Chile’s gamble to make itself the next Silicon Valley could fatten your wallet.

WHEN IS SILICON Valley not like Silicon Valley? When it’s six thousand miles south, comes with an equity-free $40,000, and where everybody habla español. Chile’s entreprenuer-attracting project, Start Up Chile is entering its third year, after receiving 1600 applications from 70 countries. The project is under the aegis of the Work Ministry, and specifically the subagency of CORFO, which is set up to attract and encourage development in Chile.

Applicants send in their proposals, and the lucky accepted get the aforementioned $40,000 to spend on their project, and plenty of government expedited hand-holding to accomplish what takes other foreigners weeks and months to accomplish, including near instantaneous bank accounts and carnets (Chilean ID), as well as a one-year temporary visa.

The goal of Start Up Chile is to establish the nation as the center of innovation on the continent. There are training courses, meetings, meetups and other support to keep project participants going during the six months that they’re required to be in-country. The Chilean government is banking on people being attracted to Chile as a great place to launch a global business, whether tourism, tech, or something else. In turn, their presence will teach Chileans a little more about the business world outside of Chile, the language of innovation, and a little more thinking outside the box.

The place where it all happens is a pretty, airy upstairs space in a classic old building in the middle-class Providencia neighborhood of Santiago, and the office, which is usually buzzing with the latest batch of entrepreneurs, looks not unlike a frequent flier lounge, toast squares and bottomless coffee included.

But will it work? An Israeli entrepreneur, Arnon Kohavi, came to Chile independently (not through Start Up Chile) from Silicon Valley, with hopes of basing his venture capital shop here. Six months out, he picked up and moved to Singapore, because he couldn’t gain acceptance from the country’s elite, claiming that there is an entrenched upper class, members of which “don’t need to work hard,” as reported in thenextweb. He also blasts social conservatism, and the overarching control of conservative religious groups (he names Opus Dei), to explain why Chile just isn’t at the “tipping point” yet, though he thinks in ten years, things will change. The lack of universal access to education, protested against in this year’s massive educational demonstrations cripples the tech ecosystem, he says.

So is Start Up Chile a good gamble for entrepreneurs? The chance to get your hands on $40,000 and gain a community of people rooting for your success is a pretty big carrot, and Start Up Chile is banking on people continuing to apply for the program.

With the world recession in full swing, and loads of quick-minded, unemployed young people looking farther afield than their home country, I’d say they’re probably right.