Doing Business Chile 2026

FREEDOM OF FORM

The corporate form is not a formality

It defines who controls the company, how far the partners are liable with their own assets, how it is managed, how profits are distributed and how easily you will be able to transfer, finance or reorganize the investment.

Chilean law recognizes a plurality of vehicles, most of them familiar to international investors, and enshrines freedom of form as the general rule. Except for the exceptions detailed below, there is no obligation to adopt a predetermined type, and the decision is driven by the line of business, the number of participants, the committed capital and the management model.

Freedom of form and its exceptions Chile recognizes broad freedom to carry out economic activities and allows foreign investors to hold equity in Chilean companies. A foreigner may own the entire capital of a local company without, as a general rule, being required to have a Chilean partner or to obtain special authorizations merely for being foreign.

This rule operates without prejudice to sectoral restrictions or limitations tied to strategic activities, natural resources, transport, fishing, media, maritime cabotage or the acquisition of certain real estate in border areas. There, the analysis also depends on the line of business, the location of the assets and the investor’s nationality.

The exception to freedom of form is businesses subject to special sectoral regulation, for which the law requires a specific corporate type, an exclusive purpose and prior authorization from the regulator. That is the case for banks and financial institutions, insurance companies and general fund managers, which may only operate as special stock corporations under the permanent supervision of the Financial Market Commission (CMF); pension fund managers (AFPs), in turn, are governed by Decree Law No. 3,500 and supervised by the Superintendence of Pensions.

INCORPORATIONROUTES

General and simplified regimes

It admits, among other types, the SpA, the SRL, the EIRL and the closely held S.A., and cuts incorporation times from weeks to hours.

Recommended for companies with no major financing needs or a simple ownership structure. For multiple partners, shareholders’ agreements or tailored governance, the public deed provides greater legal certainty.

S T O C K C O M PA N Y ( S PA )

SpA: the standard investment vehicle

The SpA is a capital vehicle, very commonly used to channel investment into Chile, that combines the flexibility of a capital company with formalities markedly lighter than those of the stock corporation. It is governed by Articles 424 et seq. of the Commercial Code and, in matters not covered by its bylaws or those provisions, supplementarily by the rules of the closely held S.A.

Its main features are as follows.

It may be incorporated by public deed or by private instrument with signatures certified and protocolized before a notary, registering and publishing the extract within sixty days, or under the simplified regime of Law No. 20,659. Its main features:

It is formed by one or more shareholders, individuals or legal entities, Chilean or foreign, with liability limited to the amount of their contributions.

Capital is divided into shares and the law requires no minimum amount. Unless the bylaws provide otherwise, subscribed capital must be paid in within five years of incorporation, on pain of being reduced by operation of law to the amount actually paid.

Its most distinctive feature is broad statutory freedom, which allows nearly every aspect of the company’s operation to be regulated — from management (one or more administrators, a third party or a board) and voting rights to share series with differentiated rights, dividends and shareholder entry and exit mechanisms.

Unlike the stock corporation, it is not dissolved when all shares come to be held by a single owner, unless the bylaws so provide — making it ideal both for the individual entrepreneur and for a subsidiary wholly controlled by a foreign parent.

S TO C K C O R P O R AT I O N ( S . A . )

S.A.: tradition and formality

The stock corporation is the most traditional and formal structure in Chilean law: a legal entity formed by a common fund supplied by shareholders liable only for their contributions, managed by a board of essentially removable directors. It is governed by Law No. 18,046 and its regulations.

It is incorporated by public deed, the extract of which must be registered with the Commerce Registry and published in the Official Gazette within sixty days. The closely held form may use the simplified regime of Law No. 20,659; special corporations require the regulator’s authorization to exist. Capital must be fully subscribed and paid within three years of incorporation, and is reduced by operation of law to the amount paid if not completed within that term. It requires a minimum of two shareholders and is dissolved by operation of law if all shares come to be held by one person for an uninterrupted period exceeding ten days, except in the cases exempted by law.

Closely held S.A. Closely held stock corporation. It does not publicly offer its securities. Board of at least three members, shares not traded on an exchange and, as a general rule, no permanent CMF supervision or reporting. It is the usual alternative for ventures with several shareholders that do not open their capital to the securities market and seek the protection of formal legal requirements.

Publicly held S.A. Publicly held stock corporation. It publicly offers its securities or meets the other conditions established by law and the CMF. Board of at least five members, registration of its shares in the CMF Securities Registry and permanent supervision, with disclosure, transparency and corporate governance obligations. Unless unanimously agreed otherwise, it must distribute at least thirty percent of the year’s net profits as an annual dividend.

Special S.A.s Banks, insurance companies, fund managers and other entities with their own legal statute. Their incorporation requires the regulator’s authorization to exist and they remain under the permanent supervision of the CMF or another competent agency.

SRL AND EIRL

Limited liability company (SRL)

It is incorporated by public deed, with registration of the extract in the Commerce Registry and publication in the Official Gazette within sixty days, or through the simplified route of Law No. 20,659. Its business name must end with the word “Limitada”; omitting that word makes the partners jointly and severally liable for the company’s obligations.

Its logic is more personal and closed than the SpA’s. Any amendment of the bylaws requires, as a general rule, the unanimous agreement of the partners — unanimity usually also required to assign partnership rights, admit or withdraw partners and increase capital. That rigidity has displaced it in favor of the SpA, though it remains useful for a closed, stable company with few partners who value joint control.

BRANCHOFAFOREIGNCOMPANY

Operating without a subsidiary: the branch

The agency or branch allows a foreign company to operate in Chile without creating an entity with its own legal personality. It is not an independent legal person, but an extension of the parent company within Chilean territory. It is governed by Articles 447 et seq. of the Commercial Code and by Law No. 18,046. To establish one, the law contemplates, in general terms, the following steps:

1 Protocolize before a notary the documents evidencing the parent’s incorporation and good standing, a certified copy of its bylaws and the agent’s general power of attorney, legalized or apostilled and translated into Spanish where applicable.

2 Execute a public deed in which the agent declares, among other statements, that the parent knows and submits its assets located in Chile to Chilean law, that the branch will maintain readily realizable assets sufficient to answer for its obligations, and that the agent assumes the representation with broad powers.

3 Register the extract with the Commerce Registry and publish it in the Official Gazette within sixty days. Thereafter, the branch is required to publish its balance sheet annually in the Official Gazette.

Its most significant consequence lies in the risk: the foreign parent is fully and unlimitedly liable, with all of its assets, for the obligations incurred through the branch in Chile. It allows operating without a local company, but does not insulate the parent.

C O M PA R AT I V E TA B L E

The vehicles, side by side

↳ Comparison table available in the PDF

OVERVIEW

An open framework, no prior authorization

Chile maintains one of the region’s most open frameworks for foreign investment, with no general prior authorization and full freedom for a foreign investor to own one hundred percent of a Chilean company. The relevant question is not whether you can invest, but under which statute to channel the capital to secure access to the formal foreign exchange market, repatriation of profits and protection against regulatory risk.

Principle of non-discrimination The law allows investment in virtually every sector without restricting full foreign ownership. This openness is complemented by the constitutionally rooted principle of non-arbitrary discrimination, under which the foreign investor receives treatment equivalent to a national.

Narrow sectoral limitations nonetheless remain — maritime cabotage, media, fishing, border areas and strategic activities reserved to the State such as nuclear energy and hydrocarbons — whose details, including the corporate types required in each case, are covered in the Business legal structures chapter of this report.

