working remotely

Chile Investment, how to invest in Chile, what to watch out for when investing, economic issues, currency exchange in Chile, and more.
User avatar
nikotromus
Rank: Chile Forum Citizen
Posts: 94
Joined: Wed Jul 26, 2017 10:12 am
Location: Las Condes

working remotely

Post by nikotromus » Fri Nov 10, 2017 7:10 pm

Hi all,

I've got a job offer in Texas from a guy I worked for a decade ago. He wants me to move there, but I'm going to ask him if I can take a reduced salary and work remotely from Chile. Not sure if anyone knows the answer to these, but here goes:

1. How complicated will it be for him to allow me to do this from a tax/legal perspective?
2. How would the tax situation work? Would I pay taxes to both Chile and the USA?

Thanks in advance...

User avatar
admin
Site Admin
Posts: 15372
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: working remotely

Post by admin » Sat Nov 11, 2017 6:28 pm

1. No idea. For chile's part, does not matter where you are paid or where you work.

2. Think you are only taxed in the u.s. if you are physicaly working there. Chile just deals with it as normal income.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

User avatar
nikotromus
Rank: Chile Forum Citizen
Posts: 94
Joined: Wed Jul 26, 2017 10:12 am
Location: Las Condes

Re: working remotely

Post by nikotromus » Sat Nov 11, 2017 7:00 pm

Thanks admin. I am thinking you are correct.

I know one person here who is doing what I am going to try to do, but he is in the states on a business trip. I am trying to get ahold of him.

jehturner
Rank: Chile Forum Citizen
Posts: 1429
Joined: Thu Nov 20, 2008 12:24 am
Location: La Serena

Re: working remotely

Post by jehturner » Sat Nov 11, 2017 9:54 pm

admin wrote:
Sat Nov 11, 2017 6:28 pm
2. Think you are only taxed in the u.s. if you are physicaly working there.
Yes, sounds right unless you're American or still a US resident, in which case they'll hound you wherever you go, albeit above a somewhat high threshold. My situation is a bit different, but I'm also paid from the US and would only be liable for US income tax while actually working there. I'd think your friend might want to get some slightly better advice though, as I have no idea what other regulations might be relevant on that side.

User avatar
admin
Site Admin
Posts: 15372
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: working remotely

Post by admin » Sun Nov 12, 2017 7:24 am

One of the more common mistakes we get all the time, especially from the U.K., is accountants that seem to think for some reason they need to incorporate a branch in Chile to have a worker located in Chile (even if they are just a contractor). They are worried about the liability or something.

From the U.S., never run in to that problem. You would just be a foreign contractor.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

User avatar
Space Cat
Rank: Chile Forum Citizen
Posts: 901
Joined: Thu Dec 04, 2014 9:20 pm
Location: Valdivia

Re: working remotely

Post by Space Cat » Sun Nov 12, 2017 11:30 am

By the way, has anybody tried to get a work visa based on a foreign contract? I sometimes get asked in tech communities how a freelancer can move to Chile. Before Extranjería was accepting foreign contracts for the rentista visa but now it's not allowed.

at46
Rank: Chile Forum Citizen
Posts: 312
Joined: Fri Sep 20, 2013 6:13 pm
Location: Vancouver/Santiago

Re: working remotely

Post by at46 » Sun Nov 12, 2017 3:02 pm

Space Cat wrote:
Sun Nov 12, 2017 11:30 am
By the way, has anybody tried to get a work visa based on a foreign contract? I sometimes get asked in tech communities how a freelancer can move to Chile. Before Extranjería was accepting foreign contracts for the rentista visa but now it's not allowed.
Before vs. now, what period of time are you talking about? The rentista requirements on the extranjeria website haven't changed in the last few year from what I can see: a proof of periodic income.

