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Setting up your
Company in Chile

key i nfor mation to inves t in C h ile


01
Setting up
Your Company
in Chile
01. Setting up Your Company in Chile

Stages of starting a business in Chile as a foreign investor

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LEGAL STARTING
INVESTMENT MUNICIPAL
CONSTITUTION ACTIVITIES
PROJECT LICENSE
OF COMPANY BEFORE THE SII

STAGE 1: Establishing the Company


In Chile, there are two ways to start a company:

Tu Empresa en un Día
Through the Tu Empresa en un Día (Your Company in One Day) portal, a company can be created
in a simple online process that, for small businesses, is free-of-charge. At present, this system
is only available for limited liability companies, individual limited liability companies (EIRL) and
stock companies (SpA), but will gradually be extended to include other types of companies.
@ For further information, see www.tuempresaenundia.cl and www.escritorioempresa.cl.

Traditional method Chilean law


Companies must, in general, be established by public deed. envisages several
In some cases, however, a private deed, with the founders’
different types of
signatures witnessed by a public notary, suffices. The deed
specifies matters such as the type of company, its field of company structure
activity, its partners and their respective capital contribution, and the decision
how profits will be distributed and how the partners will answer as to which is most
for any losses. An extract of the deed must be published in the suitable will depend
Diario Oficial (Official Gazette) and be included on the Registro
on factors that
de Comercio del Conservador de Bines y Raíces corresponding to
the company’s domicile. include the investor’s
business strategy
@ For further information, see Law 19.857, Law 3.918, Law 18.046 and
the Commercial Code. and the scale of the
equity contribution.
• The company structures • An EIRL can undertake jointly responsible for its
most commonly used by all types of civil and liabilities.
foreign investors in Chile commercial activities
are: except those restricted by • An extract of the public
law to corporations. deed through which the
• Individual limited liability company was established
company (EIRL) • The EIRL is managed by must be included on the
its owner or a General Registro de Comercio del
• Limited liability company Manager designated by Conservador de Bienes
him/her. Raíces (Business Register of
• Corporation (S.A.), public the Real Estate Registration
or closed Office) corresponding to
Limited Liability
Company the company’s domicile
• Stock company (SpA)
and be published in the
Companies of this type are
Diario Oficial (Official
Individual Limited governed by Law 3.918
Gazette) within 60 days of
Liability Company and, additionally, by the
the date of the deed.
Commercial Code and the
Companies of this type are
Civil Code. Their principal
governed by Law 19.857, Corporation
characteristics are as follows:
introduced in 2003, and are In companies of this type,
subject to norms similar to which are governed by Law
• They are established by
those for limited liability 18.046, the capital is usually
public deed.
companies. Their main contributed by a large
characteristics are as follows: number of shareholders
• They must have a minimum
of two partners and can who are answerable only
• The company is established have up to a maximum up to the amount of their
by a natural person who of 50. The partners are respective contribution. The
creates a legal entity economically answerable main characteristics of these
through a public deed in up to the amount of their companies are as follows:
order to operate under respective contribution
his or her own name but unless, under the terms • They are established by
keeping personal assets of the company’s creation, a public deed containing
separate from those of they have agreed to a information that
the company. The owner larger amount. includes the identity
is, therefore, answerable of the shareholders,
with personal assets only • The partners may be the company’s capital,
up to the amount of the natural persons or legal purpose and duration
capital contributed to entities, Chilean or foreign. and the manner of their
the company while the They freely agree on the administration and the
company is answerable company’s purpose and the distribution of profits.
with all its assets. means of its management
and supervision. • An extract of the public
• The name of the company deed must be published in
must include that of its • The company’s name may the Diario Oficial (Official
founder or an invented contain that of one or more Gazette) within 60 days of
name that refers to of its partners or refer to the date of the deed.
its purpose. It must its purpose. It must include
also include the words the word “Limitada” and, if • A corporation’s capital
“Empresa Individual de this is not the case, all the must be fully subscribed
Responsabilidad Limitada” partners will be considered and paid in within three
or “EIRL”. years of its establishment.
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If this does not occur, the to whose supervision they are by one or more persons.
amount of its capital is subject.
automatically reduced to • Their capital is divided into
the amount effectively Closed shares.
subscribed and paid in. T h e s h a re s o f t h e s e
• They may be established
c o r p o r a t i o n s a re n o t
• C o r p o r a t i o n s are by public or private deed
p u b l i c l y t ra d e d . Th ey
administered by a Board of and, in the latter case,
must be registered on the
Directors. It must have at the signatures must be
Business Register of the Real
least three members who witnessed by a public
Estate Registration Office
are essentially revocable notary.
corresponding to their
and take decisions by domicile within 60 days as
majority. • An extract of the deed
from the date of signing the
must be published in the
deed through which they were
• A corporation’s name may Diario Oficial (Official
created.
contain the name of one Gazette) within a month of
or more of its partners or Stock Company (SpA) the date of the deed and
an invented name and is must be registered with the
followed by the letters S.A. Stock companies are a variant Business Register of the
of corporations and limited Real Estate Registration
liability companies and Office corresponding to
Types of corporation: are governed by their own the company’s domicile.
Public statutes and by Article 424
and subsequent articles of
These are the corporations
the Commercial Code and,
whose shares are publicly
additionally, by the norms
traded and, either as a legal
for closed corporations. Their
requirement or voluntarily,
main characteristics are as
must register their shares on
follows:
the Securities Register held
by the Superintendency of
Securities and Insurance (SVS) • They may be established
Company Structures in Chile

