1) What are the Principle Types of Legal Structures in Latin America?
There are four main company types in Latin America. The requirements, characteristics and how they operate differ slightly between countries; however, there are some commonalities:
A Branch Office of a Foreign Company (Sucursal de Sociedad Extranjera)
A Corporation (Sociedad Anónima – ‘S.A’)
A Simplified Shares Company (Sociedad por Acciones Simplificadas – ‘S.A.S’)
A Limited Liability Company (Sociedad de Responsabilidad Limitada – ‘SRL’ or ‘LTDA’)
In most cases, and where permissible under local laws, a simplified shares company is the best legal structure for most business applications.
2) The Key Steps of the Incorporation / Registration Process
Although costs, time periods and levels of stress involved in setting up a company vary between each Latin American country, nearly all of them share key procedural elements.
- Confirm the most appropriate legal structure.
- Complete a company name search.
- Prepare the company by laws.
- Obtain the official company books.
- Register the company with the local authorities.
- Obtain the company tax ID.
- Open a corporate bank account.
3) Legal Compliance Requirements of a Company
Most countries in Latin America required local companies to meet some minimum statutory requirements. While these vary from country to country, the region shares some commonalities. See below some of the basic legal compliance requirements in Latin America.
- Appointment of a company legal representation (‘local director’) – This person is the legal face of the company in front of the Governmental authorities. This person must be a national of the country or be a foreign national with the right to live/ work in the country.
- Register a legal/fiscal address – This is the registered legal address of the company and will be used for the filing of taxes, mailing purposes and for other official communication. This must be a physical address within the country, and in most cases, it must be a registered office location.
- Tax declarations – Every legal entity within Latin America must file monthly and annual tax declarations with the national tax authority.
Lawshi lawyers work across sectors and countries in Latin America to deliver advice to you wherever you operate. Our focus is on helping you mitigate risk and benefit from innovation, enabling your business or organization to thrive. If you have any queries about the business opportunities in your country of interest or anything to do with a specific Latin American industry, do not hesitate to get in touch with us at email@example.com.