Company Formation 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. While the rest of Latin America and the Caribbean has been seeing FDI drop over the last three years, Chile saw a 14% rise in 2015, bringing in US$20 billion, making it the third largest recipient of FDI in the region. 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 multi-nationals, company incorporations, start-ups, and investors. Now is the perfect time to begin the visa process and begin investing in Chile.
Since May 2013 Chile has become one of the easiest places in the world to start a business, with new legislation enacted allowing companies to be formed online in just one day. Nonetheless, as with many emerging economies, investment conditions in Chile can differ considerably to other countries and therefore it is always advisable to engage a local lawyer or legal expert before commencing any business activities.
According to the World Bank’s Doing Business Guide, the steps to be taken to officially form a company in Chile, which can be concluded within 1-2 days, are as follows:
- Register the company online and obtain authentication number
- Notarize company statutes and have them signed digitally by the notary
- Obtain a RUT number by registering with the Internal Revenue Service (SII in Spanish)
- Print receipts/invoices at an authorized printing company
- Seal accounting books and other documents with the IRS
- Acquire a “patente municipal” working license from the municipality
- Register for labor related accident insurance
How to setup a Company in Chile: Types Of Chilean Companies
You must also choose the right type of company structure for your business. Below we have identified and provided a brief summary of the different types of companies you can create in Chile.
Individual Limited Liability Company
If you are a sole business owner looking to form a company in Chile then this is the best option for you. An Empresa Individual de Responsabilidad (EIRL) is a commercial legal entity that exists separately to its owner and can engage in all civil and commercial activities. The exception to this is those activities reserved by law for corporations. The owner of the company is liable up to the amount of contributed capital while the company is liable entirely for the value of all its assets. The name of the company must also make clear its activities or include the name of its owner.
Limited Liability Company
This type of company can be formed by between 2 and 50 shareholders and its name must again must include the name of one or more of the partners or its activities. There is no minimum capital contribution requirement and the activities and administration of the company can be freely decided by the partners.
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 corporation: a public corporation and a close corporation.
Stock Company (SpA)
These companies are governed by the same norms as close corporations are managed in an almost identical format. They are formed by one or more individuals whose capital participation is represented by shares.
Chile Business Services as part of the Biz Latin Hub group has a group of experts that can offer you specialized advice and guidance to set up your business in Chile. In addition to company formation and incorporate, we can offer you tailed and profesional accounting, legal and financial services. Contact David here.