Chile’s national congress has just approved a new law that will be making some adjustments to the business incorporation process in the country over the coming months. These changes – dropping incorporation costs to zero, setting up an online registration option, and shortening the time frame to a single day – will effectively make Chile the easiest country in the world to incorporate a new business.
Hong Kong and Singapore are currently ranked as the easiest places in the world to do business and the effects of this policy have been huge. Over the past several years, these jurisdictions have proven that when government gets out of the way of business, wealth can be created very quickly.
It’s no coincidence that apartment and office prices in Hong Kong and Singapore are among the highest in the world. These locations have acted like magnets for capital coming from both within and outside the regions, driving up the price of land on these small island-nations.
Chile has much, much more land than Hong Kong or Singapore, but it seems reasonable to assume that this change in the incorporation process will significantly increase demand for real estate throughout the country.
Chile has already been attracting the attention of investors, entrepreneurs, and expats from around the world. Becoming the easiest place in the world to register a business could be a very strong catalyst for the growth of the country.
So what’s the best way to play this? Should everyone pack their bags and start planning their new business venture to launch in May when these new changes come into effect?
That's not a bad idea, actually, but if that isn’t possible for you, investing in Santiago real estate would be an easy way to gain some exposure.
If I were an accountant or lawyer, I’d be looking into what it would take to get accredited in Chile, and doing an intensive Spanish course if I wasn’t already fluent in the language.
Becoming a real estate agent that deals specifically with office space, and maybe homes and apartments close to the city center, would probably be one of the fastest ways to build wealth over the coming years.
In emerging markets like this, there is always a lag time between demand for new goods and services and when there is actually someone providing them, so business opportunities in Chile are going to become even more abundant than they already are.
Is Santiago going to be the next Hong Kong? Only time will tell. For the moment, we know that the wheels have already been set in motion, and it looks like things will soon be getting quite interesting.
Darren Kaiser is an American expatriate and current resident of Chile. He is a small business owner, journalist, and investor. You can find more at his website http://www.darrenkaiser.com.
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