Chile Experiences First Decline in Company Numbers in a Decade

The Chilean economy faced challenges in 2023. The Central Bank reported a mere 0.2% growth in gross domestic product (GDP). This pales in comparison to the 2.1% expansion in 2022 and the exceptional 11.3% surge in 2021.

The slowdown affected various indicators reported by taxpayers to the Internal Revenue Service (SII). For the first time in over a decade, the number of companies operating in Chile decreased.

According to the SII, the 2024 tax year saw a 0.6% reduction in businesses compared to the previous year. The total number of companies fell to 1.5 million, a decrease of 8,416 from 2022.

This decline marks a significant shift. Since 2010, the number of companies has consistently increased. Even during the COVID-19 pandemic in 2020, there was a 1.3% growth in business numbers.

The economic slowdown impacted other areas as well. Both reported sales and the number of dependent workers contracted in 2023. Total sales amounted to 32,676 million UF (US$952.83 million), a 9.8% annual decrease.

Economic Shifts in Chile

This decline in sales surpassed the 8.3% drop observed during the 2020 health crisis. The number of dependent workers also fell by 4.8% in 2023, reaching 282 million. This represents 488,000 fewer employees than the previous fiscal year.

The data reveals disparities between different segments of taxpayers. Large companies made up only 1.1% of the total but accounted for 87.5% of sales and 49.4% of dependent workers in the country.

In contrast, micro, small, and medium-sized enterprises (MSMEs) represented 79.4% of all businesses. However, they only contributed 12.5% of total sales and 42.9% of employment.

These figures reflect the ongoing economic challenges in Chile. The country continues to grapple with the aftermath of the pandemic and broader economic shifts. The decline in business numbers signals a changing landscape for Chilean enterprises.