E S TAT U TO L E Y N ° 2 0 . 8 4 8

The Foreign Direct Investment Statute

The Foreign Direct Investment Statute, contained in Law No. 20,848, is an elective protection framework for eligible foreign direct investment; it replaced the former Decree Law No. 600 of 1974. It was published on June 25, 2015, and the Foreign Investment Promotion Agency that administers it began operating on January 21, 2016. Its application is voluntary: the investor may opt in to obtain the certificate and the associated rights, or channel the capital through the general foreign exchange route.

Scope and concept of investor Under Article 3 of Law No. 20,848, a foreign investor is an individual or legal entity formed abroad, neither resident nor domiciled in Chile, that transfers capital into the country under the terms of Article 2, and includes companies, foundations, foreign States and international organizations. Unlike DL 600, it does not benefit Chileans.

Forms of investment and minimum amount Article 2 of Law No. 20,848 defines foreign direct investment as the transfer into the country of capital or assets of a foreign investor for an amount equal to or greater than USD 5,000,000 or its equivalent in other currencies, which is the minimum amount to opt into the statute. It may take the form of freely convertible foreign currency, physical assets, capitalizable technology, loans from related companies, capitalization of loans, reinvestment of profits, or the acquisition of a stake in a Chilean company conferring control of at least 10% of the voting rights. Access to the Formal Foreign Exchange Market derives from Article 6 and the exchange regulations.

Procedure and investor certificate An investor wishing to opt in must request the certificate under Article 4 of Law No. 20,848 from the Foreign Investment Promotion Agency. The application must evidence the completion of the investment and its supporting documents. The Agency issues the certificate within fifteen days of receipt; once that period lapses without a decision, the rules of Law No. 19,880 on administrative procedures apply.

INVESTOR RIGHTS

Rights that give the operation stability

The statute recognizes, in Articles 5, 6, 8 and 9 of Law No. 20,848, rights that give the operation stability.

Remit abroad the transferred capital and net profits, once tax obligations in Chile have been met.

Access the formal foreign exchange market to convert the investment’s currency and obtain the currency for remittances, at a freely agreed exchange rate.

Exemption from Value Added Tax on the import of capital goods, subject to the legal requirements.

Treatment under the common regime applicable to domestic investors, without arbitrary discrimination. Any claims must be pursued before local courts.

VAT exemption on the import of capital goods Article 8 of Law No. 20,848 ties the VAT exemption for capital goods to Article 12, letter B, No. 10 of Decree Law No. 825. It is available to investors and recipient companies with projects in sectors such as mining, industry, forestry, energy, infrastructure, telecommunications, technological research and development, and the medical-scientific field. The investment must reach at least USD 5,000,000 and the exemption applies to capital goods of projects that will generate revenue no earlier than twelve months after the acquisition of the first goods. To obtain it, the investor files an application with the Ministry of Finance, attaching its foreign investor certificate where applicable. The Ministry must decide within sixty calendar days of receiving all documents; failing that, the application is deemed approved.

Articles 10 to 14 of Law No. 20,848 govern the foreign investment promotion strategy and the Committee of Ministers advising the President of the Republic. In any event, every project must comply with general and sectoral regulations, and may therefore require permits beyond those of the statute.

CAPÍTULO XIV

The Central Bank’s alternative mechanism

A foreign investment may be registered under Chapter XIV of the Central Bank’s Compendium of Foreign Exchange Regulations, as an alternative to the Law No. 20,848 statute. These rules govern loans, deposits, investments and capital contributions from abroad, and do not apply to transactions of up to USD 10,000 or its equivalent. The transaction must be channeled through the formal foreign exchange market and reported to the Central Bank using the corresponding registration forms.

Chapter XIV allows capital inflows to be channeled and reported without requesting the Law No. 20,848 certificate, but it follows a different logic. It is only a foreign exchange and reporting route; by itself it grants none of the statute’s benefits and gives no access to the VAT exemption. Its contribution forms are narrower than the statute’s, since the investment is channeled through the inflow of foreign currency or pesos from abroad, and it also admits capital contributions paid in with shares or equity rights of companies formed abroad, pursuant to Chapter XIV of the Compendium. The statute, by contrast, guarantees access to the formal foreign exchange market to remit capital and profits and the option to request the VAT exemption.

COMPARINGTHEROUTES

The capital inflow routes, side by side Alternative mechanism — Chapter XIV of

↳ Comparison table available in the PDF

P R OT E C T I O N T R E AT I E S

Investment protection treaties and free trade agreements

Chile has an extensive network of international agreements that can give foreign investors additional protection, through Investment Promotion and Protection Agreements and free trade agreements with investment rules. These instruments typically complement domestic law with standards such as fair and equitable treatment, national treatment, most-favored-nation treatment, protection against expropriation without adequate compensation, free transfer of funds and investor–State dispute settlement, subject to each treaty’s requirements.

Coverage depends on the applicable treaty, the investor’s nationality or structure, the protected asset and the reservations agreed by Chile. Before structuring a significant investment, check whether an agreement is in force with the jurisdiction from which the capital will be channeled and whether it contains substantive protection rules or access to international arbitration. The agreements in force can be consulted on the website of the Subsecretaría de Relaciones Económicas Internacionales (SUBREI).

EXECUTIVE MAP

What protects you and what does not

The economic guarantees of the 1980 Constitution — whose validity was confirmed after the rejection of the 2022 and 2023 reform proposals — operate as the baseline protection framework for every investment in Chile.

Guarantee What it means for your company Limit or real risk

Freedom of economic You can operate in any lawful business without asking Regulated businesses (banking, insurance, activity permission for being foreign. Freedom is the rule; regAFPs, media, fishing, cabotage) have specific Art. 19 N° 21 ulation is the narrow exception. sectoral requirements. See Business legal structures.

No State discrimination The State cannot treat you differently from a local The test is arbitrariness, not mere inequality; Art. 19 N° 22 competitor without legal grounds. If a competitor lawful, proportionate differences are valid. receives an arbitrary regulatory advantage, that difference can be challenged.

Intellectual and industrial Trademarks, patents and intangible assets enjoy Effective protection depends on prior registraproperty autonomous constitutional protection, in addition to tion; unregistered rights are harder to defend. Art. 19 N° 25 the Industrial Property Law.

R E G U L ATO R Y E X P R O P R I AT I O N

The real risk: regulatory, not formal, expropriation

Direct expropriation — decree, seizure of assets, compensation — is the risk investors fear most and the one that occurs least in Chile. The real operational risk is regulatory or indirect expropriation: a regulatory change that strips your concession, license or business model of value without formally transferring the property.

The constitutional guarantee is not enough Chile’s constitutional guarantee does not automatically cover indirect expropriation. The protection of Article 19 No. 24 operates against the formal deprivation of property, not against rule changes that erode the value of the business.

Treaties add the missing layer A bilateral investment treaty (BIT) or the investment chapter of an FTA can provide additional coverage through fair and equitable treatment standards. See Foreign investment.

The entry jurisdiction defines access The choice of the jurisdiction from which the investment is structured can be decisive for accessing that arbitral protection. An intermediate holding company in a country with a BIT in force with Chile makes the difference.

AVENUESOFRECOURSE

How to seek redress: the three avenues

Faced with a State act affecting the investment, Chilean law offers three paths, with very different deadlines and scope.

Avenue When to use it Key deadline Practical limitation

Constitutional protection An unlawful or arbitrary act 30 calendar days High inadmissibility rate if another action threatening an economic constifrom the act or from suitable avenue exists; it does not Art. 20, Constitution tutional right; an emergency when it became resolve disputes on the merits. response. known.

Ordinary courts Expropriation, damages, breach Depends on the type Lengthy procedural timelines; it is of contract by the State. of action. advisable to agree to arbitration in contracts with the State where the law allows.

