Doing Business In Comparative Guide

1 Legal framework

1.1 Does your jurisdiction have a civil law system, a common law system or a hybrid system?

Chile follows a civil law system rather than a common law system. The country's legal framework is mostly grounded in legislation enacted by the National Congress (the legislative branch) and other codified instruments. As a result, judicial decisions are persuasive only between the parties to the dispute, i.e., have relative effect (i.e. binding only on the parties involved in the dispute), and do not create binding precedent in the manner of the common-law doctrine of stare decisis.

This does not mean that case law is irrelevant. Judicial precedent remains an important source of guidance in commercial and legal decision-making. However, lower and higher courts are not legally bound to follow a particular line of precedent, without prejudice to the role of the Supreme Court as a court of cassation or unification.

1.2 Which legislative and regulatory provisions primarily govern the establishment and operation of enterprises in your jurisdiction?

The company's governing document/instrument corresponds to its articles of incorporation or bylaws ("Estatutos" in Spanish). The framework applicable to its formation and operation, be it statutory and/or regulatory, will depend on the adopted legal form. The most relevant are:

• Sociedad Anónima (closed corporation): primarily governed by Law No. 18,046, Supreme Decree No. 702 and the company's bylaws.
• Sociedad de Responsabilidad Limitada (limited liability company): governed mainly by Law No. 3,918, the Code of Commerce and the company's bylaws.
• Sociedad por Acciones (joint-stock company): governed primarily by its bylaws, and the Code of Commerce, and subsidiarily, the legal framework applicable to closed corporations.
• Agencia de Sociedades Extranjeras (Branch or agency of a foreign entity): governed by the agent declaration and the Code of Commerce.

The closed corporation is often deemed as the most robust form of business entity in Chile, as it must comply with certain corporate formalities (e.g. at least two shareholders, regular board meetings and annual shareholders' meeting, among others). By contrast, the joint-stock company provides greater flexibility, offering two key advantages: (i) it may deviate from some default corporate governance rules applicable to closed corporations; and (ii) it may be incorporated with a single shareholder.

1.3 Which bodies are responsible for drafting and enforcing these provisions? What powers do they have?

The bylaws are drafted and enacted by the initial shareholders or partners of the relevant entity at the time of its incorporation.

The responsibility for enforcing the bylaws depends on the type of entity:

• Closed corporation: The board of directors is primarily responsible for managing the company and ensuring compliance with the bylaws, with shareholders exercising oversight through shareholders' meetings.
• Joint-stock company: Management of the entity is defined in the bylaws and may consist of a board of directors, one or more managers, or the shareholders themselves. Similarly to closed corporations, shareholders may monitor compliance with the bylaws.
• Limited liability company: The administrator(s), or any other managing body determined by the articles of incorporation, is responsible for ensuring the proper functioning of the company and compliance with the bylaws.

2 Types of business structures

2.1 What are the main types of business structures in your jurisdiction and what are their key features?

In Chile, the four main business structures are:

1. Closed corporation: Formed by shareholders who own the company. Incorporation requires at least two shareholders, and management is entrusted to a board of directors. It is regulated by Law No. 18,046 and Supreme Decree No. 702. In general, shares are freely transferable, unless restricted by a shareholders' agreement. There is a second type of corporation, namely open corporations, whose shares are publicly traded securities and where the law takes precedence over the articles of incorporation. Corporations or companies with more than 2,000 shareholders are required to be open corporations.
2. Limited liability company: It is formed by partners who hold participation rights rather than shares, where, similarly to closed corporations and joint-stock companies, such partners' liability is limited to the amount of their capital contributions. This type of entity is governed by Law No. 3,918 and the Code of Commerce. Unlike closed corporations and joint-stock companies, the transfer of rights requires unanimous partner consent, making this structure more restrictive in terms of ownership transfer.
3. Joint-stock company: In contrast to closed corporations, which require at least two shareholders, these structures may be incorporated with a single shareholder. Their participation in the ownership of the entity is materialized in shares, and its governance/management framework is primarily determined by its respective bylaws. The Code of Commerce, Law No. 18,046, and Supreme Decree No. 702 apply on a supplementary basis. As with closed corporations, shares are generally transferable unless restrictions are agreed among shareholders.
4. Agency: Constitutes a permanent establishment of a foreign parent company for tax purposes. Incorporation requires notarized corporate documents from the parent company and a public declaration by the local representative. It is regulated by the Code of Commerce.

2.2 What capital requirements apply to these different types of business structures?

Under Chilean law, there are generally no minimum capital requirements for establishing any of the mentioned structures. The main exceptions and rules are as follows:

• Closed corporation: does not allow so-called industry shares, (contributions consisting solely of manual labour or professional services). All contributions must be made in cash or in kind, and in the latter case must be valued by the shareholders. If the articles of incorporation do not specify otherwise, it is assumed that shares must be paid in cash. Unless unanimously agreed by the shareholders, non-cash contributions must be valued by independent experts, and in the case of capital increases, the shareholders' meeting must also approve both the contribution and the valuation. Though no minimum capital requirements apply to this structure generally, certain types of corporations, such as pension fund administrators and insurance companies, among others, are subject to certain additional requirements.
• Limited liability company and Joint-stock company: These entities generally follow the same principle, contributions must be in cash or in kind, with in kind contributions valued by the partners or shareholders, unless the bylaws provide for expert valuation.
• Agency: The agent's declaration must specify the capital allocated to the Chilean branch, as well as the date and method by which such capital will be deposited in the agency's bank account in Chile.

In all cases, capital may be stated and paid in Chilean pesos or foreign currency. However, for accounting purposes, balance sheets and financial statements may only be presented in a foreign currency with prior authorization from the Servicio de Impuestos Internos (Internal Revenue Service).

2.3 What is the process for establishing these different types of business structures? What procedural and substantive requirements apply in this regard? What is the typical timeline for their establishment?

Closed corporations and Limited liability company, must be incorporated by means of a public deed.

Joint-stock companies may be incorporated either by public deed or by a private instrument registered in a public notarial registry.

Regardless of the type of company or entity, an extract of the incorporation deed or instrument must be registered with the Registro de Comercio del Conservador de Bienes Raíces (Registry of Commerce of the Real Estate Registrar) of the company's domicile within 60 days of the execution of the aforementioned public deed or instrument. After its registration, the extract must be published in the Diario Oficial (Official Gazette) within the aforementioned 60 days.

