Chile has continued to grow as one of the most attractive commercial jurisdictions in Latin America. The South American powerhouse has a stable economy and a political environment welcomes foreign participation. Furthermore, Chile scores highly on the ease of doing business ranking published by the World Bank. However, as legislation regarding company formation differs from country to country, it might still be complicated to start a business in Chile.
In recent informative pieces, we have provided information regarding registering a company in Chile and vital tips to take into account when setting up a business in Chile. In this article, we will discuss the necessary steps to create a branch of a foreign company in Chile. Keep reading to learn more.
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Why Incorporate a Branch of a Foreign Company in Chile?
A branch of a foreign company is not a separate legal entity from its parent company, but it is the Chilean agency of the parent company. As a result, the company does not have autonomy and therefore it is not considered to be an incorporated entity in Chile. The main advantages of incorporating a branch of a foreign company in Chile is that the ‘parent company’ can provide guidance/vision and the ability to share company resources.
*Please note that the branch of a foreign company still falls under Chilean law.
Documents Required to Set Up a Branch of a Foreign Company in Chile?
To set up a branch of a foreign company, legalization and official translation of the following documentation of the foreign parent company are required:
- Articles of incorporation of the parent company
- The by-laws of the parent company
- Certificate of good-standing of the parent company
- Power of Attorney given to the appointed agent who will manage the foreign branch
On the same date of registration of these documents, the appointed agent must carry out a public deed containing the following:
- The name and capital (amount and capital contribution terms) of the company
- The domicile and corporate purpose of the branch in Chile
- A statement and declaration that the foreign company understand Chilean legislation
A summary of this public deed executed by the agent must be published in an official newspaper and registered with the Registry of Commerce within 60 days from the date when the public deed was carried out.
Obtain a Tax ID
A foreign branch will fall under local law when operating in Chile. Once it has been set up, the branch must obtain a tax ID to set up agreements and become commercially active like opening a bank account. It is of vital importance that the foreign branch is aware of its tax and accounting requirements while operating in Chile.
Want to Register a Company in Chile?
Chile provides an attractive business environment for foreign investors looking to launch commercial operations. We at Biz Latin Hub have a team of local and expat professionals who can guide you through all the complexities that may arise when doing business abroad. Reach out to Craig here at Biz Latin Hub to see how we can support you in Chile.
Watch this video to learn more about forming a company in Chile: