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Intellectual property from R&D: what Chile's R&D Law covers

Sat, 03 Oct 2026 00:00:00 +0000

A successful R&D project produces something valuable: new knowledge. Protecting it takes money and time. The good news is that the R&D Law lets you include those costs in the benefit, under certain conditions.

What it covers

According to the Certification Regulation and Corfo’s FAQ, the activities needed to establish rights over the following are eligible:

Industrial property: invention patents, utility models and designs.
Copyright over computer programs (software).
Rights over new plant varieties.

This includes the related costs: professional services, expert reports, defending against oppositions and publications required for registration.

After certification: changes, audits and closing your R&D project

Wed, 30 Sep 2026 00:00:00 +0000

Getting the Corfo certificate is a milestone, not the finish line. While the project runs and when it closes, the company has obligations that, if missed, can cost it the benefit.

1. Changes: always notify

Projects change: an experiment fails, the team turns over, the budget is adjusted. According to Corfo, it’s the taxpayer’s responsibility to report every change in amounts, timelines, team or other aspects.

Corfo evaluates the changes and decides whether to:

Leveraging AI for innovation (and when your project can qualify as R&D)

Sun, 27 Sep 2026 00:00:00 +0000

Artificial intelligence has become the default tool for innovation. Many companies in Chile are building models, automating processes and launching AI-based products. A question we hear often is: can that qualify under the R&D Law?

The short answer: sometimes yes, sometimes no. It depends on whether your project uses AI or creates new knowledge with AI.

Using AI is not doing R&D

The R&D Law doesn’t reward adopting technology; it rewards generating knowledge. So it helps to separate two kinds of project:

Amending tax returns: the R&D Law's retroactivity explained

Thu, 24 Sep 2026 00:00:00 +0000

One advantage of the notice of intent is that the R&D Law credit applies retroactively. But that retroactivity has a practical consequence: you may need to amend prior years’ tax returns.

Why you need to amend

With a notice of intent, a company can start spending before the project is certified. But the process is long:

Up to 18 months to submit the formal certification application.
Up to 180 calendar days for Corfo to certify.

By then, the company has already filed taxes for one or more years in which it incurred project costs, without being able to use the 35% credit yet.

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.

What is a Corfo R&D certificate and how do you get one?

Sun, 20 Sep 2026 00:00:00 +0000

To use the R&D Law benefit, doing research and development is not enough: the project or contract must be certified by Corfo. That certification, granted through a formal resolution, is what people usually call “the Corfo certificate”.

What is certification?

It is the process in which a company asks Corfo to verify that its project or contract meets the requirements of Law 20,241. If Corfo approves it, it issues a reasoned resolution that allows the company to apply the tax benefit to the R&D expenditure it actually incurs.

What Chile can learn from Australia, Canada and Ireland on R&D incentives

Thu, 17 Sep 2026 00:00:00 +0000

More than 40 countries offer R&D tax incentives. A University of Chile study (Weber, 2022) compares Chile’s design with those of Australia, Canada and Ireland: the first two because, like Chile, they have large mining sectors, and the third because of a similar growth path. All three invest considerably more in R&D than Chile.

Country	R&D investment as % of GDP (2019)
Australia	1.8%
Canada	1.7%
Ireland	1.2%
Chile	0.3%
OECD average	2.4%

1. Higher rates for SMEs

Chile applies the same rate (35%) to every company. Other countries reward smaller ones more:

Joint R&D projects: applying together with other companies

Tue, 15 Sep 2026 00:00:00 +0000

R&D is rarely done alone. A supplier and its customer, two companies in the same industry or a large company and a startup may share a technical problem. The R&D Law lets them tackle it together through a joint project or contract (proyecto asociativo).

What a joint project is

It’s an R&D project or contract involving two or more taxpayers, who fund it together and apply to Corfo for certification jointly. Each company claims the tax benefit on its own contribution.

What is a tax credit? And why it's worth more than a deductible expense

Sun, 13 Sep 2026 00:00:00 +0000

“Tax credit” comes up in every conversation about incentives, but it is rarely explained well. And the difference matters: one peso of tax credit is worth far more than one peso of deductible expense.

The simple definition

A tax credit is an amount subtracted directly from the tax you owe. It does not reduce the base used to calculate the tax; it reduces the tax itself, peso for peso.

A deductible expense, by contrast, is subtracted from income before the tax is calculated. Its real value depends on the rate: at a 27% rate, every $100 of deductible expense saves $27 of tax.

Unused R&D credit: what happens if your company has losses

Thu, 10 Sep 2026 00:00:00 +0000

The R&D Law credit equals 35% of certified spending and is offset against First Category (corporate) Tax. But what happens if the company doesn’t owe enough tax to offset it against? You’re left with unused credit (remanente).

When unused credit arises

According to SII Circular No. 19, there’s unused credit when First Category Tax doesn’t exist or is smaller than the credit. That can happen because:

The company has a tax loss that year.
The company is exempt from First Category Tax in that year.
The tax has already been covered by other credits the law allows to be applied before the R&D credit.

What happens to unused credit

The rule has two parts:

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.

How to document the technical uncertainty in your R&D project

Thu, 03 Sep 2026 00:00:00 +0000

If one concept decides whether your project qualifies under the R&D Law, it’s scientific or technological uncertainty. The law mentions it explicitly, and most rejections happen because the project fails to demonstrate it. See Why Corfo rejects projects.

