Technology & Outsourcing 2023

Last Updated October 26, 2023


Law and Practice


Grupo Wolf is a Chilean legal services company, established in 2017. Its focus lies within various specialised fields, primarily encompassing three fundamental areas: business advisory, real estate and litigation. The business advisory division is oriented towards providing legal services to companies and start-ups, offering comprehensive consultancy covering commercial, corporate, labour, tax and technological aspects. Within the latter, advisory services include subjects such as blockchain, crypto assets and decentralised finance. The real estate practice is dedicated to legal services for individuals, property brokers, real estate firms and construction companies. The litigation practice centres on civil, commercial, labour, family disputes and arbitration proceedings. Grupo Wolf's organisational culture is built on three essential pillars: people, innovation and creativity. Its horizontal structure fosters a collaborative environment, promoting the generation of ideas.

In the context of IT outsourcing in Chile, there have been notable trends and key developments in recent years within the technology and outsourcing field. Firstly, there has been a significant increase in the adoption of cloud computing, with companies migrating their IT operations to cloud environments. This has generated a higher demand for IT outsourcing services related to cloud infrastructure and application management. This shift to the cloud has also brought about heightened concerns regarding cybersecurity, with companies demanding rigorous data security standards from their IT service providers.

On the other hand, the integration of technologies, such as artificial intelligence and automation in IT management, has driven efficiency in outsourcing processes. These technological solutions are increasingly being incorporated into outsourcing agreements to enhance productivity and reduce operational costs. Finally, it is important to highlight that the COVID-19 pandemic has had a lasting impact on IT outsourcing services in Chile, accelerating the adoption of remote work models and the need for technological solutions to support this new work dynamic. Remote work and business continuity have become common practices in IT outsourcing, demonstrating companies’ adaptability to changing circumstances.

In the realm of business process outsourcing (BPO) in Chile, significant trends and key developments have been identified, including the following.

  • Digitalisation and automation: in Chile, as elsewhere, digitalisation and process automation stand as central trends in service outsourcing. Companies seek to harness technology to enhance efficiency and reduce costs.
  • Information and communication technology (ICT): investment in information and communication technologies is essential for BPO in Chile. This encompasses the adoption of online collaboration tools, customer relationship management (CRM) systems, and data analysis solutions.
  • Customer experience focus: customer satisfaction is a critical factor in Chilean BPO. Companies aim to enhance the customer experience through the implementation of technology-based customer service solutions, such as chatbots and virtual assistants.
  • Cybersecurity and data protection: given the growing concern over cybersecurity and data privacy, BPO firms in Chile are investing in stricter security measures and regulatory compliance in line with local and global regulations. 
  • Outsourcing specific business processes: companies in Chile are outsourcing specific business processes that are not central to their core activities. This allows them to focus on their core competencies and reduce operational costs.

Furthermore, the COVID-19 pandemic has also influenced the BPO industry in Chile in various ways, including those set out below.

  • Remote work: the need for social distancing drove the adoption of remote work in the BPO industry in Chile. Companies had to quickly adapt to enable their employees to work from home.
  • Increased demand for digital services: the pandemic increased the demand for digital services, such as online support and virtual customer service, accelerating the adoption of technologies to meet these needs.
  • Greater focus on business continuity: the pandemic reinforced the importance of having robust business continuity plans in the BPO industry in Chile. Companies are now more focused on ensuring that their operations are resilient to disruptions.
  • Investment in technology infrastructure: the pandemic led to increased investment in technology infrastructure to support remote work and online collaboration. This includes expanding networks and implementing cloud solutions.

As a result, in the Chilean market, BPO is undergoing significant changes driven by technology and adaptation resulting from the COVID-19 pandemic. Investment in technology, cybersecurity and customer care are key areas of focus, and the common practices that emerged from the pandemic are reshaping how BPO companies operate in Chile.

New technologies have had and continue to have a significant impact on the Chilean and global markets. These technological innovations have driven efficiency, automation and security across various industries.

For instance, AI and machine learning are propelling automation and efficiency in various sectors. Chatbots and machine learning are being used to enhance customer service and streamline internal processes, thereby positively impacting productivity and service quality. Additionally, robotics and process automation have improved operational efficiency, revolutionising manufacturing and logistics in Chile. Blockchain and cryptocurrencies have transformed the financial industry, ushering in new, faster, secure and cost-effective forms of investment and transactions. Similarly, NFTs have revolutionised the digital art industry and any sector seeking to provide services in a unique manner, fostering the creation of communities and loyal audiences for the goods and services offered.

Smart contracts themselves represent a disruption, as they prevent parties from breaching their agreements, making human relationships much more effective without the need to initiate legal proceedings to enforce obligations. The authors have advised clients in this field and have been involved in some processes with them.

