When you picture Chile, images of the towering Andes mountains or the imposing Atacama desert might come to mind. The country is also home to the Chiloé Archipelago, the land of captivating myths and legends used by natives to explain all aspects of life.
But beyond its breathtaking landscape and rich cultural heritage, Chile is also emerging as a hotspot for remote talent acquisition.
The Economist ranked Chile as the safest country for investment out of all Latin American countries. And if that’s not enough of a green flag, the World Economic Forum also ranked Chile as the top country in Latin America in global competitiveness — a measure of a country’s ability to offer high-quality goods and services at reasonable costs and with satisfactory returns.
These accolades paint a picture of a country with highly skilled local talent open to remote work and an economy primed for growth.
In this article, we’ll explore what makes Chile and its skilled workforce a top choice for companies seeking remote talent.
Advantages of Hiring in Chile
Since the introduction of the internet and the concept of a digital economy in the 1990s, the Chilean government has invested heavily in its technological infrastructure, including reliable internet connectivity and widespread use of digital technologies.
Before diving into the benefits of hiring in Chile, here are some quick stats:
- Language: Spanish
- Currency: Chilean Pesos (CLP)
- Capital city: Santiago
- Population: 19.6 million
- Cost of living rank: 82nd
Talented Tech Professionals
Chile holds the distinction of being the most educated country in Latin America (LATAM). One potential reason is that the country spends 5.4% of its GDP on education, more than the average for other LATAM countries.
As a result, Chile has many solid educational institutions. In fact, the top-ranked university in LATAM is Pontificia Universidad Católica de Chile, located in Santiago, Chile’s capital.
This access to quality education has made Chile a hotbed for skilled professionals in the region, especially in IT, fintech, and cybersecurity. It’s also a home to several startups.
Lower salary expectations, a favorable cost of living compared to many Western countries, and being located in a similar time zone to most North American regions make it easy to see how Chile’s skilled talent pool helps the country stand out as a cost-effective hiring option for remote employees.
Some typical roles for remote team members include:
- Software engineer
- Data scientist
- Project manager
- Software developer
- Sales representative
Hiring Compliantly in Chile
Employment Contracts
According to Chilean labor laws, employment contracts are mandatory when hiring in Chile. Contracts must be in writing and signed by both parties at least 15 days before employment begins.
Employment contracts must include:
- Date and place where the contract was signed
- Employee’s nationality and date of birth
- Start date
- Job description and work location
- Salary and pay schedule
- Number of working hours and work schedule
Working Hours and Pay
The maximum legal workweek hours in Chile are gradually transitioning from 45 to 40. On April 26, 2024, the limit was officially reduced to 44 hours. On April 26, 2025, it will be reduced to 42 hours, and finally to 40 hours on April 26, 2026.
The National Monthly Minimum Wage is CLP 500,000, equivalent to USD 535, as of July 1, 2024, and employees are typically paid once a month.
Chilean employees are also entitled to a Legal Gratification bonus. Through this bonus program, companies are required to split their profits with employees. Companies have two options to calculate the bonus amount:
- Award 30% of the company’s net income to be split amongst all employees proportionate to their income.
- Pay each employee a bonus of 25% of the wages they earned that year, capped at 4.75 times the minimum monthly salary.
It’s also common for businesses to pay a bonus known as Aguinaldo, which is similar to the 13th-month payment. It’s typically split in two, with half given on Chile’s Independence Day, September 18, and the second part awarded during the Christmas season.
Probation Period
Probation periods are not required or recognized in Chile. Instead, most companies hire employees on a fixed-term contract for up to 12 months and use that time as a probationary period before offering a permanent contract.
Employer Taxes
Chile’s corporate tax rate is 27%. Employers and employees are also required to contribute to the Social Security Scheme.
The employer’s contribution is relatively low. Typically, they only pay part of the Unemployment Insurance, which is 2.4% of the employee’s gross salary. However, the employer covers the entire 3% contribution cost for fixed-term contracts. They also pay around 1.5% for disability and survival insurance.
Termination Process and Severance Pay
There is no at-will employment in Chile, and companies must give employees one month of termination notice and provide cause. At-will termination is only recognized for “exclusive confidence” positions, such as directors and managers.
In the event of termination, employees are entitled to one month’s salary for every year worked, up to a maximum of 11 years. Any partial year worked over six months is rounded up to a full year of severance pay.
Employees terminated for gross misconduct are not eligible for severance pay.
Paid Leave Laws in Chile
Vacation and Holidays
After one year of employment, employees in Chile are entitled to 15 working days of annual paid vacation.
Employees who have worked for at least ten years earn an additional leave day for every three years of work, even if they have changed employers.
Chile also has several paid holidays, including:
- New Year’s Day
- Good Friday
- Labour Day
- National Day of Indigenous Peoples
- Our Lady of Mount Carmel
- Reformation Day
Sick Leave
Employees are entitled to a sick leave if they provide a medical certificate within two days of taking a leave from work. The employer must forward the certificate to the health insurance institution within three days.
Employees who are out sick for less than three days are not entitled to compensation. Employees who are sick for over three days receive regular pay starting on day four. If the sick leave lasts more than ten days, employees receive pay dating back to their first sick day. Employees are legally protected from having their contracts terminated while on sick leave.
Maternity Leave
Pregnant employees are entitled to 30 weeks of maternity leave, paid for by the country’s health insurance agency, which must begin six weeks prior to the due date.
Paternity Leave
New fathers receive five days of paid leave, which the employer pays for, and must be taken within the first month of their child’s birth.
Parental Leave
Female employees are entitled to 10 days of parental leave to care for a child under 18. They receive their regular pay during this leave but must make up the time at a later date.
Why Digital Nomads Love Chile
Chile doesn’t offer a special visa for digital nomads, but other options exist for those who want to work from Chile.
Digital nomads can apply for a Temporary Resident Visa, which allows them to work in Chile for up to one year. Family members of the visa holder can apply for a Dependent Temporary Resident Visa, but they are not authorized to work under this permit.
Many nationalities, including EU, U.S., and U.K. residents, can also stay visa-free for up to 90 days in Chile.
Hire in Chile with Remofirst
Partnering with an Employer of Record (EOR) like Remofirst simplifies the process for companies hiring in Chile.
We work with experts who understand local regulations, requirements, and tax laws to ensure full compliance with Chilean labor laws. We can also assist with the hiring process and onboarding of top talent, including full-time employees, freelancers, and independent contractors.
Contact us today to schedule a demo and discover how you can start hiring remote workers in new regions worldwide, including Chile.
