Investing in the Santiago Stock Exchange (BCS) is a strategic opportunity to access a growing, well-regulated market. For many international investors, forming a company in Chile simplifies this process and offers significant tax and financial benefits. Below, we provide a step-by-step guide to establishing a company in Chile for investing in the local stock market.
Why form a company in Chile to invest in stocks?
Establishing a company in Chile for investing in the Santiago Stock Exchange (BCS) has several advantages beyond simple market access. For example:
- Legal Security and Formality: Having a company in Chile adds credibility and facilitates financial operations by meeting the requirements of both the Stock Exchange and the banking system.
- Access to Business Financial Services: Companies generally have greater access to specialized banking and investment products that can enhance portfolio management.
- Ease of Obtaining a RUT: The RUT (Unique Taxpayer ID) is essential for operating in the Chilean market. Forming a company enables the organization to obtain its own RUT, facilitating transactions with brokers and other financial institutions.
- Tax Optimization: A formalized company allows for tax benefits, such as deductions on earnings and clearer management of capital gains taxes.
Key steps to establish a company in Chile
Below are the main steps to form a company in Chile and begin buying stocks on the Santiago Stock Exchange.
1. Define the company type that fits your needs
In Chile, investors have several options when forming a company, but the two most popular structures for operating on the Stock Exchange are the Corporation by Shares (SpA) and the Limited Liability Company (SRL):
- SpA: The more flexible option, it allows for a single shareholder and easy addition of new partners without requiring amendments to the bylaws. It is ideal for those looking to operate independently.
- SRL: More restrictive regarding new shareholders but offers a more consolidated structure for those preferring shared ownership.
2. Create and register your company
The Chilean government offers the “Your Company in One Day” portal, where the registration process is quick and can be completed in less than 24 hours. To register, you must:
- Access the portal and enter the identification details of shareholders and legal representatives.
- Define the business purpose, specifying that the company’s goal is to invest in financial assets.
- Sign the document digitally with the Unique Key. If you are a foreigner, you may use an advanced electronic signature (check with Chilean consulates or obtain a digital signature in Chile).
3. Obtain the business RUT
Once the company is registered with the Commercial Registry, the next step is to obtain the RUT (Unique Taxpayer ID) from the Internal Revenue Service (SII). This ID is necessary for conducting transactions and fulfilling tax obligations. To obtain the RUT, you will need:
- The company’s incorporation documents.
- The company’s business classification with the SII (it must be categorized as financial or investment).
- Complete the registration and obtain the RUT certificate.
Opening a bank account for your company
To operate on the Santiago Stock Exchange, the company must have a local bank account. Having this account simplifies the transfer of funds to and from the brokerage firm. Among the banks that commonly provide accounts for investment companies are Banco de Chile, Santander, and Scotiabank. Key points to consider include:
- Required Documentation: Articles of incorporation, powers of attorney for representatives, and identity verification for shareholders.
- Account Type: A commercial or investment checking account is best for transfers and payments to the brokerage.
- Processing Time: Approval may take from one week to a month, depending on the company structure’s complexity.
Choose a stock brokerage in Chile
To access the Chilean stock market, you must register with a stock brokerage authorized by the Financial Market Commission (CMF). Brokerages generally offer additional portfolio management and risk management services for companies.
Popular brokerage firms in Chile include:
- LarrainVial: Offers a wide range of financial services for businesses, from investment advisory to fund management.
- BICE Inversiones: Specializes in the local market, offering wealth management and investment analysis services.
- BTG Pactual Chile: Experienced in the regional market, this brokerage provides access to international markets and advanced diversification options.
Documentation requirements for investing in the Santiago Stock Exchange
In addition to incorporation documents and the RUT, brokerage firms typically require additional information to comply with transparency and anti-money laundering regulations. Required documents include:
- Financial Statements: These demonstrate investment capacity and serve as financial backing.
- Tax Residence Certificates: The company must have a tax address in Chile to operate.
- Power of Attorney Document: Specifies who is authorized to make investments and decisions on behalf of the company.
Tax advantages and responsibilities for Stock Investments
Investing in the Santiago Stock Exchange through a company allows for tax benefits and better management of tax responsibilities. Some of these benefits include:
- Investment Loss Deductions: The company can deduct investment losses when calculating taxes, optimizing the tax burden.
- Preferential Capital Gains Tax Rates: Capital gains are taxable, but companies may benefit from differentiated rates and reinvestment options.
It’s essential to comply with monthly and annual filings with the SII, reporting income, expenses, and financial assets to avoid penalties.
Personalized guidance for forming your company and accessing the Santiago Stock Exchange
If you’re considering establishing a company in Chile to invest in stocks and need a team of experts to guide you through the process, contact Becker Abogados. With our experience in corporate and financial law, we’ll help you navigate the Chilean legal system, enabling you to optimize your investment securely and efficiently.
