Introduction:

Chile has increasingly attracted attention in recent years as one of Latin America’s most stable and investor‑friendly jurisdictions, offering a combination of economic strength, favorable tax rules, and an extensive treaty network that appeals to both individuals and corporations. While not a “tax haven” in the traditional sense, Chile is often considered a regional “tax paradise” because of the strategic advantages it offers to foreign investors and expatriates when compared with other jurisdictions in the region.  

One of the most notable advantages is Chile’s territorial tax system. Foreign residents are generally subject to Chilean tax only on income sourced within the country, and foreign‑sourced income can remain outside the scope of taxation for a significant initial period after establishing residency. This system is particularly favorable for expatriates and international investors who maintain income streams abroad, as it allows a measure of tax deferral and ensures that Chile does not become an immediate global tax burden for new residents.  

From a broader perspective, Chile is recognized for its political stability, open trade policies, and well‑regulated financial system. As a member of the OECD since 2010, Chile has committed to international tax standards while still maintaining an environment that is attractive for business structuring and cross‑border activities. Its legal framework ensures predictability, which is highly valued by multinational enterprises establishing regional headquarters or investment platforms in South America.  

A significant component of Chile’s appeal lies in its network of double taxation agreements (DTAs), designed to prevent the same income from being taxed twice and to provide legal certainty for cross‑border transactions. Germany, Austria, and Switzerland all have comprehensive DTAs in force with Chile. These agreements cover key areas such as dividend, interest, and royalty payments, as well as the allocation of taxing rights, thereby reducing potential tax barriers for companies and individuals operating between Chile and these European countries. In practice, this allows German, Austrian, and Swiss businesses to optimize their tax positions while benefiting from Chile’s role as a gateway to Latin America.  

Taken together, Chile’s territorial taxation model, economic stability, OECD alignment, and carefully negotiated double taxation treaties make it a uniquely attractive jurisdiction. For both expatriates and international corporations, the country provides a set of fiscal and legal conditions that are difficult to match elsewhere in the region.

On the Map & What Others Say

Chile stretches along the southwestern edge of South America, occupying a narrow strip of land bounded by the Pacific Ocean to the west and the towering Andes Mountains to the east. Its unique geography makes it one of the longest north-to-south countries in the world, spanning more than 4,000 kilometers yet rarely more than 240 kilometers across. This orientation gives rise to an extraordinary diversity of climates and landscapes, from the arid Atacama Desert in the north—often cited as the driest place on earth—to the fertile valleys and Mediterranean-like climate of central Chile, and the glaciers, fjords, and rugged beauty of Patagonia in the far south.  

Chile’s distinctive placement on the map also grants it both natural isolation and strategic significance. Its coastal cities, including the vibrant capital Santiago and the historic seaport of Valparaíso, provide gateways to the Pacific, while the Andes act as a natural border and cultural backdrop. The country’s geography not only defines its scenery but also profoundly shapes its economy, lifestyle, and international perception.  

Travel writers and lifestyle commentators consistently note Chile’s appeal as a place to both visit and live. A contributor to National Geographic Traveler once described Chile as “a country of contrasts where deserts, vineyards, and glaciers coexist within a single, slender territory.” Bloggers focused on expat living often highlight the high quality of life in Santiago, pointing to a strong infrastructure, modern amenities, and easy access to world-class outdoor adventures. Several digital nomad lifestyle reviews describe Valparaíso as an artistic and bohemian city, famous for its colorful hillside homes, street art, and lively cultural scene.  

From adventure travel magazines to personal blogs, recurring themes include Chile’s safety compared to many of its regional neighbors, the warmth of its people, and the sense of discovery that comes with exploring such a geographically diverse nation. Whether it is trekking through Patagonia, tasting wine in the Colchagua Valley, or skiing in the Andes just a short drive from Santiago, Chile is frequently portrayed as a destination where natural splendor and modern living converge.  

In short, Chile’s location not only defines its landscapes but also underpins the cosmopolitan yet relaxed lifestyle that has caught the attention of travelers, expatriates, and cultural commentators around the globe.  

How the Tax System Works in Chile

Chile’s tax system operates on a framework that is relatively modern and transparent, particularly compared to other countries in Latin America. It combines both national and municipal levies, with a strong emphasis on income taxation and value-added tax as its central revenue sources. Administered primarily by the Chilean Internal Revenue Service (Servicio de Impuestos Internos, or SII), the system applies to both residents and nonresidents, but the scope and calculation of liabilities vary significantly depending on an individual’s or company’s status and the type of income.  

At its core, the Chilean system is built around three pillars: personal taxes, corporate taxes, and indirect or other mandatory contributions. Personal income tax rates operate on a progressive scale that can result in relatively high effective taxation for top earners; corporate taxation follows a semi-integrated system with different rates depending on the regime elected; and consumption-based taxes, primarily the Value Added Tax (VAT), account for a substantial share of government revenue. Municipal taxes and specific sectoral levies add another layer of responsibility for both individuals and businesses.  

To put this in perspective, an individual earning the equivalent of around USD 15,000 per year may see a very limited tax liability, while a high-income professional earning USD 100,000 or more annually will be subject to progressively higher rates that can approach the top bracket. On the corporate side, companies face headline rates in the range of roughly 25–27% of annual profits, though the exact burden often depends on the system they use for integrating corporate tax with shareholders’ personal tax obligations. For businesses and consumers alike, a flat 19% VAT applies to most goods and services, which is broadly in line with many European economies.  

The Chilean model is often described as investor-friendly, due in part to its extensive treaty network and generally clear rules around taxation of cross-border activities. However, it also maintains anti-avoidance standards and reporting requirements that expatriates and multinational enterprises must navigate carefully.  

In the sections that follow, we will look more closely at each of the major components of the Chilean tax system:  

• Personal Taxes: How residency is determined, how income is categorized, and what progressive tax brackets mean for working individuals and expatriates.  

• Corporate Taxes: The semi-integrated system, available regimes for local and foreign investors, and how distributions to shareholders are treated.  

• Other Taxes: Including VAT, municipal business license taxes, real estate contributions, and sector-specific levies that affect both individuals and corporations.  

Together, these elements form a comprehensive tax environment that shapes Chile’s attractiveness to both residents and foreign investors, while also ensuring steady revenue for the state.  

Taxation of Individuals

Chile operates on a worldwide taxation system for residents and a source-based system for non-residents, making the residence status of an individual a critical factor in determining tax liability.  

Tax Residence Rules

An individual is generally considered a tax resident in Chile if they remain in the country for more than 183 days within a single calendar year, or over a rolling 12-month period spanning two years. After three consecutive years of continuous residence, individuals are deemed domiciled and thereby fully subject to worldwide taxation. During the first three years of residence (counting from the date of arrival), foreigners are subject only to Chilean-source income taxation, unless they elect to be taxed on worldwide income earlier.  

Income Tax Structure for Individuals

Chile applies a progressive income tax system to residents, known as the Impuesto Global Complementario (IGC). This is a personal, annual, progressive tax on all income earned, with rates ranging from 0% up to 40%. For employees, income tax is often withheld monthly as the Impuesto Único de Segunda Categoría (a withholding tax on employment income), which functions as a credit against the individual’s annual IGC liability.  

As an illustration:  

• A Chilean resident receiving income equivalent to around US$20,000 in a year may fall into a lower bracket (under 10%).  

• Someone earning in excess of US$200,000 annually could be subject to the top marginal rate of 40%.  

Taxation of Non-Residents

Non-residents (those who do not meet the 183-day test or are within their first three years of residence) are taxed only on Chilean-source income. The general withholding tax rate applicable to non-residents is 35%, though for employment income, the withholding is typically 20%. These rates may be reduced under Chile’s network of double tax treaties.  

Deductions and Allowances

Resident taxpayers may benefit from several deductions and credits when calculating their annual tax:  

• Personal allowances, such as family-related deductions, are limited compared to some jurisdictions.  

• Contributions to mandatory pension and health systems are deductible.  

• Certain voluntary savings instruments (APV savings plans) and mortgage interest payments may also offer tax benefits.  

