How to Register as a Sole Proprietor (Empresario Individual) in Chile

Becoming an independent contractor in Chile—legally known as an empresario individual—is a streamlined and cost‑effective option for solo entrepreneurs. You retain full control, face minimal bureaucracy, and can start operations quickly. The main trade-offs include unlimited personal liability and compliance with tax and bookkeeping requirements.

Disclaimer: This article is for informational purposes only. Always check official sources or consult a local advisor before proceeding.

What is a sole proprietorship in Chile?

In Chile, a sole proprietorship is formally referred to as an empresario individual. It’s the simplest business entity where one person manages all operations, bears unlimited personal liability, and receives all profits. It also aligns with the country’s Mipyme micro and small enterprise classification.

How does an empresario individual work in Chile?

Empresario individual vs Empresa de Responsabilidad Limitada (EIRL)

Choosing between a sole proprietorship and a limited liability individual enterprise (EIRL) depends on your risk tolerance and growth plans:

(Note: EIRL is less common but exists; some choose SpA or SRL structures for scalability.)

Step-by-step guide: How to register as an empresario individual in Chile

Step 1: Verify your eligibility

Both Chilean nationals and foreigners can register as sole proprietors. If you’re a foreigner, you’ll need to first obtain a RUT (Rol Único Tributario), Chile’s tax ID, to conduct any commercial activity. While residency is not strictly required, foreigners without residence may need to appoint a legal representative in Chile to handle official processes and correspondence with tax authorities.

Step 2: Obtain your RUT (Rol Único Tributario)

The RUT is essential, as it identifies you for all tax and business purposes. You can apply online through the Servicio de Impuestos Internos (SII) portal or at an SII office, completing Form 4415 to request both your RUT and registration of economic activities. Processing usually takes up to 10 business days, so plan ahead before signing contracts or starting operations.

Step 3: Register with the Commercial Registry

Your business name and activity must be registered in the local Conservador de Comercio (Commercial Registry) where you plan to operate. This step formalizes your business legally and ensures your trade name is protected. The registry will ask for details such as your business purpose, registered address, and supporting documents, and you’ll need to pay a small administrative fee.

Step 4: Obtain your municipal operating license (Patente Municipal)

Every business in Chile must obtain a Patente Municipal, which is a license from the municipality where your business is located. This license confirms that your business is authorized to operate in that jurisdiction. Fees vary depending on the nature of the business and its capital, and the license must be renewed annually with the municipality.

Step 5: Declare the start of your activity

Once your business is legally registered, you must file an “Inicio de Actividades” declaration with SII. This declaration activates your tax obligations and confirms the date on which your business officially starts operating. Filing is done through Form 4415 online or in person, and without this step, you won’t be able to issue invoices or comply with VAT and income tax rules.

Step 6: Open a bank account (optional, but recommended)

Although not legally required, opening a dedicated bank account makes it much easier to separate business and personal finances. Most banks will request your RUT, business registration documents, and municipal license to open the account. A separate account simplifies bookkeeping, improves your credibility with clients, and avoids confusion during tax audits.

Step 7: Keep proper accounting and comply with obligations

Once operating, you must maintain organized financial records, including Purchase and Sales Books, invoices, and receipts. These records are mandatory for VAT filing, annual tax returns, and possible inspections by SII. Using digital accounting tools or a local accountant can help you stay compliant, especially since Chilean tax rules require electronic invoicing (facturación electrónica) for most businesses.

Financial and tax obligations for an empresario individual in Chile

Income tax: You pay income tax under Chile's First Category regulations, and file annually through a progressive system.

VAT (IVA): Standard rate is 19%, applied to most goods and services. Complete monthly VAT returns and payments.

Record-keeping: You must maintain purchase and sales records, invoices, and supporting documents—as required by SII.

Other obligations: Stay updated on tax reforms—for example, new SME-friendly “transparente” regimes that could exempt small business owners from certain corporate taxes.

Launch your contracting career and stay compliant with Deel

Registering as a sole proprietor gives you independence, but it also means handling taxes, invoices, and records on your own. Deel’s all-in-one platform helps you manage obligations without the stress. With Deel, you can:

• Automate invoicing and expense tracking with essential Bookkeeping tools
• Create, send, and sign localised work agreements
• Keep accurate records for tax season
• Access expert tax advice and compliance support
• Get paid through multiple payment and withdrawal methods
• Spend your earnings in USD with the Deel Card
• Access funds early with Deel Advance
• Enjoy contractor perks from 150+ partners

Stay independent, without the admin overload. Sign up to Deel for free today.

FAQs

What is the minimum capital required?
None. You only need to cover small fees related to RUT registration and municipal patente.

Do empresario individuals need to register for VAT (IVA)?
Yes—if your business turnover exceeds thresholds or you operate in VAT-applicable sectors. Otherwise, VAT registration is still common.

How much do monthly or annual tax contributions cost?
Costs depend on revenue. You’ll pay VAT (19%) and income tax per your income bracket. Monthly bookkeeping and tax filing tools streamline compliance.

Can an empresario individual hire employees?
Yes—but then you must register as an employer, withhold payroll taxes, and manage social security contributions.

How long does it take to register?
Typically around 10 days if all paperwork is in order. RUT issuance can take up to 10 days.

Can foreigners register as empresario individuals?
Yes. Foreigners can apply for a RUT and register similarly—though having a local legal representative can help.

Do I need a business bank account?
Not mandatory, but highly recommended for clear bookkeeping and separating business from personal finances.

What happens if I stop operating?
You can formally deregister via SII and cancel your municipal license. Final tax returns must be filed.

Are there government incentives or tax breaks?
Chile is rolling out a “Régimen Pyme Transparente” to exempt many small businesses from First Category tax—an evolving benefit worth exploring.

Can I use Deel as an empresario individual to get paid by international clients?
Yes. Deel supports global payments, low fees, and transparent forex—perfect for Chilean freelancers.

Does Deel generate compliant invoices?
Yes. Deel’s invoice templates meet Chilean SII standards, including VAT where applicable.

Can Deel help with taxes?
Yes. Deel provides downloadable payment records and tax-ready reports to aid your filing—without replacing your accountant.

Does Deel offer contracts?
Absolutely. Deel offers SII-compliant contract templates and legal language tailored to Chile.

Can I access benefits through Deel as a sole proprietor?
Yes. Deel offers optional benefits like health insurance and retirement savings—adding protections typically limited to full-time employees.