Hiring in Chile

The contract sets out role, salary in CLP, working hours, place of work, duration and confidentiality terms. The EOR is the counterparty to the employee, which is what removes the need for your own entity.

Spanish is the standard contract language. Bilingual versions are common, with Spanish prevailing.

Fixed-term contracts are capped at one year, or two for managers and degree-qualified professionals. Repeated renewals invite scrutiny and most EORs default to indefinite terms.

Agree the structure from day one. Keeping the employee working after the end date makes the contract indefinite automatically, and so does a second renewal.

Some EORs insist on a fixed-term start as policy because they, not you, carry the severance risk. Ask before you agree a start date.

Overtime is capped at 2 hours a day, needs a written agreement and is meant for temporary needs. It can also be exchanged for up to 5 extra days of leave a year.

Managers and staff who genuinely work without immediate supervision can be excluded from the hours limit under Article 22, which removes overtime, but the labour inspectorate reads that exclusion narrowly. Put the position in writing either way.

Leave also grows with long service, adding a day for every 3 years beyond 10. Professional roles often add a few days on top of the statutory 15, so check the EOR's standard contract when you budget.

Sick pay comes from the employee's health insurer (FONASA or an ISAPRE) under a medical licence, with a three-day waiting period on short licences. Maternity and parental leave are funded by a capped state subsidy, so confirm whether the EOR tops up higher salaries.

There is no at-will dismissal. Every termination must rest on a legal cause, and unjustified dismissal claims add a surcharge of 30% to 100% on top of severance.

The EOR runs the process as the legal employer and will want the paperwork in order, including written notice copied to the labour inspectorate, final pay, unused leave and a signed settlement (finiquito). Pregnant employees and union officers are protected, and dismissing them needs court approval.

The cost most often missed is the gratificación legal, a statutory profit share. Most employers pay 25% of salary, capped at 4.75 minimum monthly wages a year. Complementary health insurance and life cover are standard for professional roles even though they are not mandatory.

EORs often bundle benefits through a group scheme. Ask what is included in the fee and what is billed on top.

Employer contributions add about 6.8% on top of gross salary for an indefinite contract in a low-risk role. That is before gratificación and the EOR fee. Most contributions stop at a monthly earnings ceiling of 90 UF, so the percentage falls for senior hires.

Unpaid contributions are the trap. Under the Bustos law, a dismissal has no effect while pension or health contributions are outstanding, and salary keeps accruing until they are paid, so check the EOR's payment record.

Ask whether the EOR employs through its own Chilean entity or a partner, because the employing entity's documents go into the application. The 85% rule applies to the employer, not to you: employers with more than 25 workers must keep at least 85% of staff Chilean, though specialist technical staff are excluded from the count.

Set start dates after approval, not before.

Get the data processing terms in the service agreement, not just the privacy notice. Cross-border transfers need a lawful basis under the new regime.

Ask where payroll data is hosted and who in the partner chain can see it.

Incorporation here is quick through the online company registry, but the running cost is the point: a Chile-resident legal representative, tax IDs for foreign shareholders, monthly tax filings, electronic invoicing, accounting and an electronic payroll book set an annual floor.

Permanent establishment risk is about what people do, not where payroll sits. Revenue-generating activity can create exposure regardless of the employment route.