It is of utmost importance for businesses and legal professionals to be aware of these technologies and their legal implications to adapt to an ever-evolving market and be prepared for the new way of practising the profession.

Outsourcing has experienced significant growth in recent years. Chilean companies opt to outsource a range of services to optimise operational efficiency, reduce costs and focus on their core competencies. While the outsourcing landscape may vary by industry and specific company needs, there are areas that stand out as the most outsourced in Chile.

IT services are one of the primary services outsourced in Chile. This includes the maintenance of IT infrastructure, technical support, application management and software development. IT outsourcing enables companies to access specialised expertise and stay up to date with the latest technological trends. Additionally, outsourcing of customer service and call centre services is common in Chile. This encompasses telephone support, online assistance, and social media management. The goal of this outsourcing is to ensure efficient and 24/7 customer service.

Furthermore, the outsourcing of data processing and accounting is prevalent among companies. They subcontract tasks such as financial accounting, payroll, billing, and accounts payable and receivable management to reduce administrative burdens and ensure accuracy in financial management. Closely related to the previous point, outsourcing of human resources services, including payroll administration, benefit management and talent acquisition, is a common strategy in the Chilean market.

In Chile, technological transactions and outsourcing of services are subject to a legal and regulatory framework aimed at promoting security, data protection and efficiency in commercial operations.

Chile has a Personal Data Protection Law that establishes strict rules for the collection, processing and transfer of personal data. Companies must obtain the consent of data subjects and ensure adequate security measures when handling personal information. This Regulation aims to safeguard the privacy of individuals and has a significant impact on technological transactions and outsourcing involving personal data.

While the standard of this legislation may not be as high as that of the European Union’s General Data Protection Regulation (GDPR), significant legislative advances have been made with the processing of bills seeking to strengthen and enhance this legislation. These efforts focus not only on personal data protection but also on cybersecurity. All of this was accelerated with the publication and entry into force of the Fintech Law, which includes principles such as open banking, demanding higher standards of information protection and security. This is because, by law, the parties involved or actors in the ecosystem will be required to share important user information.

In Chile, the specific restrictions and compliance issues in technological transactions or outsourcing vary depending on the industry. For example, in the financial services sector, there are strict regulations related to the protection of financial data and cybersecurity, with a particular focus on complying with the regulations of the Financial Market Commission (CMF). Financial institutions must ensure that technology service providers comply with the required regulations and security standards.

In recent years, there has been an increase in regulatory scrutiny in various sectors, including financial services, in response to the COVID-19 pandemic and the relatively recent Fintech Law. Regulatory authorities have issued additional guidelines on cybersecurity and business continuity in the remote working environment, requiring companies to review and adjust their technology and outsourcing contracts to comply with these new regulations.

In Chile, industry-specific restrictions and compliance issues in technological transactions or outsourcing depend on the sector in question, with a special focus on financial services in recent years due to the pandemic and regulations related to cybersecurity and business continuity.

In Chile, the current legislation regarding data protection dates to 1999, with some subsequent amendments, and is considered inadequate to address the current demands in this field. However, there is currently an advanced project for a new personal data protection law aimed at addressing these deficiencies. This new legislation includes several noteworthy aspects that will revolutionise the way personal data is handled in the country.

  • Enhanced rights: the new law reinforces the rights of access, rectification, cancellation and opposition (ARCO) and introduces new rights, such as the right to data portability and the right to object. This will grant individuals greater control over their personal data and its handling by companies.
  • Regulation of international data transfers: the new legislation consolidates the regulation of international data transfers, ensuring that they are carried out securely and protecting data privacy, which is especially relevant in a globalised world.
  • Special data regulation: specific rules are established for the processing of special data, such as health data, data of minors and geolocation data, setting clear standards for their handling. This will ensure enhanced protection of sensitive data.
  • Principles for data processing: the new law defines principles for data processing by public entities, establishing clear rights and responsibilities. It also establishes a mechanism for individuals to exercise their rights and for potential infringements to be sanctioned.
  • Creation of the Personal Data Protection Agency: for the first time, an autonomous public control authority called the "Personal Data Protection Agency" is introduced, tasked with overseeing data processing, and protecting the rights of data subjects. This will ensure proper oversight and effective compliance with the legislation.
  • Data processing without consent: the new law regulates cases in which data can be processed without the consent of the data subject, setting clear limits to ensure data privacy and security.

Furthermore, Law No 21.459 on Computer Crimes represents a significant advancement in the regulation of cybercrimes and the protection of cybersecurity in Chile. This updated law addresses the growing challenges of cybercrimes and cybersecurity by including new cybercrimes, granting greater authority to investigative bodies, and expanding the criminal liability of legal entities.

