An EOR in Chile Can Hire Staff on Your Behalf

If you are interested in doing business in Chile, using an employer of record (EOR) could be your best option. Because an EOR in Chile will be able to hire staff on your behalf, allowing you to enter and exit the market quickly. 

Chile's geographical location and its main cities
Chile’s geographical location and its main cities. EOR Chile

For anyone keen to avoid the need to register a company in Chile, or who simply wishes to get to know the market better while considering a deeper commitment, the flexibility of this option can be particularly attractive.  

With a gross domestic product (GDP) of $282.3 billion in 2019 (all figures in USD), Chile is the fifth-largest economy in Latin America, despite having a population a fraction of the size of its competitors. 

The country is also one of the most prosperous in the region, with gross national income (GNI) hitting $15,010 per capita in 2019, positioning Chile as a high-income country according to the World Bank standards. 

Chile is a popular destination for international capital, with foreign direct investment (FDI) inflows reaching $11.93 billion in 2019. That is partly bolstered by the country’s status as a beacon of free trade, with dozens of free trade agreements (FTAs) in place, providing local businesses preferential access to key markets throughout the world. 

Among the country’s major exports are copper, timber, fruits, nuts, and seafood, with major destinations for Chilean goods including China, the United States, Japan, South Korea, and Brazil.

If you are interested in doing business in this growing and prosperous economy, read on to understand how hiring through an EOR in Chile could be the best option for you. Or go ahead and contact us now to discuss your business options.

What will an EOR in Chile do for you?

An EOR in Chile will hire staff on your behalf via its locally registered entity, providing you with local workers without having to go through company formation. 

That means, while those workers are officially employed by the EOR firm, you will have full control over their schedules and duties, and be responsible for meeting all corresponding financial responsibilities related to salary and benefits. Note that you will have to pay the EOR firm a fee for each worker they employ on your behalf.

That cost, however, is often significantly lower than costs associated with setting up, maintaining, and liquidating a company, especially if your engagement in the market is of a limited scale or on a short-term basis.

Choosing an EOR in Chile also means that you can get to work much quicker, with staff available in only the time it takes to find the right personnel. That is something an EOR will be able to help you with, as it will have an established recruitment network for you to tap into.

In addition, when you hire via an EOR in Chile, you guarantee compliance with local regulations and norms, relieving you of a due diligence headache, while the labor and tax law experts that the EOR has on staff will be able to provide you with ongoing advice on any regulatory changes and how they may affect your business.

Chile's market snapshot, which can be useful for anyone considering hiring the services of an EOR in Chile.
EOR Chile. Doing business in Chile a market snapshot.

The ongoing advice that an EOR in Chile can offer regarding regulations is an extension of the compliance guarantee that should be part of the service agreement that you sign. As such, the provider will provide assurance that all operations are carried out in accordance with Chilean legislation, including:

  • A maximum working week of 45 hours where no exemption exists
  • Guaranteed payment of the minimum wage to entry-level workers (approximately $469 per month in 2021)
  • Payment of statutory overtime rates (which equal 150% of standard rates) 
  • Honoring of paid annual vacation entitlements (which stand at 15 days per year after one year of service)

The EOR firm will also guarantee compliance with the following regulations related to employee deductions and contributions:

Employee Deductions:

  • Pension Fund (AFP) contributions paid to the pension fund named by the employee, with deductions equally an average rate of 11% of the salary
  • Unemployment insurance paid through the named pension fund, deducted at a rate of 0.6% of the salary
  • Health Insurance paid to the National Public Health Insurance organization FONASA, at a rate of 7% of the salary

Employer Contributions: 

  • Unemployment insurance paid through the same named pension fund, at a rate of 2.4% of the salary 
  • Disability insurance, similarly paid through the pension fund, deducted at a rate of 2.3% 
  • Accident insurance paid to the Workers’ Insurance Institute (ISL), deducted at an average rate of 0.93%, but subject to a calculation based on the level of risk involved in the role being undertaken

Biz Latin Hub can be your EOR in Chile

At Biz Latin Hub, our multilingual team of hiring and EOR specialists is equipped and available to help you find the ideal staff you need for your operations in Chile. With our full suite of back-office solutions, including, legal, accounting, and company formation, we can be your single point of entry to support your market entry and ongoing operations in Chile, as well as any of the 15 other nations around Latin America and the Caribbean where we operate.

 Reach out to us now for a consultation or free quote.

Or learn more about our team and expert authors.

Back office solutions and market entry services offered at Biz Latin Hub, a company that can be your EOR in Chile.
Back office solutions and market entry services offered at Biz Latin Hub. EOR Chile

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