How to Set Up a Nearshore CoE in Chile

Setting up a nearshore Center of Excellence (CoE) in Chile is no longer just a cost-saving strategy. It’s a way to secure top-tier talent, streamline operations, and create long-term innovation capacity within Latin America. Chile’s stable economy, strong digital infrastructure, and skilled workforce have made it a standout nearshore hub for global enterprises.

Companies across the U.S. and Europe are looking south. According to the World Bank, Chile ranks among the top three countries in LATAM for ease of doing business, making it a natural choice for establishing a scalable CoE. Whether you’re considering a Build Operate Transfer (BOT) model or a fully owned center, the country offers flexibility to grow and adapt.

In this article, you’ll learn what a nearshore CoE really means, why Chile is leading the way, and how to set one up effectively. From benefits and challenges to step-by-step planning and future trends, you’ll get a complete roadmap to build a Chile Center of Excellence that drives impact.

What Is a Nearshore Center of Excellence (CoE)?

A Nearshore Center of Excellence (CoE) is a dedicated hub where you centralize specialized expertise, processes, and resources in a nearby country to support global business operations. Unlike a traditional outsourcing model, a CoE is designed to build long-term knowledge, consistency, and innovation rather than just provide staff augmentation.

Think of it as a strategic command center. Instead of scattering critical functions across multiple vendors or locations, you bring them together in one nearshore hub. This allows you to standardize best practices, improve governance, and align your teams with enterprise-wide goals.

When nearshoring to Latin America, the geographic and time zone proximity matters. A Chile CoE, for example, lets U.S. companies operate within just a one-to-three-hour time difference, depending on the region. This makes real-time collaboration easier than managing offshore centers in Asia or Eastern Europe.

Another defining feature of a nearshore CoE is its focus on high-value functions. It’s not just about coding or support tasks. Many enterprises use CoEs for advanced analytics, cloud architecture, product engineering, or even AI and machine learning initiatives. According to IDC, 60% of global enterprises plan to expand their nearshore capabilities in LATAM by 2026, with CoEs being a central part of that growth strategy.

The model also supports knowledge retention and scalability. Instead of relying on short-term contractors, you build an embedded team with institutional knowledge. Over time, this reduces dependency on outside vendors and gives you more control over intellectual property.

For companies evaluating Chile as a location, a nearshore CoE offers the added advantage of tapping into one of the most digitally advanced economies in Latin America. The country ranks first in the region for digital readiness, according to Cisco’s Global Digital Readiness Index, reinforcing its reputation as a secure and future-focused place to establish a CoE.

Why Chile Is Emerging as a Nearshore Center of Excellence

Stable Business and Political Environment.

Chile is consistently ranked among the most stable economies in Latin America. The World Bank’s 2023 Ease of Doing Business Index places Chile at the top of the region, ahead of Brazil and Argentina. A reliable regulatory framework gives global companies confidence to establish long-term operations without unexpected policy shifts disrupting business continuity.

Strong Digital Infrastructure.

High-speed internet coverage and reliable connectivity make Chile one of the most digitally advanced countries in LATAM. According to the International Telecommunication Union (ITU), Chile leads South America in fixed broadband penetration, with more than 50% of households connected at speeds above the regional average. This infrastructure supports large-scale, technology-driven operations essential for a Center of Excellence.

Highly Skilled Talent Pool.

Chile’s universities produce thousands of STEM graduates each year. The Ministry of Education reports that over 25,000 students graduate annually from engineering and IT-related programs. This steady talent pipeline supports CoEs that focus on software engineering, data science, cloud computing, and emerging technologies. Multilingual skills, especially in English, also position Chilean professionals for seamless collaboration with North American and European teams.

Strategic Nearshore Location.

Proximity to the United States is a major advantage. Chile shares a one-to-three-hour time difference with major U.S. business hubs, depending on the season. This overlap enables real-time collaboration during working hours, reducing the delays often experienced with offshore centers in Asia or Eastern Europe. Travel between Santiago and key U.S. cities like Miami or Houston is straightforward, making executive oversight and team integration easier.

Government Support for Technology and Innovation.

The Chilean government has actively promoted its technology ecosystem through initiatives such as Start-Up Chile, a globally recognized accelerator program. Public policies encourage foreign investment, provide tax incentives, and support digital transformation. In 2022, Chile invested 0.34% of its GDP in research and development, one of the highest rates in South America according to UNESCO. This commitment strengthens the ecosystem that CoEs depend on.

Reputation as a LATAM Tech Leader.

Chile consistently ranks first in regional innovation and competitiveness indexes. The Global Innovation Index 2023 places Chile at the top in Latin America, highlighting its strengths in business sophistication and knowledge-intensive industries. This reputation reinforces Chile’s appeal as a hub where companies can build Centers of Excellence that don’t just execute tasks but drive innovation and growth.

Steps to Set Up a Nearshore CoE in Chile

1. Define the Strategic Scope of the CoE

Start by identifying what functions your CoE will own. Some organizations focus on software development and engineering, while others prioritize data analytics, cloud services, or quality assurance. According to Deloitte’s Global Shared Services Survey, 81% of companies establish CoEs to drive process standardization and efficiency. Clarity on scope ensures your Chile CoE aligns with overall business goals.

