Contributors from Chile were asked three questions: What were the highlights/trends in your market last year? (i.e. important mergers, regulatory changes, economic situation etc.); What are the opportunities and challenges for accounting firms in the market?; What are the expectations for the future short/medium/long term?
By Karl Matson, country manager, Biz Latin Hub, 3E Accounting
Chile has managed an impressive growth rate over several years due to its abundant mining investment and its strong foreign direct investment in renewable energy.
Although the fall in mining activities seems to have slowed the economy down, Chile is forecasted to recover from the recession in 2018. In addition, trade activities and private consumption are increasing in Chile, which is helping rev up the country’s economic engines.
Chile is a steady, thriving country that has consistently ranked highly in international indexes in politics and economics. Economic growth is projected to gradually strengthen to 2.8% in 2018.
In 2017, several changes came in, such as the new tax law, which has been in effect since 1 January 2017. Now, two different tax regimes are in place: the attributed regime; and the distributed regime. Also, on the 23 February, legislation to create of the Financial Market Commission was published, which will come into effect next year. This new enforcement body will replace the existing Chilean Securities & Insurance Commission (Superintendencia de Valores y Seguros).
In addition, on 1 June, Chile’s new merger regime was put in place. This establishes a mandatory pre-merger notification system and requires a quantity of information and supporting documentation related to the projected operations to be submitted.
Although there have been many changes, Chile retains a strong regulatory framework and performs well on the World Bank Doing Business Reports for registering property, dealing with construction permits, starting a business and enforcing contracts.
The supply in the consultancy sector in Chile is scarce; there are a small number of local consulting and professional accounting companies, all Chilean. This is because international companies like KPMG and Ernst & Young have set up consultancy companies in the country through subsidiaries and franchises.
However, a gradual growth in the demand for consulting services has been detected, as international and local companies focus on medium and large companies, opening up consultancy services to micro businesses and small enterprises.
In conclusion, it can be said that in Chile, professional accounting firms gain more and more attraction due to the new tax regime and the new applied taxation system. In general, consultancy services are becoming more valued and a growth is expected to take hold as the global economy strengthens.
By Jaime Andres Jullian, managing partner, Jullian Consultores
There have not been many massive changes, however, there were regulatory changes- both in tax and in labour. We have implemented a new accounting and administrative software which is developed 100% in house.
Robotisation is on rise and the accountants of the future should adapt quickly. They also need to adapt with regards to artificial intelligence as well as the standardisation of accounting processes. This will lead to the replacement of many professionals in the area, who do not realise the path.
The accountants of the future should be more analytical and critical professionals when it comes to their work and the analysis of the company.
There are growing expectations with regards to economic growth. We expect to maintain our historical 15% rate of economic growth (real) avoiding poor economic performance. Based on our estimation, we should maintain that rate of growth over the next five years.
In order to achieve this, we are working on standardising some of our products and services we provide as well as automating some of the very repetitive functions.
By Fernando Braun, partner, SMS Chile
An important regulation was voted to establish a new organic entity named “Consejo Mercados Financieros – CMF”, replacing the old SVS (Superintendencia de Valores y Seguros, the equivalent of SEC in the USA), with legal power to guarantee public faith and able to contract accounting firms with this purpose.
We see in Forensic Audit as the most attractive opportunity for the future.
The future expectations are aligned with the present, as the economic trend shows that GNP next year will increase to 2.5 to 3 percent in the future and the inflation rate will be three percent flat in the next year.