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We serve as your Employer of Record in Chile. A resource-rich and economically evolving country, Chile offers a favorable business environment to companies looking to expand their horizons in South America. However, navigating its complex labor and tax regulations can be challenging. That’s why an Employer of Record (EOR) in Chile can be the best way to streamline your operations and ensure compliance with local laws without needing a local business entity.
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Step 1 – In-Depth Planning & Assessment
Your collaboration with a Chilean Employer of Record, like INS Global, begins with a comprehensive consultation to align with your business goals. This includes evaluating the number of employees required, their roles, and your timeline for expansion. The Employer of Record customizes its services to meet your specific needs, ensuring a seamless integration process in Chile.
Step 2 – Effective Setup, Recruitment & Onboarding
Whether you’re forming a new team in Chile or relocating current employees, the Employer of Record manages all legal and administrative obligations. This includes handling visas, work permits, payroll, contract management, and ensuring compliance with Chilean labor laws. Acting as your legal employer in Chile, the Employer of Record eliminates the need to set up a local entity, saving both time and resources.
Step 3 – Ongoing HR Management & Compliance
Once your employees are operational in Chile, the Employer of Record handles ongoing HR and payroll tasks. This includes processing salaries, managing employee benefits, and ensuring compliance with health insurance and social security regulations. The Employer of Record serves as the HR link between you and your Chilean team, managing administrative duties and resolving employee issues, enabling you to focus on expanding your business with confidence.
The Advantage in Figures
PEO/EOR
Company Incorporation
Price
80% Less Expensive
Market Entry
2-5 Days
6 Months
Accelerated Market Entry
A Chilean Employer of Record allows your business to quickly enter the Chilean market without the need to establish a local entity, facilitating a faster and more efficient expansion.
Compliance with Local Laws
The Employer of Record ensures full compliance with Chilean labor laws, including regulations on taxes, employment contracts, and employee benefits, reducing the risk of legal complications.
Access to Local Workforce
The Employer of Record assists in recruiting and managing local staff, giving you access to Chile’s skilled labor market while taking care of all employment-related requirements.
Cost Efficiency
By partnering with a Chilean Employer of Record, you can avoid the high costs associated with setting up and managing a local entity. The Employer of Record handles payroll, benefits, and HR functions, enabling you to focus on core business activities.
Scalability and Flexibility
A Chilean Employer of Record provides the ability to scale your operations up or down based on market conditions without the long-term commitment of setting up a local entity, offering greater operational flexibility.
While establishing a subsidiary in Chile is a traditional approach to local expansion, partnering with an Employer of Record presents several advantages:
Choosing the right Employer of Record in Chile is critical for a smooth market entry. Consider these essential factors:
Check Our Labor Law Guides
Contracts
In Chile, employment contracts are required by law and must be in writing, as stipulated by the Labor Code. These contracts outline essential terms such as job duties, salary, working hours, and conditions for termination. Contracts can be for an indefinite period, a fixed term, or for specific tasks or projects. Indefinite-term contracts are prevalent, providing long-term job security. The minimum wage in Chile was set at CLP 410,000 per month as of 2023. Compliance with written contracts ensures clarity and legal protection for both employers and employees, fostering a more structured labor market.
Probationary Periods
Chilean labor law allows for probationary periods, typically lasting up to 3 months. During this time, either party can terminate the employment without cause and without the need to pay severance, provided proper notice is given. The probationary period is designed to give employers the opportunity to evaluate the employee’s performance and suitability for the role. Employees on probation still enjoy basic labor rights and benefits, such as social security contributions and paid leave. This period is crucial for ensuring that new hires meet the necessary job requirements and fit well within the company.
Working Hours
In Chile, the standard workweek is capped at 45 hours, typically spread over 5 or 6 days, with a maximum of 10 hours per day. Overtime is compensated at a rate of 150% of the regular hourly wage and is limited to two hours per day. The Labor Code also includes provisions for flexible working hours and alternative work arrangements to promote work-life balance. Recent discussions and legislative efforts have focused on reducing the workweek to 40 hours to align with international standards. Despite these regulations, certain sectors, particularly informal and agricultural, often see longer working hours without proper compensation.
