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27 September 2023

Business: Why And How To Set Up A Company In Chile

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Company Formation in Chile: Despite its considerably smaller size, Chile is now attracting roughly as much Foreign Direct Investment (FDI) as one strongest economic Latin America countries, Mexico.
Chile Corporate/Commercial Law
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Company Formation in Chile: Despite its considerably smaller size, Chile is now attracting roughly as much Foreign Direct Investment (FDI) as one strongest economic Latin America countries, Mexico.

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The graphic above highlights why company formation in Chile is a great option for investors looking to business in the region.

Company formation in Chile is widely recognized as one of the most stable and prosperous options in South America, attracting investors seeking both political and financial transparency in the region. Its impressive year-on-year GDP growth of 11.7% in 2021 is a testament to its stable legal and macroeconomic system, rich natural resources, and high-quality infrastructure. The total GDP of Chile is $317 billion (USD), and its GDP per capita is above the regional average, at over $16,000, making it a highly attractive destination for foreign investors who contributed about US$12.72 billion to the economy in 2021. The country boasts an very appealing business package for those looking to start company formation in Chile.

With an expanding middle and upper class and a renewed push from the government to diversify investment sources, Chile is a highly attractive investment destination for multinationals, company incorporations, start-ups, and investors. Now is the perfect time to begin the visa process and begin the process for company formation in Chile.

Chile has made it extremely convenient to start a business since May 2013, with new laws allowing for online company formation within a day. However, investing and navigating corporate laws in Chile may differ from other countries. Therefore, it's recommended to seek guidance from a local legal expert before commencing company formation in Chile.

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What are the steps for Company Formation in Chile? This graphic lays out the 7 steps.

The World Bank's Doing Business Guide outlines the steps to for company formation in Chile, which can typically be completed within 1-2 days. These steps are as follows:

  1. Register the company online and obtain authentication number
  2. Notarize company statutes and have them signed digitally by the notary
  3. Obtain a RUT number by registering with the Internal Revenue Service (SII in Spanish)
  4. Print receipts/invoices at an authorized printing company
  5. Seal accounting books and other documents with the IRS
  6. Acquire a "patente municipal" working license from the municipality
  7. Register for labor-related accident insurance

Starting a Business in Chile: Types Of Chilean Companies

You must also choose the right type of company structure for your business when deciding to pursue company formation in Chile. Below we have identified and provided a brief summary of the different types of companies you can create in Chile.

Individual Limited Liability Company

An EIRL is a good choice if you're the sole business owner for the company formation in Chile. It's a separate legal entity that conducts most business activities, except for a select few which are reserved for corporations. As the owner, you're only liable for the amount you invest in the company, and the company is liable for all its assets. The company's name should show what it does or include the owner's name.

Limited Liability Company

You can form this type of company with 2 to 50 shareholders, and the company name must include the name of one or more partners or its activities. There is no minimum capital requirement, and the partners are free to decide on the company's activities and management. This is a popular option for investors looking to easily begin company formation in Chile.

Corporation (SA)

A corporation must be formed by a group of shareholders that establish a common fund and administered by a board of directors with decisions taken by a majority vote. Each shareholder is liable to the extent of their individual capital contribution. The starting capital of a corporation must be fully subscribed and paid within 3 years. There are two types of corporations: a public corporation and a closed corporation. To start company formation in Chile, all entity options must be considered.

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Company formation in Chile will offer you opportunities in an important country in Latin America

Stock Company (SpA)

The same norms that govern close corporations apply to these companies and they are managed in a nearly identical way. One or more individuals form them and their capital participation is represented by shares.

To begin the process for company formation in Chile, it is very important to have an excellent understanding of the various entity types and which one represents the company´s business activities.

Originally published 14 April, 2016 | Updated On: 25 July, 2023

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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