The UK exported over £1.5 billion of goods and services to Chile in 2013, and is the country’s sixth largest foreign investor. And despite Chile having a relatively small population – its 17.95 million inhabitants make it the sixth most populated country in South America – it is the UK’s second largest export destination on that continent.
The UK has a trade surplus with Chile with the main UK exports being:
- Crude oil
- Industrial machinery
- Cars
- Beverages
- Pharmaceuticals
A business can be set up in just a day in Chile and over 100 British companies have direct operations in Chile and many more export through local partners.
The pros and cons of exporting to Chile
Chile not only has good political relations with the UK, it also has a growing middle class – both of which benefit British businesses wanting to do business out there.
Strengths of the Chilean market include…
- An open economy with with no net national debt
- Commitment to free trade
- A well developed financial market and economic structure.
Challenges to trading with Chile include…
- Travel time is about 15 hours, with no direct flights
- Spanish is the national language, you should not assume negotiations can take place in English
- Work needed on enforcing intellectual property rights.
If you’re doing business in Chile, you’ll need a reliable and cost-effective conference call provider to help keep in touch when travelling isn’t an option. Here’s How to set up a conference call between the UK and Chile.
And remember, you can now screen share and video conference, using Crankwheel.
Tax and customs in Chile
Tax
There are three main types of taxation in Chile:
- Business profits tax – charged at 20%, this tax is also known as first category tax
- Individual income tax – charged at rates of between 0% and 40%, depending upon salary, this is also known as second category tax
- VAT – charged at a rate of 19%, with some exceptions.
There are also additional taxes on beverages, fuel, luxuries, mining activities, and tobacco.
Customs
Chile has free trade agreements that cover 62% of the world, and any imports to the country from those outside of these agreements are subject to custom duties of 6%. Before you carry out any type of trade with Chile, it’s advisable to take on a customs agent to take care of imports and exports.
Image from Pablo by Buffer.