These two laws are essential for addressing cybersecurity threats, safeguarding personal data and promoting online security in Chile. They also provide a legal framework that can deter digital criminals and facilitate the prosecution of those who commit digital crimes. Their proper implementation will be crucial to ensuring their effectiveness in practice and securing data protection and cybersecurity in the country.

In Chile, there is no standard contract, but the type of contract commonly used is the service provision contract. This type of contract outlines the terms and conditions under which a service provider will provide services to a specific client, including aspects such as the description of services, deadlines, fees, responsibilities of the parties, payment terms, and the relationship with workers, among others.

Furthermore, it is common to incorporate specific clauses related to data protection and information security since these are critical aspects in IT transactions and outsourcing of services or workers. However, it is important to note that the specific terms and conditions can vary significantly depending on the circumstances and the needs of the parties involved. Therefore, it is essential to have a contract tailored to the particularities of each business and avoid using standard or template contracts.

In the context of outsourcing transactions in Chile, while there is no standard contract, there are various ways in which these services are outsourced. These models can vary depending on the complexity of outsourcing and the business objectives involved. Some examples include the following.

  • Outsourcing of services: this is the most common and basic model of outsourcing. In this approach, a company contracts an external provider to manage and execute a specific part of its operations or services. For example, a company may outsource its IT services to a specialised provider.
  • BPO: this involves outsourcing complete processes or specific business functions. This goes beyond simple service outsourcing and can include processes such as human resources management, accounting or customer support.
  • Multi-sourcing: in this model, a company chooses to work with multiple service providers instead of relying on a single provider. This can help diversify risks and leverage the specialisation of different providers in specific areas. However, managing multiple providers can be more complex in terms of co-ordination and management.
  • Joint ventures: in some situations, companies may choose to establish a joint venture with an external provider to collaborate in service delivery. This can be beneficial when both parties have complementary resources to offer.
  • Cloud computing and Software as a Service (SaaS): while not contract models themselves, the adoption of cloud-based services and SaaS has become a form of technology outsourcing in Chile. Companies can use cloud services to efficiently host applications and data without the need to manage internal infrastructure.

It is important to note that the choice of the contract model will depend on the specific objectives of the company, available resources and particular circumstances. Additionally, Chilean legislation and regulations must be considered in the drafting of these contracts to ensure legal compliance and the protection of the rights of the parties involved.

The digital transformation, including technologies such as cloud computing, SAAS and infrastructure as a service (IAAS), has had a significant impact and growth in outsourcing contract models in Chile, especially considering the recent pandemic.

These technological advancements have led to the review and adaptation of contracts to reflect the new dynamics and challenges in the provision of IT services. For example, contracts now include specific provisions related to data security, cloud management, intellectual property, remote services, and other technology and information-related aspects.

Additionally, clauses have been incorporated to address liability in the case of failures in the provision of technology services, ensuring greater protection for all parties involved in the transaction.

In summary, digital transformation has led to a significant evolution in outsourcing contract models in Chile to adapt to the needs and challenges of modern technology.

In Chile, technology and outsourcing transactions are subject to a series of protections for customers, aiming to ensure that the parties involved fulfil their contractual obligations and protect the rights of customers.

One of the initial levels of protection is the drafting of detailed and clear contracts that clearly establish the obligations and responsibilities of both parties. This includes the description of services, delivery timelines, service level agreements (SLAs), pricing and other essential terms. A well-structured contract provides a solid foundation for resolving disputes and enforcing agreed-upon terms.

Customers have the right to demand assurances that technology services or products will meet the agreed-upon standards. If the promises are not met, customers can require corrections or financial compensation as stipulated in the contract. In this regard, penalty clauses are often included, which represent an advance assessment of damages. If one of the parties fails to meet its obligations, the complying party will not need to prove the damages before a court but will only need to establish the breach to claim the penalty clause.

In cases where the service provider does not enter a formal contract with the customer but regulates their relationship solely through the terms and conditions of its platform, it is essential to carefully review its content before engaging its services. While there is no standard content requirement for terms and conditions in Chile, they are becoming increasingly relevant due to the impact of technology services on various industries. As a recommendation, always verify the jurisdiction in which potential disputes are resolved and whether the obligations of the service provider are detailed comprehensively.

At this juncture, what holds the utmost significance is the stipulations laid down by the parties within the respective contract. Nevertheless, one can identify certain common scenarios in which both the client and the provider may terminate the contract, as set out below.

  • Termination by mutual agreement: if both parties concur on terminating the contract, they may do so at any point. Typically, this is formalised through a written agreement that delineates the terms and conditions of termination, including potential compensations or exit agreements.
  • Adherence to timelines: contracts usually specify timeframes for service delivery. If one party consistently or substantially fails to meet the agreed-upon deadlines, the other party may have the right to terminate the contract due to non-compliance. Alternatively, a predetermined duration for the business relationship may be established. In such a case, if neither party expresses the intent to renew the business relationship before its expiry, it will conclude upon the fulfilment of said timeframe.
  • Non-compliance by either party: generally, contracts stipulate certain non-compliances, whether specific or general, which result in the diligent party being able to terminate the contract without having to indemnify the other party for such circumstances.

