Chile has a very open and transparent import regime - probably the simplest in Latin America.
Currently her common external tariff is 6% based on CIF value of goods. Exceptions are 'luxury' items eg cars, alcoholic beverages, where an additional tax is levied.
In 2003 the reciprocal preferential trade agreement with the European Community came into force. The provisions of the treaty allow over 90% of goods produced within Chile and the countries of the European Community may enter each other's territory duty free.
VAT (or IVA) is currently 19%, levied on the CIF value plus customs duties for imports.
Chile uses the Harmonised Tariff System (HS).
Import licensing
Most imports into Chile are free of controls but all imports valued at over US$3,000 require an import licence issued by the Central Bank. The licence is used for statistical purposes rather than control.
Pricing and information
All pricing should be in US$ CIF. Sterling is not an option.
Ideally product literature should be translated into Spanish. If yours is not, it is almost certain that your competitors' is, offering them an automatic advantage.
Payment terms
Chileans normally accept to pay by Letter of Credit for an initial purchase from a new supplier; but as this is expensive (interest rate charged is Libor plus 4.5%), importers will expect easier payment terms in subsequent transactions.
The most common method is through Bills of Exchange. Repayment terms are usually 30-60 days.
It is important to remember when pricing for market entry, that your established competitors will already have in place very competitive pricing. You must be prepared to be flexible, but satisfy yourself with the usual commercial and banking references.
Disputes
In the event of non-payment, it makes sense to use a lawyer specialising in Latin America. Although the time limit for protesting non-payment is one year after the payment date specified, it is best to begin any action as soon as possible.
Freight Forwarding
A freight agent experienced in Latin America really helps, especially at the Chilean end.
Customs procedures are quite straightforward, but the authorities are sticklers for correct documentation. If they ask for forms, they really want them.
Free Trade Zones
There are 2 Free Trade Zones (FTZ's) operating in Chile: Iquique in Region I in the North and Punta Arenas in Region XII in the South. The Free Zone of Iquique includes the port of Arica and Iquique.
The regions immediately surrounding Iquique and Punta Arenas are considered extended duty free zones and goods shipped from the FTZ's into them only pay 4% customs duties and no VAT.
Importers who have storage facilities with the FTZ, pay duties and VAT only when the products are removed by their clients. Goods can be repackaged, labelled, assembled, displayed and re-exported from the FTZ's, lowering the importer's costs, improving cash flow and speeding up import procedures because goods are available immediately.
Product requirements/standards
ISO9000 standards have been included as Chilean standards by the National Standards Institute. Certain products, such as industrial safety, building and construction materials, must comply with specific local requirements set by the supervising entity. For further details in the UK, contact Technical Help for Exporters (THE) Tel: 020 8996 7111.
Methods of doing business
The most common distribution channels are through agents, distributors and wholesalers.
When appointing agents, or entering into any contract, all legal documents should be drawn up and checked by qualified local lawyers, since contracts with Chilean parties comply with Chilean laws.
Agents have a number of rights including: remuneration, exclusivity, co-operation, loyalty and good faith and adherence to instructions. Give careful thought to your agency agreement, setting time limits and regular periods for review.
How safe is your product label or trademark?
Chile is a member of the World Intellectual Property Organisation and signed the Paris Convention for Protection of Industrial Property in 1991.
Patents
Registered patents are protected for 15 years (soon to become 20 years). Although Chile's laws provide protection for industrial patents and are generally compatible with international regulations, the law does not provide patent protection for plant/animal varieties, nor 'pipeline' nor transitional protection for pharmaceutical patents filed before 1991.
Trademarks
Registration of a national or foreign trademark grants absolute ownership for 10 years, which is renewable indefinitely.
An exporter or investor should register trademarks as soon as possible prior to starting operations in Chile.
Copyright
Chile's copyright law was revised in 1992, extending the term of protection in Chile to the author's life, plus 50 years. Computer software piracy can be a problem, as well as video and audio tape.
Industrial models
Industrial designs and models are granted protection for a non-renewable period of 10 years.
Doing Business in Chile