Services for international clients
10 steps to incorporating in Chile
Chile Business will efficiently and effectively project manage our Clients' Chilean company incorporation engagement, providing detailed email status updates frequently.
- Prior to Chile company incorporation, our client i) settles Chile Business fees, ii) signs and returns our engagement letter and iii) provide us all the required due diligence documents.
- Chile Business drafts a detailed engagement project plan for our client, including corporate bank account opening, office space, taxation and visas. This engagement plan maps out each step to engagement completion, optimising transparency and setting client expectations.
- Chile Business assists our clients determine i) what type of Chile business entity is required, ii) if business license is required, iii) banking and cash flow considerations and iv) employment visa strategies.
- Chilean or foreign individuals who reside abroad are required to appoint a legal representative or agent resident in Chile. Our clients usually request Chile Business to be the nominee Chilean resident director. Alternatively, our clients can appoint their preferred local director.
- After the company structure is agreed with our client, Chile Business will i) reserve company name and ii) prepare incorporation forms for client's signature and notarization (including POA, if applies).
- If the client does not wish to travel for incorporation in Chile, every director and shareholder must legalize at the Chile Consulate a Power of Attorney, together with their passport copies for the purpose of individual tax and company registration. Thereafter Chile Business starts with individual RUT application and company incorporation. Chile Business will be happy to guide our clients in all the above procedures.
- After the above steps are complete, Chile Business will email our client the company public profile and certificate of incorporation. Thereafter Chile Business publishes the legal documents in the Official Gazette and in the Commercial Registry. If required, Chile Business will help the company register with the tax authorities (SII) to obtain a Tax Identification Number and the Municipal Licence.
- After Chile incorporation, Chile Business assists our client open a corporate bank account, preferably with an international bank such as HSBC, Citybank (Banco Edwards Citi) or Santander. Where possible, Chile Business bank account opening team will liaise with the bank, so that our clients do not need to travel for an account opening interview.
- After the engagement is complete, Chile Business couriers a full company kit to our client, including original corporate documents, unopened bank correspondence and a client feedback survey.
- To support the incorporation process in Chile, Chile Business provides our client a Chile office address for invoicing purposes. Additionally, many clients request telephone, fax and email support for their company following entity establishment. Alternatively, our client may request a full Chile virtual office.
To help us engineer the optimum Chile corporate structure, please complete the questionnaire below, then press the submit button below. This data remains confidential and is not sold to third-parties. In the next few hours one of our senior staff will ring or email you.
Types of companies in Chile
|Summary||LLC||Fast business setup solution||Public limited company||LLP||Representative office||Branch office|
|Also known as||SRL||SRL||SA||SRL||Agencia||Sucursal|
|Best use of company||All products and services||Close a costumer deal now||To secure public funding||Professional services||Marketing & Research||Specific projects|
|Limited liability entity||Yes||Yes||Yes||Yes||No||No|
|Can bid for Government contracts||Yes||Yes||Yes||Yes||No||Yes|
Accounting and tax regulations
Accounting and tax
- Corporate income tax rate is levied at 20% on world-wide income. Capital gains are also taxed at the same rate (20%).
- Non-residents living in Chile are subject to tax on income sourced from Chile during the first three years. After this period, they are subject to tax on their worldwide income.
- The standard rate of VAT is 19%. All resident companies must file for VAT on a monthly basis.
- Resident companies can carry forward or backward tax losses indefinitely.
- Dividends from a Chile resident company to a non-resident company are subject to withholding tax of 35%. Dividends transfer between resident companies is tax-exempt.
- Interest payments are subject to a withholding tax of 35%, while royalties are subject to withholding tax of 30%.
- Rural property is taxed at 1% annually, while the urban property is taxed at 1.2%.
- Tax returns must be filed by the 31st of April, every year.
- Only certain entities are required to file audited statements. These includes banks, financial institutions, insurance companies, pension plans and public-traded companies.
- Consolidated statements must be prepared when a subsidiary is controlled at 50 percent or more by a corporate shareholder. However, when the subsidiary's operations differ significantly from those of the parent company, consolidation is not required.