INSTITUTIONS

Institutions that reduce sovereign risk

Three independent bodies limit arbitrary State behavior and provide operational certainty.

Judiciary Courts of Appeals and a Supreme Court with guarantees of independence. The Constitutional Court can declare a rule inapplicable in a specific case. The system is predictable though not always fast; define dispute resolution mechanisms in your contracts and consider arbitration.

Office of the Comptroller General It reviews the legality of administrative acts before they take effect (toma de razón). It reduces executive arbitrariness and gives certainty about the validity of the acts authorizing your operation.

Autonomous Central Bank It is constitutionally barred from financing public spending by issuing money. It anchors monetary stability and access to the formal foreign exchange market. See Foreign investment for the foreign exchange access rules.

BUSINESS READING

The right question is not “Can the State expropriate me?” but “What do I do if the rules

of my sector change?”

The constitutional protection action allows 30 days — a period that runs out before the board even meets — and the ordinary courts are not fast. Real protection comes from three decisions taken before investing: structuring from a jurisdiction with a BIT in force with Chile, documenting asset value from day one, and negotiating stabilization clauses in contracts with the State where possible. The constitutional guarantee is the floor, not the ceiling, of your protection.

1 Structure from a jurisdiction with a BIT in force with Chile.

2 Document asset value from day one.

3 Negotiate stabilization clauses in contracts with the State where possible.

INCOMETAX

The architecture of the system General structure and concept of income

The Income Tax Law (Article 1 of DL 824 of 1974) taxes income in broad terms, as all benefits, profits and increases in net worth that are received, accrued or attributed, whatever their nature, origin or name. It combines a company-level tax with final taxes at the owner level. The company-level tax is the First Category Tax (IDPC). The final taxes are two: the Global Complementary Tax — on individuals domiciled or resident in Chile, on their worldwide income, at graduated rates — and the Additional Tax — on persons and entities without domicile or residence in Chile, on their Chilean-source income, generally at a 35% rate. There is also the Second Category Single Tax on employment income. The IDPC paid by the company operates as a full or partial credit against the owner’s final tax; this integration is the centerpiece of the system and defines the investment’s total burden.

Residence, domicile and source Persons and entities domiciled or resident in Chile are taxed on their worldwide income; non-residents, only on their Chilean-source income. This distinction determines the investor’s entire taxation. An individual is a resident when they remain in Chile, continuously or not, for more than 183 days within any twelve-month period. The Income Tax Law does not define domicile, so the Civil Code applies, which understands it as residence accompanied by the intention to remain. As an incentive, a foreigner who establishes domicile or residence in Chile is taxed only on Chilean-source income during the first three years, a period the authority may extend; thereafter, they are taxed on worldwide income. Income is Chilean-source when it derives from assets located in Chile or activities carried out in the country, regardless of the taxpayer’s domicile.

INCOMETAX

Income tax regimes

Law 21,210 of 2020 reorganized the income tax regimes by company size and nature of activity. The two relevant to most investors are the partially integrated general regime — or semi-integrated — and the Pro Pyme regime. The partially integrated general regime (Article 14, letter A of the LIR) is the rule for larger companies. It applies a 27% IDPC on net taxable income, determined under full accounting. Owners are taxed on withdrawal, remittance or distribution, and credit 65% of the IDPC; the remaining 35% must be clawed back, hence the name “partially integrated.” The Pro Pyme regime (Article 14, letter D, No. 3), for smaller companies, applies a permanent 25% IDPC on a cash flow basis and integrates the credit fully, without the 35% clawback. There are also the tax transparency regime, the presumed income regime — for certain agricultural, mining and transport activities — and a special regime for taxpayers whose owners are not subject to final taxes, such as foundations and corporations.

Regime Statute IDPC rate Credit integration Tax base

Pro Pyme Art. 14 D N° 3, 25% permanent; 12.5% for business years 100% (no Simplified cash flow general LIR (DL 824) 2025, 2026 and 2027, and 15% for business clawback) year 2028

Pro Pyme Art. 14 D N° 8, Exempt at company level Direct attribution Cash flow, taxed at transparent LIR (DL 824) to the owner owner level

Presumed Art. 34, LIR (DL IDPC on a presumed base, by activity By activity Presumed (percentage income 824) of a reference value)

INCOMETAX

First Category and Global Complementary taxes

First Category Tax The IDPC taxes capital income, per the classification of Article 20 of the LIR. It is a proportional-rate tax, declared and paid annually. It covers income from commerce, industry, mining, real estate exploitation, income from movable capital and, in general, any income whose taxation is not provided for in another category or exempted.

The tax base is net taxable income, determined by deducting direct costs from gross income, then necessary expenses, and applying the legal adjustments, including monetary correction for inflation. An expense is deductible when it is necessary to produce the income of the current or future years, relates to the business, is paid or owed in the period and is substantiated before the SII. For payments abroad, deduction is on a paid basis and requires the corresponding Additional Tax to be declared and paid. Tax losses are carried forward indefinitely, but not back; they are non-transferable and may only be used by whoever generated them. During the year, IDPC taxpayers make monthly provisional payments (PPM) on account of the annual tax, which is paid with the April return, adjusted for inflation.

Global Complementary Tax The Global Complementary Tax applies to individuals domiciled or resident in Chile on their worldwide income, at a progressive rate starting at 0% and reaching a top marginal rate of 40%. Its base gathers income withdrawn from or distributed by companies, gains on movable capital and employment income, the latter added only to increase the rate. The IDPC paid by the company on the profits it distributes is credited; when it exceeds the final tax, the individual may request a refund of the excess. Under the partially integrated regime, the creditable amount is 65% of the IDPC, raising the owner’s maximum burden to 44.45%.

INCOMETAX

Employment income and the Additional Tax

Second Category Single Tax The Second Category Single Tax applies to dependent employment income — wages, salaries and, in general, remuneration and pensions of those providing services under subordination and dependence — pursuant to Articles 42 No. 1 and 43 No. 1 of the LIR. It is a withholding tax; the employer deducts and remits it monthly, so the worker generally files no annual return for this income. Its rate is progressive in brackets over monthly remuneration, mirroring the Global Complementary Tax structure on a monthly basis. It starts with an exempt bracket and reaches a top marginal rate of 40%. Brackets are expressed in monthly tax units (UTM), which indexes the scale to inflation. The tax is “single” while the worker earns income from one employer only. When they receive simultaneous remuneration from more than one employer, or also earn other income subject to final taxes, they must re-liquidate in the annual Global Complementary Tax return, crediting the tax already withheld. Fees under Article 42 No. 2 of the LIR are not subject to this single tax; they are taxed under the Global Complementary Tax.

TAXBURDEN

Integration: 35% with a treaty, 44.45% without

The system integrates the company’s tax with the owner’s. The company pays IDPC; upon distributing profit, the owner pays the final tax and credits the IDPC already paid. The decisive question is what percentage of that credit can be applied, which under the partially integrated general regime depends on the owner’s residence. If resident in a country with a treaty in force, they credit 100% of the IDPC and the combined burden stays at 35%. If resident in a country without a treaty, they credit only 65%, must return the remaining 35%, and the combined burden rises to 44.45%. This same clawback affects individual shareholders resident in Chile. The table shows the mechanics on a profit of 100 under the partially integrated regime.

