Overview of Chile's investment environment
Chile is one of the most stable and open economies in Latin America and a member of the Organization for Economic Cooperation and Development (OECD). With its transparent legal system, stable political environment, and advantageous geographical location, Chile has become a preferred gateway for Chinese companies to enter the Latin American market.
Key Benefits
- Stable legal environment: Chile has the most comprehensive legal system in Latin America, and foreign investment is protected by the constitution.
- Free Trade Network: Trade agreements signed with 65 economies, covering 88% of global GDP
- No foreign exchange controls: free flow of capital and unrestricted remittance of profits
- Tax incentives: The corporate income tax rate is 27%, and some industries enjoy special incentives.
- Strategic location: an important port on the Pacific coast, a trade hub connecting Asia and Latin America
China-Chile economic and trade relations
China is Chile's largest trading partner, and Chile is China's third-largest trading partner in Latin America. Since the China-Chile Free Trade Agreement came into effect in 2006, bilateral trade has increased more than fivefold. Currently, over 100 Chinese companies have invested in Chile, with a total investment exceeding US$15 billion.
Comparison of Company Types
Chilean law provides for a variety of corporate forms, the most suitable for foreign investors being the joint stock company (SpA) and the limited liability company (Ltdda). Below is a detailed comparison of the main types of companies:
| Company type | Joint Stock Company (SpA) | Limited Liability Company (Ltda.) | Limited Liability Company (SA) |
|---|---|---|---|
| Minimum number of shareholders | 1 person | 2-2-50 people | 2 people |
| Capital | No minimum requirement | No minimum requirement | No minimum requirement |
| Establishment time | 7-10 days | 10-15 days | 15-20 days |
| Management structure | Flexible and customizable | Direct management by shareholders | Board Governance |
| Equity Transfer | Simple, no need to amend the charter | Requires approval from all shareholders | Free transfer |
| Applicable situations | Both wholly foreign-owned and joint ventures are acceptable | Small joint ventures | Large enterprises and listed companies |
Recommendations
For most Chinese investors, we recommend the SpA (stock corporation) form. With its advantages of simple establishment, flexible management, and convenient equity transfer, the SpA is particularly well-suited for foreign investment. Since the implementation of the SpA Company Law in 2007, it has become the preferred corporate form for foreign investors.
Registration requirements
Basic Requirements
- Shareholder identity: natural persons or legal persons, no nationality restrictions
- Legal representative: can be a shareholder or a third party (must be a Chilean resident)
- Registered address: must have a physical office address in Chile
- Business scope: most industries are open to foreign investment, with restrictions on a few industries
Required documents
Foreign investors need to prepare the following documents to establish a Chilean company:
- Shareholder identification (passport or business license)
- Power of attorney (if entrusting an agent to handle the matter)
- Draft Articles of Association
- Proof of registered capital
- Appointment letter of legal representative
Note: All foreign documents must be notarized by a notary public in the country of origin and apostille or legalized by the Chilean Consulate. Chinese documents typically require a three-level authentication process: notarization, legalization by the Ministry of Foreign Affairs, and legalization by the Chilean Consulate.
Registration Process
Preliminary preparation (2-3 days)
Determine the company name, business scope, equity structure, and prepare required documents
Drafting of Articles of Association (1 day)
Lawyers draft company articles and determine management structure based on client needs
Notarized signing (1 day)
Signing of company incorporation documents at a notary public
Business registration (1-2 days)
Submit an application to the Commercial Registry to obtain a company registration certificate
Official announcement (1 day)
Publication of company incorporation notice in official daily newspaper
Tax ID application (1 day)
Apply for a RUT tax number from the tax bureau to activate the company's tax identity
Time and cost
Registration Time
- SpA joint stock company: 7-10 working days
- Limited Liability Company: 10-15 working days
- Joint-stock company: 15-20 working days
Cost Structure
Chilean company registration fees mainly include:
- Government fees: approximately US$500-1,000 (based on registered capital)
- Notarization fee: approximately US$200-500
- Listing fee: approximately $100-200
- Attorney fees: Determined according to the scope of services
Fee Description
Actual fees vary depending on factors such as company type, registered capital, and scope of services. Lawshi Lawyers provide transparent fee schedules and fixed quotes with no hidden fees. Our services include full legal support throughout the registration process to ensure a smooth transition.
Post-registration matters
After the company is successfully registered, the following matters need to be completed before it can operate normally:
1. Open a bank account
- Choosing the right commercial bank
- Provide company registration documents and tax number certificate
- The legal representative must be present in person or through video verification
- Account opening time: 3-7 working days
2. Obtain relevant permits
- Municipal Business License (Patente Municipal)
- Industry-specific licenses (if required)
- Environmental Impact Assessment (Specific Project)
- Registration with the labor department (when hiring employees)
3. Accounting and tax compliance
- Establish accounting books
- Monthly tax filing
- Annual financial statements
- Statutory audit (if applicable)
Taxation Points
Main taxes
- Corporate income tax: 27% (2024 tax rate)
- Value Added Tax (IVA): 19%
- Withholding tax: 35% on dividends, 35% on interest, 30% on royalties
- Municipal tax: 0.25%-0.5% of business income
Tax incentives
Chile offers tax incentives to certain industries and regions:
- R&D investment: R&D expenditure can receive a 35% tax credit
- Extreme regions: The extreme south and north receive tax breaks
- Renewable energy: tariff-free import of certain equipment
- China-Chile Tax Agreement: Avoiding double taxation and reducing withholding tax rates
Tax planning advice
Proper tax planning can significantly reduce your tax burden. We recommend considering your tax structure from the early stages of company establishment to leverage the China-Chile Tax Agreement and Chile's preferential tax policies. Our tax team can provide you with professional tax planning solutions.