- Chile imposes no exchange controls over money transfers by resident businesses.
- Chile has a network of 28 Double Taxation Treaties with countries including Australia, South Africa, UK and USA. These treaties reduce withholding tax on payments abroad.
- Chile Business assists our clients with i) documenting and implementing accounting procedures, ii) implementing financial accounting software, iii) preparation of financial accounting records and iv) preparing forecasts, budgets and sensitivity analysis.
- For an active trading company, these accounting and tax fees are an estimate of Chile Business fees to efficiently and effectively discharge your annual company accounting and tax obligations. Following receipt of a set of draft accounting numbers from your company, Chile Business will more accurately advise accounting and tax fees.
- It is important our clients' are aware of their personal and corporate tax obligations in their country of residence and domicile; and they will fulfill those obligations annually. Let us know if you need Chile Business' help to clarify your annual reporting obligations.
Legal and complianceDuring the Chile company registration process, Chile Business Compliance Department guides our client through legal and tax obligations.
- According to Companies Act, a Chile company must have at least one permanent resident representative of any nationality.
- Every company must lodge an annual return confirming relevant details of the company for the public register including names and addresses of all directors, address of principal place of business and details of shareholders and their shareholdings.
- Each company must have a registered office in Chile. Chile Business can provide this for an annual fee.
- Chilean companies must obtain a Tax Identification Number (RUT) and register for VAT prior to starting business.
- There are four major taxes in Chile i) Corporate and personal income taxes, ii) Value-added Tax, iii) Customs duties and iv) Stamp tax. Collecting information, completing tax return forms and preparing separate tax accounting books in some cases might be a challenging task. Chile Business will be pleased to help you with the same.
- A company secretary is not required when forming a company in Chile; however Chile Business recommend one be appointed to ensure a correct compliance in accordance with corporation act.
- When starting a business in Chile, it is important to anticipate what registrations and licenses are required. This is a complex area as the type of permits or special licenses vary depending on the nature of the activity and include health, environmental and municipal permits.
- After forming a company, entrepreneurs should prepare a business start-up document and submit it to the National Tax Service (SII). When needed, Chile Business will complete these tasks on your behalf.
- Every Chilean company must obtain a working license from the municipality where they operate (for each of the enterprise's establishments, offices, warehouses). The license fee is paid once a year for a 12-month period, from July 1st to June 30th. The fee ranges from 0.25% to 0.5% of the company's share capital.
- To comply with Chilean Law, all employees in the country must register to a professional accident insurance controlled by public authorities.
- It is compulsory for every Chile company to appoint a local Legal Representative. To minimize complexity, Chile Business recommends our client appoint a Chile staff member already in the country. If our client is uncomfortable with this strategy, Chile Business will provide a passive, nominee Legal Representative.
Entrepreneurs starting a Chilean company enjoy generous government support, including:
- Chile has Latin America's 2nd lowest corporate tax rate (20%), which makes the country more attractive than other developing countries like Brazil (34%) and Argentina (35%).
- Dividends from one Chilean resident company to another are 100% tax exempt.
- All exports from Chile are completely exempt of i) customs duties and ii) VAT. Even, customs duties and VAT paid on inputs used in the production of exports will be re-imbursed.
- Regional tax incentives available to resident businesses including i) a 17% tax rebate is available on income from investments in Region I, XI, and XII and ii) 25 year corporate tax exemption and import duty exemption for companies producing mining supplies.
- A Chilean holding company is 100% tax exempt if i) it is listed on the Chile stock exchange, ii) it is not domiciled in Chile, iii) shareholders and directors are not Chile residents and iv) the company's purpose is making investments in other countries.
- Chile has signed double tax treaties with 28 countries including Australia, Canada, South Africa, UK and USA to reduce withholding tax on dividends, interests and royalties to foreign companies.
- Chile has been positively ranked in the 33rd position (out of 137 countries) in the Global Competitiveness index 2017-2018 edition. This is largely due to the nation's i) developed financial markets, ii) well-educated and trained labour force as well as iii) world-class infrastructural facilities.