Chile’s new law: incorporate your business in just one day, in one step, and for free

Chilean President Sebastián Piñera inaugurated a new online platform that will allow aspiring entrepreneurs to start a business in one day, with one step and at zero cost. This system, which has been implemented in countries such as New Zealand, Australia, Canada and Singapore, among others, “will facilitate entrepreneurship, making Chile a more competitive country,” said Flores, the interim minister of Economy.

With this change, entrepreneurs can easily select the type of legal entity they want to create and complete a form in which they specify the characteristics of the company, such as the names of its partners, the legal name, the line of business and capital that the company will have. The people who will be part of the company can identify themselves using an electronic signature. Software will convert all of this information into a definitive document that will then be sent to the Internal Revenue Service and allow the company to begin operating immediately, as well as assign a taxpayer ID number in Chile.

Previously, if an entrepreneur wanted to start a business in Chile, he or she would have to hire a lawyer, who would draft the necessary paperwork, and go to a notary to certify it. Once the approval from the notary was obtained, the business creation would be published in the Official Record and registered in the national Commerce Registry. Only after this could the company commence operations and obtain a Taxpayer ID Number through the Internal Revenue Service. All of these steps would take an average of 8 working days, with an associated cost ranging from approximately US$500 to US$700 in Santiago, with higher costs and longer wait times in rural regions of Chile.

In the system’s first phase, entrepreneurs will be able to use the platform to incorporate as a Limited Liability Partnership. In accordance with local laws and regulations, the other types of legal structures available for companies incorporated in Chile will be progressively added to the system, beginning with Individual Limited Liability Companies in November of this year and concluding with Reciprocal Guarantee Corporations in 2016.