I am excited to bring to you the story of one of our readers who has taken some concrete steps to internationalize in Chile. In addition to being probably the easiest country in the world to start a business, Chile is an excellent location to consider for various aspects of internationalization. You’ll get those specific details and resources with this boots-on-the-ground perspective of what it is really like to live in Chile and go through the residency/citizenship process, open up a bank account, and more. Even if you are not specifically interested in Chile, you will enjoy and find useful the author’s interesting perspective about what it’s like to adjust to living in a foreign country.
Internationalizing in Chile
In Chile, there are incredible opportunities for those in the know. Opportunities for a guy like me, and maybe for you if you're really serious about planting a flag in a South American country where things actually work – and work quite well.
Assumption #1: You're an International Man reader and therefore smart, well–read, and interested in real insights and not a recycled article from Wikipedia.
Assumption #2: You want to know what it's like to actually live in Chile, as well as a few tips on the immigration process, opening a bank account, how to buy a car, the cost of living, hiring a maid, safety, and more.
Assumption #3: You are not a native Spanish speaker but want to know how hard it is to get things done without being fluent.
I think it's important to know a writer's background so one can identify their biases, inherent or otherwise. And since I'm a Latin-loving, white, 50-ish American mid-westerner and subscriber and perennial conference attendee of all things Doug Casey since 1989, I do have my biases.
I started my internationalization plan back in 1993, got side-tracked for about a decade, and then started again in earnest as the great economic unraveling began to raise its ugly head.
I've secured a second passport from a lovely Caribbean country and made sure all my kids are fluent in Spanish. One actually speaks Mandarin, too.
I've been living in Chile for about 6 months of the last two years, fulfilling my residency requirements. So, while I'm not an expert in all things Chile, my intent is to share some up-front impressions and on-the-ground experiences in the hope that this information will be helpful should you decide to plant one of your flags in what I believe is a wonderful country.
So, with that in mind, let's get started.
The Chilean Culture and People
For me it's easy to like the Chileans, probably because I like Latin America in general. As an outsider and an observer of cultures, I've noticed some intriguing subtleties.
I've noticed that Chileans are, by nature, hard-working, which shouldn't be surprising since the social security system is privatized and there is only a very small welfare system for the poorest of the poor. In short, people are expected to work and save for their future. The message is clear: It's not the state's responsibility to take care of you when you can take care of yourself.
That said, gas station attendants, bathroom attendants, and grocery baggers all expect a small tip for services rendered. Not tipping, on the other hand is bad form. Strangely, taxis are the exception. Tips at restaurants are always 10%.
Sundays are definitely family day. Many families go to mass and then spend the rest of the day at home, at a neighborhood park, or at a local restaurant. There are areas in Las Condes, a barrio in Santiago, where streets are closed off so children can ride their bikes without worrying about traffic.
Business in Chile is more relationship-based than in the US. There's more of a small-town feel to doing business, even in metropolitan Santiago. Even so, you can find top-notch professionals comparable to elsewhere in the world.
What I mean by “business is more relationship-based” is that, at the professional level (not clerical), there's more of a desire to know one's customers beyond just a transaction. It's not unusual to be invited to lunch or even to one's home for a barbeque, also known as an asado, to strengthen the personal connection. Of course, one must present himself as a value-added client in order to have such an invitation extended to them.
Business introductions are also important. Even for a personal checking account, it's better to have an attorney recommend you via email or letter than to do it yourself. It's not crucial, just recommended.
Santiago, the Capital
With a third of the county's 17 million citizens living there, Santiago is the political, economic, and social center of the country.
Santiago appears to me to be a First World city. It compares well with many cities in the US in terms of services, amenities, entertainment, and food.
The nicest part of the city is El Golf in Las Condes. I share an apartment there with a fellow gringo. Quaint cafés and small, upscale boutiques (and even Starbucks) shaded by large oak trees make this area very easy to live in. Not too different from some of the older, ritzier neighborhoods of Dallas.
Compared with other large cities, the transportation system is not bad. Black and yellow taxis are plentiful. The metro and bus systems work relatively well.
You may be wondering if Santiago is safe. In short, yes. However, like all big cities there are areas to avoid. Violent crime is rare, but theft is not. Make sure a pickpocket doesn't lift your wallet on a crowded metro or bus.
Santiago is not necessarily cheap. With a peso that is strengthening against the US dollar and foreign capital pouring into the country, prices for most things are not bargains.
The two categories with lowest prices are food and labor. Chile is a food-producing powerhouse, especially fresh produce. Take a drive along back roads, and you'll see field after field, both flat lands and mountainsides, with avocado, citrus, grapes, berries, and other high-end produce.
The mountainous terrain and the north-to-south orientation of the country allow farmers to take advantage of microclimates. It's quite something to look at a 30-foot avocado tree with ripe fruit in the mountains with the snow line just 1,000 feet above.
