Consecutive, well-ordered electoral processes since the end of the dictatorship of Gen Augusto Pinochet (1973-90) underline the maturity of Chile's political institutions. Recent economic stagnation, political infighting, corruption scandals, and social unrest are unlikely to affect overall political stability significantly. However, heightened levels of protest activity are a key feature of the operational environment, and political tensions affect both the government and opposition coalitions. Tensions involving indigenous peoples will also continue as the Mapuche community rejects Piñera’s proximity to the military and their presence in their ancestral lands which are primarily located in La Araucanía and Biobío regions.

The country's political stability and pro-business economic agenda have consistently won high ratings among international investors, and it is considered one of the most attractive investment destinations in the region. Although policymakers’ overall pro-business stance continues, the implementation of ambitious agendas to improve the business environment is currently undermined by the widespread pressure to prioritize social policies and increase government spending.

The Piñera administration has faced strong opposition to its key reform proposals regarding pensions, tax, labor codes, and environmental licensing. Greater political articulation will continue to be demanded as Piñera struggles to recover the political capital lost during the 2019 demonstrations. Moreover, the president faces intense social pressure to deprioritize pro-business reforms in order to focus on social policies to address protest demands and the COVID-19 crisis.

Corruption is relatively rare and does not pose an obstacle to foreign investment. International surveys on corruption consistently place Chile on par with most European countries.  However, a series of scandals in various ministries and public institutions since 2014 has tarnished Chile’s reputation as a country with minimal incidence of official malpractice. Such incidents have included issues over campaign financing and corruption scandals involving the police force. In response to these scandals, the government and Congress have introduced several measures to increase transparency in political campaign financing, including a USD 100m loan from the Inter-American Development Bank (IADB) in 2016 to improve its anti-corruption and transparency policies.

In addition to a new regulatory framework for corruption-related crimes that was approved in October 2018, President Sebastián Piñera on 13 March 2020 introduced to Congress a new set of bills designed to toughen penalties on corruption and collusion, which will be discussed by legislators over the next few months. This new anti-corruption agenda is a response to the October 2019 protest movement, which demanded new measures to tackle ‘abuses’ by government authorities and businesses.

Chile is considered a Full Democracy in the 2020 Democracy Index, developed by The Economist Intelligence Unit (EIU), where the country ranks 21 out of 167 countries scored and 25 out of 198 at the 2020 Corruption Perception Index by the Transparency International Organization.

The country ranks 43 at the  Human Development Index developed by the United Nations Development Programme.

The operating environment has been affected by restrictive measures to address the COVID-19 pandemic. Supply chains have been disrupted by delays caused by queues at sanitary checkpoints, while social distancing policies (such as mandatory quarantines) have undermined the mobility of workers. Besides the total closure of non-essential businesses in cities subject to quarantines, operations have slowed due to tougher sanitary protocols in workplaces. Exports have also been affected by COVID-19-related disruptions of maritime routes and sanitary protocols at ports of destination. Such disruptions will very likely be minor in a post-COVID-19 scenario as Chile’s operating environment is structurally positive with few restrictions on property ownership.

Overall, Chile’s operational environment is marked by positive attitudes towards foreign direct investment, highly developed infrastructure, low levels of corruption compared to the rest of the region, and a relatively liberal labor market. Its operational outlook is underpinned by consolidated institutions and solid macroeconomic stability. However, social unrest since October 2019 is likely to lead to some changes in the economic model, including taxation and labor legislation. Increased environmental scrutiny is likely to lead to projects being challenged in courts, causing delays and raising cancellation risks, including mining and energy.

Although protest activity has been contained by the pandemic and occasional demonstrations have been a traditional feature of the operational environment, increased protest activity on the back of Piñera’s austerity agenda will remain a concern for businesses in a post-COVID-19 scenario. However, the targeting of foreign companies will remain rare. Most anti-government movements will continue to focus their pressure on calls for a greater role by the state in social issues, and not on overthrowing the government.

Foreign and local workers receive the same treatment under Chilean law, yet only a maximum of 15% of the total workforce can be foreigners in companies with more than 25 employees. However, management positions and specialist technical staff can be filled by foreign employees if it can be proved that Chilean workers are unable to do the same job. There is no local worker equity-ownership obligation for foreign companies.

Labour relations have changed in recent years, with legislation becoming more pro-labor and resulting in further costs for the employer. As a result, labor activism has become more prominent, with mineworkers, in particular, demanding a greater share of the wealth received through copper exports; 90% of miners are unionized compared with just 13% of the overall workforce. COVID-19 has also fuelled activism as companies that have dismissed workers or temporarily suspended work contracts amid the economic slowdown have been targeted by unions and derogatory campaigns on social media, which has caused reputational damage. The combination of persisting social discontent, impacts of COVID-19, and Chile’s tradition of active labor movements mean that activism will continue to be an issue in the foreseeable future.​​​​​

The country's infrastructure is good by regional standards and improving, with a satisfactory transport system for foreign business operations. Driving restrictions are regularly introduced in the Santiago region during periods of, particularly, high air pollution (see HEALTH section). This is most common during the fall and winter months (May to September). Primary and secondary roads are generally in good condition. However, winter storms can result in hazardous driving conditions and/or closed roads, particularly in mountainous areas (e.g. at border crossings with Argentina) and in the south, where some routes in rural areas are unpaved.