Once the extract has been registered and published, the company or entity is deemed duly incorporated under Chilean law as of the date of its deed of incorporation. The standard incorporation process typically takes one to three months.

In addition, a simplified electronic incorporation process is available through the Ministerio de Economía Fomento y Turismo's (Ministry of Economy, Development, and Tourism) online platform known as "Empresa en un Día" (company in a day). This allows for digital incorporation, issuance of a Chilean Tax ID (RUT, Rol Único Tributario"), and registration of the initiation of business activities with the Internal Revenue Service, all through a simplified online process.

2.4 What requirements and restrictions apply to foreign players that wish to establish a business directly in your jurisdiction?

Foreign entities or individuals wishing to establish a business in Chile face relatively few restrictions. Incorporation must be carried out by means of a public deed or, in some cases, a private instrument authorized before a notary, depending on the type of company or entity chosen. The process must comply with the registration and publication requirements outlined in Question 2.3.

For the incorporation to be valid, the company must maintain a registered office in Chile. In addition, for tax purposes, it is generally advisable for foreign partners or shareholders to obtain a Chilean Tax ID, which can be obtained through a simplified procedure before the Internal Revenue Service. The company must appoint a natural person with a Chilean Tax ID for the purpose of representation of the company before the tax authority.

2.5 What other opportunities, using people/entities not connected with the main person, are there to do business in your jurisdiction (eg, agency, resale); and what requirements and restrictions apply in this regard?

As noted above, establishing an agency is a commonly used mechanism for foreign entities to conduct business in Chile without creating a new local company.

In addition, there are no significant restrictions on existing companies, either directly or through a special purpose vehicle (SPV). The main exception applies to open corporations, in which case, if the purpose of the acquisition is to obtain (direct or indirect) control of such open corporation, the transaction must be conducted through an oferta pública de adquisición de acciones (commonly known as an OPA) or public share-purchase offer, regulated by Law No. 18,045.

3 Directors and management

3.1 How is management typically organised in the different types of business structures in your jurisdiction?

1. The closed corporation is managed by a board of directors composed of at least three members. In the case of open corporations, the minimum requirement is five members.
   The board of directors, in turn, must appoint one or more managers and establish their responsibilities and duties with regard to the management of the company. In the case of open corporations, the position of manager is incompatible with that of director.
2. The limited liability company can be managed in one of the following ways:
   
   • By all the partners, acting jointly or independently.
   • By one or more designated partners.
   • By a third party designated by the partners.
   Although less common, a board of directors may also be appointed as the administrative body.
   In any case, there is flexibility for the person(s) or body in chage of administration to appoint one or more managers or directly assume the management of the company.
3. The joint-stock company, like the limited liability company, has considerable flexibility in governance. The company may be managed by a board of directors, by one or more general managers, or by the shareholders, acting jointly or independently, as determined in the bylaws.
4. The agency is managed by an agent who is a representative of the parent company. The agent's role is to carry out business operations and represent the agency before Chilean courts and authorities.

3.2 Is the establishment of specialist committees recommended or mandated for certain types of enterprises? If so, which areas should they cover?

In general, Chilean law does not require companies to establish specialist committees. The only exception applies to publicly traded corporations, they must have a committee of independent directors if the company has a market capitalisation equal to or greater than USD 61 million and at least 12.5% of the outstanding voting shares are held by shareholders who individually control or own less than 10% of such shares.

3.3 Is the appointment of corporate directors permitted in your jurisdiction?

Chilean law is structured on the assumption that directors are natural persons. It should also be noted that, as a general rule, directors may simultaneously serve as executive officers. However, in the case of closed corporations, the position of executive officer is incompatible with that of chairman of the board, and in open corporations it is incompatible with the position of member of the board (director).

In joint-stock companies, given the broad contractual freedom available, the mechanism for forming the board of directors may be established in accordance with the shareholders' preferences.

However, a new law currently in force (Law No. 21,757), provides that for a gradual four-year implementation period staring in 2025 and, once fully effective, will require that in open corporations no more than 60% of the board members are of the same gender.

3.4 What requirements and restrictions apply to the appointment of directors, in terms of factors such as number, residence, independence, diversity etc?

The requirements vary according to the type of company:

1. Closed corporation: the board of directors must comprise at least three members, one or more of whom may be shareholders. All directors are elected by the shareholders at a shareholders' meeting. There is generally no requirement for independent directors or diversity, and no restrictions on the nationality or residence. In the case of open corporations, the board must have at least five members, and independent directors must be appointed as described in Question 3.2. With respect to diversity, as of January 31, 2026, boards of open corporations must include a minimum percentage of members of the same sex, with progressive implementation so that by 2031, no gender may represent more than 60% of the board.
2. Joint-stock company: the rules are generally consistent with those applicable to closed corporations, but without limitations on board composition.
3. Limited liability company: if a board of directors is established as governance body, the provisions of the bylaws shall govern its functioning.

3.5 How are directors selected, appointed and removed? Do any restrictions or recommendations apply to their tenure?

For closed corporations and joint-stock companies, directors are elected by the shareholders at a shareholders' meeting. Shareholders may either allocate their votes to one candidate or distribute them among several candidates as they see fit. Directors may be re-elected indefinitely.

The election of directors is carried out by all members, except in the case of joint-stock companies (as stipulated in the bylaws), where it is not possible to elect only one director. The board of directors as a whole can be renewed but, during their tenure, cannot be partially removed.

The bylaws may provide for alternate/replacement directors, who may (i) permanently replace an incumbent in the event of a vacancy, or (ii) temporarily step in during an absence or impediment.

Directors may only be removed in their entirety by the shareholders' meeting. However, if a director is subject to legal disqualification, their mandate terminates ipso facto. In the event that alternate directors have been designated, these will assume the role; otherwise, the board may appoint a replacement and the existing board remains in its office until a new board is elected at the next annual shareholders' meeting.

In the case of joint-stock companies, the specific provisions of the bylaws will govern the procedures for the appointment, removal, and replacement of directors, if the bylaws provide for a board of directors.