Upon the conclusion of a contract, regardless of the underlying cause for termination, the client retains the entitlement to have all data and assets provided to the provider during the contract’s duration returned. This is particularly crucial in the context of data storage or processing services. Furthermore, the client may request that the provider continues to adhere to confidentiality and data protection obligations even after the contract’s termination, particularly if it concerns sensitive information.

In the realm of contracts and Chilean law, it is possible to seek compensation for losses suffered because of a breach of contractual obligations. These losses are generally referred to as "damages." Among the losses that may be compensable are, for instance, expenses incurred to repair or replace damaged goods, lost profits due to the contract breach, and additional expenditures made because of such breach.

Furthermore, a distinction is made between direct and indirect losses. Direct losses are those that immediately arise from a contract breach. For example, if a supplier fails to deliver products on time, the direct loss could be the additional cost incurred to obtain those products from another supplier. In contrast, indirect losses are not the immediate result of the breach but are a consequence of the direct loss. Using the same example, an indirect loss could be the loss of profits on a project because it could not commence on time due to a delayed delivery. In some cases, the ability to recover indirect losses may be subject to limitations established by the contract or the law, for example, in Chile, losses without a clear causal relationship are not indemnified.

In Chile, as in many jurisdictions, the ability to recover certain types of losses such as reputation or potential business opportunities can be complex, as previously mentioned in this section. Often, this will depend on specific circumstances and contractual provisions in force. For instance, it may be necessary to demonstrate that such profits would have been obtained if the contract had been properly fulfilled, hence constituting a loss. Similarly, filing claims for damages related to reputation or harm to the business may require strong evidence of how the contractual breach directly caused these losses.

Additionally, some losses may not be subject to liability limitations. Typically, this applies to losses resulting from intentional misconduct or gross negligence on the part of the breaching party. If the other party intentionally breaches the contract or acts with extreme negligence, it may be possible to recover a wider range of damages, including those that might otherwise be limited by the contract or the law.

It is important to note that the determination of what type of damages can be claimed depends on the explicit terms of the contract, the interpretation that can be drawn from its text and the applicable law in the specific case.

In Chile, certain implicit terms are recognised, which may be relevant to technology or outsourcing contracts. These implicit terms are based on general principles of the legal framework. The most significant one is good faith in contracts. In Chile, as in many jurisdictions, there is an implicit obligation of good faith in the formation and execution of contracts. This implies that the parties involved in a contract must act honestly and fairly towards each other. In the context of technology and outsourcing contracts, this means that the parties must fulfil their obligations fairly and must not engage in actions that could unfairly hinder the contract's performance.

Another general principle of law is known as Pacta Sunt Servanda, which translates to "agreements must be kept." This principle establishes that the parties entering a contract are obligated to fulfil its terms and conditions as they are set out in the contract.

In other words, when parties voluntarily agree to the terms of a contract and sign it, they are legally bound to adhere to those terms. This principle reflects the fundamental idea that contracts are binding, and trust and security in commercial transactions rely on the fulfilment of contractual agreements.

It is essential to note that if the parties wish to modify or clarify these implicit obligations, they can do so through specific provisions in the contract. Additionally, Chilean legislation can also influence the interpretation of implicit terms and the rights and responsibilities of the parties.

In Chile, cybersecurity has become a paramount concern for both clients and providers. Clients often demand that providers have well-defined and documented information security policies. This includes the implementation of access policies, strong password protocols, patch and update management, and other measures to safeguard data confidentiality and integrity.

Furthermore, providers are required to strictly adhere to personal data protection standards. On the other hand, clients may request regular security audits to assess the strength of cybersecurity measures implemented by the provider. These audits may encompass penetration testing, vulnerability assessments, and security policy reviews. Additionally, the implementation of antivirus software, firewalls and measures to detect and prevent cybersecurity threats, such as ransomware and malware, is essential for the security of technological operations. For business continuity assurance, providers in Chile are adopting proactive approaches to ensure that technology services remain operational even in adverse situations. Therefore, providers often have business continuity plans in place describing how they will maintain operations in the event of significant disruptions, such as natural disasters or cyber-attacks. Providers establish incident response teams that can act swiftly in the event of cyberthreats or unexpected interruptions. Finally, the parties generally enter into service level agreements (SLAs) that set clear expectations regarding uptime, disaster recovery and other aspects related to business continuity, providing clients with confidence in service delivery.

