Auditor in Chile: Why do you need one?

Chile is one of the best performing economies and countries in Latin America, meaning more executives looking at company formation in Chile. A cornerstone of this success is that it has great respect for the rule of law and regulations. Just like any other country, you will need local representation, which includes an auditor in Chile.

Before you launch or move your business to the country it is crucial that you understand the local tax and accounting requirements, as they may differ from your home market. An auditor in Chile can help you navigate these new waters and make sure that your business stays compliant under both local and international law, as Chile follows IFRS standards.

Partnering with a local specialist such as Biz Latin Hub means that you will have an experienced guide on your side as you enter the new market. We can set you up with an auditor in Chile or elsewhere in Latin America and the Caribbean, with our 18 dedicated local offices across the region. Our array of back office services can help you through company formation and ongoing support such as help with accounting and taxes.

Why invest in Chile?

The country continues to employ policies that promote international trade and is a member of the Pacific Alliance, the Rio Group, Mercosur, APEC, and UNASUR. With a business environment that promotes foreign investment in practically every sector and a growing start up ecosystem, it is no wonder that Chile is a favorite destination for entrepreneurs.

According to the Doing Business study published by the World Bank, Chile is the 59th easiest country to do business in.

Foreign investors in Chile may access all productive activities freely, especially in the food, infrastructure, tourism, energy, and mining industries; there are some restrictions in certain sectors such as in the maritime, media, and air transportation sectors. The mining sector in Chile for instance, is full of opportunities for foreign investment.

Why does a company need an auditor in Chile?

Local expertise is crucial for foreign investors to navigate the complexities of doing business in a new country. Financial regulations in Chile, for example, can be particularly intricate, requiring several months or even years to fully comprehend.

As a precaution against potential issues, utilizing the services of local specialists is highly recommended. The two most common legal entity (company) structures in Chile are a Corporation/Joint Stock Company (Sociedad Anónima – S.A) or a Limited Liability Company (Sociedad de Responsabilidad Limitada – S.R.L). The S.A. is the most common legal entity structure in Chile.

There are specific local laws and fiscal requirements when registering a new corporation in Chile. Publicly listed companies must have annual audits, as must large companies – this depends on number of employees, income, and/or assets and by sector. Full financial audits are also necessary for mergers and acquisitions as well as most foreign branches.

It is also important to note that accounting records must be kept in Spanish.

What is the role of an auditor in Chile?

The auditor is there to check that the company is conducting its business appropriately to aid financial transparency. That means that they may not be an employee of the company, nor may they be connected to the company in any way. This allows them to be impartial and independent when conducting the audit.

You may also want to have internal audits for various reasons such as proving the financial health of the company, transparency in order to remain in good standing and so on. This might not be a legal necessity, but can be invaluable in terms of presenting your business.

What qualities does an auditor need?

An auditor must be registered with the CMF, the local accountancy organization. When looking for an auditor in Chile, there are certain factors to keep in mind, including:

• Experience: Look for an auditor that has experience working with foreign investors and in your industry.
• Reputation: Check online reviews and feedback to assess the quality of service you can expect.
• Language: Ensure that the auditor you work with is fluent in a language you are comfortable communicating in.
• Communication: If you will be spending extended periods outside of Chile, choose a lawyer or firm that is proficient in using online tools for easy management and reporting.

FAQs on an auditor in Chile

Biz Latin Hub can provide you with an auditor in Chile

Starting a company in Chile requires the support of a qualified financial team from the outset to ensure that your business complies with local laws and is well-regarded by the authorities.

Without this, even a well-planned business may struggle to thrive. At Biz Latin Hub, we have a team of locally-based specialists who possess a comprehensive understanding of the Chilean business environment, including its laws and complications.

We are well-equipped to assist foreign companies looking to conduct commercial activity in the region with all accounting, taxation, and financial matters.

If you’re interested in learning more about the Chilean economy, the opportunities for starting a company there, and need an auditor in Chile, please contact us today.