Employer of Record in Chile (EOR in Chile)

Hire Globally, Pay Locally, Expand Effortlessly

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.

Want to have a Team in Chile TODAY?

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We prefer to let others grow their business.

Want to Have a Team in Chile TODAY?

Show me how to grow my business now!

We prefer to let others grow their business.

Efficient Business Expansion in 3 Steps with an Employer of Record in Chile

Step 1 – In-Depth Planning & Assessment

Your collaboration with a Chilean EOR, 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 EOR 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 EOR 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 EOR 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 EOR handles ongoing HR and payroll tasks. This includes processing salaries, managing employee benefits, and ensuring compliance with health insurance and social security regulations. The EOR 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.

Benefits of Partnering with a Chilean EOR

Accelerated Market Entry

A Chilean EOR 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 EOR 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 EOR 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 EOR, you can avoid the high costs associated with setting up and managing a local entity. The EOR handles payroll, benefits, and HR functions, enabling you to focus on core business activities.

Scalability and Flexibility

A Chilean EOR 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.

Testimonial

Manuel Ramos

TERAO ASIA

Managing Director

We think INS Global is a good solution about starting business in new and complex markets. Understanding the market doesn’t mean you need to set up a company immediately.

 5/5

EOR vs. Company Incorporation in Chile: Making the Right Choice

While establishing a subsidiary in Chile is a traditional approach to local expansion, partnering with an EOR presents several advantages:

Speed – With an EOR like INS Global, the setup process in Chile is expedited, enabling you to start operations and hire staff much faster than the traditional company incorporation process, which can take months. An EOR can have your team operational within weeks or even days.
Compliance – Both EORs and subsidiaries must adhere to Chilean tax laws and labor regulations. EORs possess the expertise to manage these complexities and ensure ongoing compliance, reducing the risk of legal issues.
Cost – For smaller teams or short-term projects, EOR services are often more cost-effective than establishing a subsidiary, as they avoid the significant upfront costs of incorporation and ongoing administrative expenses. For larger companies, EORs provide streamlined solutions that integrate new markets into global payroll systems seamlessly.
Control – While incorporating in Chile provides full control over HR, finances, and operations, EORs offer comparable control over your workforce while reducing administrative burdens and liability.

Crucial Factors for Selecting the Best Employer of Record in Chile

Choosing the right EOR in Chile is critical for a smooth market entry. Consider these essential factors:

Industry Expertise and Credibility – Search for a Chilean EOR with a strong industry reputation and proven experience, like INS Global. Client reviews and industry accolades are reliable indicators of their trustworthiness.
Comprehensive Service Range – Verify that the EOR provides all necessary services or can customize their offerings to suit your specific needs, including visa and work permit support, payroll processing, tax compliance, and navigating Chile’s labor laws.
Ability to Scale – Choose an EOR that can expand its services in line with your business growth. Their team should be capable of managing an expanding workforce and adapting to evolving business demands.
Consistent Communication and Clarity – Opt for an EOR recognized for its clear and regular communication. They should keep you updated on regulatory changes, important deadlines, and potential issues, offering a dedicated contact and online tools for easy access to vital information.
Transparent and Fair Pricing – Evaluate the cost structures of various EOR providers. Ensure their pricing is clear, competitive, and free of hidden charges. Independent advice can help you secure the best value for your EOR in Chile.

Chile Labor Law Overview

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

How does an EOR help with entering the Chilean market?

An EOR 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

What are the financial advantages of using an EOR in Chile?

Using an EOR 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.

Can an EOR handle visa and work permit processes in Chile?

Yes, a Chilean EOR oversees the entire visa and work permit application process, ensuring compliance with local immigration laws and procedures.

Which types of businesses benefit most from EOR services in Chile?

EOR services in Chile are particularly beneficial for businesses of all sizes looking for rapid market entry, cost efficiency, and less administrative burden.

How does an EOR ensure compliance with Chilean labor laws?

EORs in Chile have local experts who stay informed about regulatory changes and manage all compliance tasks to ensure adherence to local labor laws.

What control do I retain over my employees when using an EOR in Chile?

While the Chilean EOR is the legal employer, you maintain significant control over the day-to-day management and operational decisions regarding your employees.

Employer of Record in Chile (EOR in Chile)

Hire Globally, Pay Locally, Expand Effortlessly

Efficient Business Expansion in 3 Steps with an Employer of Record in Chile