Over the past couple of years, Latin America has seen the foreign direct investment in their lands decline considerably. Despite the fall in FDI in Latin America, Chile has been an exception. How to start a business in Chile as foreigner is common question by the customers who have intention to setting up business under FDI law. IN fact, Chile has seen a rise in foreign direct investment. A 14% rise in FDI was recorded in the year 2015. This has made Chile, despite its smaller size, one of the most invested countries in the continent, ranking just behind the leaders Mexico. Since 2013, Chile has become one of the most convenient countries to invest in. The government has relaxed the rules regarding the foreign investments. There is less red tapes to go through. The rise in the middle class and more purchasing power of the lower class means that the people in Chile now have more money than ever to spend. This mean, investing in Chile is profitable and can earn a good rate of return if the investment is done properly.
With all that being said, a foreigner must know the right set of rules and steps to follow when starting a business in Chile. Listed below are those steps.
Step One: The first step of starting a business in Chile as a foreigner would be to register the business online. This is basically securing the name of the business. It is crucial because if the same name already exists in Chile then you would have to find a new name for your business. Furthermore, there are certain terms in Chile that cannot be used as business names. Once the name registration is done, you are expected to receive an authentication number. This number needs to be kept safe for it will be used further later on.
Step Two: After registering the name of the business and getting the authentication code, the owner of the new business in Chile will have to get the business statues notarized. These statues will include the articles of association and the articles of memorandum along with all other documents of the business. Once notarized, the documents will have to be signed off digitally by the notary. It is expected that this will take around 2 to 3 working days. It’s a fairly straight forward process of company registration Chile that requires a small fee.
Step Three: The third step of starting a business in Chile involves the Internal Revenue Service or as they are commonly known in Spanish as the SII. In this step, the business is expected to register with the Internal Revenue Service to receive a RUT number. Once again, this number is crucial for the running of the business as failure to get this can make the business liable for lawsuits in the near future. The time needed to receive this number is one to two working days.
Step Four: After obtaining the RUT number, the fourth step in starting a business in Chile is quite simple. You would have to print the receipts and all other invoices you had incurred all along. These printings have to be done at an authorized printing company. This is done for the purpose of keeping track of all sort of documents which may be needed later on. How to register a company in Chile if the company is LLC, LLP or branch office of foreign company?
Step Five: The next step in starting a business in Chile takes the business back to working with the Internal Revenue Service again. This time the business is expected to seal all their accounting books with the IRS. This is done for proof checking and keeping track of the legality of the business. Its not just the accounting books that will be vetted by the IRS, a lot of other documents; financial and non financial will also have to be submitted to the IRS. This process may take longer than the allotted 2 to 3 business days advertised and also business ideas in Chile.
Step Six: We are now reaching the end of the business starting process in Chile. The second last step of this whole process requires the business to obtain a “patente municipal”. This is basically a working license that can be obtained from the local municipality. This basically confirms the legal status of the business and allows the business to operate smoothly with no problems. Setting up business in Chile as foreigners may choice our 7 steps to follow.
Step Seven: The last and final step of starting a business in Chile requires the business to register for labor related accident insurance. This is a must for all businesses operating in Chile, whether they are local or foreign. It basically ensures that’s the labors working for the company are safe and have insurance coverage in case something goes wrong.
How to register a company in Chile as nonresident if the entrepreneurs have limited budget of paid up capital. What are the other costs to setting up business and how long might need to finish all procedure to startup? Yes, any inquiries regarding business setting up in Chile as foreigners are earnestly requested to contact us to assist you.