Chile is a country in Latin America with a very vibrant economy and attractive business environment. The country is widely known for its economic freedom, and it provides a very friendly environment for business. It is also fairly easier to set up a business in Chile than in other countries of the same region.
With a renewed push from the government to diversify investment sources, Chile is now a highly desirable investment destination for multinationals, investors, and entrepreneurs.
Types of companies in Chile
Chilean law authorizes various types of business entities that both local and foreign investors can register. This includes the following:
- Individual Limited Liability Company (Empresa Individual de Responsabilidad Limitada or E.I.R.L): this is the best option for a sole business owner looking to form a company in Chile. An EIRL can engage in all civil and commercial activities. The owner of this type of company is responsible for the amount of contributed capital while the company is liable totally for the value of all its assets.
- Joint Stock Company (Sociedad por Acciones or SpA): this is one of the most important structures for company formation in Chile. It is an adaptable figure that protects the partners. SpAs may be incorporated and operate with only one shareholder. The capital is divided into shares.
- Limited Company (Sociedad Anónima or S.A): corporation must be established by a group of shareholders that solidify a common fund and it must be administered by a board of directors with decisions taken by a majority vote. Each shareholder in a corporation is liable to the extent of their capital contribution. There are two types of corporations: a public corporation and a closed corporation.
- Limited Liability Company (Sociedad de Responsabilidad Limitada or Ltda.): an LLC is formed through a public deed where the amount that each partner contributes must be indicated, and each partner is responsible for such amount. It cannot have more than fifty partners and the liability of the members of an SRL is limited to the number of their contributions or to the higher amount specified in the bylaws.
- General Partnership: in the company structure, all partners contribute in equal conditions with a minimum of two partners without employing any maximum number.
- Limited Partnerships: under this company form, there have to be two types of partners. The limited partner makes a specific contribution to the corporate fund and is only liable for the amount contributed, and the managing partner manages the company by himself or by delegates, being accountable for the corporate debts and jointly and severally liable for the corporate duties.
- Branch of a foreign company (Agencia): a branch acts as an alternative form of entity as it compares to the presence of a foreign parent company in Chile that does not seek to incorporate a new company. It is not a separate legal entity, except in the case of specific tax purposes.
Requirements before registering a company in Chile
If you are interested in starting commercial activities in Chile, it is important to know the requirements involved in the company formation process.
To incorporate a company in Chile, the following requirements must be fulfilled:
- Designated company name: the incorporation must register a name for the company with Chile’s Company Registry. The agency will then confirm if the chosen name is available and suitable to use.
- Description of the company activities: the founder must explain the nature of the business, its activities, and its future plans.
- Shareholders’ details: as asserted by Chile’s law, the shareholders can comprise corporations or individuals of any nationality. The shareholders’ details must include their legal names.
- Company director details: the company director can be of any nationality.
- Registered office address: the company in Chile must have a registered address.
- Memorandum and Articles of Association: this document sets up the company in Chile. It must be presented to the Conservador de Comercio for authorization.
Steps involved in registering a company in Chile
The steps to be taken to officially form a company in Chile, are as follows:
- Choose the type of company: this is the most important stage in a company formation process.
- Get legal representation in Chile: legal representation is very important when doing business in Chile. Note that a Chilean company requires a Chilean native or a foreigner with a credible visa to be the legal representative of the company.
- Incorporating the company in Chile: after choosing the type of company that suits the nature of the business, the company must then be legalized.
- A deed of incorporation is generated with the help of a notary, which must contain details of the partners, the entity type, the address of the company, the capital of the company, the name of the company, and corporate purpose.
It must also contain the number of directors, shares, and members of the board of directors, if necessary.
- Registration in the Commercial Registry: the company must be registered with the Commercial Registry in Chile within the first 60 days after the deed is notarized.
- Publishing in the Official Gazette: when the new company is registered at the Chilean Registry, it must publish the official notice of the company in the Official Gazette within the first 60 days after the company was registered.
- Obtaining the Taxpayer Identification Number (RUT or Rol Único Tributario): the company must obtain a RUT number by registering with the Internal Revenue Service. This RUT identifies the company as a taxpayer.
- Open a corporate bank account: once the company is officially registered, a corporate bank account should be opened in Chile.
It is worth citing that foreigners also have the option of creating a company in Chile. It is not necessary to have a particular visa; you can have a temporary or permanent visa.
Being one of the safest countries in Latin America, Chile is a favorable place to do business.
Are you ready to form your company in Chile? Let’s go ahead and contact your Damalion expert now.
