Since 2003, Healy Consultants Group has assisted our Clients with starting their business in Chile. Our Chile company registration services include i) Business registration in Chile ii) company license registration iii) corporate banking solutions iv) visa approval strategies v) staff recruitment options and vi) Chile office rental solutions.

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Chile business setup summary

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• Advantages and Disadvantages

  Advantages of Chile company registration

  1. Entrepreneurs starting a Chilean company enjoy generous government support, including:
     • Chile has Latin America’s 2^nd 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 are 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;
  2. Chile has been positively ranked in the 33^rd 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.

  Disadvantages of Chile company registration

  1. Foreign entrepreneurs will face problems in Chile, including:
     • Chile has an inefficient bureaucracy. Consequently, entrepreneurs will face delays when seeking business license approval from the Government;
     • Obtaining finance can be difficult for foreign entrepreneurs because i) interests are freely negotiable so bankers tend to increase them ii) time delays are common during the loan approval process and iii) high commissions are demanded by the officials;
     • Chile has high electricity costs, with average tariffs ranging 20 cents per KWh. Furthermore, power outages are common in the country;
     • Only up to 15% of a Chilean company’s employees can be foreigners . This can be a major impediment for multinational companies because only 10% of the local people speak English.
     • In November 2020, Chile increased its legal monthly minimum wage to US$430 per month (from US$388). This is the highest legal minimum wage in Latin America.
  2. A Chilean company must have either i) 1 resident director or ii) 1 resident company representative. Healy Consultants can provide nominee director services to support our Client for US$12,000 per annum;
  3. Renting an office space can be expensive in Chile as the average annual rental is US$25 per sq. ft.;
  4. The Chilean economy is heavily dependent on exports, which makes it vulnerable to external shocks. For example, in 2013, the Chilean peso depreciated 10% against the US$ due to decrease in demand for its exports;
  5. Chile is prone to earthquakes due to its location in the ‘ring of fire’. This may disrupt daily business and trade;
  6. The official language for conducting business in Chile is Spanish. Moreover, Chileans prefer speaking Spanish over English or any other language. As a result, foreign investors have to mostly source local suppliers to conduct business as well as to expand their presence in the Chilean market.

• Best uses for a Chilean company

  

  1. Chile is a great place for subsidiary registration for our Clients willing to expand to Latin America because:
     • Registering a company in Chile can be done within 9 weeks, with only i) US$1 for the company’s share capital ii) 2 shareholders and iii) a single director. Our Clients will furthermore not be requested to travel to Chile to complete administrative procedures, which will all be taken care of by our firm’s Chile business registration agent;
     • Foreign entrepreneurs can register in all sectors of the economy except hydrocarbons. Consequently, Chile is the 7^th freest economy in the world according to 2015 Index of Economic Freedom;
     • Chile is the 2^nd least corrupt country is the Latin America, according to the 2015 Corruption Index by Transparency International. Consequently, foreign companies can utilize the Chilean legal system to resolve business disputes.
     • A Chile resident company is not required to submit annual audited financial statements to the government.
     • Entrepreneurs can easily convert foreign currency into Chilean peso as there are no exchange controls imposed in the country. Hence Clients registering a new firm in Chile find it easy to exchange their home currency into peso and vice versa.
  2. Our Clients willing to register a a new manufacturing and distribution business in South America often choose Chile because:
     • Chilean free zones offer resident businesses: i) 100% corporate tax exemption for all company operations and ii) import duty exemption;
     • Chile is the top choice for product distribution centre because it has the best infrastructure in Latin America. The country’s high quality roads, bridges, railways, air and sea-ports ease transfer of goods/services;
     • Government incentives are available for all resident businesses including i) a refund of expenses for employee training up to a maximum of 1% of that employee’s annual payroll and ii) tax credit up to 15% of annual profits for approved R & D projects;
     • Chile has the most skilled labour force in South America with 99% literacy rate. Furthermore, the average wage rate is also low at US $764;
     • Average monthly warehouse rental costs are low at US$ 0.5 per sq. ft.;
     • Average monthly industrial space rental is US$ 0.5 per sq. ft.;
     • A Chile resident company can either carry back or carry forward their business losses.