3.6 What are the directors' primary roles and responsibilities, and how are these exercised?

Directors are responsible for managing the company as its governing body and must act in the best interests of the company with diligence and care. If directors are to be remunerated, compensation must be determined in advance by the shareholders' meeting. Any additional significant payments for services beyond their role require prior approval in accordance with the procedures set out in the law. Unauthorised payments result in both the benefiting director and those approving such payments becoming jointly liable to the relevant entity for such amounts.

If the company's financial statements are rejected, the board must call a second shareholders' meeting to approve or reject the new financial statements. If the shareholders' meeting reject the new financial statements, the board of directors is automatically removed and the directors who approved them are disqualified from re-election for the following term.

Directors must exercise a standard of care which is qualified as acting with the same attention they would apply to their own affairs. They have the duty and right to be fully informed of the company's operations, especially prior to board meetings, and the exercise of their functions cannot be delegated. They are expected to actively participate in board and committee meetings, ensure that relevant matters are discussed, and oppose any decisions that are unlawful or harmful to the company's interests.

They must refrain from making decisions or entering into contracts that do not serve the corporate interest and must disclose any potential or actual conflicts of interest. They are required to abstain from voting where applicable, though they may still express their views. To avoid liability, dissenting directors must formally record their opposition in the minutes, which must be disclosed at the next shareholders' meeting.

Finally, directors are subject to confidentiality obligations, but may share information with third parties strictly for analytical purposes, provided those third parties are legally or contractually bound to confidentiality.

3.7 Are the roles of individual directors restricted? Is this common in practice?

The roles of individual directors are not restricted; however, the functions of the board of directors are exercised collectively and within a "legally constituted chamber," meaning that meetings are convened in accordance with the bylaws or applicable law and meet the required quorums. In closed corporations and joint-stock companies, generally, majority consent may be sufficient to execute acts and contracts, which are then formalized by public deed. For closed corporations, the applicable legal framework establishes that the general quorum for approval is an absolute majority of the directors present with voting rights. The articles of incorporation may establish quorums higher than those indicated.

3.8 What are the legal duties of individual directors? To whom are these duties owed?

As noted in Question 3.6, the roles and responsibilities of directors focus on ensuring effective governance, acting in the best interests of the company, and fulfilling their legal duties. These duties include exercising diligence or care, maintaining confidentiality, acting with loyalty, safeguarding the company's records, remaining accountable to the company's creditors, and refraining from abusing a majority position on the board.

These duties are owed both to the company itself and its shareholders.

3.9 To what civil and criminal liabilities are individual directors primarily potentially subject?

Directors may be subject to both civil and criminal liability, depending on the unlawful actions committed that affect the interests of the company or its shareholders. Directors found responsible are jointly and severally liable to each other, as the case may be, and to the company for any compensation, damages, or other civil or financial penalties arising from the violation of the law or its regulations that cause harm to others.

Directors may also be subjet to administrative liability if the corporation, company or part of its activities are subject to state control. Depending on the regulations, such liabilities may result in fines or e.g., a ban on serving as a director in open corporations.

In the context of companies, areas of criminal liability may include unfair administration; providing or approving false information on material matters to shareholders or third parties; entering into abusive agreements that cause harm to other partners by exploiting a majority position on the board of directors; and various other conduct that may be classified as economic crimes under Law No. 21,595, such as corruption offences, tax offences, fraud and money laundering.

4 Shareholders/members

4.1 What requirements and restrictions apply to shareholders/members in your jurisdiction, in terms of factors such as age, bankruptcy status etc?

There are no specific restrictions on who may be a shareholder in Chile. However, the bylaws, in the case of closed corporations, joint-stock companies, and limited liability companies, may establish limitations on who may be partners or shareholders. In some corporations subject to a special charter or authorization from an agency (e.g., banks, insurance companies and pension fund administrators), shareholders must meet certain requirements or not been subject to bankruptcy, administrative sanctions or criminal offenses.

4.2 What rights do shareholders/members enjoy with regard to the company in which they have invested?

1. For closed corporations and joint-stock companies: Shareholders have the right to participate in profits, dividends, and capital returns proportionally to their paid-in contributions. They generally have pre-emptive rights to subscribe for new shares or securities convertible into shares, unless such rights are expressly waived or excluded under applicable law. In the common share class, shareholders have the right to vote and speak at meetings, however these rights may also be limited for other share classes.
2. For limited liability companies, partners are entitled to a proportional share of profits, dividends and capital returns based on their paid-in contributions. They are also responsible for the administration of the company and the decisions related to its control and management.

4.3 How do shareholders/members exercise these rights? Do they have a right to call shareholders' meetings and, if so, in what circumstances?

Shareholders exercise their rights both individually and collectively. Individual shareholders may review the annual report, balance sheet, inventory, minutes, corporate books, and the external auditors' report at the company's offices during the 15 days prior to the shareholders' meeting. Depending on the share class, if any, –common, voting, or voice-only– they may participate in meetings accordingly. Dividends are received when declared by the board or shareholders, unless they hold unpaid subscribed shares or belong to a series or share class with different dividend rules. In joint-stock companies, unpaid shares do not entitle the holder to any rights unless the bylaws explicitly provide otherwise. Furthermore, shareholders may pursue legal action if harmed in any way.

Collectively, shareholders exercise their rights at shareholders' meetings, where they can amend bylaws, appoint directors, and decide on key matters. Shareholders holding at least 10% of the outstanding voting shares may request the board to convene a meeting on specific issues. If the board fails to act, shareholders representing at least 10% of issued voting shares in closed corporations may directly convene the meeting directly. If all voting shares are represented, a meeting may be validly held even without formal notice. For joint-stock companies, bylaws may be amended by through unanimous shareholders agreements in the form of a public deed or a notarized private instrument (obligation to provide an extract to the Registry of Commerce and published in the Official Gazette applies equally for incorporating acts as to amending ones, with regard to the bylaws).

4.4 What influence can shareholders/members exert on the appointment and operations of the directors?

As noted in Question 3.5, shareholders may allocate their votes in favour of one candidate or distribute them among several when electing directors. Shareholders typically do not intervene in the day-to-day operations, unless the bylaws grant additional powers to shareholders' meetings, particularly in closed corporations and joint-stock companies.

Law No. 18,046 provides that directors elected by a specific group or class of shareholders owe the same duties to the company and all shareholders as other directors and may not act solely in the interest of those who elected them.