Item With treaty Without treaty

Net taxable income 100 100

IDPC (27%) paid by the company 27 27

Profit distributed to the foreign shareholder 73 73

Grossed-up Additional Tax base 100 100

Additional Tax (35%) 35 35

17.55 (65% of IDPC, after the IDPC credit (net of clawback) 27 (100% creditable) clawback)

Additional Tax payable (35 minus net credit) 8 17.45

Total tax burden 35% 44.45%

Net remittance received by the investor 65 55.55

Under the Pro Pyme regime the credit is applied in full, without clawback, so the owner’s combined burden does not reach 44.45% even if resident in a country without a treaty. This makes Pro Pyme attractive not only for its lower IDPC rate, but for its full integration.

IVA

Value Added Tax

VAT is an indirect consumption tax, governed by DL 825 of 1974, operating on a debit-and-credit basis. The VAT charged on the taxpayer’s sales and services is its fiscal debit; the VAT borne on its purchases is its fiscal credit. The difference, when debit exceeds credit, is the tax payable for the period. The general rate is 19%, set by Article 14 of DL 825, in force in 2026. As a general rule, taxable events include the habitual sale of tangible movable goods and constructed real estate located in Chile and services rendered or used in the country, plus imports, construction contracts, the leasing of furnished real estate and the licensing of trademarks, patents and processes.

Chilean VAT follows the destination principle. It taxes imports, but not exports; although exports are exempt, the exporter may recover the fiscal credit borne on purchases and services destined for its export activity, even through a cash refund. There is also a mechanism to recover VAT borne on fixed asset acquisitions, designed not to penalize investment.

Digital services from abroad Law 21,210 brought digital services provided from abroad into VAT. A foreign provider supplying remote services to be used in Chile by consumers who are not VAT taxpayers must charge and remit the tax, for services such as digital entertainment, software, storage, platforms, IT infrastructure and advertising. If the user in Chile is a VAT taxpayer, the obligation to declare and pay shifts to that user.

Exemptions and administration Among the exemptions relevant to the investor is the import of capital goods destined for investment projects, under the foreign investment framework, which requires an application to the Ministry of Finance and compliance with the requirements of Article 12, letter B of the VAT Law. Exports of goods and certain services classified as exports by the National Customs Service are also exempt. VAT is declared and paid monthly, no later than the 12th of the following month, extended to the 20th when filed online. The system requires documentary support — invoices, credit and debit notes, dispatch guides, today generally electronic — to use the credit-and-debit mechanism.

REMITTANCESABROAD

Taxation of foreign investment and remittances

A non-resident is taxed only on Chilean-source income. Remittances sent by the Chilean company or subsidiary to its foreign owners are, depending on their nature, subject to the Additional Tax at rates the law differentiates and treaties may reduce.

Profit distributions. Subject to a 35% Additional Tax, with the right to credit the IDPC under the integration rules already described. They produce the 35% burden with a treaty or 44.45% without one.

Interest. As a general rule, 35%. A reduced 4% rate applies to loans granted from abroad by foreign or international banks or financial institutions, subject to conditions; treaties may lower it, usually to 10% or 15% depending on the creditor’s country. The thin capitalization rule of Article 41 F of the LIR applies: when total annual indebtedness exceeds three times equity at year-end, the excess is taxed with a single 35% tax, with the right to credit the Additional Tax declared and paid on those items.

Royalties. As a general rule, 30% under Article 59 of the LIR. The rate drops to 15% for certain royalties, such as those paid for the use of invention patents, utility models, industrial designs and drawings, and for the use of certain computer programs, without prejudice to treaties. To deduct as an expense a royalty paid abroad to a related entity, the payment must not, as a general rule, exceed 4% of the year’s sales and services revenue, unless the rate in the beneficiary’s country is 30% or higher or the transaction is between unrelated parties.

Services. As a general rule, 35%, with a reduced 15% rate for certain engineering, technical and professional services rendered inside or outside Chile. The law exempts from withholding certain services rendered abroad — freight, loading and unloading, storage, certain insurance and reinsurance operations, export commissions, international telecommunications — subject to the requirements of Article 59 of the LIR and to treaties.

Indirect sales. Capital gains of a non-resident on the disposal of shares or rights in companies formed abroad are subject to a 35% Additional Tax when those companies have an underlying asset located in Chile and the legal requirements are met, regardless of the buyer’s domicile. This prevents the sale of a foreign company from leaving the underlying Chilean asset untaxed.

SME REGIMES

SME regimes and benefits

The Income Tax Law offers regimes aimed at small and medium-sized companies, introduced by Law 21,210 of 2020. To qualify as an SME, gross revenue must not exceed an average of UF 75,000 over the last three years, counting related parties, with a cap of UF 85,000 in any single year; effective capital at the start of activities must not exceed UF 85,000; and at least 65% of revenue must come from non-passive activities.

Pro Pyme general (Art. 14 D No. 3). A permanent 25% IDPC rate, temporarily reduced to 12.5% for business years 2025, 2026 and 2027, and to 15% for business year 2028, under Law 21,755, published on July 11, 2025; the temporary reduction is conditional on the employer contribution of the pension reform reaching the level set for each year. It is taxed on a cash flow basis, with immediate depreciation of fixed assets, and owners credit the IDPC paid in full, without the general regime’s 35% clawback. Disallowed expenses are subject to a 40% penalty tax. The PPM has a preferential 0.25% rate in the start-up year and when prior-year gross business revenue does not exceed UF 50,000; above that, the rate is 0.5%; the same Law 21,755 halved these provisional payments for business years 2025 to 2027.

Pro Pyme transparent (Art. 14 D No. 8). Available to SMEs whose owners are final-tax taxpayers, upon notice before the close of the fourth month of the year. The company is exempt from IDPC, and owners are taxed on an attributed basis on the income the company generates, regardless of withdrawals; the penalty tax on disallowed expenses does not apply. For structures with foreign investors, it requires verifying that the owners qualify as Global Complementary Tax or Additional Tax taxpayers.

Presumed income (Art. 34). An exception that can benefit agricultural, mining and transport SMEs, when effective income exceeds the presumed amount. The annual sales or net revenue limits are UF 9,000 for agriculture, UF 5,000 for transport and UF 17,000 for mining. Income is presumed at 10% of the property’s fiscal appraisal in agriculture; 10% of the vehicle’s current market value in transport; and per the legal scale on annual sales in mining. The option is exercised within the first four months of the year; whoever abandons it cannot return to it for five years.

Other benefits. The savings incentive of Article 14 E of the LIR, which allows deducting a portion of reinvested net taxable income, subject to a legal cap; instant or accelerated depreciation under certain regimes; and the fixed asset investment credit of Article 33 bis of the LIR, applied against the IDPC, with an annual cap of 500 UTM. Their availability depends on the regime, the revenue level and the type of asset or investment.

TRANSFER PRICING

Transfer pricing and anti-avoidance rules

Transfer pricing Cross-border transactions between a Chilean taxpayer and related parties abroad must be agreed at market values. Article 41 E of the LIR empowers the SII to challenge prices, values or returns when they do not reflect market conditions between independent parties, and imposes an annual transfer pricing sworn declaration filed each June. When the SII identifies a discrepancy with normal market value, the adjustment is subject to the single tax of the first paragraph of Article 21 of the LIR, currently 40%, plus a possible 5% fine on the difference under Article 41 E, unless the taxpayer timely provided the required information.

General anti-avoidance rule A hallmark of the system is the primacy of substance over form. Article 4 bis of the Tax Code requires tax obligations to be recognized and enforced according to the legal nature of the facts, acts or transactions performed, regardless of the form or name the parties gave them. It is the basis of the general anti-avoidance rule, which distinguishes two figures. Abuse of legal forms exists when, through acts with no relevant legal or economic result or effect other than the tax saving, the taxable event is avoided, the base is reduced or the obligation is deferred. Simulation exists when acts conceal the configuration of the taxable event, its true amount or its date. The law simultaneously recognizes legitimate tax options, allowing a reasonable choice among the alternatives the law itself provides.

