Current business situation
Chile is considered one of South America's most stable and prosperous countries, leading the list for competitiveness, income per capita, globalisation, economic freedom, and low perception of corruption.
Chile has a market-oriented economy characterised by a high level of foreign trade and a reputation for strong financial institutions and sound policy that have given it the strongest sovereign bond rating in South America. Exports of goods and services account for approximately one-third of GDP, with commodities making up some three-quarters of total exports.
As a mining-based economy, Chile enjoyed high economic growth figures of about five per cent for several years. The economy has slowed, particularly in response to reduced investment predominantly in the mining sector, with growth currently sitting at about two per cent.
Chile still has the second-lowest tax burden in the 35-member OECD and the government maintains a tight rein on fiscal spending, ensuring the highest credit rating among the major economies of Latin America and the lowest yields on government debt.
The economic slowdown and a troubled government reform agenda have impacted levels of foreign investment in recent times, with the country looking at a range of stimulus to increase productivity and innovation in key sectors.
With two way trade of about $A1.5 billion, and a long history of doing business together, Chile is considered a natural entry point for Australian businesses entering Latin America.
Chile has a sophisticated approach to doing business, and Santiago, where most business is conducted, is a well-developed city. Chile takes a leading and active role in regional multilateral trade platforms, such as the Pacific Alliance and Mercosur and has more bilateral free trade agreements than any other country in Latin America.
It is important to be aware that while senior leaders often speak fluent English, Australian companies will benefit from having staff or partners that speak Spanish. This is particularly relevant at middle management levels, where many negotiations are conducted.
Relationship building is critical in the Chilean context, and investing time to build and develop relationships is essential to business success, together with taking a long term view to any investment decisions.
Setting up in Chile
There are two options to operate a business in Chile.
- through a representative
- by setting up a local corporate entity.
The process to incorporate a company in Chile is relatively simple and can be concluded within one or two days. Despite this it is advisable to obtain legal advice before incorporating a company to fully understand the duties and responsibilities related to the corporate structure of your choice.
Types of companies that may be set up in Chile
Under Chilean corporate law, there are several types of corporate entities that can be formed depending on a business’s specific needs. The most widely used include:
Corporation ('Sociedad Anónima')
Sociedad Anonima (SA) is similar to a Proprietary Limited company in Australia. It is formed by a minimum of two shareholders that establish a common fund. Shareholders are only liable for their respective contributions .The SA is administered by a board of directors with at least one Chilean representative. Decisions are taken by a majority vote and members of the board of can be replaced at any time. A SA. can be publicly traded or closely held.
Limited liability partnership ('Sociedad de Responsabilidad Limitada')
A Sociedad de Responsabilidad Limitada (SRL) can be formed by a minimum of two and a maximum of 50 partners. At least one partner must be domiciled in Chile. A SRL’s name must include the name of one or more of the partners or its activities.The liability of its partners is limited to the amount of capital contributed or to a greater amount specified in the partnership deed. There is no minimum capital contribution required. The SRL’s administration an activities can be freely decided upon by the partners. SRLs are not required to publish or file accounts.
Stock Company (Sociedad por Acciones)
A Sociedad por Acciones (SpA) is similar to a Sociedad Anonima but can be incorporated with only one individual who’s capital participation is represented by shares. This individual may be a trustee company. A SpA does not need to have a board of directors and can operate with a sole director or administrator. A SpA is one of the most flexible company structures with few reporting requirements.
Individual Limited Liability Company (Empresa Individual de Responsabilidad Limitada)
An Empresa Individual de Responsabilidad Limitada (EIRL) is best suited to sole business owners. An EIRL exists separately to its owner and can engage in all civil and commercial activities. The owner of the IRL is limited to the amount of capital contributed while the EIRL is liable entirely for the value of all its assets.
Links and resources
Government, business and trade
Australia- Chile Chamber of Commerce
Australia-Latin America Business Council
News and media
Business News Americas
Please note: This list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only. The content is for information and carries no warranty; as such, the addressee must exercise their own discretion in its use. Australia’s anti-bribery laws apply overseas and Austrade will not provide business related services to any party who breaches the law and will report credible evidence of any breach. For further information, please see foreign bribery information and awareness pack.