4.5 What are the legal duties/responsibilities and potential liabilities, if any, of shareholders/members?

Directors' duties include diligence, information, confidentiality, loyalty, custody of company records, acting in the best interests of creditors, and non-abusive use of majority positions.

Legal liability may arise for breach of these duties, which may be civil, administrative/regulatory (especially for open corporations) or criminal. In the event of a breach of the law, its regulations or the articles of incorporation, compensation must be paid to anyone who has suffered damage. If applicable, compensation must be paid for the offences indicated in Question 3.9.

4.6 To what civil and criminal liabilities might individual shareholders/members be subject?

Shareholders must exercise their corporate rights in accordance with the bylaws and with due respect for the rights of other shareholders. By acquiring shares, shareholders agree to comply with the company's articles of incorporation and any resolutions adopted at shareholders' meetings. They also agree to pay any outstanding amounts if the shares acquired are not fully paid.

The law provides for legal liability for breach of these duties, which may be civil, administrative (especially in the case of open corporations) or criminal. In the event of a breach of law, its regulations or the articles of incorporation, indemnification applies to the affected party. Particular attention is given to the abusive exercise of the position of a controlling stake of the company being exercised in detriment of the other shareholders, as indicated in Question 3.9.

4.7 Are there rules governing the issuance of further securities in a company? Do rights of pre-emption exist and, if so, how do they operate? Can they be circumvented? If so, how and to what extent?

New securities are issued in accordance with the relevant regulations, primarily outlined in Law No. 18,046 and its associated directives. In the case of convertible bonds, additional considerations apply under Law No. 18,045. For joint-stock companies, the provisions stipulated in the articles of incorporation must be followed. The Code of Commerce governs the issuance of shares, and where it does not contradict the articles of incorporation, Law No. 18,046 and its regulations also apply.

Shareholders are entitled to pre-emptive subscription rights. This right may be waived and transferred. It may be exercised or transferred within 30 days of the date of publication of the option notice. A waiver may also be executed concurrently with the shareholders' meeting at which the capital increase or issuance of securities convertible into shares is approved.

For companies with shares distributed in series or classes, the capital increase must maintain the proportion of each series in the total number of shares issued. Other conditions may be agreed upon, but they require the vote of two-thirds of the shares of the affected series, with dissenting shareholders having the right to withdraw from the company.

The preferential share price is determined at the shareholders' meeting, and such determination may be delegated to the board of directors.

4.8 Are there any rules on the public disclosure of levels of shareholding and/or stake building?

In closed corporations and joint-stock companies, this information is accessible only to shareholders and can be reviewed 15 days prior to a shareholders' meeting.

In open corporations or issuers of publicly traded securities, this information must be submitted to the Financial Market Commission (the corresponding regulatory body mandated to supervise the securities, insurance, and banking markets), which publishes a list of shareholders quarterly. Information regarding the percentage is only published for the 12 largest shareholders.

In limited liability companies, as the capital is materialized in ownership percentages or participation rights rather than shares, partners and are recorded in the bylaws, these can be found in the extracts registered before the Registry of Commerce and published in the Official Gazette.

5 Operations

5.1 What are the main routes for obtaining working capital in your jurisdiction? What are the advantages and disadvantages of each?

The main sources of working capital in Chile include bank financing, capital increases, bond or commercial paper issuance, derivative contracts, the assignment of future cash flows or invoices and private or direct lending through investment funds.

Bank financing provides recurring lines of credit but is less viable for start-ups or Small and Medium-sized Enterprises, despite the availability of state-backed credit lines.

Capital increases are a straightforward and widely used, particularly in venture capital and crowdfunding. Their success depends on securing support from shareholders or angel investors. Crowdfunding carries risks, including failing to achieve funding targets or facing conflicting visions among shareholders. For publicly traded companies, capital increases are a viable option when bank loans are not favourable, though the process can be time-consuming.

Issuance of bonds or commercial paper allows issuers greater control over financing terms. However, non-listed companies must carefully manage offerings to avoid triggering registration and reporting requirements with regulators. Crowdfunding can also be a viable financing option for Small and Medium Enterprises (SMEs).

Derivative contracts are mainly used by medium and large companies to hedge currency or interest rate risks. Due to their complexity, they are generally unsuitable for small businesses.

Assignment of future cash flows or invoices is widely used across companies of all sizes and represents a significant source of non-bank financing. However, invoice discounting involves higher costs, as payments depend on prior delivery of goods or services.

Private or direct lending through alternative-asset funds provides working capital when bank credit is scarce. It offers faster execution and flexible terms (e.g., senior, unitranche or mezzanine features) tailored to the borrower's needs, sometimes with larger ticket sizes. The trade-offs are a higher all-in cost than bank debt, tighter covenants and reporting, collateral requirements, and heavier documentation. It is often used to complement bank facilities or to finance growth/M&A where speed and certainty are priorities.

5.2 What are the main routes for the return of proceeds in your jurisdiction? What are the advantages and disadvantages of each?

Shareholders can obtain returns through dividend distribution, issuance of bonus shares, share capitalization and the company's acquisition of its own shares.

Dividends are the most common mechanism but depend on the existence of profits. Ordinary dividends are declared annually, with the possibility of additional, provisional, or contingent dividends. Bonus shares operate similarly, with the added feature that shareholders receive stock instead of cash, so the benefit depends on share value and liquidity.

Share capitalization does not require profits, making it an attractive option. However, it requires updating the company's share capital, and may pose risks for creditors or breach contractual obligations requiring minimum capital levels or equity ratios.

Closed corporations may offer to purchase shares from its shareholders, but are strictly limited to up to 5% of subscribed and paid shares may be repurchased, and these must be disposed of within 24 months.

In joint-stock companies, bylaws govern these mechanisms, allowing greater flexibility or alternative arrangements depending on the shareholders' agreements.

5.3 What requirements and restrictions apply to foreign direct investment in your jurisdiction?

In accordance with Chapter 14 of the Central Bank Foreign Exchange Regulations, foreign investments must be reported to the Central Bank of Chile. Chapter 14 applies to foreign loans, deposits, investments and capital contributions.

The referred regulations impose two main requirements:

1. Transactions must be executed through the Formal Exchange Market, comprising banking institutions, stockbrokers and other entities authorised by the Central Bank as a participant in this market.
2. The parties must inform the Central Bank of any investment by using the appropriate forms.