Special Regimes for Foreign Nationals and Digital Nomads

Chile does not have a formal "digital nomad visa" or a special tax holiday for expatriates comparable to those of some competing jurisdictions. However, the three-year exemption on foreign-source income effectively provides a temporary regime favorable to expatriates moving to Chile. This allows new residents—such as entrepreneurs, foreign employees, or remote workers earning from abroad—to limit taxation to Chilean-sourced income during their initial years in the country.  

Given Chile’s growing role in the digital economy, foreign taxpayers working remotely from Chile but earning income sourced outside the country may find the first three-year rule particularly advantageous. Nonetheless, it is important to monitor the evolution of tax reforms, as Chile has, in recent years, debated adjustments to individual income taxation to broaden the base and increase collections.  

In summary, Chilean individual taxation is progressive and residency-driven, with an initial three-year window that can be strategically beneficial to new residents. For expatriates and digital workers, understanding how residence is determined, and how Chile distinguishes between Chilean- and foreign-sourced income, is essential to effective tax planning.  

Taxation of Corporations

Chile’s corporate tax system is structured around a framework known as the First Category Tax (Impuesto de Primera Categoría), which applies to companies on their net taxable income derived from Chilean sources. The system has undergone reforms in recent years, introducing distinct regimes designed to encourage investment while ensuring proper revenue collection. 

At present, the standard corporate income tax rate is 27% for companies under the "Partially Integrated Regime," which is the most common system. This regime applies broadly to medium and large businesses and allows shareholders to credit part of the corporate tax already paid against their personal tax liability on dividend distributions. Smaller enterprises that fall under the “Pro-Simplified Regime” benefit from a reduced 25% corporate rate, alongside simplified compliance and accounting requirements.  

Deductible expenses for corporate tax purposes generally include those that are necessary to produce income and are duly documented. Typical deductions encompass salaries and wages, rental expenses, depreciation of assets, interest on business loans, and certain professional fees. However, expenses must be directly linked to generating taxable revenue, and any "luxury" or non-business-related expenditures are explicitly excluded. For example, a company can deduct reasonable travel costs tied to client meetings or project work, but personal or recreational travel would not qualify.  

Chile also provides targeted incentives to stimulate investment in specific sectors and regions. One of the most notable examples is the Tax-Free Zone in the extreme regions of the north (Arica, Iquique) and the far south (Punta Arenas and Tierra del Fuego). Businesses operating in these special zones may benefit from lowered customs duties, exemptions from VAT on certain transactions, and other preferential treatments that substantially reduce operating costs. For instance, importing equipment into these zones can be considerably cheaper than in Santiago or Valparaíso, representing potential savings of tens of thousands of US dollars for capital-intensive projects.  

Additional incentives exist for strategic industries. Export-oriented companies, particularly in technology and services, can access benefits under Chile’s agreements designed to boost competitiveness abroad. Moreover, the government offers accelerated depreciation regimes intended to encourage investment in machinery and infrastructure. For example, allowing an asset such as industrial equipment worth around USD 200,000 to be depreciated more quickly provides significant early tax relief.  

Overall, Chile’s corporate income tax structure balances relatively moderate tax rates with targeted incentives, making it an attractive jurisdiction for both local entrepreneurs and foreign investors, particularly those looking to establish operations tied to regional trade and resource development. The system’s rules on deductible expenses and its special preferential zones are important levers by which companies can optimize their effective tax burden.  

Other Significant Taxes

Chile’s tax system includes several important taxes beyond personal and corporate income tax. These have significant implications for residents, nonresidents, and foreign investors, particularly in the areas of capital income, consumption, and wealth transfers. Below is an overview of the most relevant supplementary taxes in Chile.  

Capital Gains Tax

Capital gains taxation in Chile depends on the type of asset and investor profile.  

• Securities: Gains from the sale of listed shares on a stock exchange may be exempt if certain holding period and transactional requirements are met. Otherwise, capital gains are usually taxed as ordinary income at progressive rates (up to 40%) for residents, or a flat 35% withholding for nonresidents.  

• Real Estate: Sale of real property can trigger capital gains tax, although an exemption of roughly USD 250,000 (150 UTA – Chilean Tax Units) is available for individuals. Gains above this threshold are taxed at progressive income tax rates.  

• Cryptocurrencies: The Chilean tax authority (SII) treats crypto disposals as taxable events. Profits are categorized as capital gains or miscellaneous income, and subject to ordinary income rates for residents, or 35% flat tax for nonresidents.  