LEY 21.713

The tax compliance reform

Law 21,713 of 2024 — enacted on October 21 and published on October 24, 2024 — reformed the tax compliance regime across the board. It amends the Tax Code, the Income Tax Law and the VAT Law, among other statutes. Its contents include the general anti-avoidance rule and the concept of abuse — adjusted shortly afterwards by Law 21,716 of 2024 — the SII’s access to banking information and bank secrecy, passive income, exporter VAT, purchases through digital platforms, the fight against informality and organized crime, and the creation of a Tax Council within the SII. The reform confirms the Chilean system’s direction toward greater compliance control. For the investor, aggressive tax planning has less room and transaction documentation gains importance.

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of your structure in Chile?

LEGAL FRAMEWORK

Legal framework and principles

Private sector labor relations are governed by the Labor Code (consolidated text set by DFL No. 1 of 2002 of the Ministry of Labor and Social Security). The right to work and to a non-discriminatory environment has constitutional rank under Article 19 No. 16 of the Constitution, and Article 2 of the Labor Code prohibits discrimination on grounds of race, sex, age, marital status, union membership, religion and nationality, among others.

Administrative enforcement and interpretation fall to the Labor Directorate, through the Labor Inspectorates, whose rulings set criteria binding on the employer, though not on the courts. Disputes are resolved before the Labor Courts, with challenges through the annulment appeal and, exceptionally, the unification of case law before the Supreme Court.

The organizing principle of the field is the primacy of reality. What defines an employment relationship is not the contract’s name, but the effective presence of subordination and dependence. Article 7 of the Labor Code defines the individual contract as one under which the worker renders personal services under the employer’s direction and dependence in exchange for remuneration. When a “fee-based” contractor keeps a schedule, receives instructions and depends economically on the company, courts tend to recognize an employment relationship with all its consequences, whatever the invoice says.

EMPLOYMENT CONTRACT

The employment contract

The contract must be in writing and Article 10 of the Labor Code lists its minimum clauses, including identification and nationality of the parties, nature of the services, place of work, working hours, remuneration and start date. The employer must make the contract available to the worker within 15 days of starting, or 5 days if it is for a specific job or service or for less than 30 days. Failure to do so exposes the employer to a fine and creates a presumption that the worker’s account of the terms is true. After signing, the employer must register it electronically on the Labor Directorate’s portal within 15 days.

Under Article 10 of the Labor Code, the contract must contain, at a minimum, the following stipulations.

· Place and date of the contract

· Identification of the parties, indicating the nationality, domicile and email address of both, if any, and the worker’s dates of birth and start of employment.

· Description of the nature of the services and the place or city where they are to be rendered; the contract may specify two or more specific functions, whether alternative or complementary.

· Amount, form and payment period of the agreed remuneration.

· Duration and distribution of working hours, unless the company operates a shift system, in which case the internal regulations apply.

· Any other terms the parties agree upon.

Where applicable, the contract must also state any additional benefits provided by the employer in the form of housing, electricity, fuel, food or other in-kind benefits or services.

EMPLOYMENT CONTRACT

Hiring modalities

The law prefers the indefinite-term contract, but admits temporary modalities. The fixed term has a maximum of one year, extendable to two for managers or persons with a professional or technical degree, and becomes indefinite upon a second renewal, upon continuation with the employer’s knowledge after expiry, or upon 12 or more months of discontinuous service within 15 months of the first hiring. The contract for a specific job or task lasts as long as the work does, but chaining stages of the same work into successive contracts makes the relationship indefinite. There is no general probationary period, except for domestic workers (up to two weeks); in practice it is replaced by an initial fixed term that, if satisfactory, becomes indefinite.

WORKING HOURS

Working hours

Ordinary working hours are being gradually reduced by Law No. 21,561, published on April 26, 2023 (the 40-Hour Law). The current cap and its evolution are as follows.

44 h 42 h 40 h 44 hours per week from April 26, 42 hours per week from April 26, 40 hours per week from April 26, 2024. 2026 (the cap in force as of this 2028. report’s cutoff date).

The reduction does not authorize cutting remuneration, and the Labor Directorate clarified that Law No. 21,561 does not require a proportional reduction for relationships whose hours are already below 40 (Ruling ORD. No. 886/34, of December 26, 2024). The same law narrowed the categories that may be excluded from the hours limit to managers, administrators, attorneys-in-fact with management powers and those rendering services without immediate senior supervision.

Overtime Overtime is capped at two hours per day with a surcharge of at least 50% over the agreed salary. It may only be agreed for the company’s temporary needs, in writing and for a term of no more than three months, renewable. The 40-Hour Law also allowed overtime to be compensated with rest days, up to five per year.

Remote work and telework Remote work and telework, regulated since 2020, require a written agreement specifying the modality, the place of performance, supervision, treatment of working hours and a disconnection of at least 12 continuous hours of rest in every 24-hour period. Law No. 21,561 also added, for workers with children up to 12 or with their personal care, whatever their work modality, the right to a two-hour band within which they may bring forward or push back the start of their day by up to one hour.

REMUNERATION

Remuneration

The base salary cannot be lower than the monthly minimum wage for a full ordinary workweek. Law No. 21,751, published on June 28, 2025, set the value in force from January 2026, and Law No. 21,830, published on June 22, 2026, provided the adjustment applying from May 2026.

$553.553 $412.938 Workers over 18 and up to 65. CLP 539,000 gross per Workers under 18 and over 65. CLP 402,082 from month from January 1, 2026 (Law No. 21,751) and CLP January 1, 2026 and CLP 412,938 from May 1, 2026. 553,553 from May 1, 2026 (Law No. 21,830).

From January 1, 2027, the minimum wage will be adjusted automatically per accumulated CPI variation between May 1 and December 31, 2026, so confirm the value in force when setting salary bands.

Statutory profit-sharing bonus The statutory profit-sharing bonus is an annual benefit that a for-profit company must pay when it earns net profits, and there are two alternatives. Article 47 of the Labor Code requires distributing among workers no less than 30% of those profits. Article 50 offers the alternative most companies adopt: paying each worker 25% of monthly remuneration accrued in the year, with an annual cap of 4.75 monthly minimum wages, which exempts the company from the 30% rule whatever the profit and makes the cost predictable. Remuneration is subject to the Second Category Single Tax, which the employer withholds and remits to the Treasury, progressive from 0% to 40%. See Taxation.

VA C AT I O N A N D L E AV E

Annual vacation and leave

Annual vacation is 15 business days (Monday to Friday, excluding holidays) with full pay, for workers with more than one year of service, and 20 business days in the Magallanes and Chilean Antarctica and Aysén regions and the province of Palena. The excess over ten days may be split by agreement, and up to two consecutive periods may be accumulated.

Progressive vacation. Grants one additional day for every three further years to anyone with ten accumulated years of work, with a limit of ten creditable years from previous employers.

Collective vacation allows the establishment to close by aligning the closure with staff vacation.

Law No. 21,645, on work-life balance, added preferential vacation timing during school holidays for those with personal care of a child under 14 or an adolescent under 18 with a disability or dependence.

Only absences for illness, pregnancy and maternity or paternity leave carry a right to pay or subsidy; any other absence must be agreed between the parties. Subsidized medical leave has no annual limit, subject to prior affiliation and contribution to the health system.

TERMINATION

Termination of the employment relationship

Dismissal in Chile always requires cause. At-will dismissal does not exist, and the company must invoke an express legal ground, even when terminating several workers at once, since the law has no special rules for collective dismissal. The grounds are in Articles 159, 160, 161 and 163 bis of the Labor Code, and severance depends on which is invoked.

