If you are doing business in the Chilean market, or planning to launch there, you will need to understand financial regulatory compliance in Chile.
Because non-compliance with financial regulations can result in legal inconveniences or financial penalties, potentially impacting your business and diminishing your company’s standings in the eyes of local authorities.
As such, if you are considering starting a business in Chile, the following guide should be of significant interest.
If you are already doing business there, or have questions about your planned market entry, contact us today to discuss how we can support you.
Chilean market popular among investors
Known for being one of the most stable, developed, and prosperous nations in Latin America, Chile is a popular destination for foreign investors looking to enter the region.
The country has registered strong growth over recent years, with gross domestic product (GDP) increasing four-fold between 2002 and 2019, even despite three short downturns during the period.
That also saw gross national income (GNI) — a key indicator of general prosperity — more than triple, with Chile registered GNI of $14,990 per capita in 2019 placing it as a high-income nation by international standards (all figures in USD).
Nevertheless, despite its high-income status, Chile manages to provide a competitive market for investors and businesses, which can be seen by using the BLH Payroll Calculator to compare estimated costs for workers.
Chile is known as a beacon of free trade, and has built up a large portfolio of free trade agreements (FTAs) with countries throughout the world. It is also a founding member of the Pacific Alliance — a 10-year-old regional economic integration initiative that also includes Colombia, Mexico, and Peru, and has ambitions to expand beyond the region.
All of these factors add up to make the country an enticing prospect for investors, who will need to adhere to financial regulatory compliance in Chile in order to maximize their benefits in the market.
Financial regulatory compliance in Chile: key responsibilities
While some aspects of financial regulatory compliance in Chile can vary based on the type of entity you have, the following aspects of corporate compliance are generally applicable to all.
Holding of an annual shareholders meeting, including proper prior notification to all shareholders, is an essential aspect of compliance in Chile. In the cases of both ordinary and extraordinary shareholders meetings, the minutes for the meeting must be registered before a notary public.
Proper circulation of those minutes, generally via a board of directors meeting, is then a prerequisite of financial regulatory compliance in Chile for applicable entities.
Initial filings or renewal of a company commercial license before the pertinent local authority is another essential element of compliance, and must be done each semester.
Submitting internal financial statements and/or balances to shareholders is commonly written into company by-laws, and in such cases is another essential compliance requirement that must be fulfilled as part of a corporate secretarial services regime.
Designation and coordination with external or internal auditors is another essential element of compliance where it is stated in the company by-laws.
Obtaining and updating the company’s shareholder book of letter must be undertaken by law in order to remain in full compliance with local norms.
Registering the pertinent documents of shareholders and directors before the commerce custodian or registry custodian forms another integral part of financial regulatory compliance in Chile.
Obtaining a corporate seal, which effectively acts as a company signature and will be used to stamp official documents, is also an essential element of company compliance.
Key Dates for your financial regulatory compliance in Chile
Many of the aforementioned aspects of financial regulatory compliance in Chile must be undertaken at specified times, or during specified periods of the year. Below dates key to the proper execution of corporate secretarial services in Chile are listed.
Payment or renewal of commercial licenses must be completed within the first month of company incorporation, and twice per year thereafter — on January 31 and July 31.
Holding of an ordinary annual shareholders meeting must be done in accordance with the date specified in the company statutes, where applicable. In the absence of such a stipulation, such a meeting should be held within the first four months of the financial year, which follows the calendar year in Chile.
Submission of consolidated financial statements, where required, can be variable according to financial regulatory compliance in Chile, however generally must be completed before the end of the financial year on December 31.
Holding of extraordinary shareholders meetings, when required, can be undertaken on a date that is agreed to by both shareholders and the board of directors.
Board meetings are not fixed to a specific date, however they must usually be held at least two times per year.
Biz Latin Hub can help you with your financial regulatory compliance in Chile
At Biz Latin Hub, our team of multilingual corporate support specialists have the experience and known how to help you with financial regulatory compliance in Chile. With our comprehensive portfolio of back office solutions, including accounting & taxation, company formation, legal services, hiring & PEO, and visa processing, we can be your single point of contact for entering and doing business in Chile, or any of the other 17 markets around Latin America and the Caribbean where we have teams in place.
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