Forming a company in Chile
In Chile we have 3 types of legal entities that come into consideration for a foreign company or a foreign individual when they want to incorporate a company in Chile and these are a private limited liability company (sociedad de responsabilidad limitada), a company by shares (sociedad por acciones) and a corporation (sociedad anónima). In all of them, shareholders are not personally liable for the company’s debts.
Private limited liability companies (sociedad de responsabilidad limitada) are formed by at least 2 shareholders and they have one or more managers, who are appointed at the signing of the public deed forming the company. Changes in the articles of incorporation and bylaws can only be reached by unanimous agreement of the shareholders.
Corporations’ (sociedad anónima) capital is divided by shares and there have to be at least 2 shareholders. It has a Board of Directors, a General Manager, and the General Shareholders’ Meetings. Resolutions are passed by majorities.
Companies’ by shares (sociedad por acciones) capital is divided by shares. It only needs one shareholder. Resolutions are passed by majorities and there is no need to have a Board of Directors, just a General Manager, and the General Shareholders’ Meetings.
In Chile no name reservation is needed for companies to be formed. Also, there is no restriction about the minimum amount of the company’s capital. However, it is advisable to form a company with no less than U$2,000 as capital. There are also no restrictions about foreigners owning a company and no minimum number of shares have to be owned by locals. Though, the legal representative has to be a Chilean national or a foreigner with a valid working or permanent visa.
In order to form the company, the foreign company has to give someone a power of attorney, first to apply for an identification tax number (RUT) for the foreign company and then sign the public deed forming the company. If the shareholders are people only their passports are needed, but if the shareholders are companies additional information about those companies are required.
The identification tax number is for the purposes of collecting the taxes due when the profits are sent abroad to the foreign partner of the company. The power has to be duly notarized by a Public Notary and legalized at the Chilean Consulate abroad.
After the public deed forming the company is signed, the Articles of Incorporation of the company are submitted to the Commerce Register and published in the Official Gazette.
The next step will be obtaining RUT for the recently formed company at the Chilean IRS. Additionally to the aforementioned documents, the legal representative or a person with a power of attorney will need to show a valid lease agreement signed at a Notary Public to establish a valid address for the company. The legal representative of the company has to be a Chilean or a foreigner with a valid working visa due to the fact that the tax authorities need a person in Chile to be notified in case they need any tax-related information or to notify a lawsuit.
After this point, the company is fully functional.
The process starting from the date signing the public deed until the identification tax number is obtained should take about 10 to 15 days.
The following step is obtaining a bank account, which in Chile can be quite difficult.