How Can Foreign Companies Hire Employees in Chile?

Chile's Labour Code generally governs employment performed in Chile, regardless of the employer's location, although some workers are subject to other legal regimes. That is why foreign companies that hire employees in Chile pick the legal route before they pick the candidate.

In this blog, we explain how foreign employers can hire in Chile. We cover hiring routes, permits, contracts, severance, payroll costs and employer registrations. We flag 2025-2026 figures where rates change each year. Last reviewed: 2 November 2026.

What Are the Best Ways to Hire Employees in Chile?

Three routes dominate in practice: incorporate a Chilean company, register a branch of your parent company, or engage an employer of record for a faster start.

Chile is open to foreign employers, with no general local-shareholder requirement in most sectors. According to the Dirección del Trabajo and Chile's Labour Code, employment contracts must identify the employer and state the employment terms. According to the Servicio de Impuestos Internos (SII), employers also handle payroll tax withholding, while social security contributions are declared through Previred.

Your choice of route should track your commitment level, because businesses expanding into multiple markets often test Chile with a light footprint before formalising a permanent entity. In practice, we see two mistakes most often: loosely documented engagements, and treating a contractor as a substitute for a real employment structure. Both can lead to inspections, back payments and fines; courts resolve disputed employment claims.

1. Incorporate a Chilean company

A Sociedad por Acciones (SpA) or a limited liability company becomes the direct employer. Traditional incorporation generally requires a notarial deed, Commercial Registry registration and Official Gazette publication; eligible companies may also use the simplified online regime. Timelines vary. This route suits companies committed to Chile beyond a market test.

2. Register a branch of your parent

Your overseas company employs Chilean staff directly through a registered branch. Parent documents must be appropriately apostilled or legalised and translated where required before filing. Allow time for these formalities. Some tenders and corporate customers prefer contracting with the parent entity.

3. Use an employer of record

A local provider may employ workers under a compliant arrangement, but supplying workers for direction by your managers is subject to Chile's temporary staffing and subcontracting rules. Setup can take days rather than weeks, which suits small teams, first hires and remote-first businesses.

4. Engage independent contractors

Permissible for genuine project work, but substance-over-form tests apply. If the relationship looks like employment in practice, the Labour Directorate can inspect and sanction breaches, while disputed severance entitlement is determined by the courts.

Do Foreign Hires Need a Work Permit in Chile?

Foreign hires need immigration status that permits work; temporary residence for lawful remunerated activities is one route.

According to the Servicio Nacional de Migraciones (SERMIG), Chile's migration authority, temporary residence is available for people carrying out lawful remunerated activities, including employees.

Timing matters more than employers expect. Confirm the candidate's work authorisation before employment begins. Sequence the offer, contract and start date accordingly.

1. Apply for the appropriate residence permit

SERMIG accepts applications for temporary residence for lawful remunerated activities, generally from abroad. An employment contract or a formal job offer may support the application. Permit holders can generally change employers without notifying SERMIG, except for the 90-day permit granted on a job offer.

2. Watch the foreign-worker quota

Under the Labour Code, employers with more than 25 employees must generally have at least 85% Chilean workers. The calculation excludes specialist technical staff. Some foreign workers count as Chilean, including those with over five years' residence or qualifying Chilean family ties.

3. Hire permanent residents like local staff

Holders of permanent residence face no contract-linked conditions. They can usually be hired on the same terms as Chilean citizens. Permanent residence alone does not remove a worker from the quota calculation.

What Are the Documentation and Registration Rules for Chilean Employment Contracts?

Employment contracts must be documented within the applicable deadline and registered electronically with the Labour Directorate.

An employment relationship can exist before the contract is written. According to the Labour Directorate, both parties must generally sign a written contract within 15 calendar days after work begins. The deadline is five days for a contract for a specific job or service, regardless of its duration, or for a contract lasting less than 30 days. Special rules may impose shorter deadlines for certain occupations. Provide a Spanish copy or an accepted translation; statutory terms apply even where the document is silent.

According to the Dirección del Trabajo (Labour Directorate), employers must register signed contracts electronically within 15 business days of signing. Employers must also maintain required labour records. Late registration can result in fines.

1. Choose the right contract type

Open-ended (indefinido) is the default. Fixed-term contracts are generally capped at 12 months, with exceptions, and can convert to open-ended employment if work continues past the term. Project contracts end when the task does.

2. Cover the statutory essentials

The contract must state identification details, role, remuneration, place of work, hours, start date and duration. Unlawful clauses are void, with the statute filling the gap rather than the whole contract failing.

3. Follow the termination and severance rules

Chile has no at-will dismissal; a legal cause is required. Business-needs dismissals call for 30 days' notice or pay in lieu. Eligible employees with at least one year of service generally receive 30 days' severance per year, subject to statutory rounding and a cap of 330 days.

How Do You Register as an Employer in Chile?

Five steps carry most foreign employers from zero to compliant payroll: form the entity, obtain the tax number, enrol in social security, register contracts digitally, then run the monthly cycle.

Registration is procedural rather than political — Chile welcomes foreign employers — but the sequence matters. Plan the sequence before your first employee starts. Some filings follow signature and have their own deadlines.

Many groups hand this stage to a provider offering international accounting services through a vetted Chilean member firm, so the new entity plugs into group reporting from day one. Our member success stories include comparable multi-country rollouts where hiring was the first milestone, not the last.

Step 1: Incorporate and obtain the employer tax number

For a conventional incorporation, sign the SpA or Ltda deed before a Chilean notary, register the extract with the Commercial Registry and publish it in the Official Gazette. Obtain the employer RUT (tax roll number) from the Servicio de Impuestos Internos (Internal Revenue Service, SII). Branches file appropriately apostilled or legalised parent documents, with translations where required.

Step 2: Enrol with the social security bodies

Set up the applicable payroll contributions for:

• Each worker's AFP pension administrator
• The worker's health insurer, Fonasa or Isapre
• AFC unemployment insurance
• Occupational accident insurance
• SANNA insurance

Caja de Compensación affiliation and SENCE-related training arrangements are optional. Their funding depends on the arrangement; neither is a general mandatory employer payroll levy.

Step 3: File contracts digitally

Register each signed contract on the Labour Directorate's electronic platform within 15 business days of signing. Maintain digitalised labour files ready for inspection.

Step 4: Set up payroll and monthly filings

Run monthly declarations through Previred, withhold income tax for payment to SII, and keep wage records that reconcile with the digital labour file.

Step 5: Meet health and safety duties

Mandatory accident insurance under Ley 16.744 applies from the first employee. Workplaces with more than 25 workers must also establish a joint employer-worker safety committee.

What Does Employing Staff in Chile Cost?

From 1 May 2026, the monthly minimum wage is CLP 553,553 for workers over 18 and up to 65. Employer contributions vary by insurance rate and contract type.

Two numbers drive most budgets: the gross salary you offer and the mandatory contributions loaded on top. Chile funds pensions, health, unemployment and accident cover through monthly contributions, declared and paid through the Previred consolidated platform.

According to the Superintendence of Pensions, the employer pension contribution is 3.5% from August 2026 through July 2027. The rate includes disability and survivor insurance funding and changes during the reform phase-in. From August 2025 through July 2026, the new reform contribution was 1%, with disability and survivor insurance funded separately at the applicable rate. No 13th month is mandatory in Chile. The Labour Directorate says statutory profit sharing applies when the legal conditions are met, including qualifying net profits. One calculation option pays 25% of annual remuneration, capped at 4.75 monthly minimum wages per worker.

1. Pay at or above the minimum wage

The statutory monthly minimum is at CLP 553,553 from 1 May 2026 for workers over 18 and up to 65. Verify the current rate before budgeting.

2. Schedule within the working-time rules

The ordinary working week fell from 44 to 42 hours on 26 April 2026. It is scheduled to fall to 40 hours in 2028. Overtime carries a 50% surcharge and is capped at two hours a day.

3. Budget leave and holidays

Annual leave is 15 working days after one year of service, rising in the far-southern regions. Chile also observes around 18 public holidays a year, and employee-side deductions vary with the worker's circumstances, AFP fees, health plan and applicable contribution ceilings.

Conclusion

Hiring in Chile comes down to sequence. Choose an entity, branch, employer of record or carefully scoped contractor. Confirm work authorisation for foreign staff, sign and register contracts, and set up social security for payroll. Budget for the applicable minimum wage and employer contributions. From 1 May 2026, the monthly minimum is CLP 553,553 for workers over 18 and up to 65. Employee-side deductions vary by worker and plan.

Getting the order right is what protects you. We help clients coordinate hiring and payroll with local member firms. Late contract registration, missing work authorisation and contractor misclassification can create costly problems.

As a global network of independent professional firms, 3E Accounting Global connects foreign employers with vetted Chilean member firms for entity setup, permit sequencing, contract registration and payroll compliance. If hiring in Chile is on your 2026 agenda, speak with us before the first offer goes out.

Frequently Asked Questions