Setting up in Santiago

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While overseeing the expansion of media content company Spafax, chief executive Niall McBain and president of content marketing Raymond Girard discovered the ideal opportunity in Santiago, Chile

Niall McBain joined content agency Spafax in 1995 and has taken the company from strength to strength, from a London-based business to a global one, producing inflight digital entertainment and magazines for ‘transumers’ – or consumers in transit.

In 2004, when the company was looking to expand into a new market, president of content marketing Raymond Girard spotted an opportunity in Chile. “Raymond was running our North American operation at the time and was conscious of the opportunity that was growing in South America,” says McBain. “Chile has a great business ethic, a great banking system, and the economy has been stable and growing for a very long time,” adds Girard. “There are great business connections with Europe and America, so it made sense for us to make it a hub for the American operations.”

Getting started
Once expansion to Santiago got under way, Girard learnt to speak Spanish in order to help with the process. “Speaking Spanish in Chile is essential,” he explains, “as you’re not necessarily going to be dealing with people who have a working command of the English language.”

Whether negotiating a lease or opening a bank account, “I wouldn’t recommend setting up a business in Chile without first having a proper command of the language. Not only will your clients appreciate your use of Spanish, but it will also increase their level of trust in you.”

Despite becoming fluent in three months, Girard found there was much more to learn. “We assumed that being able to speak Spanish led to understanding the entire culture of the place – we were wrong, and that was our biggest learning curve.”

Once things were under way and they took on their first client, the Spafax team found that business in Santiago was very demanding. “The client needed to get a magazine up and running in three months,” recalls Girard. “Ideally we would have loved to have had 10 months to set up the business, open the office and get business licences, but we had to think on our feet and improvise quite a bit.”

In fact, they ran into hurdles almost immediately, discovering that Chilean employment law can cause real headaches for businesses; while issuing an invoice without an official government tax number is considered a serious offence.

“In terms of staffing the business, there were times when I had to pay the staff by withdrawing money from the ATM because we couldn’t get the various permissions, licences and paperwork in place in time,” says Girard. He adds: “After three months of employment they expect to be with you as long as they would like to be.”

Cultural differences
Girard and McBain also found the Santiago business community smaller and more structured than in the UK. “There are certain things you can’t say to certain people,” says Girard. “It’s a small-business market and I love the fact that the business community is really tight. Everybody knows everybody here. So there’s a certain amount of respect – but there are also a lot of rules that you have to play by.”

Business etiquette is much more formal too, says Girard. “The Chileans are almost Singaporean in their approach to business: don’t show up late for a meeting or you will forever be branded as disrespectful.”

The working culture is very much a reflection of this, with longer working days. Employees start at 9am, take a long lunch and work until late. “Lunch there is very social, so they will go for a group walk or go for a picnic in the park,” says Girard. “But they stay at the office late. Rush-hour in Santiago starts at 7pm, it’s quite remarkable.”

Crossing borders
The Santiago office has experienced steady growth over the past decade. From starting with six full-time staff the company now has 28, and is working with clients such as DirecTV, the largest satellite provider in South America, and South American airline LAN.

The latter is “a great partner to have”, says Girard. “LAN have acquired other airlines in other countries such as Argentina, Ecuador and Colombia so we’ve followed them throughout the region.” The business also boasts magazines in nine South American countries and has expanded beyond print, working across various digital platforms “from social media to apps”.

Girard advises companies looking to use Chile as a Latin American hub that South America is not an integrated market: “The amount of barriers to interrupt regional trade are phenomenal, so if you’re trying to expand into South America you’re probably going to have to open more than one office. Our dream of having a regional hub might have been a bit naïve. Prepare for a lot of limitations of what you can sell and to whom.”

Santiago was the seventh international office opened by Spafax – most recently they’ve opened their 13th in Lima. “Our next step is further integration and expansion into Brazil,” says McBain. “It’s a really important market for us, and we’ll want to look at how we join up that office with Miami and the US.”

Santiago fact file

Population: 
Almost seven million

Currency: 
Chilean peso

Language: 
Spanish

Sightseeing: 
“Just outside Santiago there’s a phenomenal ski station called Valle Nevado,” says Girard. “From there you can drive down to Zapallar, which is this stunning little beach community and seaside resort on the Pacific.”
www.vallenevado.com/es

Food
“The Mestizo restaurant is in a public park and has a really interesting design,” says Girard.
http://mestizorestaurant.cl

Where to stay
“I’m really partial to a small chain of hotels called Noi – they are usually built into neighbourhoods so you feel you’re living like a local,” says Girard.
http://www.noihotels.com

Getting there
“The best connection from the UK is via Madrid on LAN. That is the most convenient, but BA also fly there,” says Girard. Or book through WEXAS Travel (iod.com/ traveloffers or call 020 7838 5976).

Useful contact
British embassy in Santiago
https://www.gov.uk/government/world/chile

About author

Behiye Hassan

Behiye Hassan

Behiye Hassan has interviewed a range of directors on various topics. She specialises in travel and trends in working space and the entrepreneur community.

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