Chile's Reconstruction Law: South Gate's View

Chile is competing for capital again. Now you have to read the calendar

At South Gate, we believe the National Reconstruction and Economic and Social Development Law is the clearest pro investment signal Chile has sent in decades. For the first time since 1990, the corporate tax rate is coming down: from 27% today to 23% in 2029.

But anyone who reads only the headline will get it wrong. The law does not take effect all at once. It arrives in layers, with different dates, windows that close, and benefits that depend on regulations that do not exist yet. The real value is in the fine print and in the calendar.

What changes, and when

President José Antonio Kast signed the law on October 9. Only its publication in the Diario Oficial (Chile's official gazette) remains, and nearly every deadline runs from that date.

Estimated date	Measures
Nov 1, 2026 First measures	Credit for knowledge based service exporters: 15% Santiago Metro Region, 20% other regions SME regime monthly provisional tax payments (PPM) drop from 0.25% to 0.23% Tax authority (SII) empowered to cross check data with other state agencies Sence training tax credit: 80%, 50% or 15% of cost, depending on salary
Dec 1, 2026 Temporary	VAT exemption on the first sale of completed new homes, for one year 50% cut in gift tax for twelve months
Jan 2027 Capital	Capital repatriation taxed at between 7% and 10% One year window to opt in
2027 to 2029 Core tax changes	Corporate tax: 25.5% in 2027, 24% in 2028, 23% in 2029 Credit restitution: 30% in 2027, 20% in 2028, zero in 2029 Tax stability from US$ 50 million (regulation pending) Property tax exemption on primary homes of owners aged 65+

Estimated dates, assuming the law is published in the Diario Oficial in October 2026.

The first measures companies will feel are enforcement and temporary ones; the rate cut, the headline news, only begins in the 2027 tax year.

What we welcome

• A real corporate tax cut with a set timeline. Moving from 27% to 23% over three years brings Chile closer to the benchmarks international investors use. Combined with the gradual elimination of credit restitution, it improves net returns on both reinvesting and distributing profits.

• Certainty for large projects. Tax stability contracts freeze the tax burden for 10, 15 or 20 years for investments of US$ 50, 100 and 350 million or more, in exchange for 1.5 points above the general rate. For mining, energy and infrastructure, that stability is worth more than the cut itself.

• A nod to the knowledge economy. The 15% credit for employees in the Santiago Metropolitan Region, and 20% in other regions or rural districts, makes Chile a more attractive location for export service centers. It is a concrete opportunity for companies deciding where to place their regional hub.

• Funding to rebuild. The Emergency Fund grows from CLP 800 billion to CLP 1.2 trillion and is extended through December 2028, giving visibility to those taking part in rebuilding Valparaíso, Ñuble and Biobío.

What concerns us

• Enforcement arrives before relief. From the first month, the SII can cross check information with other state agencies. The rate cut, by contrast, starts in 2027. Companies will see a better informed tax authority before they see a lower tax bill.

• Tax stability depends on a regulation that does not exist yet. Until the Finance Ministry issues it, no investor can sign a stability contract. We recommend not locking in financial models that assume this benefit until the text is known.

• The Constitutional Court changed the bill. The Court struck down the provision that would have required the State to compensate project owners whose environmental approval (RCA) was annulled by the courts. For investors, the risk of a revoked RCA remains their own. Environmental due diligence matters as much as ever.

• The windows are short. Capital repatriation for one year, withdrawals from STUT and FUR registers at a flat 10% tax for eight months, payment agreements with the Treasury for 180 days. Those who wait to “see how it works” may miss out.

What we recommend doing now

1. Get tax records in order before November. With the SII cross checking data across agencies, inconsistencies between public records and tax filings will be more visible.

2. Assess capital repatriation early. The window would open in January 2027 and last one year, but the decision requires legal and cash flow analysis first.

3. Review STUT and FUR balances. The flat 10% tax would only be available until June 2027 if the law is published in October.

4. Rerun the business case with the phased rate. 25.5% in 2027, 24% in 2028 and 23% in 2029 change the present value of projects being decided today.

5. Prepare the tax stability application. Projects above US$ 50 million should have their case ready for when the Finance Ministry publishes the regulation.

6. Map the knowledge services credit. If your company exports services, where your teams are located within Chile now has a direct tax impact.

Our take

At South Gate, we see this law as a serious invitation to invest in Chile, not an immediate windfall. The biggest benefits arrive between 2027 and 2029, while obligations and enforcement kick in from day one.

The companies that win from this reform will not be those that react to the headline, but those that plan against the calendar. If you are considering entering or growing in Chile, now is the time to talk.