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SOVEREIGN MAN

You won’t believe the opportunities here

Santiago, Chile

November 21, 2012
Santiago, Chile

The Chilean economy is booming right now. Full stop. From agriculture to retail to construction to mining. Everywhere you look, it’s happening.

This isn’t pretend economic growth, conjured out of thin air by central bankers who drop freshly printed currency from helicopters. It’s the real kind, brought about by increased production, greater exports, technological development, and fiscal discipline.

So far this year, for example, the Chilean government has posted a budget surplus of 1.7% of GDP, up from 1.4% last year. Unsurprising, Chile’s gross debt level is a paltry 11.3% of GDP, putting it in the same category as countries like Saudi Arabia and Estonia.

Yet despite such a strong fiscal position, taxes in Chile are the lowest in the OECD at just 17% of GDP. This means that a whopping 83% of all economic activity remains in the hands of private businesses and individuals, not incompetent, thieving bureaucrats.

All of this is self-reinforcing. Low taxes mean that the economy can grow, unrestrained. And high economic growth means that the government can keep tax rates low. It’s a virtuous circle.

Here’s the best part, though. Amid all of this economic growth, there’s tremendous opportunity on the ground here. Jobs are plentiful, disposable income is growing, and confidence is high.

If you’re an employee type, chances are you’ll be able to find a job here. The labor market is tight, and companies really need talented workers. Plus, new ventures are being created daily, and foreign companies are investing heavily in the country.

Not to mention, Chilean immigration law is perhaps the most straightforward in the western hemisphere. There are very few obstacles to obtaining a work permit. And of course, you can eventually obtain citizenship as well.

(I should mention that a passport from Chile is one of the more valuable in the world… more on that soon.)

If you’re an entrepreneur or investor type, the opportunities are even more sensational. Wealth in Chile is rising, so overall demand is very strong. But the supply of very high quality products and services is incredibly tight.

To give you an example, Chileans who are coming into wealth for the first time want to send their children to the best private schools possible. But the supply and demand are so out of balance that tuition rates have gone through the roof… yet the schools still have waiting lists a mile long!

The same fundamentals hold for just about every high quality product or service across the economy… from beauty and anti-aging treatments to heavy machinery to high performance sports cars to top brand electronics to fine dining.

This is especially true for the luxury market in Chile, which is growing at a rate of 20% p.a. according to the Association of Luxury Brands. Ferrari sales last year quadrupled over the previous years. Premium restaurants are often booked out days in advance.

This is just the tip of the iceberg. There’s much more growth to come for Chile, and this means there is a lot of room for foreigners to set up shop, ply their skills, and make a fortune in this booming economy.

About the author: Simon Black is an international investor, entrepreneur, permanent traveler, free man, and founder of Sovereign Man. His free daily e-letter and crash course is about using the experiences from his life and travels to help you achieve more freedom.

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Comments on this entry are closed.

  • bob2356

    According to tax-rates.org Chile has a 40% top tax rate on world wide income over 67k and 19% vat rate and up to 20% social security. That doesn’t seem very low to me. Am I missing something here?

    • http://www.facebook.com/profile.php?id=100000634348528 Bobby Penzke

      I was thinking the same thing. I knew the tax rate was from 0%-40% depending in the amount of units (a unit is worth about 20,673 CH$). 1 CH$ = $475.70

    • dodo

      you are correct.. the author just wants you to eventually contact him and ask for his consulting and you will end up paying him a fee or he will get you to buy farmland he owns at super high prices and you will be parted with your money. ALl the posts about Chile being the best place to live is hype. There is a high crime rate, streets are over saturated with cars, air is polluted with smog, people are rude and on the edge, chilean IRS is as tough as the IRS, banks will ROB you in fees and interest rates are not regulated.. I can keep going.. anyways better stay where you are..

  • http://www.facebook.com/ben.dunphy Ben Dunphy

    Keeping on the entrepreneurial subject, maybe you could let us know the cost of unskilled labor in Chile in your next article.

    • http://twitter.com/ctoledoa Cristian Toledo

      US$ 540 monthly is the minimal wages by law

  • gabriel munteanu

    Do you happen to know how much of this luxury products are bought by borrowing and how much by the purchasing power of the individuals? I mean, do these guys that buy Ferraris pay cash? or they go in debt for that?

  • http://narth.com Nature 1

    Everyone I’ve spoken to on obtaining employment in Chile has told me the same thing: Chile is incredibly classist & unless you know someone (which I don’t), it’s really waste of time for anyone who isn’t a rich businessperson. Everyone says I’d get a teaching job instantly & it’s sooo in demand, like the article states, but the ppl who were lucky to obtain teaching jobs in Chile told me that wages are awful.

    I’m STILL trying to obtain info on whether or not subscribing to Sovereign Man Confidential would benefit me, a BSc educated individual, & how much in savings I should have to make a minimal investment in Chile.

  • http://twitter.com/mjaaska mj

    “This is especially true for the luxury market in Chile, which is growing
    at a rate of 20% p.a. according to the Association of Luxury Brands.
    Ferrari sales last year quadrupled over the previous years. Premium
    restaurants are often booked out days in advance.”

    Sounds like a bubble. I’m not calling a top, though.

  • John Smith

    I was also trying to compare Chile taxes to the US. Chile taxes are 16-18% of GDP and in the US they are 24-27% of GDP. The US has so many different taxes and many are hidden. You can’t just think about income tax. I like to use Heritage.org for references. They list Chile as 7th and the US as 10th in regards to economic freedom. Taxes in the US will be increasing dramatically in the near future due to government spending and debt. It is inevitable. Chile has a better handle on spending and debt for now.

    I’d like to see a comparison of someone making $100k in the US versus Chile. Considering taxes, health care, cost of living, etc.

  • Sage

    Do you know if there is the problem of face recognition and tracking every where you go in this and other countries?

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