How to Set Up an Entity in Chile

Expanding into Chile gives companies access to a stable, open market with strong legal protections and regional trade links. The country ranks highly in Latin America for ease of doing business and economic freedom, so incorporating locally is an efficient way to build a durable presence. By opening a local company (also known as incorporating an entity), you will be able to sign contracts locally, hire under local law, and pursue tax or commercial advantages.

Disclaimer: This content is for informational purposes only and does not constitute legal, tax, or financial advice. Always consult official sources before acting.

What “opening an entity” means in Chile

Opening an entity in Chile means legally registering a company or branch so the business becomes a Chilean legal person with its own tax ID (RUT). Common pathways include setting up a subsidiary (a new Chilean company, such as a Sociedad por Acciones or Sociedad de Responsabilidad Limitada), or establishing a branch (agencia) of a foreign company. Either route requires registration with the business registry and tax authorities and gives you the ability to operate under your own corporate name rather than through intermediaries.

Entity overview in Chile

Step-by-step guide: How to open an entity in Chile

Step 1 — Choose the right structure

Most international SMBs expanding to Chile opt for the Sociedad por Acciones (SpA). It offers limited liability and simplicity in governance, allows easy transfer of shares and has fewer corporate formalities than full corporations.

The Sociedad de Responsabilidad Limitada (Ltda.) is an option for a partnership-like structure, requiring 2 to 50 partners.

Instead of creating a new company, a foreign company can also register a branch in Chile. This involves executing a public deed in Chile that documents the parent company’s resolution to establish a branch, assigns capital to it, and appoints a local agent. A branch is not a separate legal entity – the foreign parent is fully liable for branch activities.

Step 2 — Verify and reserve the business name

Search the national business registry (Registro de Empresas y Sociedades (RES)) to ensure the name is unique. Once you find an available name, you can reserve or register it as part of the incorporation process through the RES “Tu Empresa en un Día” system online. You may need a local Clave Única (national online ID) or work with a Chilean notary or lawyer who can use the system on your behalf if you don’t have local credentials.

Step 3 — Prepare incorporation documents

In Chile, the primary document is the Articles of Incorporation (Escritura de Constitución), which is essentially the company’s charter or constitution. If you use the online RES system, the platform will guide you through a form to generate these articles electronically (with standard clauses available).

You’ll need identification for all founders (passport or national IDs) and for the person who will act as the Legal Representative in Chile. If any shareholder or the appointed representative isn’t going to be physically present to sign, you must issue a Power of Attorney (POA) to a Chilean representative or lawyer to act on your behalf. Those POAs must be notarized and apostilled/legalized in your home country and then notarized in Chile.

Step 4 — Register the company

You can either:

• Use the online registry (fastest): complete the electronic form on the RES portal and sign digitally. You or your representative will need a digital signature (available to Chilean residents) to sign electronically. Once signed and submitted, the system registers the company and issues a registration certificate and identification number.
• Use the traditional notary route: execute a public deed at a notary. The notary will help you publish the extract in the Official Gazette (Diario Oficial) and register it in the Commerce Registry of the local Real Estate Conservator.

Step 5 — Register for tax and social security

Register the company with Chilean Internal Revenue Service (Servicio de Impuestos Internos – SII) and file Form F-4415, the start of activities declaration, to obtain your tax ID number, called the RUT (Rol Único Tributario).

If you will be hiring, you must then register as an employer with the appropriate social security funds. Chile doesn’t have a single “social security office” to register; instead, employers must set up accounts with: (1) a private pension fund administrator (AFP) for employee pension contributions, (2) a health insurance fund (either public Fonasa or private Isapre, chosen by each employee), and (3) the unemployment insurance system (administered by AFC Chile). Obtain the municipal business license (Patente Municipal) in the company’s municipality.

Step 6 — Open a corporate bank account

Establishing a corporate bank account in Chile is an important step to operate financially. A local bank account is needed for paying local suppliers, employees, and government fees (many taxes and contributions in Chile are paid via bank transfers or local bank interfaces).

Banks in Chile typically require the company’s incorporation documents, RUT, identification for signatories, and KYC interviews. The legal representative (or account signatories) will likely need to visit the bank in person to complete Know-Your-Customer (KYC) forms; account opening often takes a few weeks. Be prepared to disclose ultimate beneficial owners and the nature of the business.