While most of the produce is exported, there's still plenty left for local consumption. Add the thousands of home gardens and roadside stands, and the price of local produce is quite reasonable.
The Immigration Process
Excuse the broad strokes here on visas, but I've not really concerned myself with categories other than the one I applied under, which is the investor visa. Should you get serious about immigration, you'll want professional help – see the section on resources below – so I'm only hitting some highlights here.
In short, naturalization is a straightforward 3-step process:
- temporary visa
- permanent visa
The temporary visa falls into 3 categories:
Regardless of the category you choose, a temporary visa allows you to reside in the country for anywhere from 3 months to a year, with renewals of similar time frames. Each type allows you certain privileges.
For example, a tourist visa allows you buy land or a car, but you can't open a checking account. That means you have to wire funds from outside the country to the seller or an escrow account in order to make large purchases. The good thing about owning land or a car is that, should you want to go after a permanent visa, you've helped build your case with these purchases.
To really secure your status in the country, you need to go for your permanent visa, or permanencia, which is what I'm currently working on.
In my case, I applied under an investor visa while in Chile. The required documents were:
- passport copy
- birth certificate
- note of good standing from my US bank
- notarized copy of a financial statement with “sufficient funds”
What constitutes “sufficient funds” is not clear, as there is no law that says you have to have a certain amount to invest when applying under the investor visa. It generally means a minimum $50,000US, though $100,000 should definitely be sufficient. Can you show less than $50,000 and still be approved? Possibly. The point is that the amount is not clearly defined and there is a lot of discretion for the Chilean government.
My application for an investor visa was approved within a month. The investor visa is a one year temporary visa that can lead up to the permanencia.
If you do decide to get a permanent visa, then you need to spend 6 months in Chile during the year approved on your investor visa. After the 6 months, you can apply for your permanencia.
Regardless of which temporary visa you obtain, you'll be issued a tax payer ID card also known as a RUT card. This card puts you in the system and is your national ID card.
There are a couple of things to keep in mind if you go the investor visa route. First, you should be serious about making investments or running a real business with real customers, etc. A shell company won't cut it. You must submit a business plan along with documentation related to things such as financing, incorporation, any partnerships, etc. It is up to the discretion of the immigration officials as to whether your plan is viable or not.
Once you obtain a permanencia you can apply for citizenship and a Chilean passport after 5 years of permanent residency. See here for more details.
Once you have a RUT card, as a temporary resident, you can open a bank account. An introductory letter from an attorney is preferable but not required. I had an American friend who was already a client introduce me, which worked just fine.
All banks have a firm “know your customer” policy in place. They will want to see your passport, RUT card, and a recent banking statement from your home bank. You'll fill out your forms, which will be in Spanish, and then you'll have to wait several days or a week for your application to be approved.
Hiring a Maid
A full-time maid will run about $35 to $40US for a full day (at current exchange rates). For that you get cleaning, cooking, clothes washed, groceries purchased, and more. It is best to clarify expectations up front. Your maid will probably speak only Spanish.
Buying a Car
The cost of purchasing a car versus shipping one down is about the same. When you become a resident your household goods can be shipped in without duty. You can import a car duty free only to the duty free zones in Iquique in the far north or Punta Arenas in the far south. Should you want to sell it later, you can do so only in these regions. So it's just better to buy locally.
You may want to consider buying an SUV. While the main roads are well maintained (and privatized), it is easy to get off-road onto gravel once outside the city. If you intend to drive a lot outside of the city, an SUV makes sense but is certainly not a requirement.
Tip: Toyota has a very strong presence in the country, with dealerships in every zone, making it easy to have your car serviced.
As a resident you can write a check or use your credit card to purchase your car, or you can finance it if you can show appropriate means within the country.
Is it necessary to be proficient in Spanish? The short answer is “no,” but you'll wish you were.
Proficient means you can communicate verbally with the locals to order dinner, take a taxi, or go shopping, and you have gotten over the fear that you'll make a fool of yourself. With that said, you will find that many professionals (banking, attorneys, CPA, hotel reception) speak English.
If you don't speak Spanish, it may be wise to enroll in a 2 or 3 week intensive program – see the resource section below. Then consistently practice reading, writing, and speaking 60 to 90 minutes each day, just like an exercise program. Use Spanish in real situations every chance you get.
For now Chile appears to be an underrated offshore destination. I don't know how long this will last, because it has a lot going for it in terms of location, personal freedom, ease of doing business, and a booming economy.
I encourage you to hop a plane to see for yourself.
This is the service I used, and I've have been quite happy with them. They have a menu of services you can choose from. John, an American, is the owner and has lived in Chile for over 15 years. A very good resource for all things Chile from an American perspective. Once you're ready to begin the visa process, ask for Ricardo, a charming and retired Kodak executive; he's the one who handled my case.
Good Spanish school with several locations throughout Chile and South America.