There are common contractual clauses that assist the client in managing and measuring the provider’s performance. These clauses are used to establish clear expectations, ensure service quality and enable proper oversight. As an illustrative example, SLAs are an essential clause that defines performance standards and key indicators that the provider must meet. SLAs address aspects such as uptime, response time and issue resolution, allowing the client to quantitatively measure the provider’s performance.

Contracts often include provisions that allow the client to monitor and audit the provider’s operations. This may include regular security audits, compliance assessments and quality reviews. Additionally, these clauses define how changes in services will be managed and how continuous performance improvements will be driven. This allows for flexible adaptation to changing client needs.

These contractual clauses help establish a robust framework for managing and measuring the provider’s performance in technology and outsourcing transactions in Chile. They enable the client to closely monitor service compliance and ensure that the desired quality is maintained throughout the contractual relationship.

The cloud services contract is a specific agreement designed for clients who wish to use applications or platforms provided remotely by a provider. In this context, this type of contract may have considerations that are important to consider.

Firstly, the client has the freedom to use the applications, if they adhere to intellectual property rules and any restrictions imposed by the provider. This implies that the client must use the applications in a legal and ethical manner, respecting the provider's intellectual property rights. It should also be clearly established that the provider is the sole owner or proprietor of the applications or programs that can be accessed remotely. Furthermore, it is assumed that the provider holds the necessary licences and permissions to use other applications or software required to access their cloud service.

Additionally, these contracts often include non-competition clauses. These clauses aim to prevent the provider from using the information and expertise acquired in their favour to compete unfairly with the client. For instance, they seek to prevent the provider from launching a business using client data collected on their server.

First and foremost, it is important to note that Chile has a strong legal tradition in labour matters, and there is a high level of protection for workers’ rights. Therefore, any employee transfer related to outsourcing must adhere to the fundamental principles of labour protection and respect for workers’ rights.

The company planning to outsource must inform the affected employees of the decision. This consultation is essential to ensure that workers’ rights are respected. Transferred employees retain their labour rights and previously acquired benefits, including seniority, compensation and social benefits. The new employer (external service provider) must respect and comply with these rights. Ensuring employment continuity is particularly important, as there must be a guarantee of job continuity for transferred employees. This means that workers cannot experience a significant reduction in their employment conditions because of outsourcing.

Furthermore, all parties involved must strictly comply with Chilean labour legislation, which includes adhering to limits on working hours, safety conditions and the payment of legal benefits such as health insurance and social security contributions.

Lastly, workers will need to sign their new contract with the new employer, which must fulfil the obligations.

In Chile, the involvement of a trade union or workers’ council in the outsourcing process is regulated by labour legislation and is contingent on several factors. Firstly, if there is a collective agreement addressing outsourcing, it must be respected and consulted before any decisions are made. Secondly, a trade union will only become involved if an affiliated worker expressly requests their intervention due to concerns regarding outsourcing and the safeguarding of their labour rights. Additionally, certain collective agreements or legislation may require the employer to consult with the trade union before undertaking any significant actions related to workforce organisation. In summary, the consultation and participation of a trade union in outsourcing in Chile hinge on contractual factors and the explicit will of the workers, supported by prevailing legal provisions.

In Chile, the outsourcing of services, whether using onshore, offshore or nearshore resources, is a common business practice and has been a strategy adopted by many companies to optimise costs and operational efficiency. However, in recent years, and especially because of the economic impact of the pandemic, there has been a significant increase in preference for nearshoring compared to offshore and onshore.

This shift in the trend can be attributed to several key factors. Firstly, the pandemic highlighted the importance of geographical proximity and seamless communication in project management and corporate collaboration. Nearshoring offers an advantage in this regard by allowing for greater physical proximity and similar time zones, facilitating project co-ordination and monitoring.

Secondly, nearshoring has proven to be an attractive option in terms of quality control and regulatory compliance. By selecting neighbouring or nearby countries for outsourcing services, companies can maintain greater control over the quality of work and ensure more effective compliance with local and global regulations.

Furthermore, nearshoring has shown itself to be a cost-effective alternative compared to onshore, while also mitigating some of the risks associated with offshore outsourcing, such as cultural differences and logistical complications due to geographical distance.

In summary, although onshore, offshore and nearshore practices remain common in Chile, the significant increase in preference for nearshoring in recent years, especially post-pandemic, reflects a response to evolving business needs, highlighting the importance of geographical proximity, effective communication and quality control in today’s business environment.

In Chile, labour regulation does not establish specific restrictions for remote work, but there are some general provisions and relevant considerations aimed at the fair regulation of this new form of employment. Employers must ensure that remote workers enjoy the same labour rights and benefits as those working on-site, including aspects such as breaks, workplace safety and access to social security.

It is essential to maintain proper control over the working hours of remote employees to comply with the regulations on working hours and rest established in the Chilean Labour Code, unless they are exempt from adhering to their regular working hours. Employers must also ensure a safe and healthy working environment in the homes of remote workers, as well as compliance with health and occupational safety regulations.

