Are you considering setting up a subsidiary in Chile? You’ll need to think about more than finding a place and opening your doors. The subsidiary process can take months to complete, and that’s before you can even start to hire employees. It’s critical to understand all parts of Chile subsidiary laws to determine if setting up a subsidiary or working with an Employer of Record is the right choice for you.
How to Set up a Chile Subsidiary
You’ll start the Chile subsidiary setup process by registering your company with the Registro Publico de Comercio and Servicio de Impuestos Internos. It takes around 15 to 20 days to enroll fully. You’ll also need to publish a social constitution and create in-country bank accounts, which require official paperwork to open. Creating this account can take up to four weeks to complete.
Other steps include:
- Getting a company name approved by Chile’s Company Registry
- Drafting a brief description of what your company does
- Writing all shareholders’ names and company director details
- Creating a registered office address in Chile
- Producing a Memorandum of Association and Articles of Association and presenting before the Conservador de Comercio
A limited liability company needs a minimum of two shareholders and one director. They can all be of any nationality and do not have to live in Chile. You only need $1 as the minimum share capital required to start a Chile subsidiary.
Chile Subsidiary Laws
You’ll need to follow a variety of Chile subsidiary laws to stay compliant. Otherwise, you could find yourself facing hefty fines, or the subsidiary could even get shut down. One major law requires you to pay employees and authorities from an in-country bank account, so you cannot skip that crucial step when setting up your Chile subsidiary.
You’ll also need to choose a company name that is not already in use. When it comes time to submit your shareholders’ details, they can be either corporations or individuals of any nationality, but you must include their names in the company details. You can have between two and 50 shareholders. The subsidiary’s director can also be of any nationality and does not need to live in Chile.
Make sure to get a Tax Identification Number known as a Rol Unico Tributario (RUT) in Chile. Chile subsidiary law states you need to obtain a signed public deed and publish your subsidiary in the Official Gazette to do so. You should get your RUT in 10 days, and your company will be ready to operate legally.
Benefits of a Chile Subsidiary
The most significant benefit of setting up your Chile subsidiary is the legal ability to conduct operations in Chile and hire local workers. There is also limited liability between the subsidiary and you as the parent company, which saves the parent company from any pending litigation or potential loss.
The limited liability factor also allows a Chile subsidiary to operate under its own culture. This structural framework will enable you to create an identity separate from the parent company that conforms to the general culture and business norms in Chile.
You can enjoy even greater benefits through Chile subsidiary outsourcing with a global PEO. Globalization Partners helps you set up your Chile subsidiary quickly so that you can start hiring employees and get to work sooner. We also act as the Employer of Record, so you are not held liable for compliance.
What Do You Need?
When you decide to expand to Chile on your own, you’ll need a total understanding of Chile subsidiary and employment laws. You’ll also need the time and money to travel back and forth to Chile for several months.
The Chile subsidiary setup process also requires finding legal representation. Chile subsidiary laws state all companies in Chile need to have legal representation from a Chilean native or a foreigner with a valid visa. Your lawyer can then help you draft a legalization of incorporation deed, which is required for limited liability corporations with no resident director. Your legal representation will then become your company’s representative.
Choose Globalization Partners
Instead of trying to figure out how to set up a Chile subsidiary alone, Globalization Partners will help you expand into Chile without the headache of setting up a subsidiary. Contact us today for more information.