How to Register a Sole Proprietorship (Empresario Individual) in Chile

Chile is situated along the western seaboard of South America, and it's famous for its long coastline and unusual shape. It is considered one of the best countries in the region to do business. An estimated one-seventh of the economically active population is employed in manufacturing, which accounts for about one-sixth of the gross domestic product. In this article, we will explain the easiest way to establish your sole proprietorship in this country.

Sole proprietor in Chile

In Chile, any natural person who carries out a legal commercial activity is considered a micro or small company (Mipyme). It is called Empresario Individual (Individual or Unipersonal Company), because it is constituted by a single person. It is the most basic and simple type of business that exists in Chile, according to the Internal Revenue Service (Servicio de Impuestos Internos - SII).

As the only founder of a company, you are its sole owner, and you support the business with all your personal assets. You are the person legally responsible for all obligations and duties.

As an Individual Company,  you need to meet these characteristics:

• You have no partners
• Taxes as First Category based on income
• Your liability is unlimited

How to register Empresario Individual in Chile

There are two ways to do the registration:

1. Go to SII website, enter RUT e Inicio de actividades in the menu. First, you will need to obtain a RUT number (taxpayer ID number). Then choose the Start of Activities option, and fill out form 4415.
2. You can also carry out the procedure physically at the local Service office. You will fill out the same form, but you will have an SII agent's assistance in case of any doubts or queries.

The following laws regulate a sole proprietorship in Chile:

• Decree Law No. 830 on Tax Code
• Income Tax Law
• Law on Sales and Services Tax

VAT and taxes in Chile

You are obliged to pay the following monthly taxes:

• Declare VAT, PPM, and withholdings. This includes the issuance of sales documents (Invoices, Tickets, and others) and the obligation to keep the Purchase and Sales Book
• Declare on Form 50 - for more information, check this instruction
• VAT calendar (Form 29) - for more information, check this instruction

Your obligation is also to pay an annual tax: Income declaration.