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Doing Business in Chile 2018

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Doing Business in Chile 2018 DOING BUSINESS IN CHILE 2018 CARIOLA, DÍEZ, PÉREZ-COTAPOS SPA ALL RIGHTS RESERVED. This document or parts thereof may not be reproduced in any form without permission from the publishers. The reproduction of complete, unaltered texts is authorized pro- vided that Cariola, Díez, Pérez-Cotapos SpA is identified as the holder of all copyrights. The information and opinions contained in this document are inherently general and their applica¬tion to any specific case requires legal advice. The information contained in this document should not be taken as legal advice. Edition 2018 TABLE OF CONTENTS INTRODUCTION 9 PRACTICE AREAS 11 Asia-Pacific Desk 11 Banking, Finance and Capital Markets 11 Closely Held and Family Businesses 12 Competition/Antitrust 12 Constitutional Law 12 Corporate and M&A 13 Energy 13 Environmental 14 Fisheries and Aquaculture 14 Foreign Investment 14 Hotels, Resorts and Casinos 15 Insolvency 15 Insurance 15 Intellectual Property 15 Labor Law, Social Security and Immigration Law 16 Litigation and Arbitration 16 Mining and Natural Resources 16 Real Estate and Urban Development 17 Regulatory Law 17 Taxation 18 Technology, Privacy and Media 18 Transportation and Infrastructure 18 DOING BUSINESS IN CHILE 19 I. BUSINESS ORGANIZATIONS IN CHILE 19 A.- BRANCH OF A FOREIGN LEGAL ENTITY (Agencia) 19 (1) Establishment 19 (2) Liability of the foreign entity 20 (3) Capital 20 (4) Management 20 (5) Remittances of profits 20 (6) Publication of Financial Statements 20 B.- CORPORATION (Sociedad Anónima) 20 (1) Incorporation 21 (2) Liability of the shareholders 21 (3) Capital 21 (4) Management 22 (5) Distribution of Profits 22 (6) Financial Statements 22 (7) Transfer of shares 23 (8) Dissolution 23 (9) Minority shareholders 23 C.- SIMPLIFIED CORPORATION (Sociedad por acciones) 23 (1) Sole shareholder 24 (2) Incorporation and Amendments 24 (3) Capital 24 (4) Voting rights 24 (5) Management 24 (6) Distribution of profits 24 D.- LIMITED LIABILITY COMPANY (Sociedad de Responsabilidad Limitada) 25 (1) Organization 25 (2) Supervision 25 (3) Liability 25 (4) Capital 25 (5) Management 25 (6) Distribution of profits 25 (7) Transfer of interest 25 (8) Financial Statements 25 II. FOREIGN INVESTMENT IN CHILE 26 A. DIRECT FOREIGN INVESTMENT LAW (“DFI LAW”) 26 (1) Methods of Investment: 26 (2) Materialization and Purpose of the Investment: 26 (3) Proceedings and Foreign Investor Certificate: 26 (4) Rights of the Foreign Investor under the DFI Law: 26 (5) Transitory Tax Invariability: 27 (6) Mining Projects: 27 (7) Effectiveness of the foreign investment agreements executed under the previous system: 27 B. CHAPTER XIV OF THE COMPENDIUM OF FOREIGN EXCHANGE REGULATIONS OF THE CENTRAL BANK OF CHILE 28 (1) Foreign Loans 28 (2) Capital Contributions, Investments and Deposits 28 (3) Minimum Amount 28 III. ECONOMIC PUBLIC ORDER 28 (1) Constitutional rights and their protection 29 (2) Control of public spending 29 (3) Autonomy of the Central Bank 29 IV. COMPETITION LAW 30 A. ANTITRUST 30 B. MERGER CONTROL 31 C. INTERLOCKING AND ACQUISITION OF MINORITY STAKES 32 V. CHILEAN TAXATION 33 A. OVERVIEW 33 B. INCOME TAX 33 (1) General Aspects 33 (2) Main taxes established in the income tax law are the following: 33 (3) Taxes on enterprises and their owners or shareholders 34 (4) Transfer of Shares and equity rights 35 (5) Depreciation 35 (6) Branch of foreign corporation 36 (7) No income tax on imports 36 (8) Interest payments 36 (9) Excess indebtedness 36 (10) Royalties, patents and technical assistance 36 (11) Income Taxes on Payments made to Individuals or Entities not domiciled in Chile 36 (12) Related party transactions 37 C.- VALUE ADDED TAX. 37 (1) Tax Rate and Transactions Subject to VAT 37 (2) Tax Liability 37 (3) Credit and Debit System 37 (4) Exemptions 37 (5) Construction 37 (6) Exports 37 D. STAMP TAX 37 E. REAL ESTATE TAXES 37 VI. LABOR AND SOCIAL SECURITY SYSTEM 38 A. LABOR CONTRACTS 38 (1) Individual Labor Contract 38 (2) Collective Labor Agreements 38 (3) Special Contracts 38 (4) Labor Contract Duration 38 (5) Worker’s Age 38 (6) Employee’s Nationality 38 (7) Working Hours 39 (8) Part Time Jobs 39 (9) Daily and Weekly Rest and Yearly Vacations 39 (10) Maternity leave and benefits 40 28 (11) Remunerations 41 (12) Health and Safety 41 29 (13) Termination of the Labor Contract 42 29 (14) Subcontractor Employees / Temporary Employees 43 29 B. UNIONS 43 30 C. SOCIAL SECURITY 43 30 (1) Overview 43 (2) Coverage 44 31 D. UNEMPLOYMENT INSURANCE 44 32 E. TAXES 44 33 (1) National Employees 44 (2) Foreign Employees 44 33 VII. ENVIRONMENTAL REGULATIONS 45 33 33 A. GOVERNMENTAL ENVIRONMENTAL BODIES AND ENVIRONMENTAL COURTS 45 33 34 B. ENVIRONMENTAL IMPACT EVALUATION SYSTEM (“SEIA” –Spanish acronym) 45 35 35 C. OTHER RELEVANT ENVIRONMENTAL REGULATIONS 46 36 (1) Emission and environmental quality standards 46 (2) Hazardous solid waste 46 (3)Native Forestland Act 47 (4) Indigenous Peoples Act 47 (5)Liability for environmental damages 47 VIII.