Business Between Chile and Italy: Opportunities, Legal Framework, and How to Operate in the Italian Market
ITALY | Country Spotlight
BC&MC Law & International Business Consulting
Business Between Chile and Italy: Opportunities, Legal Framework, and How to Operate in the Italian Market
Published in the context of the 80th anniversary of the Italian Republic and the 110th anniversary of the Italian Chamber of Commerce in Chile (CAMIT).
Italy and Chile share more than a century-old migration history: they share a legal and commercial framework that makes operating between both countries easier, more predictable, and more efficient today than in most bilateral corridors between Latin America and Europe. There is a modernized trade agreement with the EU in force since 2025, a double taxation treaty in force since 2016, a BIT that protects investments, and mutual visa exemption. The question is not whether the framework exists — it is how to make the most of it.
At BC&MC, we support Italian companies that choose Chile as a regional platform, as well as Chilean companies and individuals operating or investing in Italy. This post brings together everything you need to know to make informed decisions in both directions.
1. Italy in Context: The Essentials.
2. Key Sectors and Bilateral Opportunities.
3. How to Do Business in Italy.
4. Chile–Italy Bilateral Framework.
5. How BC&MC Can Help You.
1. Italy in Context: The Essentials
In one line: Italy is the third-largest economy in the eurozone, an industrial and export powerhouse with structural strengths in precision manufacturing, agribusiness, design, and renewable energy — and the sixth-largest foreign investor in Chile.
Italy has a population of approximately 59 million people and a GDP of around US$2.322 trillion according to the IMF, WEO April 2026, with a GDP per capita in purchasing power parity of US$63,538. It is a member of the OECD, the G7, and the European Union. Its economy is the eighth-largest in the world and the third-largest in the eurozone, after Germany and France.
What distinguishes Italy as a business destination is not the size of its economy, but rather its productive fabric: a dense network of specialized medium-sized companies — the so-called piccole e medie imprese or SMEs — that are global leaders in sectors such as industrial machinery, ceramics, fashion, agrifood, design, fine chemicals, and medical equipment.
This productive fabric exports with a high level of technology and brand value, making it especially relevant for Chilean companies seeking technology, high-quality industrial inputs, or strategic partnerships.
2. Key Sectors and Bilateral Opportunities
In one line: The bilateral relationship is no longer just Chilean copper in exchange for Italian machinery — it is diversifying into hazelnuts, energy, technology, and services, with concrete opportunities in both directions.
What Italy Offers Chile
Italy is globally competitive in sectors that directly match Chile’s needs: machinery for mining and agribusiness, energy efficiency and renewable energy solutions, construction and infrastructure, aerospace technology, industrial automation systems, equipment for the food industry, and precision design and engineering. In 2025, Italy exported US$1.622 billion in industrial machinery to Chile — the most relevant individual item in bilateral trade.
Chile’s main imports from Italy in 2025 included agroindustrial harvesting and processing machinery, vaccines, cranes and industrial vehicles, pharmaceuticals, and automobiles. This composition reflects Chilean demand for high-specification technology and capital goods, precisely the niche where Italian industry is strongest.
What Chile Offers Italy
Chile mainly exports refined copper, cathodes, hazelnuts, walnuts, iodine, frozen mussels, and cellulose pulp to Italy. In 2025, Chilean exports to Italy totaled US$934 million. Bilateral trade as a whole reached US$2.469 billion that year.
One figure illustrates this momentum: Chilean exports to Italy grew by 47.3% in March 2026 compared to the same month of the previous year, while imports from Italy grew by 13.3% over the same period.
Sectors with the Greatest Growth Potential
Renewable energy and the energy transition, where Italy has technology and Chile has resources; mining technology; agribusiness and food processing; sustainable construction; cybersecurity and industrial automation; and specialized digital services.
The Italian Ambassador to Chile, Valeria Biagiotti, has highlighted the potential for collaboration in aerospace technologies, where Italy is already participating in projects in Chile such as the European Southern Observatory, ESO, and the construction of the Extremely Large Telescope, ELT, at Cerro Armazones.
3. How to Do Business in Italy
In one line: Italy is a relationship-driven market before it is a transaction-driven one — sophisticated, regional, and bureaucratically demanding, but with concrete opportunities for those who arrive with the right preparation and partners.
What legal form should be used?
For a Chilean company seeking to establish a presence in Italy, there are four main options:
Società a responsabilità limitata (S.r.l.): The equivalent of a Chilean limited liability company. It is the most common structure for small and medium-sized companies. Minimum share capital of €10,000, or €1 for the simplified version, S.r.l.s. Liability is limited to the capital contribution. It has a flexible governance structure and is the most commonly used option by foreign investors seeking their own legal presence in Italy.
Società per azioni (S.p.A.): A structure for larger companies or those seeking external financing. Minimum share capital of €50,000. It is mandatory for certain regulated activities, such as banking and insurance.
