Chile

• Author: Marcos Ríos - Juan Pablo de la Maza - Fernanda Pardo
• Pages: 103-130

103

Chile

Marcos Ríos

Juan Pablo de la Maza

Fernanda Pardo

Carey

COUNTRY OVERVIEW

With a privileged location in S outh America’s southern cone, between t he Andes

and the Pacific Ocean , Chile has positioned itself as one of the most attractive and

dynamic business venues for foreign i nvestors, thanks to its political and economic

stability, effective prevalence of the ru le of law, and an open and transparent busi-

ness environment.

Chile is a democratic republic with a pre sidential system. The president is the

head of state and government and is elected for a fi xed term of four years, with no

immediate reelection. Congress is bicamera l; representatives are elected for four-year

terms and senators for eight-year terms, and both can be reelect ed indefinitely. Judi-

cial power is vested in an independent Supreme Court of Chile and its subordi nate

courts. The lega l system is largely based on the civil law model of continental Europe,

with special emphasis on cod ified statutory law. The population’s ethnicity is most ly

white and white-Ameri ndian, with Mapuche and ot her indigenous groups account-

ing for less than one-tent h of the total population. Spanish is t he official and mai n

language.

CHAPTER 4

104 Chapter 4

An open and market-oriented e conomy, a high level of foreign trade, solid

property and investment protec tions including the world’s largest number of

bilateral investment treaties , international trade agre ements with approximately

90 percent of the world’s gross domestic product (GDP), and strong legal and fin an-

cial institutions have driven Chile’s economic growth during t he past decades and

made it an attractive venue for business and investment. The country consi stently

ranks at the top of Latin America in international repor ts and indexes. With li fe

expectanc y at birth at 80 years and adult literacy rate at 98.6 p ercent, in 2014 the

United Nations Human Development Index placed C hile as the top-ranked country

in Latin America.1 According to the Business Envi ronment Rankings of the Econo-

mist’s Intelligence Unit, bet ween 2010 and 2014, Chile has been one of the world’s

20 most attractive economies to do busi ness in, as well as the region’s leader.2 Chile

is also the top-ranked cou ntry in the region, acc ording to the World Bank’s Doing

Business report ,3 the World Economic Forum’s (WEF) Global C ompetitiven ess

Report,4 Transparency I nternational’s anti-corruption repor t,5 and the Net worked

Readiness I ndex 2014.6

These features , in addition to sound and stable macroeconomics,7 fiscal respon-

sibility,8 a solid financia l system, and strong public institutions, have allowed Chile

to increase more than seven ti mes its per-capita GDP si nce 1989,9 substantially

reduce poverty levels,10 become the first South America n country to join the Orga-

nization for Economic Coop eration and Development (OECD), and otherwise

become one of the world’s safest and most reliable business venues.

ESTABLISHING A BUSINESS PRESENCE

Permanent Structures

Suitable Corporate For ms

The types of lega l entities commonly used as busine ss vehicles in Chile are l imited

liability companies (sociedades de respon sabilidad limitada or SRLs), corporations

(sociedades anónimas or SAs), stock companies (sociedades por acciones or SpAs),

and branches (agencias). Their mai n corporate differences refer to the followi ng:

• Organization: A lega l entity generally involving one sole owner or controller

and without special bylaws, provisions, or complexitie s regarding the grant-

ing of powers of attorney may be set up in one or two business days, pur-

suant to a new online incorporation system created in 2013.11 This system

is currently applicable to SRLs a nd SpAs only and should be available for

SAs in 2016. The creation of other SRLs , SpAs, or SAs (that is, traditional

entities) typically take s to three to five weeks. Even though the creation of

branches requires fewer formal ities than SAs, t heir setup may take two to

three months due to time delays in obt aining officia l translations of cor-