There are no regulations that limit the ownership percentage in a company from foreign investors regardless any industries or services. Investment rate is not limited except for certain businesses, which are transport ships with Chilean flag and ship owners of fishing boats. Investors interested in Chile could own all the company’s shares/stocks when you invest in Chilean companies.
Law and regime regarding investments.
When they invest in Chile from foreign countries, they must comply with either following rules a), b), or c):
a) The former Foreign Investment law (DL 600) (*)
This DL 600 functions to protect rights of investors in Chile. The rights and obligations for foreign capital invested based on the law are protected by foreign investment contracts between investors and the Chilean Government. There is no distinctions of investments between domestic and overseas based on DL 600.
b) Direct foreign investment law (Law 20848)
In accordance with the taxation reform in 2014, the former Foreign investment law (DL 600) and the Foreign Investment Committee were abolished on January 1, 2016. Ministry of Economic Affairs Ordinance DFL 1 with legal effect was published in the Official Newspaper on January 21, 2016, Law 20848, regarding the new Foreign Direct Investment Framework and New Organization Establishment came into effect on same date, and the InvestChile began activities. Foreign investors are protected by the following rights for this law.
- The right to remit their capital overseas according to the rule of central bank in Chile
- The right to remit their profits overseas after fulfilling their tax obligation in Chile according the rule of central bank in Chile
- The access rights to official exchange market for exchanging foreign currency
- Impartial treatment between foreign investors and domestic investors
- Exemption of VAT for imported capital goods if investors comply with specific procedures based on certain requirements.
According to former Foreign Investment law (DL 600) and direct foreign investment law (Law 20.848), minimum amount of investment is USD 5 million when you will invest to Chilean entity (if these investments are projects for technology or bringing in asset goods, minimum amounts of investment is 2.5 million). If you use loans for investment, ratio loan amount to total investment must be less than 75%.
c) Chapter 14. Rules to loans, credits and capital increase provided from overseas.
If you apply Chapter 14, “Rules to loans, credits and capital increases provided from overseas”, the investment is different based on Law 600 and Law 20848, you will not need to conclude formal foreign capital introduction. According this rule, the amount of investment is 10 thousand dollars. However investors must inform transactions they performed to Central Bank in Chile.
It is possible to receive loans by foreign currency both foreign countries and in Chile. Lenders and borrowers can freely decide the repayment terms for principals and interests related the loans and for interest rates of principal and interest.
It is not taxed on redemption of principal. Interests are normally subject to taxed 35% withholding tax.
Based on the rule, the amount of money invested to capital or invested in Chile from a foreign countries must be exchanged in official foreign exchange market.
(*)The former Foreign Investment law (DL 600) was abolished on January 1, 2016 and the Inward direct foreign investment law (Law 20848) came into effect on 21 January 2016.