The Foreign Exchange Regulations do not require the foreign investors to enter into contracts with the State of Chile, nor do they restrict the repatriation of the invested capital or of the profits.

5.4 What exchange control requirements apply in your jurisdiction?

No restrictions or authorisations are required.

Transactions exceeding USD 10,000 must be notified and conducted through the Formal Exchange Market (Mercado Cambiario Formal).

5.5 What role do stakeholders such as employees, pensioners, creditors, customers and suppliers play in shaping business operations in your jurisdiction? What other influence can they exert on an enterprise?

In Chile, management and control of companies is not directly exercised by employees, pensioners or other third parties, except for directors or executive officers.

Employees are entitled to a "legal bonus" as part of their salary, linked to company profits. This corresponds either to 30% of annual profits (payable yearly) or 4.75/12 of the minimum wage (payable monthly), regardless of profits. In the absence of specific terms in the employment contract, the 30% profit-sharing rule applies.

Pensioners do not have access to collective benefits or company obligations, as Chile operates under an individual capitalisation pension system. Pensioners indirectly play a role in the case of open corporations, as pension funds invest part of their resources in shares of corporations listed on the stock exchange.

Creditors may influence company operations through covenants in financing or bond issuance agreements, such as requirements to maintain certain assets or units.

Customers are protected under consumer law, which establishes obligations regarding informed consent in contracts, transparency of information, product guarantees, and liability for defects.

Suppliers cannot legally dictate or opine on the contracting company's operations and rely solely on contractual agreements.

There are several external factors that may directly impact company operations. These include the Internal Revenue Service (tax compliance), municipal matters (permits required to operate) and environmental authorities (whose permits can delay or condition business activities).

5.6 What key concerns and considerations should be borne in mind with regard to general business operations in your jurisdiction?

It is vital to identify the type of activity to determine which permits are required and what measures must be met, whether these be regulatory impositions or commonly applied commercial practices. The time factor for granting permits is a critical element.

Chile has an established democracy, strong rule of law, and low levels of corruption, which allows activities to be carried out without concern for hidden costs or expenses. Despite this, tendencies related to environmental permits and administrative approval processes have been singled out as a main factor limiting foreign investment in Chile. However, a new sectoral permit law was enacted in September 2025 (Law No. 21,770), which should reduce these timeframes.

Court proceedings can be slow, so mediation and arbitration are often more efficient for resolving conflicts. Chile is a leading Latin American centre for international commercial arbitration, and higher courts consistently recognize and uphold arbitration awards.

6 Accounting reporting

6.1 What primary accounting reporting obligations apply in your jurisdiction?

The primary accounting obligations are those to be fulfilled before the tax authority, which include filing monthly and annual tax returns for both the company and its partners or shareholders. Therefore, it is essential to maintain accurate and comprehensive tax records in accordance with the Internal Revenue Service's requirements.

In the case of companies subject to operating authorisations or licences, the law or sectoral regulations may require financial statements to be prepared in compliance with IFRS standards.

6.2 What role do the directors play in this regard?

Directors are responsible for approving and reviewing the company's balance sheets and financial statements (which may be annual or quarterly, depending on whether the company issues publicly traded securities or carries out activities subject to authorisation or licensing). Once approved, the directors submit the balance sheets and financial statements to the shareholders for their approval.

In the case of closed corporations or joint-stock companies, the board of directors appoint external auditors or accountants to review the company's financial statements, unless the bylaws explicitly provide that management is not subject to oversight.

6.3 What role do accountants and auditors play in this regard?

Accountants and auditors play a vital role in the preparation of financial information, which must be presented to shareholders or regulatory agencies on an annual or quarterly basis. They are also essential for providing information to executive officers and, in certain cases, to the board of directors, particularly when board committees must be formed by law or by the company's bylaws.

External auditors play a key role in issuing an opinion on whether the financial statements fairly present the company's financial position in all material respects. They also present their conclusions to the board of directors and the shareholders' meeting. Based on this opinion, the board may approve or reject the financial statements. If the financial statements are rejected a second time, the entire board of directors may be removed.

6.4 What key concerns and considerations should be borne in mind with regard to accounting reporting in your jurisdiction?

Firstly, for tax purposes, all companies must prepare balance sheets and tax returns for the Internal Revenue Service. This requires advice from someone with expertise in preparing and presenting such information, either internally or externally.

Depending on the provisions set out in the company's articles of incorporation or in the applicable legal regulations, certain companies are required to comply with specific standards when preparing financial information. Consequently, it is essential that their advisors have a comprehensive understanding of International Financial Reporting Standards (IFRS).

Similarly, depending on the same criteria mentioned above, the company may be required to engage external auditors to audit its financial statements and issue an opinion, which will be critical for the board of directors, shareholders, and the supervisory agency. When choosing an external audit firm, it is important to consider entities registered in the Register of Account Inspectors and External Auditors or Register of External Audit Companies maintained by the Financial Market Commission.

7 Executive performance and compensation

7.1 How is executive compensation regulated in your jurisdiction?

There are no specific regulations governing executive compensation. As such, companies are free to determine the level of remuneration or compensation for their executives as they see fit. The board of directors or the company's administrator(s) determines the remuneration based on considerations it deems appropriate.

In the case of smaller companies, the remuneration of a controller who also acts as an executive may be subject to tax considerations related to the taxation of dividend distributions or capital reductions.

For companies that are issuers of publicly offered securities, information on executive compensation must be disclosed in the company's annual report.

7.2 How is executive compensation determined? Do any disclosure requirements apply?

As noted above, the remuneration of executives is determined by the board of directors, the administrator, or the administrators. There are no established rules or regulations that set limits or parameters for this determination. The amount must be aligned with the interests of the company as one of the considerations.

However, in the case of open corporations, which are required to have a committee of directors as outlined in Question 3.2, one of the committee's responsibilities is to review the remuneration systems and compensation plans for the company's executives and employees.

As previously stated, disclosure obligations apply mandatory to companies that are issuers of publicly offered securities.

7.3 How is executive performance monitored and managed?

Typically, the board of directors or the administrators (depending on the type of company) are responsible for monitoring and managing the performance of executives. In the case of open corporations mentioned in the previous answer, both the board of directors and the committee of directors evaluate the performance of executives. This is done to verify compensation systems and plans and to assess their individual performance.

7.4 What key concerns and considerations should be borne in mind with regard to executive performance and compensation in your jurisdiction?

In Chile, companies are free to determine their employee's salaries, provided they are above the minimum wage. The primary concerns in this regard are to identify the market in which the company operates and the labour market in that area. In the case of open corporations, information on executive compensation is published in the annual report. This information is then used to appropriately establish the remuneration bands and benefits that may be suitable to compensate executives.

8 Employment

8.1 What is the applicable employment regime in your jurisdiction and what are its key features?

The main legal regulations governing labour law are the Labour Code and Law No. 16,744 (Law on Insurance against Accidents at Work and Occupational Diseases).

The key features of these legal frameworks include:

• Employment contracts (types, requirements, and effects).
• Rights and obligations of employers and workers.
• Working hours, work leaves, and holidays.
• Remuneration and bonuses.
• Health and safety at work.
• Provisions of maternity protection, including pre- and postnatal leave.
• Protection of fundamental rights at work.
• Protection against workplace harassment, sexual harassment and violence at work.
• Termination of employment and compensation.
• Collective bargaining and trade unions.

8.2 Are trade unions or other types of employee representation recognised in your jurisdiction?

Yes, labour unions are legally recognised in Chile.

8.3 How are dismissals, both individual and collective, governed in your jurisdiction? What is the process for effecting dismissals?

Dismissals in Chile, whether individual or collective, are governed by the provisions set out in the Labour Code.

Please find below details of individual dismissals:

• An employment contract may be terminated on the basis of grounds expressly set out in the Labour Code. These include mutual agreement, employee resignation, expiration of the contract term, business' needs (g. economic or organisational reasons), or employee misconduct.
• In all cases, the employer is obligated to provide written notice to the employee, clearly outlining the legal grounds and factual basis for the decision, and send a copy of said notice to the labour inspection authority.
• Where the termination is grounded on the employer's needs, employees are entitled to severance pay. The amount of severance pay is calculated according to the length of service and is subject to statutory caps. Additionally, a prior notice of 30 days is required, or, alternatively, payment of the corresponding compensation in lieu of notice.
• In the case of dismissals for employee misconduct, the employer is not obliged to pay any compensation to the employee, except for compensation for unused and proportional holiday entitlement.

With regard to collective dismissals:

• Chilean law does not provide for a specific regime of "collective redundancies". Instead, multiple dismissals are treated as a series of individual terminations, each of which must comply with the statutory grounds, notice, and indemnity requirements under the Labour Code.
• In all cases, the employer must provide a written dismissal letter to the employee, send a copy to the labour inspection authority, and pay all accrued wages, benefits, and applicable severance.

In any case, if the employee considers that their dismissal was unjustified, they have the right to challenge it before the labour courts.

8.4 How can specialist talent be attracted from overseas where necessary?

Foreign nationals who wish to engage in remunerated lawful activities in Chile may apply for a temporary residence permit, provided that the following conditions are met:

• They hold a valid employment contract with a Chilean employer (natural or legal person) that is duly registered with the tax authorities. The contract must be for a minimum of three months, signed before a Chilean notary by the employer and before the competent Chilean Consulate by the employee.
• Alternatively, they may apply on the basis of a formal job offer, properly notarised in Chile and accepted by the foreign worker before the relevant This allows for an initial 90-day permit, which must then be formalised through the submission of the employment contract and its electronic registration.
• Self-employed foreign professionals may obtain a temporary residence permit by entering into a civil or commercial contract with a Chilean national or a foreigner holding permanent residence, provided that the services provided exceed 90 days.

The permits are generally valid for the duration of the employment or contractual relationship and may be renewed if the foreign national proves that remunerated lawful activities have been carried out during at least 60% of the validity period.

Furthermore, foreigners holding a temporary residence permit are not restricted to a single employer; they may change employers without notifying the migration authority, provided they remain engaged in lawful employment activities in accordance with the Labour Code.

8.5 What key concerns and considerations should be borne in mind with regard to employment in your jurisdiction?

In the employment relationship, workers are considered the weaker party, and Chilean labour laws are designed to protect them. Likewise, labour courts are highly likely to rule in favour of workers in most disputes with their employers. The latter is specially true in disputes over dismissals due to due to "business' needs" (i.e. reasons related to organizational efficiency, restructuring processes or adverse economic scenarios). Therefore, employers must comply with all applicable legal provisions regarding labour and social security to avoid fines and penalties.

9 Tax

9.1 What is the applicable tax regime in your jurisdiction and what are its key features?

Chile applies a corporate income tax system under the First Category Tax (Impuesto de Primera Categoría – IDPC), levied on income earned by entities domiciled or resident in Chile. The general regime is the Partially Integrated Regime, with a 27% corporate tax rate.

Individual shareholders are subject to the Global Complementary Tax, a progressive levy on worldwide income ranging from 0% to 40%. Non-residents are subject to the Additional Tax (withholding tax) at a flat 35% on Chilean-source income, with the corporate tax creditable against this liability. For foreign shareholders, only 65% of the corporate tax can be credited in the remittance of dividends, unless a double taxation treaty applies (full integrated regime/ corporate tax can be fully credited against the withholding tax.).

Chile also imposes a 19% Value Added Tax (IVA) on the sale of goods and most services, making it one of the most relevant revenue sources.

Other applicable taxes include withholding taxes on dividends, interest, and royalties (rates vary depending on treaties), a stamp tax on loan operations of up to 0.8% (or at a rate of 0.332% in the case of demand loan transactions), and taxation of capital gains, which are generally treated as ordinary income but with certain exemptions for listed securities.

9.2 What taxes apply to capital inflows and outflows?

Capital inflows into Chile are not generally subject to specific entry taxes. Foreign investments can be channelled through two main mechanisms: the Foreign Investment Statute (Decreto Ley No. 600, now replaced by the Foreign Investment Framework Law No. 20,848) and the Central Bank regulations. The latter mainly impose reporting obligations rather than taxes. However, certain financial transactions may be subject to the stamp tax (up to 0.8%) on loan agreements. Capital contributions made to Chilean entities are not subject to taxation upon entry.

Capital outflows are primarily taxed through withholding mechanisms. Distributions of profits to non-resident investors are subject to the Additional Tax at 35%, with a credit for the corporate income tax (27%) previously paid at the entity level. Under the partially integrated regime, only 65% of the corporate tax is creditable against the withholding, unless a double taxation treaty applies.

Outbound payments of interest are generally subject to a 35% withholding tax, though a 4% reduced rate applies in specific cases (e.g. interest paid to foreign banks or financial institutions). Royalties are usually subject to a 15% or 30% withholding tax, depending on the nature of the payment.

Furthermore, Chile applies a 19% value-added tax (VAT) on services rendered in Chile, which may also impact cross-border service payments unless exemptions apply.

Chile has an extensive network of double tax treaties, which can reduce withholding rates and mitigate the risks of double taxation for foreign investors.

9.3 What key exemptions and incentives are available to encourage enterprises to do business in your jurisdiction?

Chile offers a range of exemptions and incentives to encourage investment and business development.

A key mechanism is the Foreign Investment Framework (Law No. 20,848), which guarantees non-discriminatory treatment, free repatriation of capital and profits, and access to the formal foreign exchange market. It should be noted that a general tax on capital inflows does not exist, and capital contributions are not subject to Chilean taxes.

Certain industries are able to benefit from sector-specific tax incentives. For instance, the mining industry enjoys a stable tax regime under long-term tax invariability agreements, while the renewable energy sector benefits from accelerated depreciation and VAT exemptions on imported equipment.

Chile also offers incentives for research and development (R&D), enabling companies to claim deductions for qualified R&D expenses as a credit against corporate income tax, up to a stipulated limit. Free Trade Zones (such as those in Iquique and Punta Arenas) offer full exemptions from VAT and customs duties on imports and exports, along with reduced corporate tax rates.

Exports benefit from VAT exemptions and refunds, ensuring that goods and certain services sold abroad are free from VAT burdens. Additionally, accelerated depreciation rules are available to encourage investment in new fixed assets.

Chile's extensive network of double tax treaties further enhances its attractiveness by reducing withholding taxes and providing certainty to foreign investors.

In summary, Chile promotes investment through a combination of legal guarantees, tax benefits for specific industries, free trade zones, R&D credits, and export incentives, making it a competitive jurisdiction for doing business.

9.4 What key concerns and considerations should be borne in mind with regard to tax in your jurisdiction?

In Chile, investors are advised to consider several key tax issues.

Firstly, the country operates under a worldwide income tax system for residents and a source-based system for non-residents. Therefore, foreign investors are subject to taxation on income only from Chilean sources. However, withholding taxes apply to dividends, interest, and royalties, typically at rates of 35%, subject to treaty relief.

Secondly, Chile has a partially integrated corporate tax regime. Companies pay a first category corporate income tax of 27%, which is creditable—although not fully—against the final taxes owed by shareholders (Additional Tax for non-residents at 35%). This could potentially result in residual taxation, which requires careful modelling.

Thirdly, the tax treatment of capital gains varies depending on the asset and the duration of the holding period. For instance, gains from the sale of publicly traded shares may benefit from exemptions if certain conditions are met, whereas sales of private assets may be taxed at ordinary rates.

Fourthly, indirect taxes are significant. Value-added tax (VAT) at 19% is generally applied to goods and services, including certain cross-border digital services. Import duties and specific excise taxes may also apply depending on the nature of the transaction.

Finally, Chile has an active tax authority that is increasingly scrutinising transfer pricing, thin capitalisation (where related-party debt exceeds a 3:1 debt-to-equity ratio), and substance requirements in cross-border structures. Investors should also be aware of the country's growing network of double taxation treaties, which can mitigate withholding taxes but often require strict compliance with administrative formalities.

10 M&A

10.1 What provisions govern mergers and acquisitions in your jurisdiction and what are their key features?

The provisions governing mergers and acquisitions in Chile depend on the type of company involved, as outlined in the response to Question 1.2, and are as follows:

• The main governing documents of a closed corporation are its articles of incorporation, together with Law No. 18,046 and Supreme Decree No. 702. In the case of mergers, particular attention should be paid to Articles 99 and 100 of Law No. 18,046 and Articles 155 to 159 of Supreme Decree No. 702. In the case of open corporations, obtaining control is subject to the regulations of Title XXV of Law No. 18,045, which correspond to the process of a Public Tender Offer ("Oferta Pública de Adquisición de Acciones") or PTO ("OPA").
• The limited liability company is primarily governed by its articles of incorporation, Special Law No. 3,918 and the Code of Commerce regarding Commercial Partnerships (Sociedades Colectivas).
• The joint-stock company is primarily governed by its articles of incorporation. In the absence of these, the Code of Commerce applies, and, in matters not contrary to the bylaws, by Law No. 18,046 and Supreme Decree No. 702.

10.2 How are mergers and acquisitions regulated from a competition perspective in your jurisdiction?

Under Chilean law, certain transactions that exceed the thresholds stipulated by the Fiscalía Nacional Económica (FNE, or the National Economic Prosecutor's Office) must be notified to the FNE in relation to merger control operations under antitrust considerations. It is therefore essential to assess whether such filing is required, taking into account the turnover thresholds as well as the level of market concentration of the merging entities.

10.3 How are mergers and acquisitions regulated from an employment perspective in your jurisdiction?

The applicable labour regulations are dependent on the structure of the M&A transaction.

In the event of a share purchase, labour law requirements do not apply, and the employees of the acquired company will continue in their positions without change.

In the context of a business transfer, employee consent is not required, as their employment is transitioned to the acquiring company.

In the event of a company split, employee consent is also not required, provided that the employees are transferred along with the business in which they are engaged.

10.4 What key concerns and considerations should be borne in mind with regard to M&A activity in your jurisdiction?

Prospective buyers are expected to carry out comprehensive due diligence on the target in all relevant areas, such as:

• corporate matters and governance;
• good standing issued by public authorities;
• taxation;
• employment matters;
• pending or potential disputes;
• criminal issues;
• competition and antitrust;
• data protection;
• compliance with anti-bribery and anti-corruption rules;
• intellectual property rights;
• asset holding; and
• sector-specific considerations, particularly in regulated industries.

11 Financial crime

11.1 What provisions govern money laundering and other forms of financial crime in your jurisdiction?

The main provisions that govern money laundering and other forms of financial crime in Chile are the following:

• Penal Code
• Code of Criminal Procedure
• Law No. 19,913
• Law No. 20,393
• Law No. 21,595

11.2 What key concerns and considerations should be borne in mind with regard to the prevention of financial crime in your jurisdiction?

