Chile

AuthorMarcos Ríos - Juan Pablo de la Maza - Fernanda Pardo
Pages103-130
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-

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