Policies, institutions and regulations that provide an enabling environment for small enterprises can make a substantial contribution to employment creation. This report is an assessment of the policy environment for micro and small enterprises in Chile based on a careful mapping of existing laws and regulations. Despite a policy and regulatory framework that is relatively transparent and well implemented, micro enterprises, in particular, tend to suffer from the costs of compliance. Moreover, indicators of job quality in MSEs show that social security coverage in these enterprises tended to drecrease during the 1990s.