Article 159 · objective grounds. Mutual agreement, resignation with 30 days’ notice, death of the worker, expiry of the term, completion of the job or service, and acts of God or force majeure. None gives a right to years-of-service severance.

Article 160 · forfeiture for acts attributable to the worker. Lack of probity, sexual harassment, physical assault, insults, unjustified absence, abandonment of work, intentional material damage and serious breach of contract. It also gives no right to years-of-service severance.

Article 161 — grounds generating severance. Needs of the company, establishment or service (rationalization, modernization, falling productivity or market changes); and written notice of termination, applicable to workers with management powers or positions of exclusive trust, dismissable by notice without stating cause. Article 163 bis. The employer’s entry into liquidation insolvency proceedings.

The settlement and its components Upon termination, amounts owed must be paid in the settlement (finiquito), which includes: Outstanding remuneration and statutory or proportional vacation. Always payable, whatever ground is invoked.

Pay in lieu of notice. Applies only under Article 161 when the 30-day notice is not given; equal to the last monthly remuneration, capped at UF 90.

Years-of-service severance. Also under Article 161; accrues for each year and fraction over six months of continuous service with the same employer; equal to one month of remuneration per year, subject to the caps of Article 172 of the Labor Code, i.e. a maximum of 11 years of service and a base limited to UF 90 of monthly remuneration.

TERMINATION

Formalities, the Bustos Law and surcharges

Dismissal formalities and the Bustos Law Dismissal must be communicated in writing, stating the ground and the facts, within three business days of separation, and reported to the Labor Inspectorate and registered electronically within the same period, extended to ten days in cases of mutual agreement, resignation or death.

Social security contributions must be up to date at the time of dismissal. If they are not, the Bustos Law applies, incorporated into Article 162 of the Labor Code by Law No. 19,631: the dismissal does not end the contract until the owed contributions are paid in, so the employer keeps paying remuneration until validation. The same Article 162 provides a narrow exception when the amount owed does not exceed the lesser of 10% of the social security debt or 2 UTM and is paid within 15 business days of service of the claim. The settlement must be signed before a certifying officer (notary) to be enforceable.

Surcharges for unjustified dismissal If the court declares the dismissal unjustified, undue or improper, the years-of-service severance is increased with the following surcharges:

+30% +50% +80% undue invocation of company improper application of Article 159 for unjustified application of Article needs (Art. 161) grounds 160 grounds; may reach 100% when the court also declares that the invoked ground lacks any plausible basis.

The deadline to claim is 60 business days, extended to 90 days with a prior administrative complaint.

RIGHTSIMMIGRATION

Job protection (fuero) and fundamental rights action

Certain workers enjoy fuero, which prevents their dismissal without prior judicial authorization. Protected groups include union leaders, pregnant and postpartum women, those involved in collective bargaining and members of the joint health and safety committee. In maternity matters, Article 201 of the Labor Code covers from pregnancy and, in general, up to one year after maternity leave ends.

Added to this is the fundamental rights action, which safeguards fundamental rights in the employment relationship, such as integrity, honor and privacy, freedom of conscience and expression, and non-discrimination. It lightens the worker’s burden of proof — they need only show indications of the violation — after which it falls to the employer to justify the proportionality and reasonableness of its conduct. If it occurs in connection with dismissal, the employer pays additional compensation set by the court, of six to eleven months of the last remuneration.

SUBCONTRACTING

Subcontracting and staffing services

Subcontracting is the arrangement in which a contractor habitually performs works or services, at its own account and risk and with its own employees, for a principal company, under a civil or commercial agreement. It is lawful, but the principal company is not insulated from the contractor’s labor and social security obligations toward its workers, including termination severance.

Liability is joint and several as a general rule, so the worker may pursue the principal or the contractor for the full amount. It softens to subsidiary when the principal exercises its information and retention rights — requiring the contractor to prove compliance with its labor and social security obligations and, upon breach, withholding from payments what is needed to cover the debts; it then answers only in subsidy, once enforcement against the contractor is exhausted.

Staffing services Staff supply through temporary services companies is allowed only in the cases the law authorizes, for limited periods, and the temporary services company must be registered with the Labor Directorate and post a guarantee; outside those cases, the user company is deemed the direct employer.

COLLECTIVERELATIONS

Unions and collective bargaining

The Constitution and the Labor Code recognize the right to form unions, federations and confederations without prior authorization, and the rights to bargain collectively and to strike. Membership is personal, voluntary and non-delegable; a worker may belong to only one union per job.

Forming a company union requires minimum quorums depending on size and whether another union already exists.

In companies with more than 50 workers, a minimum of 25 representing at least 10% of the total is required; with no existing union, one may be formed with 8, but it must reach the ordinary quorum within a year, on pain of forfeiting its legal personality.

In companies with 50 or fewer workers, a minimum of 8 representing at least 50% of the total is required.

Collective bargaining takes place, as a general rule, between the company and the union, with guarantees such as job protection for those involved and the right to strike within the regulated procedure. The resulting instrument binds the company and the covered workers for the agreed term.

LEY KARIN

Workplace harassment, sexual harassment and violence

Law No. 21,643, published on January 15, 2024 and known as the Karin Law, amended the Labor Code on the prevention, investigation and sanctioning of workplace harassment, sexual harassment and violence at work. It took effect on August 1, 2024 and was complemented by Law No. 21,687, published on July 31, 2024. It requires every company to have a prevention protocol, defines the investigation procedure upon a complaint and incorporated workplace violence by third parties outside the employment relationship.

A company receiving a complaint must adopt immediate protective measures and conduct an internal investigation with impartiality and defined deadlines, or refer the file to the Labor Inspectorate, applying any applicable sanctions. A worker who is a victim of harassment retains the right to constructive dismissal for serious employer breach, with the corresponding severance. Article 154 bis requires the employer to keep confidential the worker’s personal information obtained in connection with work.

SOCIAL SECURITY

Social security

The system rests on four pillars: pensions (old age, disability and survivorship), health (illness and maternity), workplace accident and occupational disease insurance, and unemployment insurance. As a general rule, pension and health contributions are borne by the worker, deducted and remitted monthly by the employer, while accident insurance and part of the other contributions are borne by the employer.

Pensions and the 2025 reform The system was built on the individual capitalization of DL No. 3,500 of 1980, administered by the AFPs. The worker contributes 10% of taxable remuneration to their individual account, plus the AFP’s commission. The legal retirement age is 65 for men and 60 for women, with no obligation to retire.

The 2025 pension reform operated on that base. Law No. 21,735, published on March 26, 2025, created a mixed pension system and a social insurance component in the contributory pillar, and improved the Universal Guaranteed Pension. Its core is a new employer contribution, phased up to 7%; added to the Disability and Survivorship Insurance contribution, the employer’s total pension-related burden reaches 8.5% of taxable remuneration at full phase-in toward 2033. Of that total, 4.5% goes to the worker’s individual capitalization account and the remaining 4% to the new Social Pension Insurance, administered through the Autonomous Pension Protection Fund (FAPP). Implementation began with an additional 1% contribution from August 2025; some benefits, such as the benefit for years contributed, are paid from January 2026. The reform also strengthened the Universal Guaranteed Pension, a non-contributory benefit created by Law No. 21,419 of 2022.

