Opinion: To Me, Chile Is Not Business Friendly

I can not speak to the ranking of Chile in South America, and I speak from a purely North American perspective, that Chile is horrendous for starting a new business. I am not a writer but here is my perspective.

I have a small BBQ Sauce and Catering business here in Chile. (Very Small). I have had nothing but one government obstruction after another in opening and maintaining my business. Now mine is a simple mom and pop business, not some conglomerate or mega company run by people with “Old Money” as a matter of fact we have a very, very small budget. (We operate with our retirement income and nothing more). We have been met with a tax system that is arduous and oppressive that approaches a small business owner like we are criminals and not business owners who are trying to feed our families and pay our tax burden all at the same time, while still trying to grow our business. In addition, when we do not have any sales for a given month, we are punished by the SII for not making more taxable income. (No Movement!)

I have heard several gringo writers speak of how Chile is “Business Friendly”. I say yes friendly, friendly like the thief who has a knife at your throat every month for their cut! Or else!

Look, I love Chile. It is a wonderful place and the people in my mind are of the highest quality and character in ALL of South America. If there was a list of the best people in South America? Then my vote is Chile for #1! You will not find more welcoming and kind people than the people of Chile.

This however does not change the fact that the government of Chile does everything they can to influence people to do business under the table. To avoid paying taxes through rook or crook. The government of Chile does everything it can to influence people to NOT open a new business!!!!! Yes the SII should fine and prosecute the business that do not do good business! This does not change the fact that maybe if it was easier to open business here in Chile then there would be more Businesses to tax? Maybe if the government did not treat small business owners like criminals then there would be more people wanting to come in from under the shadows and open their businesses legitimately? There are many business opportunities here in Chile!

Read the news article here:

Antofagasta: Before the copper, there was silver

Now it is not fair for me to complain with out putting up some options for resolving many if not most of the problems that start up businesses face here in Chile. So here are my (gringo centered) suggestions that I feel would open up Chile to become a world wide business leader to compete with the biggest of the big. I am not saying do it the way we did it back in the USA because that would be a mistake. It is screwed up in the USA too, but it is still easier than here in Chile. Easier by a country mile.

1. Open up importation: Remove the Importation Tax. It would open up more competition for the business here to offer higher quality products at a more competitive tax. For instance: In stead of buying a new broom handle every week, because they are so poor quality they break in 3 days after purchase, we would be able to buy quality handles and the Chilean companies who make those terrible broom handles will either make a better quality handle or go out of business ( although that would take a while since we all have been overpaying for brooms with poor handles for so long).

Importation taxes are supposed to be 19% but after fees, more fees and additional fees for the fees, ends up being 26%. This results in products that cost (with shipping, insurance, Aduana fees at 26%) almost 200% more than you would pay for the same products anywhere else on the planet! How come the government of Chile wants its people to pay more for a TV than the rest of the world? People in Chile want what the rest of the world has. Specifically all the goodies and products you see on Direct TV that people have in the USA, but that they can not get here in Chile. WHY?  The reason you do not see these products here is the importation tax plain and simple. How can we here in Chile become a world class business with out being world class? Do Chileans deserve the best products at the lowest price available? It seems the Chilean government does not think so! Why?

2. Stream line the FACTURA /Boleta process: I do not have a good answer here on exactly how this can be done because frankly it is so confusing that FOR ANY START UP BUSINESS TO START UP YOU MUST HAVE AN ACCOUNTANT TO UNDERSTAND THE PROCESS…….. MONTHLY! This is outrageous. For a start up business like mine some months the accountant makes more than I have made as a business as a whole for the past 4 months. Small business friendly? NO NOT AT ALL. If the system requires an accountant on a monthly basis then there is something wrong with the system. The government deserves its share, but not to the point where there is NO LONGER A START UP BUSINESS because of the expense involved with sorting out the system. SIMPLIFY THE SYSTEM. On a positive note the new electronic FACTURA system is a good improvement. Now keep it up!
3. Stop the Double TAXATION AND FEES: This is where you pay a tax to the local municipality, and then one to the SII and on and on and on. …… and lest we forget the accountant at the end of the month who wants a pound of flesh too!
4. Make the Bureaucrats Accountable: If the client services person at the SII, does not respect and try to work with the Start Up Business owner, then doc their pay. What is good for the goose is good for the gander. Yes we all know that we have to follow the rules and that the SII has the weight of the government behind them, but that does not mean that they could not show some compassion, kindness and forgiveness instead of always trying to charge a fine or a fee, especially where it is obvious that the infraction was not intentional. There should be some discretion used on the part of the government employees to the business owner.

To me Chile is NOT Business Friendly.

Chile Today Staff