The good news is that documenting it well is mostly a matter of method.

What technical uncertainty is

There is technical uncertainty when, at the start of the project, it isn’t known whether the result can be achieved or how, and the answer isn’t available from existing knowledge: publications, products on the market or the experience of a competent professional in the field.

How to prove your R&D team's capabilities to Corfo

Tue, 01 Sep 2026 00:00:00 +0000

In the project mode of the R&D Law, a good idea isn’t enough: Corfo checks that the company has sufficient equipment and qualified staff to carry it out. It’s one of the most avoidable reasons for rejection. See Why Corfo rejects projects.

What the regulation requires

Staff capabilities

The Certification Regulation requires at least one science or engineering professional and/or technician with demonstrable R&D experience in the 36 months before the application. It’s proven with:

Public grants and the R&D Law: how to combine them without losing the benefit

Sun, 30 Aug 2026 00:00:00 +0000

Many companies doing R&D already receive public support: a grant from Corfo, ANID or another fund. A common question is whether they can also use the R&D Law. The answer is yes, but there are clear rules to avoid getting the benefit twice on the same spending.

The general rule: they’re complementary

According to Corfo’s FAQ, the tax incentive is complementary to existing public funding. You can certify a project in which part of the activities are funded by a grant.

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.

Software development and the R&D Law: when your project qualifies

Mon, 24 Aug 2026 00:00:00 +0000

Many tech companies in Chile wonder whether their software development can qualify under the R&D Law. The answer is that the law expressly includes it, but with a condition that rules out most “ordinary” software.

What the law says

Within its definition of experimental development, Law 20,241 includes the development of software, as long as it:

produces greater knowledge aimed at systematically resolving a scientific or technological uncertainty, or
delivers a substantial, innovative improvement in a process, product or service.

In other words, writing new code isn’t enough. The code must be the means to solve a technical problem you didn’t know how to solve.

How to build an R&D project budget: expenses Corfo accepts

Sat, 22 Aug 2026 00:00:00 +0000

Under the R&D Law, the benefit is calculated on certified expenditure. That makes the budget much more than paperwork: it determines how much tax credit you’ll get. A poorly built budget can end in partial certification.

Accepted expense categories

Corfo details accepted expenses in its Exempt Resolution No. 17. They fall into two broad groups.

Current expenses

Category	What it includes	Watch out for
Staff	Salaries and fees of the technical and professional staff involved	Valued by % of time allocated. At least 50% of the work in Chile
Materials and supplies	Reagents, materials, IT services, lab analyses, bibliography	Must be directly linked to the activities
Subcontracts	Services from legal entities directly related to the project	At least 50% carried out in Chile
Rentals	Movable or real property needed for the project	Justify the need
Intellectual property	Costs of registering patents, utility models, software rights or plant varieties	Must come from the certified project
Utilities	Water, electricity, phone, internet	Capped at 5% of current expenses

Capital expenses

Equipment and instruments, including insurance, shipping, import and commissioning accessories.
Infrastructure: building, fitting out or acquiring property the project requires.

Valued vs. paid out

This is a key distinction. According to Corfo, only staff costs can be valued: if an in-house engineer spends 40% of their time on the project, you can charge 40% of their cost. Every other expense must be an actual payment, backed by an invoice and proof of payment.

Full accounting and actual income: the requirement many companies overlook

Wed, 19 Aug 2026 00:00:00 +0000

Many companies come to the R&D Law with a good project and find out too late that they don’t meet a prior requirement: their tax regime. Before designing anything, it’s worth checking.

The requirement

According to the law and Corfo’s FAQ, the benefit is open to individuals or legal entities subject to First Category Tax (Chile’s corporate income tax) that declare their actual income using full accounting, and that have a contract or project certified by Corfo.

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.

Why Corfo rejects R&D Law projects (and how to avoid it)

Fri, 14 Aug 2026 00:00:00 +0000

Applying under the R&D Law doesn’t guarantee the benefit. According to a University of Chile study based on Corfo data, the certification rate was 54.4% in 2021, and that year only 37% of the amounts applied for were certified. In other words, a significant share of applications are rejected in full or in part.

The good news: the reasons for rejection are well known and mostly avoidable.

1. “It’s a routine improvement”

This is by far the most common reason. With 2015 data, 64% of rejections happened because Corfo considered the project to consist of “routine, repetitive or minor improvements, adaptations and analyses”, one of the law’s express exclusions.

Innovation is not the same as R&D (and for Corfo, the difference matters)

Tue, 11 Aug 2026 00:00:00 +0000

In Chile we use “innovation” for almost everything: new software, an improved process, a different product. But the R&D Law doesn’t reward innovation in general. It rewards something more specific: research and experimental development. Confusing the two is the most common reason for rejection.

The difference in one sentence

Innovating means introducing something new or improved into your company or the market. Doing R&D means creating knowledge that didn’t exist to solve a problem whose solution is not known in advance.

What is the UTM, and why is Chile's R&D Law measured in it?

Sat, 08 Aug 2026 00:00:00 +0000

If you read about the R&D Law, you’ll see the acronym UTM in almost every requirement. Before doing any calculation, it helps to understand what it is and why it’s used.

What the UTM is

The Unidad Tributaria Mensual (UTM), or monthly tax unit, is a unit of account used in Chile to express tax amounts: fines, thresholds, caps and benefits. Its value in pesos changes every month, because it is adjusted for consumer price inflation (CPI).

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: