Chile Company Registration: You Ultimate Guide 2024

Chile, despite its relatively smaller geographical size, has become a prominent destination for Foreign Direct Investment (FDI), rivaling larger economies like Mexico in Latin America. The country's robust legal system, macroeconomic stability, rich natural resources, and well-developed infrastructure have fueled an impressive year-on-year GDP growth of 1.9% at the end of 2023, reaching a total GDP of USD 502 billion. In 2022, foreign investors contributed approximately USD 17.10 billion to the Chilean economy, highlighting the government's efforts to diversify investment sources and position the country as an attractive destination for multinational corporations, startups, and other investors. Since May 2013, the streamlined process of online company formation has increased Chile's appeal, making it an ideal time for investors to begin the company registration process.

Chile's open market principles, democratic governance, ethical business practices, and low corruption levels make it a pivotal trading partner and export market for American businesses. In 2010, Chile became a member of the Organization for Economic Cooperation and Development. Since then, it has maintained a reputation as a stable nation, boasting a varied economy anchored in industries like forestry, copper mining, fish farming, winemaking, and tourism. Chile is an attractive option for individuals contemplating the establishment of a business in the country.

5 Facts about Doing Business in Chile

Commencing a business venture in Chile holds promise for various reasons. Chile has been dedicated to enhancing its business climate and enticing foreign investments. The ensuing benefits highlight the advantages of establishing a business in Chile:

Strong and Stable Economy

Chile boasts a strong and stable economy, often considered one of the most developed and prosperous in South America. It has a diverse market with full-grown sectors such as mining, agriculture, and services. Chile is the world's largest producer of copper, the second largest producer of lithium, and it has abundant solar and wind energy resources. The country has consistently implemented sound economic policies, contributing to its positive business environment.

Low Unemployment Rate

Chile has historically maintained a relatively low unemployment rate compared to many other countries. This is a positive aspect for businesses, as a stable job market indicates a reliable pool of skilled and motivated workers. Chile's unemployment rate is updated quarterly from March 2009 to December 2023, with an average rate of 7.27%. The government's commitment to economic stability has played a role in sustaining low unemployment levels.

Stable Currency

The Chilean peso (CLP) is the official currency, and it has shown a level of stability over the years. This stability is favorable for businesses engaged in international trade, as it helps mitigate currency exchange risks. The Chilean peso is expected to remain stable as economic and political concerns diminish, supporting the Central Bank's decision to unwind an intervention program initiated last year amid market turmoil. In July 2022, the peso fell to a record low of 1,050 per US dollar due to a sharp drop in copper prices, the principal export of Chile.

Competitive Tax System

Chile offers a competitive tax environment for businesses. The corporate tax rate in Chile is generally lower than the average in the region, attracting foreign investors. Additionally, the country has double taxation agreements with numerous nations, facilitating international business activities and reducing tax-related complexities.

As of 2024, the corporate tax landscape in Chile is structured as follows:

• Corporate Tax Rate: The corporate tax rate in Chile is 27% (25% for small and medium-sized enterprises), applicable to both resident and non-resident companies deemed as residents for tax purposes.
• Value Added Tax (VAT): Chile implements a VAT system, with a standard rate of 19%. Certain goods and services may qualify for reduced VAT rates.
• Withholding Tax on Dividends: Dividends distributed by Chilean resident companies may be subject to a withholding tax. The general withholding rate for payments is 35%, with potential reductions under double taxation treaties.
• Capital Gains Tax: There is no capital gains tax in Chile. 

Well-Established Banking System

Chile's banking system provides a comprehensive range of asset and liability products, with a notable focus on efficient foreign trade financing and money exchange operations compared to other Latin American countries. Oversight of financial entities is managed by Chile’s Commission for the Financial Market, while the Chilean Pensions Supervisor monitors the pension system, and SERNAC (Chile’s Bureau of Consumer Protection) safeguards consumers, mandating the CAE (Carga Anual Equivalente, or Annual Equivalent Cost) index for credit requests. 

Chile has a stable banking system, offering a range of financial services. The banking sector is regulated and modern, with both local and international banks operating in the country. This facilitates smooth financial transactions for businesses and investors. Chile's financial institutions are known for their reliability and adherence to international standards.

Types of Companies in Chile

The table below provides a concise overview of the top Chilean business structures, their main characteristics, and some key details about each.

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Company Formation Requirements in Chile

To set up a company in Chile, you have to meet various requirements. It involves satisfying different criteria to ensure a smooth establishment of your business in the country. Meeting these requirements is essential for a strong and legally compliant presence in Chile.

Name for Your Legal Entity

Research thoroughly to choose a unique and distinctive name for your company, as you will need to register it promptly with the country's Company Registry to secure its legal recognition and exclusivity.

Shareholders

Decide whether to have multiple shareholders, as you can benefit from strategic advantages. It is necessary for your company to have a minimum of 2 and a maximum of 50 shareholders.

Share Capital 

The share capital is typically divided into shares, and shareholders contribute funds in exchange for ownership in the company. Chilean law allows companies to have both common and preferred shares, with the share capital representing the financial basis for the company's operations and growth. The minimum capital is not determined, and it may vary based on the type and size of the company, as stipulated in the company's bylaws.

Legal Representative

Clearly define and appoint a Legal Representative within the company's bylaws, outlining their roles, responsibilities, and authority, as you will need someone to fulfill this crucial role. Ensure that the Legal Representative is fully aware of and complies with the legal obligations associated with their role.

Fiscal Address

Establish and formally register a Fiscal Address within the borders of Chile as you need an official location for all correspondence related to the company. Make sure that the chosen fiscal address aligns with legal requirements and facilitates efficient communication.

Legal Documentation

• Draft a comprehensive Deed of Incorporation, explicitly outlining the powers granted to individuals representing the company, as you should provide a clear legal framework for your business. Engage in the formal process of publishing the Deed of Incorporation and any subsequent modifications in the Official Gazette, as you will need to ensure transparency and legal compliance.
• Provide a detailed and accurately annotated copy of the Registration of the Extract in the Commercial Registry, including all relevant annotations. Include a Certificate of Validity if the deed surpasses a one-year threshold, as you will need this additional layer of authentication.
• Submit a copy of the Tax ID (Rolnico Tributario) for the company. It should align with legal specifications, as you need this crucial identifier for your business. Include apostilled copies of ID or passport for each legal representative or partner, emphasizing the importance of the apostille for international recognition.
• Present a comprehensive Tax File for Credits, providing evidence of the existence of a Current Account and showcasing commendable banking behavior, as you need to demonstrate financial responsibility. Offer detailed balance sheets for the preceding two fiscal years, as this will provide a clear picture of the financial health and stability of the company.
• Disclose an intricate and thorough depiction of the corporate network, elucidating the relationships, subsidiaries, and affiliations that contribute to the company's structure, as this information is vital for regulatory compliance.
• Share exhaustive information on ongoing or completed projects and contracts, providing an understanding of the company's operational landscape, as this can strengthen your business profile.
• Furnish an in-depth overview of the business activities, including key facets such as the primary client base, supplier relationships, and preferred payment methods, as you will need to provide a solid business profile.
• Deliver a detailed account of the financial situation of partners situated abroad, ensuring compliance with international reporting standards. 
• Include prepared accounting balance sheets and income statements for the parent company (if applicable), emphasizing transparency and financial accountability, as you will need to demonstrate the financial health of the parent company.

Investor Visa 

In cases of applicable investments, you may secure an Investor Visa by committing at least USD 500,000 to a qualifying project. This visa offers additional benefits, such as the opportunity for investors to reside in Chile, actively participate in their investment and get Chilean citizenship. 

How to register a company in Chile?

The registration process takes approximately 6-8 weeks and can be completed remotely using a Power of Attorney. It consists of the following steps:  

Step 1. Choose the Type of Business

You need to decide on the type of company that best suits your needs and ensure you meet all prerequisites. There are several types of companies in Chile, including but not limited to: Sociedad Anónima (S.A.) - Public Limited Company, Sociedad de Responsabilidad Limitada (Ltda.) - Limited Liability Company, Sociedad por Acciones (SpA) - Corporation by Shares, Empresa Individual de Responsabilidad Limitada (EIRL) - Individual Limited Liability Company, Sociedad Anónima Cerrada (S.A.C.) - Closed Corporation. Consider the specific characteristics and requirements of each type of company to make an informed decision based on your business goals and structure.

Step 2. Obtain Legal Representative in Chile

If you are not physically present in Chile, hire a legal adviser who must be a Chilean native or a foreigner with a valid visa proving residency. It is essential to have a legal representative well-versed in Chilean business regulations and practices to guide you through the intricacies of the registration process and ensure compliance with local laws.

Step 3. Set Up the Business

You should create a deed of incorporation with the assistance of a notary, including the following details:

• Name, RUT (taxpayer identification number), country of birth, marital status, address, occupation, and the couples’ participation percentage (if applicable).
• Location of the business.
• Capital of the business, and its structure. 
• Name of the business and its objectives.
• Total number of shareholders, shares, and board members (if applicable).

Step 4. Register with the Commercial Registry

Within 60 days of certifying the deed, incorporate the company at the Commercial Registry. You have to submit the following main documents:

• Two original records or valid copies of the deed signed by the notary.
• The company’s deed of incorporation document and form N°2 provided by the Real Estate Registry.

Step 5. Publication in an Official Gazette

Within the first 60 days following the company’s registration, publish the firm’s official statement in the Official Gazette. This public disclosure enhances the visibility of your company, providing transparency and fulfilling a legal requirement that contributes to building trust with stakeholders and potential partners.

Step 6. Obtaining the Rolnico Tributario (RUT) (Taxpayer Identification Number)

You have to oversee the company’s RUT with the Internal Revenue Service (SII) by:

• Selecting one or more categories of business activity when announcing the beginning of your company’s operations.
• Getting the RUT within two months after starting activities.

Step 7. Open a Business Bank Account

Following the legal registration of your business, proceed to open a business bank account with a reputable Chilean bank, such as Banco de Chile, BancoEstado, or Banco Santander Chile. Consider the nature of your business requirements when selecting the currency for the account, as you have the option to choose between Chilean Pesos or US Dollars. This strategic decision aligns with your financial objectives and operational needs, providing flexibility and ease in conducting transactions within the Chilean banking system.

FAQ

Can a Foreigner Register a Company in Chile?

Yes, a foreigner can register a company in Chile. The country has a relatively open and welcoming business environment for foreign investors. To establish a company, a foreigner can choose between different legal structures, such as a Limited Liability Company (Sociedad de Responsabilidad Limitada - SpA) or a Corporation (Sociedad Anónima - S.A.).

Can a Foreigner Own or Invest in a Business in Chile?

Yes, foreigners are generally allowed to own or invest in businesses in Chile. The country encourages foreign investment and has a relatively open business environment. Foreigners can establish their own businesses, acquire existing businesses, or invest in various sectors. There are usually no restrictions on foreign ownership, but specific regulations and requirements may vary depending on the industry. 

Can You Set Up a Business in Chile Online?

Yes, you can set up a business in Chile online. As of May 2013, Chile has implemented significant measures to enhance the ease of starting a business, introducing new laws that facilitate online company formation. These changes have streamlined the process, making it extremely convenient for entrepreneurs. 

How Long Does it Take to Incorporate a Company in Chile?

The introduction of online registration systems has expedited the company formation timeline. On average, it takes approximately 6 to 8 weeks to complete the process of company formation in Chile once you have all of the required documents. This timeframe accounts for the various steps involved in the registration process, including document submission, review, and approval by relevant authorities.

Do You Need to Have a Local Bank Account to Register a Company in Chile?

Yes, you need to have a local bank account to register a company in Chile. Having a local bank account is often considered essential for business operations. Some prominent Chilean banks include: Banco de Chile, BancoEstado, Banco Santander Chile, Banco BCI, and Banco Itaú Chile. 

At Golden Harbors, we extend our expertise to assist you seamlessly with the company registration process in Chile. Our dedicated team of corporate support specialists is well-versed in the intricacies of establishing and managing businesses in Chile. Whether you are looking to initiate a new company, expand an existing one, or navigate the complexities of investment and immigration, we are committed to ensuring your success in the Chilean market.

Our multilingual team is equipped to handle various aspects of your business journey, offering comprehensive services tailored to meet your specific requirements. From conducting market research to ensuring legal compliance, Golden Harbors is your trusted partner in every step of the process. Our extensive portfolio of services includes company setup, accounting, tax advisory, and immigration support, allowing us to provide personalized packages of integrated back-office solutions.

By choosing Golden Harbors as your partner, you gain access to a single point of contact for all your business needs in Chile. Let us work together to unlock the full potential of your business in Chile and make your company registration process a successful experience.