Dividends

Dividends in Chile are subject to a combined tax mechanism: companies first pay the corporate income tax (27%) on profits, and distributions to shareholders are then subject to personal income tax with a credit for the corporate tax already paid. For nonresidents, dividends are generally subject to a 35% withholding tax, with certain treaty-based reductions available.  

Value-Added Tax (VAT)

Chile levies a broad-based VAT at 19%, applicable to most goods and services, including certain digital services provided by foreign suppliers. While this rate is consistent across the economy, VAT exemptions exist for specific sectors, such as exports. For context, purchasing a service for approximately USD 1,000 results in around USD 190 in VAT.  

Wealth and Property Tax

Chile does not impose a broad annual wealth tax. However, there is an annual property tax (“Contribuciones”) applied to real estate. The rate varies between 0.98% and 1.2% of the fiscal value of urban properties (often below market value) and a lower scale for agricultural property. For instance, a residential property valued at USD 300,000 for tax purposes could incur between USD 2,940 and 3,600 annually in property tax.  

Inheritance and Gift Tax

Transfers of wealth via inheritance or gifts are taxable under a progressive system, with rates ranging from 1% to 25%, depending on the relationship between donor and recipient and the value of the transfer. Close relatives pay lower rates, while more distant beneficiaries face higher rates. For example, an inheritance of USD 500,000 to a child might result in a combined tax burden of 5–10%, whereas the same inheritance to an unrelated person could exceed 15%. 

Social Security Contributions

Social security contributions in Chile are largely employee-funded, with employers responsible for collecting and remitting them. The mandatory pension contribution is 10% of gross salary, plus administrative fees (around 1%). On top of this, employees contribute 7% of salary toward health insurance (either through the public system FONASA or private providers known as ISAPREs). Unemployment insurance contributions are typically shared, with employees paying 0.6% and employers around 2.4%. For example, an employee earning USD 2,000 per month may contribute roughly USD 340–360 monthly toward pension and health, while the employer contributes an additional USD 50 or more for unemployment coverage.  

Together, these taxes complement Chile’s income tax regime and create a relatively comprehensive system designed to tax income, consumption, property holdings, and intergenerational wealth transfers. For expatriates and investors, understanding these obligations is essential to effective tax planning when living, investing, or doing business in Chile.  

Who Benefits Most from Moving to Chile?

Chile’s tax system and economic environment create specific advantages for certain groups of foreign residents, while posing challenges for others. Understanding who stands to gain the most from relocating to Chile requires looking at its residency-based taxation, business landscape, and lifestyle conditions.  

Entrepreneurs and Business Owners  

Chile is consistently ranked as one of the most business-friendly environments in Latin America. Its transparent regulatory framework, strong rule of law, and numerous free trade agreements make it particularly attractive for entrepreneurs seeking a stable base to operate across the region. Startups may also benefit from programs like “Start-Up Chile,” a government-backed accelerator that has attracted thousands of entrepreneurs worldwide. From a tax perspective, corporate rates and compliance procedures are generally straightforward compared to neighboring jurisdictions, which can reduce the administrative burden for small business owners.  

Digital Nomads and Remote Workers  

For digital professionals, Chile offers reliable infrastructure, widespread internet access, and an increasingly vibrant tech community. Importantly, because Chile taxes residents on their worldwide income only after they have been in the country for more than three years, newly arrived expatriates enjoy a temporary window during which only Chilean-source income is taxable. This three-year exemption can be extended at the government’s discretion, making Chile appealing for remote workers who expect to generate most of their income from outside the country.  

Retirees

Retirees who rely on foreign pensions, investment income, or savings can also benefit from Chile’s transitional exemption on foreign-source income during the initial years of residency. That period provides tax relief while they settle in, and Chile’s relatively affordable healthcare system and high standard of living—particularly in cities like Santiago or coastal towns such as Viña del Mar—can add to the appeal. However, after the exemption period ends, worldwide income becomes taxable, which may make Chile less competitive compared to jurisdictions offering permanent territorial tax systems.  

