated, ineffective and discouraging constructive solutions that would prevent backrupcy - is currently being examined by the Congress. The new law would encourage, among other things, a quicker reorganisation of the business, renegotiation of debt and liquidation of assets. For more details, please consult the Ministry of Economy, Development and Tourism (in Spanish) webstie.
Bankruptcy Laws
See the Commercial Code on reorganisation and liquidation for businesses and individuals.
Reorganization and Rehabilitation Laws
Draft Law  on reorganisation and liquidation for businesses and individuals.

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The Active Population in Figures

201820192020
Labour Force 9,391,8889,514,5618,860,151

Source: International Labour Organization, ILOSTAT database

 
201720182019
Total activity rate 68.52%68.96%68.90%
Men activity rate 79.17%79.09%78.70%
Women activity rate 57.94%58.88%59.13%

Source: International Labour Organization, ILOSTAT database

 
Employed Persons, by Occupation (% of Total Labour Force) 2016
Wholesale and retail trade; repair of motor vehicles, motorcycles and personal and household goods 20.0%
Manufacturing 11.0%
Construction 8.7%
Agriculture, hunting and forestry 8.7%
Education 8.2%
Transport, storage and communications 7.5%
Real estate, renting and business activities 6.4%
Public administration and defence; compulsory social security 5.4%
Health and social work 5.1%
Hotels and restaurants 4.2%
Mining and quarrying 2.5%
Financial intermediation 2.0%
Fishing 0.8%
Electricity, gas and water supply 0.8%
 

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Working Conditions

Opening Hours
 
  • Legal Weekly Duration
45 hours
  • Maximum Duration
10 hours per day (with some exceptions)
  • Night Hours
Night hours are from 22:00 to 7:00.
Working Rest Day
One day a week
Paid Annual Vacation
Employees with more than a year of service have a right to 15 working days of paid holiday a year.  However, in the Magallanes region and the Chilean Antarctica, the Aysen region and the Palena province, the annual entitlement is 20 working day.
Retirement Age
65 years for men, 60 years for women
Child Labour and Minimum Age For Employment
The legal working age is set at 18 years but young people between 15 and 18 years of age can work with the permission of their parents or other tutors and on the condition that they continue studying. However, transgressing the law against child labor is quite common, especially in the agricultural sector and in hotel, restaurant and construction work.
Informal Labour Market
It is estimated that nearly 40% of Chilean workers work in the informal sector, mainly in the areas of trade and catering, social services and agriculture.

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The Cost of Labour

Pay

Minimum Wage
CLP 350,000 per month (source: Chilian Ministry of Labour, 2022).
Average Wage
Gross average annual wage in Chile is USD 26,729 (source: OECD, 2020).
Other Forms of Pay
  • Pay For Overtime
Overtime is paid at 150% of the regular rate.
  • Pay For Rest Days Worked
Work during holidays is paid at 150% of the regular rate.
  • Pay For Night Hours
Night hours are paid at 150% of the regular rate.
  • Pay For Overtime at Night
Overtime is paid at 150% of the regular rate.
 

Social Security Costs

The Areas Covered
Retirement, unemployment insurance, medical insurance, sickness-maternity, accidents at work - occupational diseases, invalidity pensions; familiy allowances, and social security allowances.
Contributions
Contributions Paid By the Employer: Accident insurance: 0.93%
Contributions varying according to the risk of the employment activity: maximum 3.4%
Unemployment insurance: 2.4%
Life and disability insurance: 1.99%
Contributions Paid By the Employee: Health insurance contribution: 7%
Pension fund contribution: 10%
Competent Organization
Ministry of Health
Social Security Institute
Superintendency of Pensions (SP)
Unemployment Insurance Agency (AFC)
ISAPRE Association
Healthcare Superintendence
The Institute for Public Health
Association of private hospitals

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Management of Human Resources

 

Recruitment

Method of Recruitment
Recruiting through job adverstisements in the press, by recruitment agencies or through a job office.
Recruitment Agencies
National Employment Agency (Bolsa Nasional de Empleo)
Recruitment Websites
Employment opportunities in Chile
Employment opportunities in Chile
Manpower
Adecco - temporary jobs in Chile
 

The Contract

Type of Contract
Legal dispositions govern work contracts; collective conventions and individual negotiations complement them. 
The formality of the work contract is very rigid unlike starting conditions and licensing constraints that tend to be more flexible.

Chile has four types of work contracts:
-open-ended contracts that are fixed-term contracts lasting for a maximum of one year (or exceptionally two)
-piecework contracts that are used when the worker is employed for a specific time-limited
-task contracts
-professional service contracts

Breach of Contracts

  • Retirement
Workers are able to retire at the legal age of retirement or, in the case of certain difficult professions, earlier (at most 10 years before the legal age of retirement) and if they have sufficient capital in their pension savings account to finance their retirement.
  • Dismissals
Termination of an employment contract can only be done based on a valid reason, with the exception of managers, who can be made redundant without a valid cause. Among reasons justifying redundancy are: the company's needs or the employee's misconduct. Dismissal without a cause in the case of managers and dismissal based on the company's needs require a  notice or an indemnity which replaces the notice; the employee is entitled to receive severance pay.
  • Other Possible Methods
Expiry of the agreed duration of employment, the end of execution of the agreed work or resignation.
Labour Laws
The Labour Code
Consult Doing Business Website, to obtain a summary of the labor regulations that apply to local entreprises.
 

Dispute Settlement

 

Conciliation Process

Cases of Dispute
Among the different causes of disputes which may arise between an employer and an employee are: work conditions, wrongful termination and sexual harassment, verbal or physical violence.
  • Legal Framework
The procedures of resolving disputes between employers and employees are set by the Labour Code.
  • Procedure
During a dispute conciliation procedure, the judge invites the parties of a dispute to come to an agreement. For more details, see the Labour Code.
 

Judicial Structures

  • Legal Framework
National arbitration is governed by the Tribunal Code and the Civil of Civil Procedure.
  • Competent Legal Body
A work tribunal (Juzgado del trabajo) is competent in the matter of work-related disputes.
 

Social Partners

Social Dialogue and Involvement of Social Partners
Since 1992 the labour code has recognised the existence of organisations representing workers, the most important of which is the Central Union of Workers (CUT). The CUT is affiliated with the international confederation of syndicates.
Unionisation Rate
15.5% in 2014 (OECD data)
Unions
Central Workers Union CUT
Regulation Bodies
Ministry of Labor and Social Security
 
 

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Latest Update: June 2022