Health, accidents and unemployment The health contribution is 7% of taxable remuneration, borne by the worker, under a public (FONASA) or private (ISAPRE) regime, the latter with additional contributions for greater coverage. Workplace accident and occupational disease insurance is governed by Law No. 16,744 and borne exclusively by the employer, with a basic contribution plus an additional one based on risk; the Disability and Survivorship Insurance (SIS), covering the worker’s disability or death before accumulating retirement funds, is also employer-funded. The unemployment insurance of Law No. 19,728 is mandatory for all Labor Code workers, administered by the Unemployment Fund Administrator (AFC) with contributions from employer, worker and State depending on the contract type; it operates whatever the cause of termination and allows monthly withdrawals once unemployed, supplemented by a Solidarity Fund.

2026 CONTRIBUTIONS

2026 contributions and taxable caps

Item Reference rate Borne by 2026 taxable cap

Pension (individual account) 10% Worker UF 90

Health (FONASA or ISAPRE) 7% Worker UF 90

Unemployment, indefinite contract 0.6% worker and 2.4% employer Both UF 135.2

Unemployment, fixed-term contract 3% Employer UF 135.2

Disability and Survivorship (SIS) Borne by the employer Employer UF 90

Workplace accidents (Law 16,744) Basic plus additional based on risk Employer UF 90

Pension reform / SIS (employer) Phased up to 8.5% toward 2033 Employer UF 90

The taxable caps are set annually by the Superintendence of Pensions. For 2026, the cap for pensions, health and Law No. 16,744 is UF 90.0 per month, and for unemployment insurance UF 135.2, effective from February 2026 payrolls. The additional accident contribution rates and AFP commissions vary by activity and administrator, so the exact cost is calculated case by case.

FOREIGN WORKERS

Foreign workers and the immigration regime

Hiring foreigners is unrestricted, save for two limits. First, Article 19 of the Labor Code requires that in companies with more than 25 workers at least 85% of the workforce be Chilean nationals. For the calculation, the law provides softening rules: the total workforce in the country is considered, not per establishment; specialist technical staff irreplaceable by nationals are excluded; and a foreigner who is the spouse, civil partner or parent of a Chilean child, the widow or widower of a Chilean spouse, or has more than five years of residence counts as Chilean. The second limit is immigration authorization: the foreigner needs a residence permit authorizing work, governed by the Migration and Aliens Law.

RESIDENCE PERMITS

Authorization to work

The usual route to work is Temporary Residence in the subcategory of persons carrying out lawful paid activities, which requires, among other documents, a valid passport, a criminal record certificate from the country of origin or residence covering the last five years, an employment contract and proof of funds, and is applied for online through SERMIG. Once applied for in Chile and admitted to processing, the certificate of temporary residence in process authorizes a person over 18 to work while it is resolved.

From an employment perspective, what matters is which category authorizes work. The holder of a Transitory Stay Permit may not perform paid activities, except under an exceptional work authorization from SERMIG for specific, sporadic activities.

Category Authorizes work Reference duration

Yes, exceptional, specific and sporadic Work authorization (Transitory Stay) Up to 90 days, extendable once activities

Yes, dependent work with an employer in Temporary Residence · lawful paid activities Temporary and extendable Chile

Temporary Residence · seasonal workers Yes, for the authorized seasonal activity Limited to the seasonal work

Temporary Residence · multiple-entry business Does not replace a dependent work permit Up to six months per year

Temporary Residence — investors / Mercosur Depends on the subcategory or permit Temporary and extendable (reciprocity)

Permanent Residence Yes, any lawful activity Indefinite, subject to retention rules

Other temporary residence subcategories (seasonal workers, investors, multiple-entry business and Mercosur) are summarized in the table above. Family members obtain residence as dependents, but may not work unless they obtain their own authorization. After five years, an adult foreigner may access the vote and apply for naturalization.

Categories, requirements and timelines may change, so check the SERMIG portal before starting the process.

LEGAL FRAMEWORK

Legal framework

The regime is set out in Decree Law No. 211 of 1973, whose consolidated text was fixed by DFL No. 1 of 2004 (published March 7, 2005; hereinafter “DL 211”). Its Article 1 seeks to promote and defend free competition. Article 3 contains a deliberately broad general clause sanctioning anyone who, individually or collectively, executes or enters into any fact, act or agreement that prevents, restricts or hinders free competition, or tends to produce those effects. Given its open nature, any conduct may be covered even if not specifically typified.

Law No. 20,945, published on August 30, 2016, reformed DL 211 and structures the current regime. It established mandatory prior control of concentration transactions administered by the FNE; toughened sanctions, raising the fine cap and adding disqualifications; and strengthened leniency. Merger control took effect on June 1, 2017.

The criminal regime for collusion is affected by Law No. 21,595 on Economic Crimes, published on August 17, 2023. Law No. 20,169, published on February 16, 2007, regulates unfair competition and assigns it, as a general rule, to the civil courts, and Decree No. 41 of 2021 approves the Regulation on notification of concentration transactions.

INSTITUTIONS

Institutions

The system rests on two specialized bodies — one that investigates and prosecutes, another that adjudicates — plus the Supreme Court as reviewer.

Antitrust Tribunal (TDLC) A jurisdictional body independent of the Government, subject to the oversight of the Supreme Court (Title II of DL 211). Under Article 5, it prevents, corrects and sanctions attacks on free competition. It comprises five sitting members: three lawyers and two economists. Its powers (Art. 18) include hearing contentious and non-contentious matters, issuing general instructions and resolving special appeals, including the review of an FNE resolution prohibiting a concentration. Acts executed in accordance with a non-contentious TDLC decision generate no liability (Art. 32), unless requalified on new evidence.

National Economic Prosecutor’s Office (FNE) A decentralized, independent public service under the President’s oversight through the Ministry of Economy. It is the prosecuting body and administrator of merger control. The Prosecutor’s powers (Art. 39) include opening investigations, acting as a party before the TDLC and the courts, and setting notification thresholds by resolution. To pursue cartels it has enhanced intrusive powers: with prior authorization from the TDLC and a Court of Appeals judge, it may raid and force entry, search and seize documents, and intercept communications.

Supreme Court It closes the system and reviews TDLC decisions, through its Third Chamber, when the corresponding appeal is filed. An appeal adds significant time to closing.

ANTICOMPETITIVE CONDUCT

Anticompetitive conduct

Article 3 defines the general rule and, in its letters, illustrates it with four groups of conduct. The list is not exhaustive.

Collusion and agreements between competitors · letter a The most serious conduct. It distinguishes hard-core cartels — agreements fixing purchase or sale prices, limiting output, allocating territories or market quotas, or rigging tenders — from agreements or concerted practices that, by conferring market power, determine marketing conditions or exclude competitors. For hard-core cartels, proving the agreement suffices, without proving market power; in the second hypothesis, market power is an element of the offense. The agreement may be express or tacit.

Abuse of dominance · letter b It sanctions the abusive exploitation of a dominant position by an agent or a group under common control. The law does not punish holding dominance, but abusing it to exclude competitors or exploit customers and suppliers. DL 211 neither defines it nor sets a share threshold; the analysis is case by case. Abuses include arbitrary discrimination, unjustified refusal to sell, tying, resale price maintenance and certain discounts with exclusionary effects.

ANTICOMPETITIVE CONDUCT

Unfair competition and interlocking Linked unfair competition · letter c

It sanctions predatory or unfair competition practices carried out to attain, maintain or increase a dominant position. Law No. 20,169 regulates unfair competition generally and assigns it to the civil courts; when such practices seek dominance, they also fall under the TDLC, so the same conduct can generate a civil action and an antitrust action in parallel.

Interlocking and minority stakes · letter d It prohibits the simultaneous participation of one person as director or relevant executive in two or more competing companies (interlocking). It applies when each company’s business group has annual revenue above UF 100,000 in the last calendar year, and the situation persists 90 days after that year ends.

