Very practically, if your goal is a quick acquisition by a company in California this is not the place for you. But if you're starting a business that can drive revenue this is a huge win in a number of ways. Either you'll get cash-flow positive or more without giving out equity or you'll be able to expand faster than you would simply bootstrapping, or you'll be in a better position to raise investment six months out.
EDIT: worth noting -- the subsidy is denominated in Chilean Pesos (20 million CLP). So it's technically something like 42.5k USD at this point. You have to spend it all in six months though so it's possible not to use it all.
Compare this to the USA Startup program that's spending $200k on a standardized startup application. Y-combinator could create the same by adding 'oh, and contribute to building standardized form' to the end of their conditions for their funding : It would be hacked together within a week by 30+ teams of very smart people... Alternatively, get participation from a collaborating set of VCs : Free PR if you contribute.
Particularly points 3.i, and 3.iii talk about incorporation in Chile as a requirement. 3.iii talks about the 'intention' of leaving operations in Chile. I've copy/pasted the section.
It's pretty hard to develop and do CEO/partner duties at the same time, especially in such an early stage. In fact I would think doing the hustle is about as much time consuming as doing the dev work. Also, It's hard to tell Chile that your not going to hire anyone because you couldn't find anyone; while taking their money. For more specific note, if you look at the requirements (dinners, talks, evaluations, presentations, publications), I don't see you'd find time to do more than 20% dev work without hiring someone.
I would love to take Chile up on their offer, and as a super hyper serious startup founder I'm excited BUT at the same time very weary of anything 'too good to be true'.
Section 3 below: 3. RESULTS AND ANTICIPATED IMPACTS. At a minimum, it is anticipated that the Projects and their Participants:
i. Are incorporated to the national entrepreneurship environment and execute their Project in Chile for at least 24 (twenty-four) weeks.
ii. Carry out activities required for the fulfillment of the goals proposed in their Projects.
iii. Are incorporated in Chile as formal companies, with the intention of leaving operations in Chile.
iv. Contract local talent.
v. Attend at least 70% of the events 3 of the Program.
vi. Lead at least 6 (six) group workshops.
vii. Attend meetings with potential investors with the intention of raising capital during their participation.
viii. Participate as mentors of national entrepreneurs.
ix. Create and publish 3 (three) notes in English on the basis of their experience in international media
* Update: Edited for spelling mistakes.