Company Formation in Chile
Updated on Friday 27th January 2023
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Chile has lately become an attractive location for foreign investors who want to set the grounds of a new company.
Foreign businessmen who want to invest in Chile should contact a team of company formation experts, who can provide specialized consultancy and assistance throughout the entire process of company incorporation in Chile.
Business entities in Chile
As a foreign entrepreneur, before investing in Chile, you have to choose which type of company best suits your interests and there are various options you can choose from.
Here are some of them: the limited liability company, the joint stock company and the branch or the representative office. However, the most commonly preferred legal entity is the limited liability company.
If you want to set up a company in Chile, these are the requirements for the limited liability type:
1. minimum one shareholder;
2. at least one director (the nationality has no importance and he/she does not have to be a Chilean resident);
3. a minimum share capital of only $1;
4. appointing an attorney to represent the company, given the fact that the director is not a resident of the country.
How to register a company in Chile
There are a few steps to be followed in the process of registering your company in Chile.
In order to open a company in Chile, you start by obtaining an authorization number after you have drafted the documents of association from an online platform (that has been active since the year of 2013).
This needs to be done in order to get a digital signature. Then, a notary has to certify the statutes by means of a digital signature; entrepreneurs can contact our team in order to receive more information about this online process.
The second step of the process is to notify the Internal Revenue Service (IRS) about the fact that you are starting economical activities in Chile. Our company formation agents can help you contact this institution and comply with its demands.
Then you have to print invoices and other documents in an authorized printing company, with the only specification that the IRS format is a requirement.
Since the beginning of 2014, companies with earnings higher than $3,750,000 a year have to use electronic invoices. This law will also apply to smaller businesses as of July 2016.
Another step for company registration in Chile is obtaining a working license from the municipality and if the company has any other offices a separate license will be issued for them.
Finally you need to go to the Mutuales de Seguridad (institution in charge of security measures), in order to pay an insurance for possible work-related accidents of your employees.
What other steps are required for company formation in Chile?
Some of the steps presented up until now represent only a part of the necessary incorporation steps that must be concluded by investors. In this part, you can discover more details concerning the registration process.
In Chile, all companies must register for taxation, as mentioned above, and when completing this step, the company will be issued with a tax registration number.
The tax number is known as RUT (Rol Unico Tributario). It will also be mandatory to establish an office in Chile, and by this, we mean that the company must have a physical address where the company’s representatives can receive business mail and other necessary documentation.
Regardless of the company type of preference, it is also necessary that you will open a corporate bank account. This is one of the basic steps for company formation in Chile, as well as one of the main incorporation steps regardless of the country of choice.
For instance, foreign investors interested in offshore company formation will also need to comply with this requirement, by setting up an offshore bank account in the offshore jurisdiction where they will start a business.
Please mind that these procedures can be completed by the investors or by the company’s representatives, but these steps can also be done with the help of our consultants in company formation in Chile.
Our consultants can provide their services and can represent you in front of public institutions only after you grant us the power of attorney, a legal document which will state the ways in which our team can represent your company.
Our team can help you register with the National Taxation Service as well as with any other institution that is involved in the registration of a legal entity.
What are the main taxes in Chile?
Chile applies personal income tax and corporate taxes. Just like in other jurisdictions around the world, the personal income tax is charged following a progressive system, which implies that the tax rate charged increases as the income of a person increases.
There are several income brackets, as presented in the list below:
- for an income of up to $11,368.06, there is no income tax;
- for an income ranging from $11,368.06 to $25,262.37, the personal income tax is charged at a rate of 4%;
- other income tax rates are 8%, 13.50% or 23%;
- a rate of 30.40% is imposed to an income of $75.787.10 to $101,049.46;
- any income above to $101,049.46 is charged with a tax rate of 35.50%.
Corporate taxes can refer to the corporate income tax, the value added tax, employment taxes, withholding taxes and others.
The standard VAT in Chile is charged at a rate of 19%. This is charged to the goods and services traded on the Chilean territory and it is applied to most of such goods and services, with only few exemptions applied.
For instance, you must know that the VAT is not charged to those who are involved in the export of goods, to those who manage cultural and sporting events, to entities involved in education and few others.
Our consultants in company formation in Chile can provide further information.
Please mind that foreign investors can start a business in Chile following the same rules and regulations available for local residents. However, until reaching this point, the foreigner must conduct the necessary procedures in order to have the right to reside here.
Depending on the nationality, the foreigner can be required to apply for visas that will allow him or her the right to carry a business activity in this country.
A residence permit is also a necessary document in order to legally reside here; our consultants can also offer immigration advice and services.
The whole process of forming a company in Chile can take a couple of weeks to which you also add the time for opening the bank account, but Bridgewest agents can assist you in the process of company formation in Chile, as well as in other countries of the world.