Employment of Expatriates
According to Article 19 of the Labor Code, a minimum of 85% of employees in a company must be Chilean citizens, but this rule does not apply to those who have lived in Chile for over five years, those married to Chilean citizens, or specialized technical personnel.
Additionally, companies with 25 or fewer employees are exempt from this requirement. To work in Chile, non-citizen workers must have a resident visa that allows them to work for pay.
The most common work visas in Chile are the "subject to contract" visa and the temporary visa, which have validity periods of two years and one year, respectively. These visas can be renewed for similar time frames, and after they expire, a request for permanent residency can be made.
Visa regulation and procedure
In February of 2021, the first Regulation of the new Migration and Alien Law was issued, which modifies the rules regarding the hiring of foreigners and migration categories. A second Regulation that will establish the subcategories of temporary residency is still pending and will ultimately give full validity to the aforementioned new Migration and Alien Law.
Notwithstanding the above, we consider it necessary to present the following points to consider.
Entry into the country: the following requirements are required:
Enter through an enabled passageway.
With travel documents: Passports, ID cards, safe-conducts or other valid and current documents.
There are no legal prohibitions.
New migration categories:
Transient stay: Authorizes staying in national territory for a limited period. No prior authorization or visa is required, except for exceptions regarding certain countries. Stay for a maximum of 90 days, extendable. Remunerated activities: Only in exceptional cases (Lecturers, consultants, others).
Official residency (diplomats): Residency permit granted to foreigners who are on an official mission recognized by Chile, and to their dependents.
Temporary residency: Residency permit granted to foreigners who intend to establish themselves in Chile for a limited time. It will be granted to those who can demonstrate family ties with Chileans or permanent residents or to those whose stay is consistent with the objectives of the National Migration Policy or in cases qualified by the Ministry of the Interior. Foreigners who currently have a student visa, subject to a work or temporary contract, valid or pending, will be assimilated to this category. The validity is for up to two years, except for seasonal workers, which may be extended up to five years. Remunerated activities: They may be immediately developed by requesting a work permit, which will be valid while the application is being resolved.
Permanent residency: Permit to settle indefinitely in Chile, which authorizes any lawful activity, without other limitations than those established by legal and regulatory provisions. It can only be granted to foreign nationals with a temporary residency permit that expressly allows applying for it and who have resided in the country for at least 24 months.
Temporary Residency Migration Subcategories: The most relevant subcategories for hiring foreigners are:
Foreigners who engage in lawful remunerated activities: Foreigners who wish to establish themselves in Chile for a limited period to carry out remunerated activities under a bond of subordination and dependence. They must present a work contract for no less than 3 months.
Formal job offer: It must be stated in a document previously notarized by a Chilean Notary Public, entered into the SERMIG electronic platform, together with the acceptance of the foreign national contained in a document signed in the competent Consulate.
Seasonal workers: Foreigners who intend to enter Chile to perform specific seasonal work for limited, unique, and interannual periods. It cannot be extended for more than six months in each calendar year of its validity.
Job opportunities: Foreigners who request it, as long as there is availability of permits for the corresponding category.
In conclusion, it is important to have a clear understanding of the new Migration and Alien Law and its regulations, in order to comply with the requirements and procedures established by the authorities.
Payment of Wages in Non-Chilean Currency
Both Chilean residents and foreign companies operating in the country may pay wages to specialized foreign employees in a foreign currency, and they will be exempt from Chilean social security obligations.
Partial Wage Payment Abroad
Wages do not need to be paid in Chile. They can be paid in any location by either the employer or a third party. However, if the wages relate to work performed in Chile, they will be subject to taxation by Chile, regardless of the location of payment, as the income is considered to have originated from a Chilean source.
Payments for Chilean Social Security
Typically, all employees are required to make Chilean social security payments. However, foreign technical workers who already pay for similar protection in their home country can opt out of Chilean social security payments if the foreign system provides equivalent coverage for diseases, disabilities, retirement, or death and meets other conditions outlined in Law 18,156.
Chile has signed social security agreements with various countries, including Argentina, Austria, Australia, Belgium, Brazil, Canada, Colombia, Czech Republic, Denmark, Ecuador, Finland, France, Germany, Luxembourg, the Netherlands, Norway, Paraguay, Portugal, Peru, Quebec, South Korea, Spain, Sweden, Switzerland, the United Kingdom, and the United States, as well as the Ibero-American Multilateral Agreement on Social Security. These agreements offer exemptions in social security and other benefits.
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