EIRL LIMITADA SpA S.A.

Purpose Several purposes or activities

Liability The owner answers The partners (Ltda.)/shareholders (SpA, S.A.)


only up to the amount are answerable up to the amount of their
of his/her capital contribution with their personal assets, except
contribution and not in the case of criminal responsibility.
with personal assets.

Constitution A natural person, with Two or more natural One or more Two or more
no other partners, by persons or legal natural persons natural
public deed included in entities. Maximum or legal entities. persons or
The Bussiness register of 50 partners. Maximum of 499 legal entities.
of The Real Estate partners or 99 Only by
Registration Office with 10% of the public deed
equity. Public included, if
deed included, if it is a closed
it is a closed co., co., or in the
or in the Register Register of
of the SVS, if it the SVS, if it
is a public Co. is a public Co.
or private deed
with signatures
witnessed by a
public notary.

Administration By the owner of the One or more One or more A board


EIRL or manager(s) partners or a third administrators elected
appointed by the party or parties (like a limited by the
owner. appointed at liability company) Shareholders’
the company’s or a board (like Meeting.
constitution. a corporation).
Decisions not Manager(s)
delegated to the appointed by
administrator(s) the board.
must be taken Shareholders’
unanimously by Meeting by
the partners. a majority of
shareholders.
EIRL LIMITADA SpA S.A.

Records Accounting and tax Accounting and Accounting and Accounting


records. They have tax records. tax records. and tax
the advantage of records.
being able to use Register of Minutes of
simplified accounting. Shareholders. Board of
Minutes of Directors
Shareholders’ meetings and
Meetings. Shareholders’
Meetings.
If a Board of Register of
Directors has Shareholders.
been elected,
minutes of its

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meetings must
be kept.

Taxation Annual First Category Annual First Category Tax at a rate of


Tax at a rate of 22.5%, 22.5%, rising to 27% in 2018, levied on
rising to 27% in 2018. taxable income and full accounting.
Simplified accounting.

Sale of Sale of rights requires Sale of rights Sale of shares does not require
no approval since requires unanimous authorization from other
company
the entry of partners approval of all the shareholders. A shareholder who
not permitted. partners. Limited wishes to sell shares is free to
transfer of rights. do so unless this is restricted
A partner who by a shareholders’ agreement.
wishes to exit by
selling stake is not
entirely free to do
so.

Preferred by Businesspeople Partners with a Entrepreneurs Shareholders


wishing to start a relationship of seeking flexible seeking
business without trust who want management protection
partners and to take few formalities and capital of their
all the decisions. and simplified divided into investment
management. shares that can and
Maximum of one easily be sold. administrative
natural person. Minimum of control.
two partners. Minimum of one
shareholder.