Since March 2021, a law has been enacted establishing the right to digital disconnection after working hours, aiming to protect the personal lives of remote workers and achieve a balance between work and personal life for employees working remotely.

Regarding the primary business considerations when allowing remote work, companies must ensure the provision of necessary technology and data security to protect company information and maintain productivity. Clear internal policies related to remote work should also be established, addressing issues such as working hours, availability, communication expectations and project management.

Fostering an organisational culture that promotes trust and collaboration among remote employees and those in the workplace is crucial to maintaining a cohesive and productive team. Finally, it is important for companies to assess the costs and benefits of remote work, including office cost savings and the potential to access a more diverse and global talent pool when considering this mode of work.

Grupo Wolf

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Trends and Developments


Grupo Wolf Chile is a Chilean legal services company, established in 2017. Its focus lies within various specialised fields, primarily encompassing three fundamental areas: business advisory, real estate and litigation. The business advisory division is oriented towards providing legal services to companies and start-ups, offering comprehensive consultancy covering commercial, corporate, labour, tax and technological aspects. Within the latter, advisory services include subjects such as blockchain, crypto assets and decentralised finance. The real estate practice is dedicated to legal services for individuals, property brokers, real estate firms and construction companies. The litigation practice centres on civil, commercial, labour, family disputes and arbitration proceedings. Grupo Wolf's organisational culture is built on three essential pillars: people, innovation and creativity. Its horizontal structure fosters a collaborative environment, promoting the generation of ideas.

Asset Tokenisation: Redefining How To Invest

In the contemporary, digitalised and globalised world, the convergence of technology with law has given rise to various innovations in the realm of business. Every technological disruption must have viability and legal basis, as failure to ensure this jeopardises both the beneficiaries or users of that technological application and the investors who have placed their bets on that development.

One of the most disruptive concepts in the past year has been asset tokenisation. It involves an application of blockchain technology that has burst onto the global financial scene, transforming the way investments are made in assets, whether they are physical or digital.

In Chile, asset tokenisation promises to revolutionise the economic landscape by enabling greater accessibility, liquidity and diversification in traditionally illiquid asset investments. This essay delves into the concept of asset tokenisation, its potential impact on the Chilean market, and the legal and regulatory challenges that must be addressed to maximise its benefits.

Asset Tokenisation: Fundamentals and Benefits

Tokenisation is the process of digitally representing a specific asset, whether physical or digital, through a token registered on the blockchain. For instance, through tokenisation, real estate, artworks, trademarks, vehicles and virtually anything within the realm of human commerce can be represented.

The key aspects of this definition are as follows. 

  • Digital representation: tokenisation aims to dematerialise physical or digital assets and apply all the benefits of blockchain technology, such as immutability, security and quick transfer, in a straightforward manner.
  • Issuance of a token registered on the blockchain: the representation must occur through the issuance of a token, which can have a specific nature depending on the purpose of tokenisation. For example, the token could be a non-fungible token (NFT) or a fungible token, based on objectives and regulatory considerations. Furthermore, the token must be registered on a blockchain. Without this step, it would not qualify as asset tokenisation, but merely as a representation of the asset through the issuance of another asset.
  • Physical or digital assets can be represented: thanks to technology, nearly all known assets can be tokenised. Therefore, the only limitations stem from a regulatory standpoint. The fundamentals of tokenisation are grounded in blockchain technology and the transformation of traditional assets into digital representations called "tokens." These tokens are stored and managed on a blockchain, providing a range of benefits and opportunities in various economic and financial domains. Below is an outline of the primary fundamentals and benefits of asset tokenisation.

Digitalisation of assets

Tokenisation involves the transformation of traditional assets such as real estate, artworks, stocks, bonds or even intellectual property rights into tokens. Each token represents a fraction or the entirety of ownership or rights over the underlying asset. This digitalisation facilitates the transfer and management of these assets, eliminating intermediaries that add no value to the process and enabling transactions to occur within seconds.


Tokenised assets are highly divisible. This means that an asset can be divided into numerous smaller tokens, allowing investors to acquire minimal fractions of ownership in a specific asset. Fractionalisation benefits small investors who previously could not access such investments due to their high costs, enabling them to effectively invest in these types of assets and democratising investments. Today, for instance, one can invest USD100 and become an owner of a fraction of real estate, generating returns from that investment.


One of the standout features of tokenisation is its capacity to foster and enable liquidity in traditionally illiquid assets. For instance, selling real estate involves a process that may take months. Tokens, on the other hand, can be digitally traded and sold on secondary markets, allowing investors to buy, sell or exchange their holdings more easily and quickly compared to physical assets. Increased liquidity brings greater dynamism to these assets, enhancing their circulation.