2. Select the Right Location in Chile

While Santiago is the primary hub due to its concentration of universities, skilled talent, and connectivity, secondary cities like Valparaíso and Concepción are gaining traction for specialized tech roles. Evaluating local labor markets, cost structures, and infrastructure helps you choose a location that matches your operational needs.

3. Choose the Operating Model

Decide whether you will establish a captive CoE that you fully own or adopt a Build Operate Transfer (BOT) model with a local partner. A BOT arrangement reduces setup risks and speeds up launch, while a captive model provides long-term control. Many multinationals use a hybrid approach, beginning with BOT and later transitioning to ownership once the operation is stable.

4. Address Legal and Compliance Requirements

Chile offers a predictable legal framework for foreign investors, but it’s essential to understand labor laws, tax regulations, and intellectual property protections. For instance, Chile enforces mandatory employee benefits and contributions, which must be factored into budgeting. Working with local legal advisors minimizes compliance risks during setup.

5. Build a Talent Acquisition and Retention Strategy

With over 25,000 annual STEM graduates, you can access a robust talent pool. However, competition for skilled developers and engineers is growing. Offering competitive salaries, professional development, and hybrid work flexibility are proven retention strategies in Chile’s tech sector. A strong employer brand also helps you attract top candidates quickly.

6. Establish Scalable Processes and Governance

A CoE must go beyond staffing and create repeatable frameworks for success. Documenting workflows, performance metrics, and knowledge transfer practices allows your Chile CoE to integrate seamlessly with headquarters. According to PwC, organizations with strong governance frameworks are 33% more likely to achieve operational efficiency at scale.

7. Integrate Technology and Collaboration Tools

To ensure real-time collaboration with U.S. or European teams, adopt tools for agile project management, secure cloud storage, and video communication. Chile’s strong broadband infrastructure supports advanced collaboration platforms, making remote-first operations reliable. Ensuring cybersecurity compliance is also critical from the outset.

8. Plan for Long-Term Scalability

A CoE in Chile should be designed for growth. Setting up with expansion in mind allows you to add functions, adopt new technologies, and scale teams as business needs evolve. Tracking performance metrics from day one ensures that scaling decisions are data-driven, not reactive.

Leveraging the BOT Model for a Chilean CoE

Understanding the Build Operate Transfer (BOT) Model:

The BOT model allows you to partner with a local provider who builds the CoE, manages operations during the initial phase, and later transfers ownership once it reaches maturity. This structure minimizes upfront risk and accelerates market entry. According to KPMG’s Global Shared Services report, companies using BOT models often achieve operational stability up to 40% faster than those that build independently.

Why BOT Fits the Chilean Nearshore Ecosystem:

Chile’s technology sector is expanding rapidly, with IT services exports exceeding $1.5 billion in 2023, according to ProChile. A BOT partner can help navigate the local hiring landscape, compliance regulations, and cultural nuances. This is particularly useful in Santiago and Valparaíso, where competition for specialized talent is high. By leveraging BOT, you can secure teams faster without compromising on quality.

Reducing Setup and Compliance Risks:

Setting up a CoE involves navigating labor laws, tax obligations, and intellectual property protections. A BOT provider assumes these responsibilities during the build and operate phases, reducing legal exposure for your company. Once transferred, the CoE is fully compliant with Chilean regulations, giving you peace of mind and operational continuity.

Ensuring Knowledge Transfer and Scalability:

A well-structured BOT agreement includes a clear knowledge transfer plan. During the operate phase, processes, tools, and best practices are documented and shared with your leadership teams. This prevents knowledge silos and prepares your CoE for expansion.

Transitioning From BOT to Full Ownership:

The transfer phase is critical. Timing depends on achieving specific milestones such as staffing levels, performance KPIs, or cost efficiency targets. Some companies transfer within two years, while others take longer, depending on their risk appetite and growth strategy. The goal is to inherit a fully functional, locally embedded CoE without the growing pains of building from scratch.

Common Challenges to Avoid in BOT-Based CoEs:

Not all BOT arrangements succeed. Some companies face issues when governance frameworks are unclear or when exit clauses are poorly defined. Misalignment between your long-term vision and the BOT partner’s operating model can also create friction. Setting transparent KPIs, legal safeguards, and performance metrics at the start ensures a smoother transition later on.

Ready to Set Up a Nearshore CoE in Chile?

Establishing a nearshore Center of Excellence in Chile positions your company to access top-tier talent, streamline operations, and accelerate innovation across LATAM. With Chile ranking first in the region for digital readiness, according to the Cisco Global Digital Readiness Index, the environment is ideal for building scalable, high-impact CoEs.

At BOT LATAM, we can help you navigate every step of the process, from initial setup to operational management and eventual transfer. Leveraging their expertise ensures your CoE is fully compliant, staffed with the right talent, and structured for long-term growth, allowing you to focus on strategic outcomes rather than day-to-day operational hurdles. Contact us for more!