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Employment in Santiago de Chile

At a Glance:

• As one of the financially strongest cities in Latin America, Santiago continues to attract a number of large multinational businesses in various industries.
• Employees in Chile work, on average, the sixth highest number of average annual hours of all OECD countries.
• The Chilean pension system is totally privatized, with workers making monthly contributions of 10% of their income into a pension fund of their choice.
• Chile currently has the lowest tax rate of all the OECD countries in the world, making it an attractive destination for many expats.

Santiago de Chile is one of the financially strongest cities in South America, generating approximately 45% of Chile’s overall GDP. As an expat, you will find the city economically stable and very welcoming to skilled workers.

A Strong International Presence in Santiago

The financial sector plays an important role in Santiago. The city is home to the Economic Commission for Latin America and the Caribbean (ECLAC), which has brought lots of investment to the city from a number of international businesses.

The computer technology and electronics sectors have a particularly significant presence in the city, with many big multinational companies such as HP, IBM, Intel, Microsoft, and Yahoo locating important offices in the city.

A large number of expats working in Santiago are employed by one of the many international business based in the city. The food processing industry, for instance, is a major contributor to the Chilean economy, with Nestlé and Coca-Cola acting as key employers in Santiago.

The more traditional industries of textiles, clothing production, and mining, still provide significant employment opportunities for locals working in Santiago. There are also a number of job opportunities teaching English at various educational institutions across the capital.

Doing Business: Santiago Style

In 2017, Chile was named as the fourth best country for doing business in Latin America according to the Ease of Doing Business ranking published by World Bank. As an expat, prepare yourself for long working hours — in 2016 Chile’s labor force worked the sixth highest number of average annual hours of all OECD countries.

However, the long hours do not always equate to high productivity. People are often slow to reply to messages and phone calls and can simply forget to get back to you. Don’t take this personally, perhaps just chat about it with your business partners if you find that it is becoming a problem.

Speaking Spanish is an major advantage if you are working in Santiago. In fact, many local businesses will not even consider you for a position if you do not know the language. While this is not usually so important in multinational companies where English is the main language of communication, speaking Spanish will definitely make settling in easier and help to earn you the respect of your Chilean co-workers.

The Job Hunt

It is quite difficult to move to the capital unless you already know where you will be working in Santiago. You cannot apply for a long-term visa without a work contract, so the easiest way to begin working there is to be sent by a company.

However, you can come to the country to look for a job on a visitor’s visa. Often the best way to start looking for a job in Santiago is through word of mouth: try asking any contacts you might have in the city if they know of any job openings.

If you understand Spanish, try looking in the local papers in Santiago. Otherwise, try the following websites:

Social Security and Taxation in Santiago

Once you are an official resident of Santiago — with a job and a fixed address — then you can start benefiting from the social security system. You will also have to start paying taxes. Read on for a full explanation of these systems.

A Pension System under Continuous Reform

Chile’s pension system, known as Sistema Previsional in Spanish, is completely privatized. Chilean workers are free to choose which pension-fund company they use. Their pension is based on the amount of contributions which they make; mandatory contributions are equal to 10% of the month’s income.

You can boost your pension through additional voluntary contributions, if you so wish. If you are self-employed, then your entire pension is made up of voluntary contributions. It is therefore entirely your own responsibility to ensure the sum of your pension at the end of your working life.

If you are a Chilean citizen and have contributed to your pension fund for at least 20 years, then you are guaranteed a minimum pension which you will receive when you retire — aged 65 for men and 60 for women. If you want to retire early, either as an expat or a Chilean citizen, your balance must be equal to at least 70% of your average real wage over the preceding ten years and at least 80% of the maximum welfare pension (PMAS).

Once you are in Santiago, you will probably learn about of the numerous changes and reforms the pension system has seen over the years. Some older citizens might even still be on the previous, completely state-run schemes. The current scheme has been formally implemented to run until 2045, so there’s plenty of time to get used to it.

Taxation: Benefits for Expats in Santiago

As an expat, the amount you are charged in taxes will largely depend on how long you intend to stay in Chile. If you are a resident of Chile, then you are subject to taxes on all of your income, whatever its source; for tax purposes, you are officially a Chilean “resident” if you spend more than six months in the country within two consecutive years.

Foreigners settling in Santiago will only pay income tax on their Chilean income for the first three years of residing in Chile. This is also the case if you are classified as a Chilean non-resident. It is possible that the tax authorities will extend the initial three-year term for another three years, after which you will be taxed on your entire worldwide income.

The main benefits of the Chilean tax system — foreign retirement benefits, pensions, and social security contributions — are completely tax free. Chile also has the lowest tax rate of all the OECD countries in the world (2015). This makes the nation something of a reputable tax haven, so enjoy it while you are in Santiago!