Transaction efficiency

As mentioned above, tokenisation reduces the need for intermediaries and bureaucratic processes in transactions. This is achieved using blockchain technology. In blockchain, transactions are executed via smart contracts, autonomous programs run on the blockchain that automate and expedite much of the transfer process and agreement fulfilment between parties. Efficiency translates to reduced costs and time associated with transactions compared to traditional methods.

Transparency and traceability

The underlying blockchain technology in tokenisation offers enhanced transparency in transactions. Every movement of a token is recorded on the blockchain, allowing for near real-time auditing and traceability. This boosts trust among involved parties and reduces the risk of fraud.

Globalisation and access to different markets

Tokenisation eliminates many geographical and regulatory barriers that can hinder investment in foreign assets. Investors can acquire tokens representing assets located in various parts of the world, opening big opportunities for diversification and exposure to international markets.

Automation of payments and dividends

Smart contracts can also be programmed to automate payments and dividend distributions to token holders. This streamlines income management for investors and ensures transparency in profit distribution generated by the assets. For those providing tokenised services, it allows for greater order and control in the distribution of earnings or returns generated by these assets.

Legal and Regulatory Challenges

Asset tokenisation, while holding great potential to transform the way investments are made and assets are managed, both physical and digital, also presents a series of legal and regulatory challenges that must be carefully addressed to ensure its adoption and successful operation. This is not only essential for structuring projects or businesses intending to utilise tokenisation as a disruptive tool but also vital for the users and investors of the respective projects or businesses. 

Some of the most significant challenges involving asset tokenisation from a legal and regulatory perspective are detailed below.

Absence of regulatory framework

One of the main challenges is the lack of a specific regulatory framework for blockchain and crypto-assets in general, as well as for asset tokenisation in particular. While significant progress has been made in some regions worldwide, in Latin America, there is room to structure solutions of this kind within the existing regulatory framework. The significant challenge here is that current legislation is designed for determining rights and obligations related to traditional physical or digital assets, which may create uncertainty in terms of how to apply it to tokenised digital assets.

Structuring a tokenised project

Given the absence of a regulatory framework, the need arises to determine whether implementing asset tokenisation is viable. For this purpose, it will be necessary to identify which legal norms are binding for the intended development and to ascertain the norms that govern the asset to be tokenised. Defining the underlying asset to be tokenised is fundamental in designing the legal structure to be implemented, as tokenising shares of a company, rights, real estate, among others, are not the same.

Property rights and representation

Tokenisation involves dividing assets into fractions represented by tokens. Deciding how property rights and representation are transferred and protected in a digital environment raises complex legal issues. Clear mechanisms must be established to determine who the legal owners of the assets are and how situations such as transfers, inheritance and litigation are managed.

Protection of non-qualified investors

By democratising access to investments, tokenisation facilitates the participation of a wide range of investors, including those less qualified. Therefore, defining a self-regulation standard to ensure that investors are properly informed and protected against possible scams and frauds is necessary. The implementation of disclosure, access and transparency rules is required to ensure that investors understand the risks and characteristics of tokenised assets.

Regulatory compliance and anti-money laundering (AML)

Compliance and anti-money laundering laws are crucial to prevent illicit activities and protect the integrity of the financial system. Tokenisation can present challenges in identifying the parties involved since tokens are associated with wallets or virtual wallets, where blockchain data is pseudonymous. Therefore, token issuing entities and intermediaries must implement rigorous procedures to verify participants’ identities and comply with AML regulations.

Custody and asset backing

As this article deals with tokens registered on a blockchain, determining where tokens will be held during users’ investment is of vital importance. Reliable custody and backing systems must be established to ensure that real assets correspond to the issued tokens. This is especially crucial in cases of bankruptcies, technical issues or cybersecurity concerns to ensure investors can recover their assets.

Privacy and data protection

Tokenisation involves transferring sensitive data on the blockchain. Ensuring privacy and protecting this data is crucial to comply with data protection regulations.

Tax challenges

Asset tokenisation also raises complex tax issues. This is due to the structure of tokenisation, as depending on how the tokenisation structure is carried out, if transferring the digital asset or token also transfers the physical asset, for example, it could result in unnecessary double taxation. Moreover, with regard to crypto-assets, tax regulations do not always adapt to new business operations, and sometimes fiscal interest prevails over the encouragement of disruptive industries.

The Potential of Asset Tokenisation in Chile

In Chile, asset tokenisation presents significant opportunities to transform the way investments are made in assets. Chile is recognised in the region for its economic stability, political stability and a continuously growing real estate market.

There are several reasons why Chile encourages the implementation of asset tokenisation, including the following by way of example.

Applicable tax regulations for tokenisation

The Internal Revenue Service (SII), which is responsible for interpreting tax norms and enforcing their compliance, has issued a series of official statements through official letters, providing clear and concrete responses to operations related to the use of crypto-assets and their tax treatment. This certainty addresses one of the identified challenges.

Anti-money laundering regulations

In Chile, the Financial Analysis Unit has a very clear and defined regulatory framework, along with a series of norms that apply to the tokenisation and crypto-asset industry. Therefore, when implementing a tokenisation project, compliance with the standard operating in Chile’s blockchain and crypto-asset industry is necessary. This involves registration with the Financial Analysis Unit, subject to the obligation to report suspicious operations according to the category under which the tokenised business falls. This includes the implementation of manuals, policies and procedures aimed at preventing money laundering and terrorism financing.

Regulations for the fintech industry

A few months ago, a regulation was enacted in Chile that governs the fintech industry. While this regulation does not extensively or robustly regulate the crypto-asset and asset tokenisation industry, it defines the regulatory framework that companies or businesses looking to implement blockchain-based solutions must comply with. This is a significant advancement for the region, as Chile is one of the few jurisdictions in Latin America where such solutions can be implemented with authorisation from the regulatory authority, the Financial Market Commission (CMF).

Flexible corporate regulations

In Chile, there is a corporate type called a sociedad por acciones whose governing norms provide flexibility, subject to certain requirements, to adapt this structure to technological innovations or disruptions.


In the evolving landscape of modern business, the concept of asset tokenisation stands as a compelling testament to the intersection of law and technology. As society moves through the digital age, the potential of blockchain technology to revolutionise investment practices is undeniable. The integration of assets into digital tokens promises to reshape the very essence of how investments are perceived and engaged with, unlocking avenues of accessibility, liquidity and efficiency that were once deemed unattainable.

While the path to realising the full potential of asset tokenisation is paved with promise, it is also strewn with legal and regulatory challenges. These hurdles must be addressed with utmost diligence, for they hold the key to unlocking the transformative benefits offered by this ground-breaking innovation. The absence of a precise regulatory framework presents a fundamental challenge that requires careful consideration and innovative solutions. The structural intricacies of tokenised projects and the safeguarding of property rights demand meticulous planning and precise legal structures.

Moreover, the protection of non-qualified investors and the navigation of compliance landscapes are pivotal to ensure the sustained growth of this innovative practice. As asset tokenisation blurs geographical boundaries, it introduces the need for the harmonisation of regulatory efforts to facilitate seamless cross-border transactions while upholding the integrity of the financial system.

In the context of Chile, a nation renowned for its economic stability and legal acumen, the potential of asset tokenisation shines brightly. By leveraging existing tax regulations, embracing anti-money laundering norms and providing regulatory guidance for the fintech sector, Chile is poised to harness the power of asset tokenisation as a catalyst for economic growth and diversification.

In summation, the synergy between technology and law has ushered in a new era of investment possibilities. Asset tokenisation emerges as a cornerstone of this evolution, heralding a future where investments transcend boundaries and barriers. The successful integration of asset tokenisation into the fabric of modern investment practices will rely upon a collaborative effort between legal expertise, technological innovation and regulatory foresight. As the legal landscape adapts to accommodate the transformative potential of asset tokenisation, it holds the promise of reshaping the investment landscape and empowering a more inclusive and dynamic economy for Chile and beyond.

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Law and Practice


Grupo Wolf is a Chilean legal services company, established in 2017. Its focus lies within various specialised fields, primarily encompassing three fundamental areas: business advisory, real estate and litigation. The business advisory division is oriented towards providing legal services to companies and start-ups, offering comprehensive consultancy covering commercial, corporate, labour, tax and technological aspects. Within the latter, advisory services include subjects such as blockchain, crypto assets and decentralised finance. The real estate practice is dedicated to legal services for individuals, property brokers, real estate firms and construction companies. The litigation practice centres on civil, commercial, labour, family disputes and arbitration proceedings. Grupo Wolf's organisational culture is built on three essential pillars: people, innovation and creativity. Its horizontal structure fosters a collaborative environment, promoting the generation of ideas.

Trends and Development


Grupo Wolf Chile is a Chilean legal services company, established in 2017. Its focus lies within various specialised fields, primarily encompassing three fundamental areas: business advisory, real estate and litigation. The business advisory division is oriented towards providing legal services to companies and start-ups, offering comprehensive consultancy covering commercial, corporate, labour, tax and technological aspects. Within the latter, advisory services include subjects such as blockchain, crypto assets and decentralised finance. The real estate practice is dedicated to legal services for individuals, property brokers, real estate firms and construction companies. The litigation practice centres on civil, commercial, labour, family disputes and arbitration proceedings. Grupo Wolf's organisational culture is built on three essential pillars: people, innovation and creativity. Its horizontal structure fosters a collaborative environment, promoting the generation of ideas.

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