The main measures to be considered regarding financial crime prevention are as follows:

• Good internal governance structure
• Robust compliance system according to Law No. 20,393
• Awareness of legislative changes related to financial crime prevention provisions

12 Audits and auditors

12.1 When is an audit required in your jurisdiction? What exemptions from the auditing requirements apply?

When an audit is required, particular attention should be paid to the authority requesting the audit and the reasons for which it is required.

If an audit is requested by the Financial Market Commission or is required for entities under its supervision, it is mandatory and not subject to exceptions. Such auditors must comply with the standards and principles established for auditors. If auditors fail to act in accordance with these rules, they may be subject to administrative sanctions.

In other cases, audits may be overseen by management bodies or partners/shareholders themselves, meaning that additional requirements may be established or that management may not be subject to any audit at all.

12.2 What rules relate to the appointment, tenure and removal of auditors in your jurisdiction?

It is essential to verify the type of company and the provisions of the articles of incorporation.

In the case of open corporations, the shareholders' meeting must, by law, appoint an external audit firm from among those registered in the Register of External Auditors maintained by the Financial Market Commission.

External audit firms must be appointed annually, based on a shortlist of three candidates proposed by the board of directors. The auditor cannot audit the same company for more than five consecutive years. Since the appointment process is annual, a different external audit firm may be appointed for the following period. In serious cases, an extraordinary shareholders' meeting may be called to revoke the appointment of the external audit firm and appoint a new one.

For closed corporations and joint-stock companies, the provisions of the articles of incorporation must be followed. These may consider an external audit firm, an account inspector, or an external auditor, determine another form of management oversight, or not establish any oversight. In the absence of any specifications in the articles of incorporation, it falls to the shareholders' meeting to appoint an account inspector or external auditor.

In the case of limited liability companies, the provisions of the articles of incorporation must be followed.

12.3 Are there any rules or recommendations that limit the scope of services as regards the provision of non-audit services by an auditor?

For companies under the supervision of the Financial Market Commission, the non-audit services that may be provided are specified in Article 242 of Law No. 18,045.

No such restrictions apply to other types of companies or entities.

12.4 Are there any rules or recommendations which cap the remuneration of an auditor as regards payment for the provision of non-audit services?

In Chile, there are no specific regulations governing this matter. However, because the board of directors submits a shortlist of candidates for the appointment of external auditors, competition on fees may arise during the selection process.

13 Termination of activities

13.1 What are the main routes for terminating business activities in your jurisdiction? What are the advantages and disadvantages of each?

The following are the main ways to terminate a company in Chile:

• The laws that govern the various types of companies and entities, as well as the articles of incorporation, provide for a dissolution and liquidation procedure. This is a standard process for terminating a company's activities.
• Alternatively, a company can be liquidated through bankruptcy proceedings, which are subject to a prior judicial sentence.

13.2 What key concerns and considerations should be borne in mind with regard to the termination of business activities in your jurisdiction?

The process of liquidating a company, if there is no prior agreement, no orderly schedule is determined, or there are multiple and varied creditors, can take time and in many cases remains unfinished.

In order for the liquidation process to be completed, it is necessary to make payments to all creditors (including employees) in a timely manner, to ensure that taxes are correctly paid, and to proceed with the corresponding capital distributions with the remainder. After that, the liquidator or liquidators must finalize the process with a final report and liquidator's account, which should be reduced to a public deed and registered in the margin of the corporate registration in the Commercial Registry and communicated to the Internal Revenue Service as the end of the company's business.

If a company is deemed to be insolvent, it may make use of the provisions set out in Law No. 20,720 to initiate a bankruptcy or rehabilitation proceeding, in accordance with the prevailing insolvency legislation.

14 Trends and predictions

14.1 How would you describe the current landscape for doing business and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?

The corporate legal system in Chile underwent modifications in 2023 and has since been operating in a stable manner. It is therefore not anticipated that the law will be amended in the next twelve months in a way that would significantly impede or restrict the activities of foreign companies.

15 Tips and traps

15.1 What are your top tips for doing business smoothly in your jurisdiction and what potential sticking points would you highlight?

Operating a business in Chile is generally straightforward, due to the country's robust institutional framework, transparent legal system and comprehensive protection of property rights.

It is strongly recommended to ensure strict and timely compliance with corporate, tax and labour regulations, as Chilean authorities are highly formalistic and place great emphasis on proper documentation. Choosing the most appropriate business structure, which is typically a Closed corporation or a Joint-stock company, is also crucial, depending on the investor's specific structure and governance requirements.

Foreign investors should pay close attention to tax planning, particularly regarding withholding taxes, VAT on services, and the application of double tax treaties. It is also essential to have clear contractual arrangements, as Chilean courts tend to interpret agreements strictly according to their wording. From a practical standpoint, building strong relationships with local advisors and maintaining good communication with public authorities can significantly facilitate operations.

Potential challenges include Chile's rigid labour framework, which favours employees and imposes strict rules on termination and collective bargaining. Environment and specific regulations can also add complexity, particularly in industries such as mining, energy, and infrastructure.

In the coming years, matters relating to personal data protection or privacy will also be relevant due to the implementation of Law No. 21,719 (December 1, 2026), which will raise standards to General Data Protection Regulation (GDPR) levels.

Although Chile has historically offered stability, investors should remain attentive to ongoing political developments, which could lead in regulatory changes in the coming years.

As a conclusion, Chile is entering a new stage marked by renewed potential for growth and investment. Despite global uncertainty and domestic challenges, the country continues to demonstrate institutional resilience, solid macroeconomic fundamentals, and a sustained commitment to modernising its economy.

Looking ahead, policy priorities are expected to concentrate on fostering entrepreneurship, attracting capital, and streamlining administrative and regulatory processes — all of which are likely to contribute to a more dynamic and competitive business environment. Recent legislative developments, such as the Fintech Law (Law No. 21,521), the Pension Reform Law (Law No. 21,735), and Law No. 21,770 — which establishes a Framework Law on Sectoral Authorisations aimed at modernising and expediting the permitting process for investment projects — reflect a clear orientation toward efficiency, innovation, and investment facilitation.

Together, these developments signal a more optimistic outlook for Chile, with conditions increasingly aligned to support innovation, private investment, and sustainable economic growth.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.