Branch office (Filiale): This is not a separate legal entity; it is an extension of the Chilean company in Italy. It is taxed only on Italian-source income, but the parent company has unlimited liability. It can be useful in the early stages of market exploration.
Representative office: Used only for promotional activities or market research. It cannot carry out commercial activities.
For most investment projects, the S.r.l. is the recommended starting point. Incorporation is formal and requires the intervention of a notary (notaio), registration with the Companies Register (Registro Imprese), and obtaining a tax code and VAT number from the Agenzia delle Entrate.
What is the tax system like?
Companies in Italy pay two main taxes:
IRES (Imposta sul Reddito delle Società): Corporate income tax with a standard rate of 24% on net profits. Resident companies are taxed on worldwide income; branches and permanent establishments are taxed only on Italian-source income.
IRAP (Imposta Regionale sulle Attività Produttive): Regional production tax, with a base rate of 3.9%, which may vary by region and sector.
VAT (Value Added Tax): Standard rate of 22%, with reduced rates of 10%, 5%, and 4% for specific goods and services.
Mandatory electronic invoicing: Since 2019, for B2B transactions, every invoice must be issued through the Sistema di Interscambio (SdI) system in XML format. This is one of the technical requirements that most often surprises foreign companies entering the Italian market.
Employer social security contributions on salaries are around 27% to 32% of gross salary.
What should you know about the labor market?
The Italian labor market is highly regulated and structured around sector-specific collective bargaining agreements, known as Contratti Collettivi Nazionali di Lavoro or CCNL. There are more than 900 of these agreements, covering virtually every sector. National collective bargaining agreements play a central role in regulating labor relations in Italy. Although their application depends on various legal and sector-specific factors, they are the usual reference for determining salaries, benefits, and working conditions. Total labor costs, including salary and contributions, are significantly higher than the nominal salary, and termination processes involve protections that vary depending on the size of the company and the employee’s seniority.
The consequences of unfair dismissal in Italy depend on several factors, including the size of the company, the employee’s hiring date, and the specific circumstances of the case. Depending on the situation, financial compensation may apply or, in certain cases, reinstatement measures may be ordered.
Business Culture: What the Manuals Don’t Tell You
Relationships come before contracts. A large share of Italian companies are family-owned or have concentrated ownership. Strategic decisions are made by the people with real authority — who are not always the ones who appear first in the meeting. Arriving with commercial proposals without first building at least a basic relationship is seen as a sign of inexperience. The first meeting is usually about getting to know each other, not closing a deal.
Italy is deeply regional. The differences between the industrial north — Milan, Turin, Bologna, Brescia — and central-southern Italy are economically, culturally, and logistically significant. A company from Milan and a company from Naples may have very different decision-making timelines, negotiation styles, and networks. This regional nature is also reflected in the language: outside major urban centers and the corporate world, English is not always a reliable resource.
Formality matters. Professional titles such as Dottore, Ingegnere, and Avvocato are used in formal contexts, and whether they are used or omitted can be read as a sign of professionalism or carelessness. Lei, the formal “you,” remains the standard initial form of address in the business world.
Deadlines are indicative. Administrative and bureaucratic processes in Italy can be significantly slower than in Chile. Licenses, permits, registrations, responses from public agencies — everything requires additional time margin. This is not a critical observation, but rather an operational reality that must be incorporated into planning.
Common Mistakes Made by Companies Entering Italy
1. Underestimating bureaucracy and failing to allocate time and resources to navigate it. Company incorporation, obtaining permits, opening bank accounts, and registering employees involve procedures with their own timelines that cannot be accelerated. Companies that assume Chilean timelines for Italian processes often incur unbudgeted costs and delays.
2. Failing to include a well-drafted dispute resolution clause in contracts. Italian civil justice is notoriously slow — commercial lawsuits can take years. Arbitration and commercial mediation are available but underused. A contract without a clear dispute resolution clause creates significant exposure.
3. Ignoring sector-specific collective bargaining agreements when designing the personnel structure. The applicable agreement determines minimum wages, benefits, working hours, and conditions — and failing to apply it correctly can generate retroactive labor contingencies.
4. Assuming that the Italian market is homogeneous. A market entry strategy designed for Milan may not work in Naples or Palermo. Regional segmentation is not optional.
5. Underestimating the language. In the corporate world of major cities, English works. In the world of SMEs, local governments, courts, and regulatory bodies, Italian is essential. Not having a fluent Italian-speaking counterpart is a real operational risk.
4. Chile–Italy Bilateral Framework
In one line: Chile and Italy have four bilateral instruments currently in force covering trade, investment protection, taxation, and mobility of people — a solid framework for operating in both directions.
The Chile–EU Trade Agreement — What It Means in Practice
The Interim Agreement between Chile and the European Union, which includes Italy as a Member State, entered into force on February 1, 2025, modernizing the original 2003 Association Agreement. Its concrete effects on Chile–Italy trade are significant: 99.9% of EU exports to Chile will become tariff-free over the implementation period, and Chilean goods will access the European market, including Italy, under preferential conditions. The agreement also includes chapters on services, public procurement, intellectual property, and sustainable development.
