Why American Startups Are Preferring Chile

Chilean Scene, News, Santiago living, SUP Partners

Chile’s capital Santiago is a well-established center of country’s cultural, political and financial hub. But the winds of startup blew pretty fast to reach Chile from northern America as the Chilean government is aiming to bring forward Santiago in global market as the heart of startup in southern America.

The idea is to put forth Chilean companies ahead in the global startup marathon. There are a number of startup initiatives that government is undertaking with a set of predetermined standards that allows Chile to pioneer the startup revolution in South America.

Tracing the history of Chilean startup, it is inevitable to ignore contribution of Chile’s accelerator program, Start-Up Chile. With an aim to provide equity-free funding, Start-Up Chile is driving the breed of young entrepreneurs in Chile.

Being a pioneer in aiding startups to set a benchmark for the generations to come, Start-Up Chile practices rigorous marketing to globalize Chile’s efforts for the expansion of its economy. One of the most prominent thing to observe is that Chile is concentrating more on technology startups.

It includes effectively utilizing mobile technology by embracing the utility of mobile app development along with the internet technology. This fact holds true in case of startups sprouting from the developing nations.

There are several reasons why Chile is looked upon as the best American hub for the startups.

Chile’s Economy is favorable for Startups

Chile is best known for its macroeconomic environment with a perfect blend of open and stable economy. One the major advantage enjoyed by Chile is its debt ratio. A controlled debt of 10% of GDP (Ref: 3 CIA World Factbook) is a clear indicator of a healthy economy. Chile has certainly put itself on the list of elite, developed countries with a striking rise in its GDP that shot up to $15000 in 2013.

Government’s perspective towards startups is fairly welcoming as the same is reflected in their policies. Because when it comes to startup policies, the Chilean government always had an optimistic perception about startup since its inception. It certainly believes that startups have a pivotal role to play in shaping up a country’s economy.

Government has taken plenty of initiatives to boost up the startup economy. It includes policy measures like giving grants to startups, including capital startup capital, providing an ideal business environment, and becoming a tax haven for the startup enthusiasts.

Consider this for example; the corporate taxes in Chile are far lower than that of its northern American competitor, United States. As of now, the Chilean government tax rate stands at 22.5%.

Chile along with Uruguay have its government-run startup programs that offer up to US$30,000. This is with regards to encouraging the spirit of entrepreneurship from across the border. Giving such a huge incentive to the budding entrepreneurs is indeed a promising gesture. Let’s be honest, nothing can be more lucrative for young and passionate entrepreneurs than this offer to persuade their dreams.

Having said that, it is not easy to get accepted under this provision. Looking at the recent figures, it reflects that out of 1715 application from more 60 countries, only 100 made it to the list.  Consider this, the cost of living for two people in a city like Santiago comes to $1500 per month, approximately. Going by this calculations, it provides a sustainable budget for two people to work full time for an idea and scale the startup gradually for almost a year.

Support from Start-Up Chile

Start-Up Chile is the most amazing that has ever happened in Chile during recent times. The beauty of this accelerating program lies in its offering of a co-working space such as CETOF. The program also offers a co-working space called CETOF that offers a free service to all its members in the form of unlimited coffee and superfast Wi-Fi access.

The idea of Start-Up Chile was itself fully funded by the Chilean government that came in the form of state-sponsored seeding. It has made its presence felt across South America prominently in the last few years.

Chile’s educated workforce is proving out to be a major asset for providing backbone to these startups. It has repertoire of educated youth which contributes heavily to the success of startup programs. Also, the cost of hiring employees is way lower in Santiago than its counterpart, Silicon Valley in San Francisco. Chile’s entrepreneurs pay $1,500 to $2,500 a month on an average to its engineers.

Now compare this to Silicon Valley’s hiring rates that shoots up to $6,000 a month. Such lower development cost is helping Start-Up Chile to intrigue startup ideas from countries like U.S, New Zealand, Singapore, and the even United Kingdom. This initiative is certainly driving young blood in Chile’s economy as one of the research indicates a growth of 1.5% in Latin America over the last decade. The best part is that it has 57% of the population under 30 years old.

Chile has certainly seized the global attention with Start-Up-Chile’s way of providing a platform for promising entrepreneurs. There are plenty of companies like Suede Lane (Toronto) that have shifted their based and moved to Chile to make the most of this thriving entrepreneurial community. Chile relies heavily on its open, stable, yet a dynamic economy to surface itself above others in Latin America to become a tech startup hub.

Chile offers a perfect business environment

More than its resonating economy, Chile offers a perfect modern-day infrastructure for a startup to nurture itself. Consider the advantage of increased broadband accessibility and the advent of cloud services. Moreover, venture capitalists are also focusing their investments in the Chile compared to other South American nations.


It has certainly cut down the costs for setting up and running an online business. In fact, such technology infrastructure gives a perfect place for startups to evolve in a better way. Also, there is a constant shrink of an information gap as more and more people are gaining internet access. These are important parameters for any tech startup to flourish and Chile has it.

More than just $40,000, tax saving schemes, and a platform, Chile offers open arms with a warm heart for the right people who has the power to transform a nation with a single idea. All that one is required to do is dedicate everything for a year or so in developing the idea to its full capacity. Chile is expected to keep attracting foreign startups to get their base in its country by providing such favorable environment.


Author Bio:

bioShahid Mansuri co-founded Peerbits, one of the leading mobile app development companies, in 2011. His visionary leadership and flamboyant management style has yield fruitful results for the company. He believes in sharing his strong knowledge base with leaned concentration on entrepreneurship and business. Being an avid nature lover, he likes to flaunt his pajamas on beach during the vacations.


Gravtar Associated ID : mansuri@peerbits.com

LinkedIN Profile: https://www.linkedin.com/in/mansurishahid