Air travel is safe and its capital, Santiago, benefits from a quick, efficient, and still expanding metro (subway) network.

Overall, Chile ranks 59 out of 190 countries scored at the 2020 Doing Business Index by the World Bank, the best-ranked Latin American country.

Despite its proximity to the drug-producing Andean countries, Chile's crime rates remain significantly lower than in other parts of the continent and it is one of the safest countries with the lowest homicide rate in the region. The country's good security situation is explained by the institutional reforms that followed the end of the Pinochet dictatorship in 1990, which made possible the creation of an effective and independent judiciary, competent security forces and low levels of corruption.

Violent crime has seen a slight upturn in recent years although it does not in principle pose a direct threat to business. In fact, most crime takes place in suburbs or poor residential townships surrounding major cities and stems from interpersonal disputes or altercations between criminals and security forces. The fact that expatriates are perceived as high net worth individuals may lead them to be targeted for certain crimes, such as car theft, residential burglaries or telephone extortion, but nothing out of the risks faced by wealthy Chileans, considering that the risk of kidnapping in the country is low.

Since October 2019, Chile has been hit by a series of social unrest in response to the Santiago metro fare increase, which evolved into a series of nationwide protests against the high cost of living and the privatisation of some services, in a society tired of social inequalities and living standards not commensurate with its income level. The spontaneous takeover of the main train and metro stations and open clashes with the national security forces (Carabineros) by groups of people who smashed and set fire to street furniture and civil infrastructure, led the government to declare a state of emergency, authorising the deployment of the army to bring order. The epicentre of the protests has been located in Plaza Italia (Santiago de Chile), very close to the area where the Mapocho Rio project is being developed. The current constitutional process may temporarily calm the wave of protests, but they are likely to continue in the future if deep structural reforms are not carried out.

In recent years, Chile has suffered from the arrival of several international criminal groups, mainly Bolivian and Peruvian, which have taken control of drug routes. Indeed, in addition to serving as a transhipment point for cocaine to Europe, Africa and Australia, the discovery of drug processing laboratories in Chile indicates that the country's role in drug production may be increasing and that it is becoming an important regional supplier of precursor chemicals used in drug manufacture. Once in the country, the drug is sold by street gangs that operate in poor and marginalised neighbourhoods and engage in micro-trafficking and other petty crime.

Domestic terrorism has largely stopped since the end of the dictatorship, although there are still occasional cases of anarchist attacks. Incidents involving Mapuche activists are common, especially in the southern part of the country, where indigenous people represent 30% of the population. Given that none of the Chilean governments have succeeded in satisfying indigenous interests, mainly in relation to land rights, their disruptive actions are likely to continue, especially in the form of protests, road blockades, transport delays, sabotage, attacks on buildings, burning of trucks and crops, etc.

Overall, Chile ranks 45 out of 163 within the 2020 Global Peace Index by the Institute for Economics and Peace.

Chile is not currently among the most cyber-attacked countries in the world according to Kaspersky cyber threat map.

Currently, Chile has a reliable national policy on cybersecurity management; these mechanisms have been in place since 2015 and involve means of cyber defense, international cooperation, and implementation of protocols. However, the study "Cybersecurity in Chilean companies", published by Ipsos and Microsoft, carried out in 2019, revealed that 39% of the Chilean companies surveyed have suffered a cyber attack at some time.

Chile's government has its own computer security incident response team (CSIRT).

No vaccinations are required to enter the country.

Chile ranks 27 out of 195 within the 2019 Global Health Security Index, a project of the Nuclear Threat Initiative (NTI) and the Johns Hopkins Center for Health Security (JHU), developed with The Economist Intelligence Unit (EIU).

The climate is arid in the north, Mediterranean in the center (Santiago, Valparaiso), and cold in the south.

In the center of the country, summers (December to February) are hot (28°C) and dry while winters are cool (10°) and rainy. Heading south, the climate becomes temperate but rainy throughout the year with the exception of summer. In the extreme south of the country (Patagonia), temperatures are cool (11°C in the summer) with regular rain and strong winds throughout the year.

Chile, spread along the Andes mountain range, is particularly vulnerable to natural disasters.

The country is situated along the Nazca fault (north) and experiences a great deal of seismic activity. On February 27, 2010, an extremely violent earthquake with a magnitude of 8.8 - one of the strongest earthquakes recorded in over 100 years - struck the country; the earthquake and subsequent tsunami left more than 700 people dead (including 350 in Constitución) and caused considerable material damage. More recently, in September 2015, an 8.4-magnitude earthquake struck off the coast of Chile, resulting in material damages in the Coquimbo region and at least 15 deaths, as well as some 3000 aftershocks; the Chilean government received much praise for its prompt response to the earthquake and ensuing tsunami threat. Generally speaking, due to stringent building standards and earthquake-resistant construction techniques, the vast majority of earthquakes do not result in any major infrastructural damages or casualties.

Chile, located along the Pacific Ring of Fire, is also home to a number of active volcanoes, e.g. the Calbuco, Guallatiri, Chaitén, Llaima, Lascar, Copahue, etc. Eruptions can lead to evacuations, flight disruptions, and health hazards due to volcanic ash in the air.

Any emergency situation can be monitored from the ONEMI - Oficina Nacional de Emergencia del Ministerio del Interior y Seguridad Pública Web page.