Business entities in Chile in 2021
Healy Consultants will assist our Clients with setting up the optimum corporate structure to suit their business needs. Most of our Clients willing to start a small business in Chile are satisfied with the setup of a limited liability company. However, joint stock company may also be a great business entity for entrepreneurs willing to raise capital in Chile, while branches and representative offices are alternative solutions for companies willing to expand in the country.
The Chilean limited liability company (SRL)
- Setup of a Chile limited liability company can be done with a minimum of 2 shareholders and 1 director, which can be of any nationality and do not need to be resident in Chile. The minimum share capital required to start an LLC in Chile is also very low, at only US$1;
- Chile company setup requirements however include i) appointing an attorney as the company’s representative when an LLC has no resident director and ii) allowing customers and business partners to identify companies with a sole shareholder, which must include “EIRL” in their name, in lieu of SRL.
The Chilean joint stock company (SpA)
- Chile joint stock company setup requires i) US$1 of share capital ii) 1 shareholder and iii) 3 directors, who do not need to be Chile nationals. This business entity is ideal for entrepreneurs willing to raise capital in Chile, as it is allowed to issue shares after business setup;
- While Chile Company Law does not require explicitly a joint stock company to appoint resident directors, the authorities may disapprove registration if they consider that such situation disallows the Board to operate. JSCs will also be required to file audited annual financial statements with the Chile tax authority.
Branch office (Sucursal)
Our corporate Clients willing to expand their business may setup a branch in Chile. While a branch office is Chile is 100% foreign owned, a local resident representative or agent must be appointed. Also, official permission from the Government must be taken before registration. Branches in Chile are allowed to invoice local customers, sign local sales contracts and receive income from customers.
Representative office (Agencia)
Our Clients who are not ready to start a business in Chile by incorporating, but would still like to market their existing foreign company, prefer to setup a representative office. While a representative office in Chile is 100% foreign-owned, such business entity must appoint a local sponsor or agent to complete setup procedures. This entity is also not allowed to make direct sales within Chile. Consequently, a representative office can only engage in promoting the business of the parent.
Different types of business entities in Chile
|Also known as||SRL||SpA||Sucursal||Agencia|
|How long to set the company up?||9 weeks||10 weeks||9 weeks||6 weeks|
|How long to open company bank account?||4 weeks||4 weeks||4 weeks||4 weeks|
|Wholly foreign owned?||Yes||Yes||Yes||Yes|
|Minimum paid-up share capital?||US$1||US$1||US$1||US$1|
|Must file annual corporate tax return?||Yes||Yes||Yes||No|
|Tax registration certificate required?||Yes||Yes||Yes||No|
|Corporate bank account recommendation||HSBC||Santander||Standard Chartered||Banco de Chile|
|Does our Client need to travel?||No||No||No||No|
|Resident director required?||No||Yes||Yes||Yes|
|Resident company representative required?||Yes||Yes||Yes||Yes|
|Resident shareholder required?||No||No||No||No|
|Minimum directors allowed?||1||3||1||1|
|Corporate shareholders allowed?||Yes||Yes||Yes||Yes|
|Public register of shareholders and directors?||Yes||Yes||Yes||Yes|
|Chile corporate tax rate?||20%||20%||20%||0|
|Annual financial statements required?||Yes||Yes||Yes||No|
|Statutory audit required?||No||Yes||Yes||No|
|Allowed to issue sales invoices?||Yes||Yes||Yes||No|
|Allowed to sign contracts?||Yes||Yes||Yes||No|
|Allowed to import and export goods?||Yes||Yes||Yes||No|
|Can rent an office in Chile?||Yes||Yes||Yes||Yes|
|Can buy Chile property?||Yes||Yes||Yes||No|
|Can own equity in other Chile companies?||Yes||Yes||Yes||No|
|Estimate of total business setup costs in Yr. 1||US$18,385||US$16,385||US$18,135||US$17,480|
|Estimate of total annual costs thereafter (excl. accounting and tax fees)||US$1,210||US$1,210||US$1,210||US$1,310|
|Sample engagement fee Invoice||View invoice PDF||View invoice PDF||View invoice PDF||View invoice PDF|