R&D Law on NovaTax Blog

SMEs and the R&D Law: real barriers and how to overcome them

Tue, 22 Sep 2026 00:00:00 +0000

The international evidence is clear: SMEs are the companies that respond most to R&D tax incentives. Yet in Chile they’re a minority among users of the R&D Law. Understanding why helps find the way in.

SMEs respond more to the incentive

A University of Chile study (Weber, 2022) pulls together the evidence:

SMEs react two to three times more than large companies to changes in the tax incentive.
According to the OECD, for every $1 of tax support, small companies generate $1.40 of additional R&D investment, medium-sized ones $1 and large ones $0.40.

The reason: SMEs find it harder to fund R&D, because they have less collateral, a shorter track record and fewer patents to show investors.

Notice of intent: how to use the R&D Law if you've already started spending

Tue, 08 Sep 2026 00:00:00 +0000

It’s one of the most common situations: a company has already started its R&D project and only then discovers the R&D Law. Is it too late? Not necessarily. That’s what the notice of intent (manifestación de intención) is for.

What it is

It’s a notice the company sends Corfo to declare that it wants to claim the R&D Law benefit for a project or contract it has already started, without needing to have it fully designed yet.

Chile's R&D Law: what it is, how it works and who can use it

Sun, 06 Sep 2026 00:00:00 +0000

Chile invests little in research and development. To change that, the government created an incentive that few companies take advantage of: the R&D Law (Ley I+D, Law No. 20,241), which lets a company recover a significant share of its R&D spending through its taxes.

This article explains what the law is, which activities qualify, how much the benefit is worth and how to activate it.

What is the R&D Law?

Law 20,241 establishes a tax incentive for private investment in research and development. It was enacted in 2008 and reformed in 2012 by Law 20,570, which made it far more flexible: it added projects carried out with the company’s own capabilities (“intramural”), removed the cap of 15% of gross income and raised the annual credit limit to 15,000 UTM.

Intramural project or extramural contract: which mode suits you?

Thu, 27 Aug 2026 00:00:00 +0000

The R&D Law gives access to the benefit through two routes: a project (“intramural”) or a contract (“extramural”). Choosing the right one simplifies the application and reduces risk.

The two modes

Project (intramural). The company carries out the R&D with its own capabilities, and can also hire third parties: universities, registered or unregistered centres, or other companies. It was added in 2012 by Law 20,570. See From 2008 to today.

Contract (extramural). The company outsources 100% of the R&D to a Research Centre registered with Corfo. This was the original mode under the 2008 law.

The R&D Law paradox: a generous incentive almost no one uses

Sun, 16 Aug 2026 00:00:00 +0000

There’s a paradox at the heart of the R&D Law: the benefit is generous, but very few companies use it. The data shows it clearly.

A country that invests little in R&D

According to OECD data compiled in a University of Chile study (Weber, 2022):

Indicator	Chile	OECD
R&D investment as % of GDP (2020)	0.34%	2.40%
Business share of R&D funding (2019)	31%	64%

Chile is among the OECD countries that invest least in R&D, and businesses fund a much smaller share than elsewhere in the organization.

From 2008 to today: how Chile's R&D Law evolved

Wed, 05 Aug 2026 00:00:00 +0000

The R&D Law we know today is not the one enacted in 2008. Understanding how it changed helps explain why it works the way it does, and why people are still debating how to improve it.

2008: a law built only for “outsourcing”

Law 20,241 was passed in 2008 with a clear goal: increase private investment in research and development in a country that invested very little. But its original design was narrow: