TN 19 (09-01)
RS 02001.935 Self-Employment Rule under the Chilean Agreement
Generally, a work activity that is considered to be self-employment under U.S. Social Security law is also considered to be self-employment under Chilean law. In certain cases however, a person may be engaged in an activity that is considered self-employment by one country and employment by the other country. For example, under U.S. law, ordained ministers and members of the board of directors of a corporation are considered self-employed. Under Chilean law they are generally considered employees. The following subsections explain how coverage is determined in each situation.
1. Activity is Self-Employment in Both Countries
When the work activity is considered self-employment by both countries, the worker will be covered only by the country of which he/she is a resident.
2. Activity is Self-Employment in Only One Country
If the activity is considered self-employment under the laws of one country and employment under the laws of the other country, the worker's coverage is determined as follows:
A worker who is a resident of the country that considers the activity to be self-employment will be covered under the laws of that country.
A worker who is not a resident of the country that considers the activity to be self-employment will have his/her coverage determined under the agreement rules on employment. Thus, the worker will be covered under the laws of the country where the work is performed unless he/she meets one of the exceptions explained in RS 02001.915 - RS 02001.930.
EXAMPLE: A U.S. citizen is residing and working in Chile as a member of the Board of Directors of a corporation. Under U.S. law he is considered self-employed while Chilean law considers him an employee of the corporation. Since he does not reside in the country that considers him to be self-employed, his coverage will be determined using the rules for employment.