Most Micro firms. Family companies, Enterprises Businesses


professional seeking to attract requiring
commonly used
partnerships. venture capital. large amounts
by of capital.
• The company must keep a (RUT) from the (SII) before Simplified procedure
Register of Shareholders. materializing their investment.
This procedure is carried out
All foreign investors who directly by authorized banks
@ For further information, see www.
obtain a RUT must appoint and stockbrokers who can
sii.cl, Law 19.857, Law 3.918, Law
18.046 and the Commercial Code. a legal representative to act obtain a RUT for customers
on their behalf before the who invest in Chile in order
tax authorities. This legal to obtain income from the
A person is representative may be Chilean purchase and sale of shares
considered to be or of another nationality but in open corporations, whether
resident in Chile if must be domiciled or resident regularly traded or not, and
in Chile. from fixed income instruments,
he or she is there
financial intermediation,
for more than six There are two alternative
shares in mutual funds or
uninterrupted months procedures for obtaining a
certain contracts.
tax number.
in a calendar year
Starting activities
or more than a total Normal procedure
of six months in This procedure is required
This procedure can be undertaken
only if the investment implies
two consecutive personally by the foreign investor
the exercise of an economic
or through the legal representative
tax years. domiciled or resident in Chile. In the activity in Chile. It consists
former case, the foreign investor in the presentation of a
STAGE 2: must go to the offices of the SII sworn statement in which
Procedures before with the legal representative, taking the taxpayer informs the SII
his passport or ID card, and fill out of the intention to undertake
the (SII) Form F-4415 (Registration of activities in the country that
RUT and/or Sworn Declaration
Domicile or residence for tax may be liable to tax.
of Start of Activities).
purposes In the case of persons not
If the procedure is carried out
A natural person is considered by the legal representative, the resident or domiciled in
to be domiciled in Chile if it foreign investor must provide Chile, this Start of Activities
can be assumed on the basis the legal representative with Statement must be presented
of the person’s activities that a power of attorney sufficient when the investment has been
he or she wishes to remain to act before the SII and, in materialized through the
in the country. This does not particular, to legalize, complete setting up of a company or
necessarily depend on the and sign Form F-4415 as well permanent establishment in
person’s presence in Chile as to receive notifications and Chile. Investors not domiciled
but on other circumstances attend meetings with the tax or resident in Chile who only
that indicate an intention to authorities on behalf of the obtain income from movable
remain there. foreign investor. This power capital are obliged to obtain
of attorney may be granted a RUT but not to present a
A legal entity is considered to
before a public notary in Chile Start of Activities Statement.
be domiciled in Chile if it was
constituted here. or another country but, in the The Statement can be filed
latter case, must be legalized in electronically through www.
Obtaining a tax number (RUT) accordance with the Apostille sii.cl. Alternatively, the
Convention of The Hague or corresponding form may be
All foreign investors, whether
by the Chilean consul in the presented in the offices of
natural persons or legal
country in question and Chile’s the SII by either the investor
entities, including those not
Foreign Ministry. or a legal representative with
domiciled or resident in Chile,
must obtain a tax number sufficient powers.
Stamping of documents
After submitting the Start
of Activities Statement,
taxpayers must stamp
documents, a procedure
under which the SII authorizes
certain documents and the
books required to record
the operations taxpayers
undertake in the course of
their economic activities.
These documents may be
electronic or on paper to
which a dry stamp has been
applied.
@ For further information, see

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www.sii.cl.

STAGE 3:
Obtaining Permits
and a Municipal
License

A number of permits may be


required in order to undertake
a n e co n o m i c a c t i v i t y.
Depending on its nature, they
may be issued by, for example,
the corresponding municipal A number of permits may
government or the Regional
Office of a Ministry (SEREMI). be required in order to
Municipal License undertake an economic
The permits and licenses activity. Depending on
issued by municipal
governments are governed its nature, they may be
principally by Law 18.695
(Organic Constitutional issued by, for example, the
Municipalities Law) and Law
3.063 on Municipal Revenues.
corresponding municipal
After obtaining the municipal government or the Regional
permits required for the
proposed activity, the Office of a Ministry (SEREMI).
interested party must apply
for a municipal license. This is
Common Permits

Permit Description Issuing Authority


Prior Information Indicates whether the physical place Dirección de Obras (Construction Work Office)
Certificate where the business will be located of the corresponding municipality.
is compatible with its proposed
commercial use and the possibilities of
building or expanding installations there.
Zoning Certificate Provides a prior indication of the Dirección de Obras (Construction Work Office)
feasibility of undertaking a commercial of the corresponding municipality.
activity at a specific address as well as
the requirements for building there.

Construction Required for the construction, Dirección de Obras (Construction Work Office)
Permit reconstruction, repair, expansion or of the corresponding municipality.
demolition of buildings or infrastructure
of any nature, whether urban or rural.

Minor Building Authorizes the interested party to carry Dirección de Obras (Construction Work Office)
Work Permit out work that does not alter the main of the corresponding municipality.
structure of the building.
Final Inspection Required before a building may be Dirección de Obras (Construction Work Office)
Approval inhabited or used for its proposed of the corresponding municipality.
purpose.

Health permits Authorization from the corresponding Obtained in person or online from the Regional
Regional Office (SEREMI) of the Health Office (SEREMI) of the Health Ministry or the
Ministry is required if the commercial Health Service corresponding to the company’s
activity involves the handling of foods domicile.
or hazardous substances.

Permit for the Used to report the start of operation of Obtained online from the Superintendency of
installation of basic infrastructure for electricity generation, Electricity and Fuels (SEC): http://www.sec.cl
services production or storage or for fuel
distribution, water and gas. Superintendency of Sanitary Services

Special permits These vary depending on the Depends on the particular permit; investors are
nature of the commercial activity advised to consult the corresponding municipal
to be undertaken and the particular government.
municipality where the business will
be located. They include: The legal representative must request it in the
offices of the Regional Office (SEREMI) of the
Approval of declaration of particulate Health Ministry.
matter emissions.
Zero Formalities: For companies
considered eco-friendly or representing
a low environmental or health risk. The
health authorities undertake to issue
the health authorization certificate
within an hour.
Permit to market electrical products
and products using gas or liquid fuels.
Request for definitive electricity
concession.
• Updated bank reports for
the person opening the
account

• Registry at the bank of the


signature to be used by the
current account holder

• Information about activity


and solvency as deemed
necessary by the bank

• Registry of a domicile in
the country

• Signing of a contract

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setting out the general
conditions of the current
account.
Legal entities

• Verification that the


company has been
legally established and its
representatives have due
and valid powers

• Proof of identity in the


form of the company’s tax
number (RUT)
obtained from the Commercial Opening a Bank Account • In the case of legal
Licenses Department of the representatives opening
municipal government of Commercial banks are free to
an account on behalf
the area where the activity establish their requirements
of a company, all the
will take place. This license for the opening of Bank
requirements applying
authorizes the company to accounts. However, They
to natural persons as
undertake the activity within usually require the following:
regards registry of identity,
the corresponding municipal Natural persons photograph, thumbprint
district. If the application is and signature also apply.
accompanied by all the permits
• Proof of identity in the
required by law, the municipal • All the requirements
form of an ID card
government must immediately applying to natural persons
issue a provisional or definitive • Recent photograph of the as regards bank reports,
license, depending on the size used for ID cards or domicile and contract also
case. passports apply to companies.

@ For further information, see • Right thumbprint on the


www.chileatiende.gob.cl, Law client information card
18.695 and Law 3.063. held by the bank
Summary of Starting a
Business

Definición del tipo de


empresa

Redacción
Escritura
(Abogado)
Publicación
Extracto
(Diario Oficial)
Otorgamiento
Escritura
(Notaría)
Inscripción
registro de
comercio (CBR)
Obtención Rut
(SII)

Iniciación
actividades
(SII)

Timbraje
Documentos
(SII)

Otros
Permisos permisos Patente
Municipal

Patente
Municipal Inicio
funcionamiento
del negocio
Inicio
funcionamiento
del negocio
Procedure Cost Place

SII office corresponding to the


domicile of a taxpayer resident in
Obtaining a RUT as
Chile or, in the case of taxpayers
a foreign investor
Free-of-charge not resident in Chile, that
(natural person
corresponding to the domicile
or legal entity)
of the legal representative
with sufficient powers
Depends on the type
Public deed and
of company and the Notary
legalization
corresponding fees

Inclusion on the Real Estate Registration Office


Business Register Basic charge of 5,500 pesos,
of the Real estate plus 0.2% of the capital Corresponding to the

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Registration Office domicile of the company

Publication in 1 UTM* or free-of-charge


Diario Oficial for companies with capital Diario Oficial
(Official Gazette) of less than 5,000 UF**

Procedures SII office corresponding to the


Free-of-charge
before the SII domicile of the company

The annual cost is equivalent


to between 0.25% and 0.5%
of the capital of each taxpayer Commercial Licenses
Municipal license (depending on the municipality Department of the corresponding
and the sector of activity) but municipal government.
cannot be less than 1 UTM
or more than 8,000 UTMs

Depends on the activity Institution responsible for


Other permits
to be undertaken the permit or procedure

* Unidad Tributaria Mensual (UTM): An indicator used for tax purposes whose value in pesos is defined by law and
is adjusted each month in accordance with the Consumer Price Index.

** Unidad de Fomento (UF): An indicator whose value in pesos is adjusted daily in accordance with the Consumer
Price Index.

@ For further information, see www.chileatiende.gob.cl, www.sii.cl, www.diariooficial.cl and


www.conservador.cl.
Central Bank regulation is based on the general
principle of freedom of foreign exchange
operations and any person can, therefore,
freely carry out such operations.

Registering the Entry US$10,000 or its equivalent in in Chapter XIV of the


of Foreign Capital other currencies are subject to Compendium must be carried
this mechanism. out through the formal
The entry of foreign capital foreign exchange market or,
into Chile is registered under Characteristics in other words, banks and
Chapter XIV of the Central currency exchange offices
Central Bank regulation
Bank’s Compendium of authorized for this purpose
is based on the general
Foreign Exchange Regulations. by the Central Bank. When
principle of freedom of foreign
This administrative system operations do not involve
exchange operations and any
operates through commercial the entry of foreign currency,
person can, therefore, freely
banks, which report the entry they must be reported directly
carry out such operations.
of the capital to the Central to the Central Bank by the
Their characteristics and the
Bank. Investments in the investor or the recipient of
corresponding procedures are
form of currency and loans the investment.
set out in the Central Bank’s
can be brought in under this
Compendium of Foreign @ For further information, see
mechanism.
Exchange Regulations. www.bcentral.cl.
Operations involving loans,
The entry into Chile of the
deposits, investments or
currency corresponding to
capital contributions for over
the operations envisaged
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www.
MORE INFORMATION

investchile.
gob.cl

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