User avatar
Space Cat
Rank: Chile Forum Citizen
Posts: 901
Joined: Thu Dec 04, 2014 9:20 pm
Location: Valdivia

Re: working remotely

Post by Space Cat » Sun Nov 12, 2017 7:30 pm

at46 wrote:
Sun Nov 12, 2017 3:02 pm
Before vs. now, what period of time are you talking about? The rentista requirements on the extranjeria website haven't changed in the last few year from what I can see: a proof of periodic income.
They changed in the beginnig of 2016: now the income must be passive and not work-related.

User avatar
admin
Site Admin
Posts: 15372
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: working remotely

Post by admin » Mon Nov 13, 2017 7:29 am

Space Cat wrote:
Sun Nov 12, 2017 7:30 pm
at46 wrote:
Sun Nov 12, 2017 3:02 pm
Before vs. now, what period of time are you talking about? The rentista requirements on the extranjeria website haven't changed in the last few year from what I can see: a proof of periodic income.
They changed in the beginnig of 2016: now the income must be passive and not work-related.
You can't do it only on a foreign contract. You can do it based on a professional visa.

No matter what way you go, you still have to prove income to support yourself during the temporary residency period.

We still find the bar for having passive income much lower for most everyone to be able to qualify. Typically, most people that would qualify under a professional visa, have some form of investment that is passive; or, at least it is fairly easy to shift some assets to some sort of passive investment to comply with the "periodic income" requirement of the retirement and periodic income visa. It does not need to be all of your income.

So for example, someone has super contracting biz working remotely, that say makes $3000 U.S. a month. They have some savings and other assets. That before would be sufficient to apply just on the income for the foreign contract.

Now, to qualify for the retirement and periodic income, say they move $50,000 in savings in to something like a really boring but regular paying dividend stock (or some other source) for a couple years while applying for residency (about 1-2 years, depending on bureaucratic speed). The dividends count as recurring / periodic income, even if they are not by themselves sufficient to support them. However, along with the $3000 income, the principle on the investment or savings, they more than comply with all the requirements.

By the way, something that people often overlook when determining if they qualify for the retirement and periodic income visa, is the American 401K plans and IRA's.

A 401K or IRA, is just an private investment account with a special tax status, if you hold it until you retire. The Chilean government does not care that it has a special tax designation. They do not care that you are not withdrawing from it, nor plan to withdraw from it in the future; however, with 401k you can withdraw from it if you really, really wanted or needed the money (typically just not a good financial move). It is under your control. Thus, it qualifies as passive investment, and what it generates on a monthly or quarterly basis is periodic income that is fair game when it comes to proving you have a source of periodic income, in conjunction with whatever other sources of income you have (e.g. your payments for remote work).
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

User avatar
admin
Site Admin
Posts: 15372
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: working remotely

Post by admin » Mon Nov 13, 2017 7:34 am

To clarify the above a bit, a social security account in the U.S. or something similar in another country, would probably not fly for those that are not retired as proof. You can not withdraw funds from a social security account when you are say 30 years old. The funds should, even if there is a tax penalty or something, be available for you to withdraw at any point should you need or want them.
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

User avatar
Space Cat
Rank: Chile Forum Citizen
Posts: 901
Joined: Thu Dec 04, 2014 9:20 pm
Location: Valdivia

Re: working remotely

Post by Space Cat » Mon Nov 13, 2017 12:01 pm

Oh, so it could be $500 rent/investment passive income and $3000/mo work-related income. Sounds really nice, thanks!

User avatar
admin
Site Admin
Posts: 15372
Joined: Sat Aug 26, 2006 11:02 pm
Location: Frutillar, Chile
Contact:

Re: working remotely

Post by admin » Mon Nov 13, 2017 2:29 pm

Yep
Spencer Global Chile: Legal, relocation, and Investment assistance in Chile.
For more information visit: https://www.spencerglobal.com

From USA and outside Chile dial 1-917-727-5985 (U.S.), in Chile dial 65 2 42 1024 or by cell 747 97974.

Post Reply