Incorporation - Types of Business Entities

The various types of entity that can be incorporated in Chile are as mentioned below:

• Corporation (sociedad anónima)
• General partnership (sociedad colectiva)
• Limited liability partnership (sociedad de responsabilidad limitada) Limited partnership (sociedad limitada)
• Association (associación, or cuentas en participación)
• Share company (sociedad por acciones)

Time Frame for the company formation in Chile varies from depending on the type of entity selected. Each business type has its own advantages and disadvantages.  The time required for the process of Company formation in Chile can be completed in 5-7 working days.

Benefits of Registration of a Company

Below are the advantages of company formation in Chile:

• Multiple Government incentives
• 2ndlowest corporate tax rate
• Exports from Chile are also exempt from custom duties and VAT
• high quality roads, bridges, railways, air and sea-ports ease the transfer of goods
• Business operation costs relatively low
• Foreign investment allowed in all sectors of the economy except hydrocarbons.

Tax Registration and Filing

In Chile, the non-resident companies and individual are taxed on their income from Chilean sources while Resident companies and individual are taxed on their worldwide income. In the Country Income taxes, must be paid during the month of April and provisional monthly payments on account of final annual income tax are due on the 12th day of each month.

Double Tax Treaty

Chile has the largest network of DTT in Latin America.  The below mentioned are the countries with which Chile has signed 30 double taxation treaties for the avoidance of double taxation: Argentina, Ecuador, Perú, Australia, España, Polonia, Austria, Francia, Portugal, Bélgica, Irlanda, Reino Unido, Brasil, Italia, República Checa, Canadá, Japón, Rusia, Colombia, Malasia, Sudráfica, Corea, México, Suecia, China, Noruega, Suiza, Croacia, Nueva Zelandia, Tailandia, Dinamarca, Paraguay

Trademark registration

In Chile Law No. 19,039 of January 25, 1991 (Industrial Property Law) provides for the law for patent registration, Trademark Registration and Industrial model rights. Chile Trademark Registration is valid for 10 years from the registration date and can be renewed for further 10 years within the validity date.  Also, Items subject to protection are classified according to international classifications.

YourGlobalPro is fully equipped to assist you with the process of trademark registration in Chile for your business. For assistance or advice in the matter of the trademark registration in Chile or intellectual property – please feel free to write or contact us.

Secretarial Compliance

• Company secretary is not required when forming a company in Chile
• All Companies by law are required to keep and maintain bound books like Journal, General Ledger, Inventory and balances book, Wages and salaries income tax-withholding ledger, VAT register, Register of goods in stock, Register of retained taxable profits, which must be stamped by the Internal Revenue Service (IRS).
• After incorporation, the business owner is required to prepare a business start-up document and submit it to the National Tax Service

Accounting Services

Chile has adopted the International Financial Reporting Standards (IFRS) and Ministry of Finance is Accounting Regulation Body. Use of computerized accounting is permitted by the Internal Revenue Service(IRS).

YourGlobalPro professionals can assist you with the entire bookkeeping and accounting services to your Chile Business Set up as per your business needs including implementation of financial accounting software, accounting records preparation and time to time preparation of budgets, forecasts.

Auditing service

Fiscal year begins on 1 January and ends on 31 December of the same year. All the Companies are required to prepare basic financial statements include the balance sheet, the statement of income, the statement of cash flows and notes to the financial statements. And the Companies are required to produce their annual financial statement to the shareholders of the company. Further the account books are mandatorily required to be published in Spanish and use the Chilean currency.

Based on the size of the business – the companies are required to prepare and file financial statements with the Authority. YourGlobalPro professionals provide you auditing services for your business as required by your business.

Banking

The main national bank is the Banco Central de Chile. All the Commercial banks in Chile offer the full range of banking services to its client. The Banking hours are from Monday to Friday, from 9 a.m. to 2 p.m. and on national holidays and December 31st, banks are closed.

YourGlobalPro professionals can facilitates all the paper work in relation to banking need and can assist you in opening bank account for your business plan in Chile.

Legal and Compliance

Below are the various Chile legal and compliance requirements to be followed by incorporated entities:

• The Central Bank of Chile must be informed of all transactions exceeding USD 10,000.
• A summary of partnership must also be filed with the Register of Commerce in this case within sixty days. This summary must also be published in the Official Gazette within the same period.
• 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.
• All companies in Chile are required to obtain a Tax Identification Number (RUT) and register for VAT prior to starting business.
• Companies must obtain a working license from the municipality where they operate.
• The municipality license fee is to be paid once a year for a 12-month period [from July 1^st to June 30^th ]
• As a part of legal compliance all employees in Chile must register to a professional accident insurance controlled by public authorities

HR and Employment Law and Immigration / VISA

Article 19, No. 16 of the Constitution of Chile along with Labour codes [contained in Decree in Force Law No. 1 of January 7, 1994, amended by Law 19,759 of October 5, 2001] regulates the labor relation matter in the private sector. Below are some of the important points in relation to HR & employment law in Chile:

• No obligation to provide fringe benefits
• Provision of canteen facilities and meals is discretionary
• normal working week is limited to 45 hours with a minimum break of 30 minutes
• 7% contribution for health purpose is mandatory
• The citizens of other countries are required to obtain Visa and work permit before entering the country for employment (except Argentina or Brazil an identity card is sufficient)

Country Statistics