Paid Leave
Chilean labor law mandates various forms of paid leave, including annual leave, sick leave, and maternity leave. Employees are entitled to a minimum of 15 working days of paid annual leave after completing one year of service. Sick leave is provided based on medical certification, with employees receiving their full salary during the period of illness. Maternity leave consists of 18 weeks, divided into six weeks before and 12 weeks after childbirth, with an option for additional unpaid leave. Fathers are entitled to five days of paid paternity leave. Chile also observes 15 public holidays, which are fully paid if they fall on a working day.
Social Insurance
Chile’s social insurance system, governed by the social security framework, includes pensions, health insurance, unemployment insurance, and occupational hazard coverage. Employers and employees contribute to the system, with employers typically contributing around 11% of the employee’s salary and employees contributing about 10%. The pension system is primarily managed by private pension fund administrators (AFPs). Health insurance is provided through either public (FONASA) or private (ISAPRE) systems. Unemployment insurance, introduced in 2002, provides financial support during periods of job loss. The social insurance system is crucial for ensuring comprehensive coverage and financial security for Chilean workers and their families.
Severance Pay
Severance pay in Chile is regulated by the Labor Code and is mandatory for employees dismissed without just cause. The standard severance pay is equivalent to a month’s salary for each year of service, up to a maximum of 11 months’ salary. Employees with more than one year of service are also entitled to compensation for unused annual leave. Additionally, Chilean law requires employers to make monthly contributions to a severance indemnity fund (Fondo de Cesantía), which provides additional financial support in the event of unemployment. Severance pay and the indemnity fund offer crucial financial protection for workers transitioning between jobs or facing involuntary unemployment.
Navigating these complex issues is time-intensive and demands constant awareness of legal developments. Partnering with an EOR in Chile serves as your local legal partner, ensuring compliance with labor laws and mitigating potential risks.
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faqs
An Employer of Record in Chile takes care of all legal, HR, and compliance tasks involved in employing workers, allowing businesses to swiftly enter the Chilean market without establishing a local subsidiary
Using an Employer of Record in Chile can be more cost-effective than setting up a local entity, as it avoids the costs associated with incorporation and reduces ongoing administrative expenses.
Yes, a Chilean Employer of Record oversees the entire visa and work permit application process, ensuring compliance with local immigration laws and procedures.
Employer of Record services in Chile are particularly beneficial for businesses of all sizes looking for rapid market entry, cost efficiency, and less administrative burden.
Employer of Records in Chile have local experts who stay informed about regulatory changes and manage all compliance tasks to ensure adherence to local labor laws.
While the Chilean Employer of Record is the legal employer, you maintain significant control over the day-to-day management and operational decisions regarding your employees.
A Global Employer of Record is an effective solutions for companies like yours that are looking to expand a workforce abroad effortlessly.
This approach allows you to outsource the international hiring process quickly and efficiency, providing access to a global talent pool while still managing payroll compliance in each country.
Public Holidays Calendar
Chile
| Date | Day | Holiday | Notes |
| January 1 | Wednesday | New Year’s Day | Mandatory holiday; most services closed |
| April 18 | Friday | Good Friday | Christian observance; public holiday |
| April 19 | Saturday | Holy Saturday | Christian observance; public holiday |
| May 1 | Thursday | Labour Day | Mandatory holiday; most services closed |
| May 21 | Wednesday | Navy Day | Commemorates the Battle of Iquique |
| June 20 | Friday | National Day of Indigenous Peoples | Observed on winter solstice; public holiday |
| June 29 | Sunday | Saint Peter and Saint Paul | Christian observance; public holiday |
| June 29 | Sunday | Presidential and Parliamentary Primary Elections | Legal holiday; electoral event |
| July 16 | Wednesday | Our Lady of Mount Carmel | Christian observance; public holiday |
| August 15 | Friday | Assumption of the Virgin | Christian observance; public holiday |
| September 18 | Thursday | Independence Day | Mandatory holiday; national celebration |
| September 19 | Friday | Army Day | Mandatory holiday; honors the Chilean Army |
| October 12 | Sunday | Meeting of Two Worlds | Commemorates cultural encounters; public holiday |
| October 31 | Friday | Reformation Day | Christian observance; public holiday |
| November 1 | Saturday | All Saints’ Day | Christian observance; public holiday |
| November 16 | Sunday | Presidential and Parliamentary Elections | Legal holiday; electoral event |
| December 8 | Monday | Immaculate Conception | Christian observance; public holiday |
| December 14 | Sunday | Presidential Elections (Second Round) | Legal holiday; electoral event |
| December 25 | Thursday | Christmas Day | Mandatory holiday; Christian celebration |
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