For Chilean companies exporting to Italy or Italian companies importing from Chile, verifying compliance with the rules of origin is the first step to accessing tariff preferences. To access the tariff preferences provided under the Chile–EU Interim Agreement, it is essential to comply with the applicable rules of origin. Currently, preferential origin may be certified through an origin declaration issued by the exporter or through the importer’s knowledge, as applicable.
The Chile–Italy BIT — Legal Protection for Investments
The Agreement on the Promotion and Reciprocal Protection of Investments between Chile and Italy is in force and is part of the 31 BITs maintained by Chile.
This instrument guarantees Italian investors in Chile — and Chilean investors in Italy — international legal protection: fair and equitable treatment, protection against expropriation without adequate compensation, free transfer of capital, and access to international dispute resolution mechanisms, such as international arbitration.
It is especially relevant for long-term investments in regulated sectors such as energy, infrastructure, or mining.
The Chile–Italy DTA — Elimination of Double Taxation
The Convention for the Elimination of Double Taxation between Chile and Italy was signed on October 23, 2015, and entered into force on December 20, 2016. It was enacted in Chile through Decree No. 205 and published in the Official Gazette on April 12, 2017.The DTA is a central tax planning instrument for any structure involving income flows between Chile and Italy — dividends, interest, royalties, fees, and capital gains.
Without it, the same income could be taxed in both countries; with it, the parties agree which State has preferential taxing rights over each type of income, while the other grants a credit or exemption.For Italian companies with subsidiaries in Chile, or Chilean companies with operations in Italy, the DTA is the mandatory starting point for international tax analysis.
Visas and Mobility of Persons
Tourism
Chilean citizens do not need a visa to enter Italy, or the Schengen Area in general, for stays of up to 90 days. Italian citizens also do not need a visa to enter Chile for the same period. This reciprocity facilitates market exploration and business visits without prior procedures.
Important — ETIAS
By the end of 2026, Chilean travelers heading to the Schengen Area will be required to obtain prior electronic authorization through ETIAS — the European Travel Information and Authorisation System. It is not a visa; it is a digital procedure similar to the U.S. ESTA. However, it will be a new requirement applicable to all trips, including business travel. Its implementation status should be verified before traveling.
Work and Residence
The visa exemption applies exclusively to tourism and short business visits. To work, reside, or establish themselves in Italy, Chilean citizens require a long-stay visa, Type D, processed before the Italian consulate in Chile, as well as a work permit, Nulla Osta, processed by the employer in Italy. The process involves timelines that may exceed 3 to 6 months and should be planned in advance.
5. How BC&MC Can Help You
In one line: We support both Italian companies seeking to operate in Chile and Chilean individuals and companies looking toward Italy — with local coverage in both countries.
Track A — Italy → Chile
BC&MC has direct experience supporting European companies — including Italian companies — that establish operations in Chile. Our services in this context include:
Legal and corporate structuring: Incorporation of companies such as SpA, SRL, and branches; preparation of bylaws, shareholders’ agreements, and ongoing legal compliance. Advisory on the most appropriate legal forms according to the business model and desired level of exposure.
Tax advisory and international tax planning: Application of the Chile–Italy DTA in structuring flows between the parent company and the Chilean subsidiary, analysis of withholding taxes on dividends, interest, and royalties, and transfer pricing advisory for transnational groups with a presence in Chile.
Immigration: Management of work and residence visas for Italian executives and technicians relocating to Chile — including temporary visas, permanent residence, and family reunification procedures.
Accounting and payroll: Accounting services under Chilean regulations, IFRS for SMEs or full IFRS as applicable, payroll processing, and monthly and annual tax compliance before the SII and labor authorities.
Track B — Chile → Italy
For Chilean companies or individuals operating or investing in Italy, BC&MC offers an integrated service at both ends of the corridor. In Chile, we handle pre-establishment advisory: analysis of the most efficient corporate structure from a Chilean perspective, tax implications in Chile of operating abroad, and application of the Chile–Italy DTA to optimize flows between both jurisdictions. In Italy, we work with local partners — law firms and tax advisors with experience in inbound foreign investment — who provide the Italian legal and regulatory expertise needed to properly execute the project on the ground. This network allows us to offer our Chilean clients real support in Italy, not just remote guidance: from choosing and incorporating the appropriate legal vehicle to local tax, labor, and accounting compliance. The result for the client is a coordinated team in both countries, with a single point of contact at BC&MC for managing the entire process. We are members of the Italian Chamber of Commerce in Chile, CAMIT, which gives us access to a network of more than 170 member companies and direct channels with the Italian business ecosystem present in Chile. For inquiries, contact us at comunicaciones@bcmc.cl or visit us at bcmc.cl.