Who Might Find It Less Suitable

Not all expatriates will find Chile’s system advantageous. High-income earners with significant global investment portfolios may face heavy tax obligations once they become fully domiciled and liable for worldwide taxation. Likewise, individuals seeking low-tax or tax-free jurisdictions may find Chile’s relatively high personal income tax rates and comprehensive reporting requirements unattractive. Additionally, those looking for immediate or permanent foreign-source tax exemptions may prefer other Latin American countries offering more favorable regimes for expatriates.  

In short, Chile is often best suited for entrepreneurs seeking a gateway to Latin American markets, digital nomads who can take advantage of the foreign income exemption period, and retirees who value stability and infrastructure while planning around the eventual tax implications. For ultra–high-net-worth individuals or long-term residents with extensive cross-border income streams, however, Chile may not present the most tax-efficient choice.  

Special Considerations for Relocation

Relocating to Chile involves both legal and practical steps that prospective expatriates should carefully plan in advance. While Chile is known for its stable economy and high quality of life in Latin America, the transition requires attention to immigration formalities, daily living considerations, and logistical details. Below are key aspects to take into account when preparing for a move to Chile.  

Residence Permits and Visas

The first step is securing legal residence. Chile’s immigration framework offers several visa options depending on the purpose of stay. Common choices include the Temporary Residence Visa, intended for those relocating for work, family unification, retirement, or investment, and the Work Visa, tied to an employment contract with a Chilean company. Retirees or those with independent financial means may apply under categories that demonstrate sufficient monthly income or assets. After a period of lawful residence, often one to two years depending on the visa type, individuals may transition to Permanent Residency, a status that provides greater stability and eventually may lead to naturalization. Applicants should prepare to provide notarized documents, proof of income, and, in some cases, police background checks from their country of origin. Since Chile has moved toward more digitalized immigration processes in recent years, applications and renewals are typically initiated through the National Migration Service portal.  

Healthcare System

Chile operates a mixed healthcare system combining both public and private options. All residents are required to contribute to a health insurance plan; employees typically pay 7% of their income toward coverage. The public system is administered through FONASA (Fondo Nacional de Salud), offering subsidized care at state hospitals and clinics. While comprehensive, the public system may involve longer wait times. Many expatriates choose to supplement or replace FONASA with a private plan through ISAPREs (Instituciones de Salud Previsional), which provide broader coverage and access to private facilities. Those relocating should consider their expected healthcare needs, budget, and whether international health insurance may be preferable, especially during the initial adjustment period.  

Opening a Bank Account

Access to local banking is essential for managing day-to-day life in Chile, but the process can be restrictive for newcomers. To open a current account (cuenta corriente), applicants generally must be permanent residents, have a consistent income in Chile, and demonstrate a local credit history. As an alternative, many new arrivals start with a “CuentaRUT,” a basic debit account offered by BancoEstado, which is widely accepted and easier to obtain with just a valid Chilean ID number (RUT). Obtaining a RUT is itself an essential step in relocation, as it functions similarly to a tax identification number and is required for most official transactions, including employment, property rental or purchase, and utilities.  

Importing Personal Items

New residents relocating to Chile may import household goods and personal effects duty-free within six months of arrival, provided that they have established their residence status. Items must be used and for personal use rather than for resale. A detailed inventory is required, and shipments are subject to inspection by Chilean customs authorities. Restrictions apply to certain goods, such as foodstuffs, plants, and firearms, which may require special permits or are prohibited. It is advisable to work with an international moving company experienced in Chilean customs procedures to minimize delays or unexpected costs.  

In summary, a smooth transition to Chile hinges on careful planning of immigration status, familiarization with the healthcare system, securing practical access to financial services, and complying with customs requirements for personal belongings. With preparation and an understanding of these practical considerations, expatriates can establish themselves effectively in Chile and take advantage of the opportunities the country has to offer.  

The 'Boris Becker Trap': Avoiding a Sham Relocation

The concept commonly referred to as the “Boris Becker Trap” highlights the dangers of attempting a superficial or purely formal change of residence for tax purposes—without genuinely moving the center of one’s life abroad. Individuals relocating from high-tax jurisdictions such as Germany, Austria, or Switzerland to Chile must be mindful that simply registering an address in Santiago or obtaining a Chilean residency permit does not, in itself, sever tax ties with the home country.  

