Chile has introduced sweeping legislation to revive growth and unlock mining investment through tax cuts, labour incentives and faster permitting.
The National Reconstruction and Economic Development Bill, presented to Congress on April 22, seeks to reverse years of sluggish expansion while positioning mining as a central pillar of recovery, with the government projecting GDP could rise 8.18% over a decade.
President Jose Antonio Kast, who took office in March, framed the overhaul around restoring competitiveness, targeting high taxes, regulatory delays and legal uncertainty that have constrained investment.
At the core of the package is a phased reduction in corporate tax rates from 27% to 23% by 2029, alongside a cut for small and medium enterprises to 23% from 2030. The reforms also reinstate a fully integrated tax system, eliminating double taxation on distributed profits, and introduce a 25-year tax invariability regime for major projects, shielding investors from future royalty increases and new sector-specific levies.
The bill pairs tax reform with a $1.4 billion annual employment credit expected to support about 235,000 SMEs employing roughly four million workers, while offering incentives for capital repatriation and temporary VAT relief on new home sales. It also includes reconstruction funding for more than 1,000 homes destroyed by recent wildfires and measures to cut approval timelines for large projects that currently exceed 1,000 days.
“We did not come here to repeat the previous cycle; we came to break it,” Kast said, outlining targets of 4% annual GDP growth, unemployment of 6.5% and a return to structural fiscal balance by 2030.
Thousands of firms to benefit
The reforms land against a backdrop of modest growth — Chile expanded 2.5% in 2025 and is forecast to grow 2.2% in 2026 — while more than 800,000 people seek work and youth unemployment remains elevated. Inflation has eased to 2.4%, allowing the central bank to hold rates at 4.50%, and equities have rallied, with the IPSA (Selective Stock Price Index) reaching a record high following Kast’s inauguration.
Supporters argue the corporate tax cut will benefit about 150,000 companies that account for more than half of formal employment and 90% of investment, but critics say the plan favours the wealthy and risks eroding public revenues.
The bill now heads to Congress, where the government lacks a majority and must secure backing from smaller parties to pass the legisl
“The bill directly addresses the structural barriers that have constrained mining investment in Chile for years,” Fiorella Ulloa, head of policy and regulatory affairs at Plusmining consultancy said.
Ulloa noted the 25-year invariability regime marks Chile’s most significant step toward restoring legal certainty since the repeal of DL 600, issued by the military government in 1974, placing it alongside Argentina’s RIGI and Peru’s stability agreements.
The framework would cap the effective tax burden at 35% for foreign investors while locking in royalties, mining patents and other levies. Combined with lower corporate taxes, it allows investors to secure a declining tax rate over time, strengthening Chile’s competitiveness in the region.
Pro-investment shift
The package signals a decisive shift toward pro-investment policy, with faster permitting, tax certainty and labour incentives aimed at restoring Chile’s position as a leading mining jurisdiction.
Still, Ulloa cautioned the impact of permitting reforms will depend on execution. Measures such as limits on environmental review rounds, caps on injunctions and deadlines for archaeological approvals address known bottlenecks, but past reforms have often been diluted in practice. Legal uncertainty around environmental litigation and gaps in the Biodiversity Service framework could continue to weigh on project timelines.
She said the bill is likely to pass but will face changes in Congress, particularly in the Senate. While adjustments are expected, the key risk for investors would be any weakening of the tax certainty framework, including shorter stabilization periods or changes to royalty coverage. Even with modifications, approval would be a positive signal, though delays in the legislative process could prolong uncertainty and slow investment decisions.
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Latin America is heading into 2026 with resources at the centre of a growing global power struggle, as governments and investors focus on who controls critical minerals and the supply chains behind them. If the region matters to you, don’t miss MINING.COM’s new series tracking the geopolitical forces reshaping it and why markets are increasingly driven by global alliances as much as local politics.
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