- INTELLECTUAL PROPERTY 47 A. TRADEMARKS 47 B. PATENTS & DESIGNS 48 IX. VISAS FOR FOREIGNERS 49 A. TOURIST VISA 49 B. VISA SUBJECT TO AN EMPLOYMENT AGREEMENT (WORK VISA) 49 C. TEMPORARY RESIDENCE VISA 50 INTRODUCTION Cariola Díez Pérez-Cotapos SpA, one of Chile’s informed about the matter at issue and who leading law firms, traces its origins back to the are thus able to provide legal assistance at first quarter of the 20th century. From its in- any moment. There is permanent interaction ception, the firm has excelled in providing legal between the work groups in charge of a specific advice to industry, banking, finance, foreign client and the specialized lawyers of the firm, so investment, international trade, transportation they can benefit from the combined experience and large-scale mining. of the different practice areas at Cariola Díez Pérez-Cotapos. The firm offers high-quality legal advice to its clients and provides a comprehensive range of The partners and associate lawyers of Cariola legal services to meet today’s business needs, Díez Pérez-Cotapos are not only outstanding including commercial and corporate law, practitioners in the legal profession, but have mergers and acquisitions, mining, banking also gained recognition in the academic field and finance, capital markets and securities, by lecturing as professors in the country’s foreign investments, environmental matters, most respected law schools and universities. taxation, labor and employment, litigation and Furthermore, lawyers of the firm participated arbitration, transportation and aviation, media in the drafting of the Political Constitution of and telecommunications, fisheries and aqua- Chile, have acted as legal advisors to public culture, insurance, competition and antitrust, entities, and have been members of the Chilean e-commerce and intellectual property. The firm Senate. The partners and associates of the firm has a leading practice in the field of mergers are fluent in at least one language other than and acquisitions, advising important foreign Spanish, and a large number of members of companies in the acquisition of large listed the firm hold graduate degrees from leading corporations in Chile, including public bids or universities in the United States and in the tender offers in Chile and in the United States. U.K. and have spent time abroad training at The firm’s experience in mining, telecommu- foreign law firms, enhancing their foreign lan- nications, energy and utilities, privatization, guage abilities and broadening their exposure finance and securities laws is also at the fore- to the international legal system. front of the market. The firm has its main offices in the capital city Cariola Díez Pérez-Cotapos believes in the of Santiago and its services have countrywi- advantages of teamwork and in the benefits of de coverage. Cariola Díez Pérez-Cotapos has exchanges of opinions and fluent communica- strong and permanent relationships with other tion with its clients and their advisors, whether law firms in Chile and abroad, and over the in-house lawyers or independent counsel in years has developed an extensive network of other countries. For that reason, each matter professional contacts and relations with leading assigned to the firm has at least one partner in law firms in Latin America. charge, heading a team of associate lawyers and specialized attorneys, depending on the matter at hand. The purpose of this work structure is to ensure efficient teamwork, in such a manner that, at all times, there are several professionals 9 PRACTICE AREAS Asia-Pacific Desk Banking, Finance and Capital Markets Over the years we have expanded our services We advise banks and financial institutions, to international companies and developed an local and international, in structuring bila- extensive network, long-term relationships with teral and syndicated loan facilities, project the most important law firms across the globe financing, structured financing, and other practicing in Latin America. We are fully aware financial transactions with diverse and com- of the relevance of the Asian-Pacific and Chine- plex collateral packages. We also assist banks se market for Chile. and financial institutions, securities brokers, investment funds, leasing and factoring com- Since 2004, we have been working on increa- panies, in connection with regulatory and sing our presence in Asia-Pacific, especially compliance issues applicable to its activities in China by organizing and participating in in Chile. seminars and conferences related to China and
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