Step 7 — Set up payroll and employment compliance

• Register as an employer for payroll taxes: Withhold and remit income taxes on salaries (Impuesto Único a los Trabajadores) and make social security contributions. New hires should be recorded with the authorities (the SII and AFC)
• Draft compliant employment contracts: Chilean law requires written employment contracts for each employee, detailing job role, salary, benefits, working hours, and other terms.
• Implement a payroll system: Set up a system or service to calculate monthly salaries, withholdings, and employer contributions. Chile’s payday and contribution deadlines are typically monthly.
• Labor regulations and ratios: Be mindful of local labor regulations such as the rule that companies with 25 or more employees must ensure at least 85% of staff are Chilean nationals.
• Benefits and insurance: Chile does not mandate a 13th-month bonus, but many companies offer bonuses or meal allowances by contract.

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Post-registration obligations

After incorporation, companies in Chile must stay compliant with local governance, tax, and employment laws. Typical requirements include:

• Tax and financial reporting: File regular returns with the Servicio de Impuestos Internos (SII). Corporate income tax is filed annually (calendar year); VAT returns are filed monthly. Keep proper bookkeeping and engage a local accountant to meet SII electronic-ledger and retention requirements (generally at least five years).
• Corporate registers: Maintain up-to-date records of directors, shareholders and beneficial owners, plus minutes of meetings. Any change to representatives, address, capital or bylaws must be notarized and registered.
• Compliance tracking: Use a compliance calendar or automated reminders to monitor tax, license and corporate filing deadlines.
• Licenses and renewals: Renew required permits on schedule. The main operating permit for most companies is the municipal Patente, paid annually or in two installments.
• Recordkeeping: Retain accounting, payroll, HR and transaction records for the legal minimum (typically five years). Employment records—contracts, timesheets and proof of payment—should also be kept for at least five years. Electronic recordkeeping is allowed.
• Employment law compliance: Keep contracts and workplace policies current with changes in labor, pension, health and data-protection laws.

Taxes and financial considerations

• Corporate tax: Small to medium enterprises (SMEs) may qualify for a reduced corporate tax rate of 25%. Corporate taxes are paid across the year with annual filings.
• VAT: 19% on most sales of goods and services.
• Payroll contributions: Employers add social and insurance contributions on top of gross wages. Employees have mandatory pension and health withholdings.
• Accounting standards: Most companies adopt IFRS or local IFRS-based rules. Note that records must be kept in Spanish and in Chilean pesos (though you can keep dual records in another currency for internal use).

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Expand internationally with Deel

Whether you’re hiring through an EOR or establishing your own local entity, Deel’s all-in-one platform gives you everything you need to expand into Chile—quickly, compliantly, and with confidence. From market entry to ongoing operations, Deel helps you hire, onboard, and manage teams seamlessly from day one.

With Deel, you can:

• Test new regions using Deel’s local entities through our Employer of Record service—hire employees compliantly, delegate payroll and taxes, and access localized employment contracts.
• Open entities with Deel Entity Setup, where our team manages everything—from incorporation and tax registration to coordination with local experts.
• Centralize your compliance and records with Deel Entity Management, including automated filings, calendar reminders, and visibility across all entities.
• Integrate with Deel Payroll and Deel HR for compliant payments, benefits, and workforce oversight—all in one platform.

For companies transitioning from the EOR model to owned entities, Deel ensures a smooth handover and consistent compliance every step of the way. Enter new markets, onboard talent, and manage your global workforce—all through one unified platform.

FAQs

How long does it take to open an entity in Chile?
Typically 4–8 weeks from start to finish; online incorporation can register the company in 1–2 days, but obtaining the RUT, bank account and licenses usually adds several weeks.

What is the minimum capital required?
There is no general legal minimum for most companies (you can technically set CLP 1).

Can foreign companies own 100% of an entity in Chile?
Yes — Chile generally permits 100% foreign ownership.

Do I need a local director or representative?
You must appoint a legal representative resident in Chile to act on the company’s behalf; this person need not be a shareholder but does carry certain compliance liabilities.

How much does it cost to register an entity?
Basic government and notary fees for a simple DIY incorporation can be low (under a few hundred USD).

Can I hire employees before the entity is fully registered?
Not directly — you generally need the company RUT and employer registrations to hire and run payroll, though you can use an Employer of Record (EOR) to onboard staff immediately until your entity is ready.

Can Deel help me open an entity in Chile?
Yes — Deel’s Entity Setup service provides end-to-end support for registration, documentation and local filings to get your Chilean entity established.

Does Deel offer ongoing compliance and payroll support?
Yes — Deel offers managed services and self-service tools for payroll, tax filings and ongoing compliance to support your Chilean operations.