Cross-Border Remote Work FAQs Chile

Assume that a foreign national employee of a foreign company wishes to work remotely for a period of time in your country performing services exclusively for the foreign company and not interacting with the local market.

Work authorisation

A. Is work authorisation required? If so, please provide a brief description of the type of visa, procedure, processing time, etc.

Generally, foreigners are prohibited from engaging in remunerated activities unless they hold a valid residence permit or work authorisation. In specific cases, the National Migration Service (SERMIG) may authorise foreign tourists to apply for a special permit to work in the country for a period not exceeding 30 days, extendable.

Under the Migration Law (Law No. 21,325), the general rule is that residence permits must be requested from abroad. For those working remotely for foreign employers without local market interaction, the "Remote Workers" (Trabajadores Remotos) subcategory of Temporary Residence may apply, provided they receive their remuneration from abroad.

Once the application is submitted online, the applicant receives a "Certificate of Residency in Process," which allows them to work legally while the final visa is issued.

As a general rule, when there is a relationship of subordination and dependence within Chilean territory, a local employment agreement must be executed. If the employer is a foreign entity without a local legal presence, it must appoint a representative in Chile (typically a payroll service provider) to manage local labor and social security obligations.

Risk of "permanent establishment"

B. Is there risk of "permanent establishment" consequences for the foreign company by virtue of the remote worker’s activities? If so, what are the main factors determining the exposure.

According to the Chilean Income Tax Law, there will be a Permanent Establishment (PE) in Chile in case (i) there is a place of business in Chile in which the foreign company permanently develops its business activity; or (ii) there is a representative in Chile with powers to close agreements related to the business of the company in Chile, or to negotiate its essential terms and conditions.

If the foreign company only performs ancillary or preparatory activities in Chile, there is no PE. Key factors include the company's main activity, the employee's specific functions, and their power to represent the company.

Local Social Security and Payroll Requirements

C. At what point and under what circumstances would the remote worker become subject to local social security and other payroll requirements?  Can such requirements be fulfilled by a foreign company, and if so by what mechanisms?

Remote workers rendering services in Chile are subject to all local payroll obligations. Foreign professionals or technicians may choose to be exempted from the Chilean pension and health system if they maintain coverage in their home country, as per Law No. 18,156. However, labor accident insurance and other payroll taxes always apply.

Local employment law requirements

D. At what point and under what circumstances does the remote worker become subject to local employment law requirements such as is wage-hour, local holidays, annual leave, maternity leave, disability leave, protection against unfair dismissal, etc.

The remote worker is subject to local labor laws if they perform services in Chile under subordination and dependence, even with a foreign entity. The principle of territoriality dictates that Chilean labor law applies to all work performed within the country.

Remote foreign worker

E. Are there special requirements governing remote work in your country which would cover the remote foreign worker?

The Remote Work and Telework Law (Law No. 21,220) applies to all employees in Chile. Key requirements include:

• Equipment and Costs: Employers must provide all necessary tools and cover operation and maintenance costs.
• Right to Disconnect: Workers are entitled to at least 12 continuous hours of disconnection in a 24-hour period.
• 40-Hour Week: Under Law No. 21,561, the standard workweek is being reduced to 40 hours.

Income tax

F. What is the employee’s exposure to local income tax, and under what circumstances is the foreign employer required to arrange for withholding of income tax?

Employees resident or domiciled in Chile are subject to Second Category Tax on their worldwide employment income. This is a progressive tax ranging from 0% to 40%. Double Tax Conventions may apply to provide credits for taxes paid abroad.

Claim for workplace injury

G. Would the remote worker be entitled to bring a claim for workplace injury in your country?

Yes. All employees in Chile must be covered by Law No. 16,744 on Workplace Accidents and Occupational Diseases. Claims are addressed through the employer's local representative.

National healthcare system or insurance

H. Would the remote worker be covered under the local national healthcare system or insurance?

Yes. The mandatory 7% health contribution is deducted from the salary and paid to Fonasa (public) or an Isapre (private).

Data Privacy and Security

I. Is a foreign employer subject to data privacy requirements?

Yes. Law No. 19,628 on the Protection of Private Life requires express, written consent for the processing of personal data. Employees must be informed of the purpose and storage of their information. The standards will meet the UE standards under the New Data Protection Law from December 1st, 2026.

Litigation and Citizenship

J. Has there been any litigation regarding foreign remote workers?

Litigation specifically targeting foreign remote workers is limited, but the Direction of Labor (DT) has clarified that Chilean law applies to work performed within the territory.

K. Would answers change if the worker is a citizen or interacts with the local market?

Citizens do not require work authorization. Interacting with the local market significantly increases the risk of “Permanent Establishment” for the foreign company.