Chile continues to stand out as a beacon for foreign investment in the region, due to the sustained demonstrations of legal certainty and respect for institutions. The recent presidential elections — and their consequent and probable public policies — only accentuate the optimism for this new year. Given this situation, a considerable reduction in bureaucracy is expected, which, historically, has prevented even greater and better macroeconomic numbers. 

The joint-stock company 

Although other options exist (EOR, purchase of “Shelf” companies, etc.), the vast majority of investors and foreign companies looking to enter the Chilean market will choose to create a Local Company or Society. In specific cases, they will choose a joint-stock company (Sociedad por Acciones, in Spanish) which is very simple to manage because it is easy to enter and exit its ownership, in addition to allowing a broad corporate purpose, among other virtues. 

The incorporation of a joint-stock company constitutes a paralegal service. In fact, this service is a commodity whose process can be easily broken down into the following stages or elements: 

• Power of attorney signed abroad by the representative of the future shareholder. This power of attorney must be signed at a notary abroad and then apostilled. 

• Registration (protocolization) of the power of attorney in a Chilean notary’s office. 

• Obtaining a Tax ID Number (RUT) for the future shareholder(s) of the future company in Chile. To obtain it, and in addition to the aforementioned power of attorney, a copy of the passport must be provided in the case of an individual shareholder. In the case of foreign legal entity shareholders, they must attach the certificate of good standing and the tax domicile certificate. 

• Signing of the Bylaws of the joint-stock company at a notary through a public deed. 

• Publication and registration of an extract of the Public Deed of Incorporation in the Official Gazette and the Commercial Registry. 

• Obtaining the Tax ID Number (RUT) of the new society or company in Chile. 

• Affidavit of Commencement of Activities before the Tax Authority (Internal Revenue Service, SII). This communication triggers the entity’s tax compliance. 

• Opening of bank accounts in national and international currencies. 

• Obtaining the Municipal Business License and payment of the first installment (semester). 

Relevant considerations 

The creation of a company in Chile, as in other jurisdictions in Latin America, involves carrying out many processes to start commercial activity. Therefore, before expanding to the country, it is necessary to know some considerations regarding business management in this territory: 

• In the context of a joint-stock company, it is not mandatory to have a Board of Directors, as the administration can be entrusted to 1 or more “Administrators”. 

• Administrators can be foreign citizens, although in such cases, the granting of limited and special powers of representation in favor of Chilean citizens or resident foreigners is strongly recommended. 

• Regardless of the form of administration, at least one legal representative must be a Chilean citizen, or a resident foreigner. 

• Every new company must have a registered tax domicile before the Tax Authority. This can be real/commercial or virtual, and the first option is recommended because it will facilitate validation processes for the purpose of activating invoicing. 

• A paralegal service for company incorporation should last a maximum of 6 weeks. 

• It is not necessary to pre-register the company name in the Public Registry. 

• An important consideration is to hire paralegal Company Secretarial (CoSec) services to guarantee the entity’s compliance with its partners, public bodies, and other stakeholders. 

Chile is a key state worldwide for its mineral reserves (lithium and copper) and natural resource extraction (gas and water). Therefore, it can be interesting to consolidate with a company in this territory. Auxadi can help you with your international expansion with its corporate legal services branch, provided by Afiens by Auxadi. 

At Auxadi, we offer comprehensive services in accounting, tax, payroll, transfer pricing and corporate legal services to multinationals and funds. With experience since 1979 and a presence in over 50 countries, including 26 proprietary subsidiaries, our advanced technological platform and proven methodology enable us to guarantee efficient management in compliance with local regulations. 

Author:

Allan Barnett Schulder Covarrubias

Regional Director Cono Sur – CL