Chile Forum

Two years ago I purchased property on the Rio Trancura near Pucon. I am excited to return this October to completed developments including: 15 beds, a bath house, a grand quincho, and river platforms for camping. My goals are to rent in a hostel style setting. It is of interest to have a bar and small restaurant.
Can anyone advise the permitting processes, insurances required, and any other legalities that must be secured in order for legal operation? Also, the time constraints of achieving each legal hurdle?

Thank you for any advice and direction.

David

That is one of those very loaded sets of questions and very particular to your own situation (e.g. property, capital, plans, location, residency, experience, Spanish, and so on ), that general advice on a forum would likly just get you in a lot of trouble.

In general I would plan at least a year in advance to just go operational with all the proper legal bells and whistles in place. Keep in mind this will depend a great deal on your time in country, amount of money you are willing to spend and so on.

Remember, the same rules apply in Chile as anywhere to starting a buisness. It is very rare that anyone goes profitable within two to three years and most take at least 5 years. Even then only say 1 in 7 businesses survive past say 5 years at all. Again, much depends on your experience. Beyond all else keep your cost under control from the start.

It always amazes us that so many people show up in Chile with these really unrealistic expectations of how fast they are going to start a buisness and make money at it. Basic economics and buisness does not change simply because of the hemisphere. Throw in the fact that bureaucracy in Chile can be slow.

Thank you for taking the time to respond. The creation of this site has been a tremendous help to many expats. I understand the pitfalls of a new business. Allow me to clarify a few things. I have successfully been leading Chile adventure kayak trips for my own business for ten years. I am a professional kayaker and there is a niche market easy to advertise to and I am well networked within this community. With that said over half of the Chile season for the Pucon location is pre-booked. Construction for new property developments are scheduled to be complete by the end of September.

In order to provide the services to this niche market in a hostel type accomodation I certainly need to secure legalities and permits. My arrival is scheduled for October after the construction completion.
First, assuming the structures are completed and influx of clients is successful is it a realistic goal to secure the legalities mentioned: bar permit, restaurant permit, hostel/hotel permit, business licenses... other required licenses?

Can some of the permits and business processes be started prior to my arrival? Is there an area where you would direct my focus of research?
Thank you, David

Yea, your going to need legal help on the ground for that. That is a mess of bureaucracy to unpack in a very short while. I really would not recommend trying to do that yourself.

Most of it can be done from outside the country by Power of Attorney.

Quick question, that may hold up the whole show. Do you have residency and a work permit? Do you have a company / LLC yet (required for those sorts of businesses as they are under the IVA tax system)?

No residency, no Chile corporation yet. Until this point I have been able to work under a local Chilean expedition company. Which I can continue to do with the adventure portion. But now I am constructing a rental property and would prefer to be legal. Thank you for the advice I will seek legal counsel.

If you really push it, you might be able to get these all together by next season. It would be pushing it however. A lot of what you need is this kind of bureaucratic chain that if one thing goes off the rails, the whole thing might be a train wreck.

Just an idea, off the top of my head (super guesses without looking in to all the gory details of your situation):

Residency: This is your biggest show stopper. 2-3 months for approval for temporary residency if you are lucky, plan for more like 4-6 with immigration delays. No temporary residency, no work permit. No work permit, and well you end up being being a tourist in your own tourism biz. Someone else has to run the show.

Corporation: 1-2 months, if you are lucky. Legal representative issues that might be dependent on your residency status.

Insurance: You might simply not be able to get it for a bunch of reasons. Property is too rural, you have not permanent residency, nature of the buisness, lack of established corporation credit, and so on.

Municipal permits: Health certificates for the building, might be dependent on your construction permit, water sources, and so on. Hostel status. All will likly be tied up in some form with your incorporation, which may be tied to your residency. Much depends on just how fast the city bureaucracy can be motivated to move. In fact, all of these city permits are going to likly hang up on your residency. They may not issue them unless you have permanent residency, which is at least a year. Alcohol license more than likly has this restriction in the Pucon area.

Don't forget tax and labor issues related to employees.

Bank accounts: This one is whole different can of worms. Just search the forum for more on this. You might get one under temporary residency, but without a checking account credit issues will be a pain to deal with.

so, 6 months on the lucky side of things, 1 year more than likly. In Chile it is a good idea to have a plan A, B, and C through Z plans, and then start them all at the same time.