February 6, 2013
Chile is about to become the easiest place in the world to form a company and start a business.
According to a new law that was recently passed, the Chilean government is slashing the bureaucracy associated with forming a company here to the absolute minimum.
Currently, it takes a few weeks to form a company in Chile at a cost of about $600, if you do it yourself. But once the procedures are simplified, entrepreneurs and would-be business owners will be able to form a company online at NO COST, all in the same day.
This is unheard of. Even ‘cheap’ corporate formation jurisdictions like Singapore, Delaware, and the Marshall Islands take a bit of time to process with at least a few hundred dollars in fees.
Establishing a Chilean company is obviously an important first step in operating a business here. And as I have pointed out many, many times before, Chile is full of opportunities for professionals, investors, and entrepreneurs.
The economy here is growing leaps and bounds, not because of trillions of dollars of funny money that central bankers have conjured out of thin air… but based on real productivity. Chileans are producing more, exporting more, and have a substantial pool of savings to invest and spend.
Consequently, the domestic retail market here is flourishing as the country’s already robust middle class grows by the day. Other industries ripe for profit include construction, infrastructure, agriculture, heavy equipment, plus the country’s burgeoning tech sector.
One of the nice things about doing business in Chile is that it’s very easy for small businesses to hire foreign workers. If you own a small tech company here, for example, and you want to hire programmers from Russia and Ukraine, it’s a straightforward process to bring them into the country with legal work permits.
This is advantage #2 of having a Chilean company– it makes for an easy way for you to obtain residency. Again, if you can incorporate a company at no cost, this reduces the cost of applying for residency to almost nothing.
Third, though it is often overlooked, Chile could be a reasonable, lower-tax jurisdiction to set up an international operating business.
The corporate tax rate here is 20% (though there are a number of exemptions). And because Chile has a number of comprehensive tax treaties signed with other countries, you could save a lot of money by choosing to have the profits taxed here at the lower rate, rather than back home at a higher rate.
Chile currently has tax treaties in force with countries such as Canada, New Zealand, Denmark, France, Spain, and the UK. Tax treaties with Australia and the United States have been signed and are pending final approval.
Right now the changes are scheduled for completion at the end of May; I’ll let you know when it happens.