Between January to March 2012, an average of 165 companies were formed in Chile every single day, compared with 122 startups in the equivalent period of the previous year.
Those figures represent an increase of 37 percent in business creation in the Andean nation’s first trimester, bringing the total number of official enterprises to 15,000.
According government officials, close to 90 percent of the startups are limited liability partnerships or individuals, meaning the focus is solely on productivity.
Chilean Under-Secretary for the Economy Tomás Flores told local paper El Mercurio that there are three reasons that account for the positive result.
1. Diminished cost and time to start a business
The first has to do with the launch, in April 2011, of a new law streamlining the paperwork and reducing both the time and cost of creating a company.
Flores said that it is now up to 25 percent cheaper to create a startup, and the time required to do so had decreased from 22 to seven days. Also, an immediate patent delivery means that companies can begin to operate their businesses instantly.
2. Economic growth
Secondly, according to Flores, economic growth and dynamism must be considered when analyzing Chile’s new business growth.
“It is not the same undertaking [to start a business] in a country that is growing by 3 percent as it is in one that is growing by 6 percent or more,” said the under-secretary. “In the second scenery, there are many more opportunities.”
3. Government funding
Finally, the under-secretary referred to the impact that has been generated in the funding programs of the government’s Production Development Corporation (CORFO, for its Spanish acronym) to small- and medium-sized businesses.
Whereas before, the organization gave resources to banks to fund entrepreneurs, today that funding goes directly to the start ups, Flores said.
The chief of the Division of Studies of the Ministry of Economy, Jorge Ernesto Hermann, said that the sectors that have grown the most are commercial, with a 24 percent growth, community service activities, with 11.5 percent, and real estate, at 9.7 percent.