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[ESTABLISHING A BUSINESS ENTITY IN CHILE]
authorization of the President of the Republic. ▪ Aquaculture and fishing : There are several activities regarding aquaculture and fishing that are restricted only for national natural persons or entities. ▪ Hydrocarbons, lithium, and deposits in Chilean waters : Mining concessions located in areas classified as vital for national security cannot be awarded to foreigners. ▪ Domestic shipping : Only Chilean boats are permitted to transport passengers and freight along the coast, rivers, or lakes. However, foreign merchant vessels may undertake these activities in the case of cargo volumes exceeding 900 tons. ▪ Insurances and Reinsurances : These businesses can only be developed in Chile by national corporations. 2. Foreign investment Chapter XIV of the Central Bank’s Compendium of Foreign Exchange Regulations regulates the entry of foreign capital into Chile. All operations involving loans, deposits, investments, or capital contributions for over US$10,000.-, or its equivalent in other currencies, are subject to this mechanism. Any of these operations must be done through a formal foreign exchange market, such as banks and currency exchange offices authorized by the Central Bank. This administrative system operates through commercial banks or entities, which reports the entry of the capital directly to the Central Bank. Any other operation which involves the entry of foreign currency must be reported directly to the Central Bank by the investor or by the recipient of the investment.
3. Any restrictions on remitting funds out of the jurisdictions (withholdings, etc.) Remittances of profits abroad are subject to a 35% tax, whether in countries with or without an Agreement to Avoid Double Taxation with Chile. If the remittance is subject to Withholding Tax, the company paying the tax may charge, as a credit, the First Category Tax paid, against the Withholding Tax. The amount of the credit will be equivalent to 100% or 65%, depending on its nature, and the country of residence of the receptor. Chilean tax regime has been subject to successive reforms and numerous administrative regulations over the law are still pending to be issued. Therefore, tax advice must be sought on a case-to-case basis.
ILN Corporate Group – Establishing a Business Entity Series
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