Incoterms for Chile Trade: What Buyers Should Know

What Incoterms Mean for Trade With Chile

Incoterms assign who pays for freight, who carries risk during transit, and who clears customs on each side of a shipment to or from Chile. Picking the wrong one is not a technicality: a foreign seller who agrees to DDP terms without a Chilean tax ID can leave a container stuck at the port with no one legally able to clear it.

This guide covers the Incoterms that come up most often when buying from or selling to a company in Chile, and the specific risks each one creates on this side of the border. For a full breakdown of each rule, see our complete Incoterms 2020 guide (also available in Spanish).

FOB: the reference point for most Chilean importers

Under FOB (Free On Board), the seller delivers the goods on board the vessel at the port of origin, and the buyer takes over risk and cost from that point: ocean freight, insurance, destination customs clearance and inland delivery in Chile. Most Chilean importers who already have a trusted freight forwarder prefer FOB, because it gives them control over the shipping line, the freight rate and the customs process, instead of inheriting whatever the foreign seller arranged. You can review our ocean freight services for Chile-bound shipments if you need to book that leg directly.

CIF: convenient for first-time buyers, but with hidden trade-offs

Under CIF (Cost, Insurance and Freight), the seller books and pays for ocean freight and a minimum insurance policy to the Chilean port of destination. It is attractive for a first purchase because it removes one decision from the buyer's plate, but the insurance coverage is minimal and the seller chooses the carrier and routing, which can mean a slower or less reliable schedule than the buyer would pick themselves. For companies shipping more than a few times a year, switching to FOB usually pays off once they have a forwarder they trust.

DDP: why it is riskier than it looks for a foreign seller

DDP (Delivered Duty Paid) puts the seller on the hook for import clearance, duties and Chile's 19% VAT at destination. On paper it looks like the simplest option for a Chilean buyer, who pays nothing beyond the agreed price. In practice, a foreign seller without a Chilean tax ID (RUT) or a registered local entity usually cannot legally complete customs clearance in their own name, which routinely causes the shipment to sit in customs until the parties improvise a workaround, often by switching the clearance into the Chilean buyer's name mid-shipment. Before agreeing to DDP, a foreign seller should confirm they can actually clear goods in Chile, not assume a freight forwarder will handle it automatically. For the duty and VAT rates that apply once goods land, see our guide to import duties and taxes in Chile.

EXW and FCA: when the buyer wants full control from the start

EXW (Ex Works) puts almost everything on the buyer, including loading the goods at the seller's premises, which can be a problem if the buyer has no local presence in the seller's country. FCA (Free Carrier) solves that specific issue: the seller still hands the goods to a carrier the buyer nominates, but the seller handles loading and export clearance, while risk transfers earlier and more clearly than under FOB for containerized cargo. Chilean importers working with suppliers in countries with export licensing requirements often prefer FCA over EXW for exactly this reason. If you are weighing whether to handle this yourself or hand it to a specialist, our guide on the difference between a freight forwarder and a customs broker explains who does what.

A practical example on a Chile shipment

A US exporter quotes a Chilean buyer two ways for the same shipment: FOB Los Angeles at USD 9,000, or DDP Santiago at USD 11,200. The Chilean buyer compares the numbers and assumes DDP is simpler and barely more expensive once ocean freight, local port charges, customs duties and 19% VAT are added under FOB. What the comparison misses is that the US exporter has no Chilean RUT and no customs broker retained in Chile, so the DDP quote cannot actually be executed as written; in practice, the shipment would need to clear under the importer's own RUT regardless, with the seller simply reimbursing the cost after the fact. Confirming this detail before signing avoids a container held at customs with neither party able to release it.

Frequently asked questions about Incoterms for Chile

Which Incoterm should a first-time importer in Chile use?

CIF is the simplest starting point because it bundles freight and minimum insurance, but FOB gives more control once the importer has a reliable freight forwarder in place.

Can a foreign seller legally use DDP to ship into Chile?

Only if they have a Chilean tax ID (RUT) or work through a party that can clear goods on their behalf. Without that, DDP terms typically cannot be executed as agreed, and the import ends up clearing under the buyer's own RUT.

What is the difference between FOB and FCA for container shipments?

Under FOB, risk transfers when the goods are loaded on board the vessel. Under FCA, risk transfers earlier, when the seller hands the goods to the carrier the buyer nominated, which better reflects how containerized cargo is actually handled before it reaches the port.

Does any Incoterm cover Chile's import VAT?

No Incoterm eliminates the 19% VAT due at import; it only determines who is contractually responsible for paying it. Under DDP the seller pays it, under every other common term the Chilean buyer does.

If you are structuring a shipment to or from Chile and want to confirm which Incoterm fits your contract and who can legally clear customs on each side, our team can review the quote with you. Talk to our team.