Tax authorities in continental Europe apply the principle of the “center of vital interests” when determining residency. This standard considers not only where a person spends most of their time but also where their closest personal and economic connections lie. Key factors include the location of family members, the habitual residence of a spouse or children, the primary place of business activities, memberships in clubs or professional associations, and even where one maintains a physician or bank relationships. If the majority of these vital interests continue to be situated in Germany, Austria, or Switzerland, the tax authorities there may argue that the person has not genuinely left—and therefore remains fully subject to domestic taxation.  

A “sham” relocation can have serious consequences. If revenue authorities conclude that the individual’s move to Chile was fictitious or purely tax-driven without corresponding lifestyle changes, they may impose back taxes as though the person had never left, along with interest and potentially significant penalties. In high-profile cases, the reputational consequences can be just as damaging as the financial ones, as claims of tax evasion often receive substantial media attention.  

For this reason, those considering Chile as their new tax residence must take deliberate steps to establish genuine personal and economic connections in the country. This includes residing in Chile for a substantial part of the year, integrating socially and professionally, moving close family members or dependents if possible, and maintaining local financial infrastructure. Only by demonstrating that Chile has become the true center of life can one effectively guard against dual residency claims and the costly dangers of being caught in the Boris Becker Trap.  

What Makes Chile an Attractive Place to Live?

Chile offers a compelling lifestyle that extends far beyond its tax regime, attracting expatriates, retirees, and professionals for an array of quality-of-life factors.  

One of the most striking features of the country is its extraordinary geography and natural diversity. Stretching over 4,000 kilometers along the Pacific coast, Chile encompasses everything from the arid Atacama Desert in the north, one of the driest places on earth, to lush vineyards and fertile valleys in central regions, to the breathtaking fjords, glaciers, and mountains of Patagonia in the south. Outdoor enthusiasts find unrivaled opportunities for hiking, skiing, surfing, and exploring pristine national parks and nature reserves. This connection to nature is complemented by a general emphasis on sustainability, with Chile increasingly investing in renewable energy and conservation.  

In terms of lifestyle, Santiago and other major cities such as Valparaíso and Concepción offer cultural richness, vibrant nightlife, and a growing culinary scene influenced by both traditional Chilean flavors and international cuisine. Santiago, in particular, combines the amenities of a modern capital with proximity to both mountains and beaches, making weekend escapes easy and accessible. Chile’s strong tradition of literature, music, and the arts further enhances its cultural allure, while numerous festivals and local traditions reflect the country’s diverse heritage.  

The climate is another draw. Thanks to its length and varied geography, Chile enjoys a wide range of microclimates—from Mediterranean conditions around Santiago and Valparaíso, to cooler, temperate zones in the south, and desert landscapes in the north. Many expatriates appreciate the central region’s mild, sunny weather, which supports an outdoor lifestyle throughout much of the year.  

Safety and stability also contribute to Chile’s appeal. Among Latin American countries, Chile consistently ranks as one of the most politically and economically stable, with relatively low crime rates compared to regional averages. This reputation for security provides comfort to foreign residents and retirees who prioritize peace of mind in their relocation decisions.  

Infrastructure is a further advantage. Chile boasts reliable telecommunications, modern healthcare facilities, and quality private and public education options. The country’s transportation system—particularly in urban centers—is well developed, with modern highways, an efficient metro in Santiago, and a growing network of domestic flights that make its elongated geography more navigable. Access to international travel is also convenient, as Santiago serves as a key hub with direct flights to major cities in the Americas, Europe, and Oceania. 

Altogether, Chile offers an appealing blend of natural beauty, cultural vibrancy, safety, and modern amenities. For those considering relocation, these attributes make the country not only practical but also deeply enjoyable as a place to live.  

Cost of Living

When evaluating Chile as a potential destination for expatriates, the cost of living is an important factor to consider, especially in comparison with Western Europe. Overall, Chile is generally more affordable than countries such as Germany, France, or the Netherlands, though the cost structure varies significantly between Santiago, the capital, and secondary cities or regional areas.

Housing and Rent  

Rental costs in Chile are substantially lower than in most Western European capitals. In central Santiago, a one-bedroom apartment typically rents for the equivalent of USD 500–700 per month, while in upscale neighborhoods such as Las Condes or Vitacura, prices may rise to USD 800–1,200. By contrast, comparable apartments in cities like Paris, Amsterdam, or Munich often exceed USD 1,500–2,000 monthly. Outside of Santiago, the difference is even more pronounced: in cities such as Valparaíso, Concepción, or La Serena, a one-bedroom apartment may cost as little as USD 350–500 per month.

Food and Groceries

Day-to-day food expenses are also more favorable for residents in Chile compared with Western Europe. A meal at a mid-range restaurant generally costs USD 10–15 per person, while in major European cities, the equivalent meal could easily be USD 20–30. Grocery prices follow a similar pattern: staples such as bread, rice, meat, and fresh produce are considerably cheaper in Chile, particularly when purchased from local markets rather than supermarkets. For example, a kilogram of fresh chicken might cost USD 3–4 in Chile, versus USD 7–9 in many parts of Western Europe.

Services and Utilities

Service-related expenses also present cost advantages. Monthly utilities (electricity, heating, cooling, water, and waste) average around USD 80–120 for a standard apartment in Santiago, compared with USD 150–250 across most Western European capitals. Internet service is readily available and comparatively inexpensive, often costing between USD 25–35 per month with reliable high-speed connections. Personal services, such as domestic cleaning, childcare, and taxi fares, similarly come at a lower price point relative to Western Europe, reflecting lower wage costs within Chile.

Overall Comparison

In broad terms, expatriates can expect their living expenses in Chile, even in Santiago, to range between 30–50% lower than in Western European capitals. However, those seeking imported goods or international luxury brands should be aware that these items may be significantly more expensive than in Europe due to customs duties and limited availability.  

For expatriates, this creates a balanced picture: core expenses such as housing, local food, and services are markedly more affordable, while imported consumer goods can carry a premium. As a result, many find their purchasing power extends further in Chile than it would in much of Western Europe, particularly when focused on locally sourced goods and services.

Tax Aspects of Leaving Your Home Country (e.g., Germany, Switzerland, Austria)

When individuals from countries such as Germany, Switzerland, or Austria consider relocating to Chile, it is important to understand that leaving one’s home country does not necessarily sever all tax obligations immediately. Many European jurisdictions have established rules that anticipate or regulate taxpayers shifting their residence abroad, with particular focus on business owners and individuals with significant asset holdings.  

In Germany, for example, the concept of Wegzugsbesteuerung (exit tax) is especially relevant for shareholders of corporations. Under this regime, if a German tax resident who holds at least 1% of a corporation’s shares moves abroad, they may be deemed to have disposed of those shares at fair market value, even if no actual sale has occurred. The resulting latent capital gain can be subject to taxation in Germany at the time of departure. This rule is designed to prevent taxpayers from moving to low‑tax jurisdictions and selling their shares without incurring German tax liability. While certain deferral arrangements may be possible within the European Union/European Economic Area, a move to a non‑EU country such as Chile generally triggers immediate taxation unless very specific conditions are met.

In addition to exit tax considerations, Germany and many comparable jurisdictions retain what is known as limited tax liability (beschränkte Steuerpflicht) for former residents. After departure, individuals may still be liable for tax in their former home country on specific categories of income. For Germany, this includes income derived from German‑source employment, business operations, rental income from German real estate, or dividends and other returns from substantial shareholdings in German companies. The same general principle applies in Austria and Switzerland, which tax certain domestically sourced income at the level of non‑resident individuals.  

This means that even after establishing tax residency in Chile, individuals with ongoing ties to assets or business ventures in their country of origin will need to carefully coordinate tax compliance in both jurisdictions. Double tax treaties—such as the agreements Chile has signed with Germany, Switzerland, and Austria—are particularly important in these situations. They play a central role in determining taxing rights, preventing double taxation, and clarifying where specific income streams will be subject to tax.  

For business owners, entrepreneurs, and high‑net‑worth individuals, advance tax planning is therefore critical before leaving Europe for Chile. Understanding the potential consequences of exit taxation, the ongoing scope of limited tax liability, and the interplay of relevant double tax treaties helps ensure a smoother transition and minimizes unexpected tax burdens after changing residency. 

Correct Preparation for the Move

When preparing to relocate to Chile, taking a structured approach can help ensure compliance with both Chilean regulations and the administrative requirements of your home country. The following checklist outlines the essential steps to address before and during your move:  

Checklist for Correct Preparation

1. Clarify Immigration and Visa Requirements

• Determine the appropriate visa category (temporary residence, work visa, student visa, or investor visa) based on your purpose for moving.  

• Review the documents required by Chilean consulates, which typically include a valid passport, proof of income or employment, medical certificates, and criminal background checks.  

• Confirm timelines for application processing, as Chilean residence permits can take several months to be granted.  

• Consider whether you will need apostilles or official translations for your documents, as Chile often requires both.  

2. Understand Tax Residency Triggers in Chile  

• Familiarize yourself with the residency rules: in general, individuals become tax residents after residing in Chile for 183 days over a 12‑month period, or if they establish their permanent home there.  

• Plan your entry date strategically, as your tax residency start date can influence your home country’s exit taxes and the timing of your inclusion in the Chilean tax net. 

3. De‑registration in Your Home Country  

• Notify local authorities (such as municipal offices or population registries, depending on your jurisdiction) of your departure.  

• Update your tax authority with a change of address and, if applicable, file a final tax return declaring your date of departure.  

• Review whether any “exit” or departure tax applies in your current country and ensure compliance before relocating.  

• Cancel or update your national health insurance registration if you will no longer be covered under your domestic system.  

4. Review Reciprocal Agreements and Reporting Obligations

• Check whether your home country has a double tax treaty with Chile. Such agreements can reduce exposure to double taxation and provide relief for taxes paid abroad.  

• Prepare for international reporting requirements, such as financial account reporting (e.g., CRS or FATCA, depending on your citizenship and residency status).  

5. Financial and Legal Preparations

• Open or research Chilean banking options in advance, noting that identification documents and residency proof are required.  

• Assess investment or corporate structures you may already hold and how Chilean taxation could affect them.  

• Obtain international health insurance coverage for the transition period until you are formally enrolled in Chile’s health system (FONASA or ISAPRE).  

6. Practical Relocation Logistics

• Ensure continuity of utilities, pension contributions, and social security records by properly closing out accounts or transferring benefits.  

• Keep notarized and apostilled copies of key documents (birth certificates, marriage certificates, academic transcripts), which are often required for administrative processes in Chile.  

• Develop a record‑keeping system to track moving expenses, income sources, and residency days, which will assist in both Chilean and home country tax filings.  

By approaching your relocation with these steps in mind, you create a well‑structured framework to minimize legal and tax complications. Careful preparation allows you to transition smoothly into your new life in Chile while remaining compliant with the obligations of both jurisdictions.  

Automatic Information Exchange (CRS)

Chile is a participating jurisdiction in the OECD’s Common Reporting Standard (CRS), having committed to the automatic exchange of financial account information with other member countries. This means that financial institutions in Chile are required to collect and report detailed information regarding accounts held by non-resident individuals and entities. The Chilean tax authority, the Servicio de Impuestos Internos (SII), then exchanges this information with the tax authorities of other jurisdictions under reciprocal agreements.  

For individuals residing in Chile who hold foreign bank or investment accounts, the implications are significant. Many jurisdictions where Chilean residents may maintain financial assets will similarly report those holdings back to the SII under CRS. This increases the likelihood that undisclosed offshore accounts, investment portfolios, or trusts could be identified and subject to Chilean taxation. In practice, this makes it more difficult to rely on secrecy jurisdictions for tax avoidance purposes.  

Conversely, for foreign nationals who hold accounts in Chile, their Chilean banking and financial information may be shared with their country of tax residence, provided that country also participates in CRS. This can expose undeclared Chilean assets to scrutiny from their home tax authority.  

Overall, Chile’s participation in CRS underscores the importance of full compliance and transparency in relation to foreign financial holdings. Taxpayers with offshore accounts should be aware that information is automatically exchanged and that failure to report these assets properly can result in penalties, additional tax assessments, and potential reputational risks. For individuals relocating to Chile, it is essential to understand both the domestic reporting obligations and the cross-border information-sharing environment now firmly in place.