The most popular business entity among Chilean business owners is the simplified corporation. The formation of the entity is backed by the Chilean Commercial Code, book 2, title VII, 8. For relevant matters outside the provisions of the bylaws and the above code, the provisions of non-publicly held corporations (Sociedades anónimas cerradas), contained in Law No. 18,046 on Corporations shall apply, provided it is not contrary to the nature of the corporation. A SpA has a separate legal personality but no maximum duration of existence. They may be incorporated for a fixed term or an indefinite period. The management of the company usually follows the bylaws stated in its articles of incorporation. Shareholders’ (acionistas) responsibility is restricted to the amount they paid for their shares. Shareholders can establish any administration structure including appointing an administrator, a board of directors, or a committee and one or more persons as administrators. The corporation can be established by a single person. It cannot be publicly listed or used for a non-profit organization.
If you are a business owner interested in setting up a simplified corporation here or you are thinking of expanding to this country, this guide provides information on registering a simplified corporation in Chile and the process of incorporation.
Features of the Corporation
SpAs can be incorporated by at least one shareholder with no residency requirements. However, every shareholder must obtain a Chilean tax identification number and appoint a resident as its representative for tax notification purposes. There is no stated minimum number of directors or other applicable officers and residency requirements, except for tax purposes. There is no minimum requirement for the capital, but it must be fully subscribed and paid within the period stated in its bylaws. The purpose of business has to be in the bylaws. To carry out business activities via a SpA, a business owner has to obtain a tax identification number from the Chilean tax authority for the entity.
The Process of Incorporation
The Registry of Commerce of the Real Estate Registrar (Registro de Comercio del Conservador de Bienes Raíces) is in charge of registering new entities. The SpA has to be registered with the Registry of Commerce in the jurisdiction where the company is located. The following documents have to be provided during incorporation:
- An incorporation document executed before a notary public
- Private document with signatures authorized before a notary public
- An abstract of the incorporation document authorized by the same notary public
- Powers of attorney in the case of foreign shareholders without representatives in Chile, etc.
Note that the abstract of the incorporation deed needs to be registered in the Registry of Commerce of the Real Estate Registrar (Registro de Comercio del Conservador de Bienes Raíces) of the SpA’s domicile and published in the Official Gazette (Diario Oficial) within four weeks. The SpA must submit a sworn statement detailing the initiation of business activities in the country by completing the form on the website of the Chilean tax authority. This statement must be submitted by the SpA at most 2 months from the start of its activities.
Information to be provided during Incorporation
The information below must be included in the abstract to be registered in the Registry of Commerce, being publicly available:
- Date of incorporation deed
- Name and address of the entity
- Details of incorporator(s)
- Purpose of incorporation
- Activities of the SAU
- Period of duration
- Amount of the issued and paid-in capital
- Name and address of the notary, etc.
Timeline of the Process
The registration of the company and publishing of the abstract have a timeframe of around five working days from the date of executing the incorporation document.
Cost of the Process
The costs of the process are mainly the registration and notaries’ fees. The notary fees range from USD150 to USD500 and the registration fees cost around USD40 to USD400, depending on the entity’s capital. If the share capital exceeds USD 200,000, the publication fee is USD70. After the entity has been incorporated, the legal representative has to file the start-up declaration (Inicio de Actividades) and request a tax identification number before the Chilean tax authority (Servicio de Impuestos Internos). This filing has no cost.
