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 South America’s southern cone, between the Andes

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

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

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

ness environment.

Chile is a democratic republic with a presidential system. The president is the

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

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

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

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

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

with special emphasis on codified statutory law. The population’s ethnicity is mostly

white and white-Amerindian, with Mapuche and other indigenous groups account-

ing for less than one-tenth of the total population. Spanish is the official and main

language.

CHAPTER 4

104 Chapter 4

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

property and investment protections including the world’s largest number of

bilateral investment treaties, international trade agreements 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 the past decades and

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

ranks at the top of Latin America in international reports and indexes. With life

expectancy at birth at 80 years and adult literacy rate at 98.6 percent, 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, between 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 country in the region, according to the World Bank’s Doing

Business report,3 the World Economic Forum’s (WEF) Global Competitiveness

Report,4 Transparency International’s anti-corruption report,5 and the Networked

Readiness Index 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 times its per-capita GDP since 1989,9 substantially

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

nization for Economic Cooperation 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 Forms

The types of legal entities commonly used as business vehicles in Chile are limited

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 main corporate differences refer to the following:

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

and without special bylaws, provisions, or complexities 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 and SpAs only and should be available for

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

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

branches requires fewer formalities than SAs, their setup may take two to

three months due to time delays in obtaining official translations of cor-