Separate from merger control, there is also an obligation to report to the FNE, within 60 days, the direct or indirect acquisition of more than 10% of a competitor’s capital, provided both the acquirer (or its group) and the target exceed UF 100,000 in annual revenue in the prior year.

MERGER CONTROL

Control of concentration transactions

Mandatory prior merger control is the most significant change of Law No. 20,945 (Title IV of DL 211, Arts. 46 to 61), regulated by Decree No. 41 of 2021.

When notification is mandatory The obligation requires two cumulative conditions. First, that it is a concentration transaction (Art. 47), i.e. that two or more previously independent agents, from different groups, cease to be so by merger; by acquisition of rights allowing decisive influence over another’s management; by association to form an independent, permanent agent; or by acquisition of control over a third party’s assets. Second, that the FNE’s sales thresholds are exceeded and the transaction produces effects in Chile.

Threshold Current amount Statute

Combined sales in Chile of the agents planning to Equal to or above UF Art. 48 letter a), DL 211; Exempt Res. concentrate 2,500,000 No. 157 of 2019, FNE

Equal to or above UF Art. 48 letter b), DL 211; Exempt Res. Individual sales in Chile of at least two of the agents 450,000 each No. 157 of 2019, FNE

Both thresholds must be met jointly. Conversion to pesos uses the UF value at December 31 of the prior year. Below-threshold transactions may be notified voluntarily under the same procedure. The FNE may adjust the thresholds, so confirm the current amount.

MERGER CONTROL

Procedure, deadlines and review

Once notified, the transaction is suspended and cannot be completed until clearance (Art. 49). The procedure has two phases, preceded by a completeness review (deadlines under Art. 54).

Stage FNE deadline Possible outcome

10 business days from Opens the investigation if complete; otherwise grants 10 business Completeness review notification days to cure. Silence is deemed the start of Phase I.

Unconditional approval; approval with remedies; or prohibition of Phase II 90 business days the transaction.

FNE silence at the end of each phase is deemed approval on the terms proposed by the notifying party. Extension to Phase II allows interested third parties to submit evidence. The Regulation provides for simplified notification for less complex transactions.

Review by the TDLC Against an FNE resolution prohibiting a transaction, the parties may file a special review appeal before the TDLC within 10 days (Arts. 18 No. 5, 57 and 31 bis). The TDLC calls a public hearing within sixty days of receiving the file, and judgment is issued within sixty days of that hearing. That judgment is generally unappealable, except when the TDLC approves subject to remedies different from the last ones proposed, in which case the parties and the FNE may appeal to the Supreme Court.

LENIENCY

Leniency

Leniency allows a cartel participant who cooperates with the FNE to obtain exemption from or reduction of sanctions (Art. 39 bis). It requires providing precise, truthful and verifiable evidence proving the conduct and identifying those responsible; keeping the application confidential until the FNE files its complaint or closes the investigation; and immediately ending participation in the cartel, unless the FNE directs otherwise.

The benefits depend on order of arrival. The first applicant providing decisive evidence may obtain exemption from dissolution, from Article 26 fines and from criminal sanctions. The second who meets the requirements and provides additional evidence may obtain a fine reduction, which cannot exceed 50% of the highest fine sought against the other respondents. It does not reach whoever organized the cartel by coercing others to participate.

SANCTIONS

Sanctions and liability

The sanctions the TDLC may impose are in Article 26 and stack in three layers.

Administrative. Modification or termination of acts, contracts or agreements contrary to the law; modification or dissolution of the legal entity; and a fine payable to the Treasury of up to 30% of the infringer’s sales in the line of business associated with the infringement during its duration, or up to twice the economic benefit obtained. If neither sales nor benefit can be determined, the fine may reach 60,000 UTA. It may be imposed on the legal entity and, additionally, on its directors, managers and anyone who took part; fines on individuals may not be paid by the company or its partners.

Criminal (hard-core cartels). The TDLC may bar contracting with the State and being awarded State concessions. Added to this is the criminal regime of Title V of DL 211 (Arts. 62 et seq.), with prison sentences for individuals who enter into, organize or execute the agreement. The 2023 Economic Crimes Law No. 21,595 included collusion among economic crimes. As for legal entities, the current Art. 65 provides that, until the law coordinates the concurrence of penalties for the infringement and the crime of collusion, they will not be criminally liable for collusion, without prejudice to antitrust sanctions and the criminal liability of their executives. Civil. Anyone harmed by an infringement declared by the TDLC may seek damages before the same tribunal, through summary proceedings, with the ruling grounded on the facts of the prior infringement judgment, which eases the burden of proof.

Additionally, failure to notify a concentration is punished with a fine of up to 20 UTA per day of delay from completion (Arts. 3 bis and 26); failure to report a stake above 10% in a competitor falls under the general regime (Arts. 4 bis and 26).

S E C TO R A L R E G U L AT I O N

Interaction with sectoral regulators

DL 211 coexists with sectoral regulation. In regulated markets — telecommunications, energy, banking and insurance, transport — sector regulators operate alongside the general regime, so the same conduct may concern the FNE and the TDLC and, in parallel, the sector regulator.

LEGAL FRAMEWORK

Legal framework and system architecture

The backbone of Chilean consumer law is Law No. 19,496, known as the Consumer Protection Law (LPDC). Three reforms concentrate the bulk of the current obligations.

Law No. 20,555, published on December 5, 2011, created the Financial SERNAC and extended oversight to financial products and services, with disclosure duties on the cost of credit.

Law No. 21,081, published on September 13, 2018, strengthened SERNAC, raised fines, defined mitigating and aggravating circumstances, and gave it the power to interpret the rules administratively.

Law No. 21,398, published on December 24, 2021 and known as the Pro-Consumer Law, enshrined the pro-consumer principle, expanded rights in e-commerce and reformed the legal warranty.

The law seeks to correct the asymmetry of the consumer relationship with rights that cannot be waived in advance, so any clause waiving a consumer right beforehand is void.

SCOPE

Consumer, provider and scope

The LPDC defines the consumer as the individual or legal entity that, under any onerous legal act, acquires, uses or enjoys goods or services as end recipient. The provider is the individual or legal entity, public or private, that habitually carries out activities of production, manufacture, import, construction, distribution or marketing of goods, or provision of services, for which it charges a price or fee.

The law adds cases it expressly covers, including the supply of a furnished property for rest or tourism for periods not exceeding three months, certain aspects of basic, secondary and higher education services, home sales by construction companies, real estate developers and the Housing and Urbanization Service, and acts connected with health services, excluding benefits and financing regulated by special laws.

This includes the right to individual compensation where the special law provides no procedure for it. Thus, a bank, a health insurer or a telecommunications company regulated by the CMF, the Superintendence of Health or Subtel coexists with the LPDC in the matters the LPDC reserves.

Protection extends partially to smaller companies. Law No. 20,416, known as the SME Statute, establishes in its ninth article the protection of micro and small enterprises acting as consumers, making certain LPDC rules applicable to specific acts and contracts with their suppliers, though excluding the rules on SERNAC’s role; actions are channeled to the competent Local Police Court or through whatever avenues apply at the company’s option. SERNAC has held, in its Interpretive Ruling on Administrative Interpretation Request No. 36,258, of May 31, 2023, that micro and small enterprises may exercise the legal warranty in their consumer role, under the ninth article of Law No. 20,416.

CONSUMER RIGHTS

Basic consumer rights and duties

Article 3 of the LPDC recognizes a core of basic rights, all unwaivable in advance. They include free choice of the good or service, truthful and timely information on goods and services and their conditions, freedom from arbitrary discrimination, safety in consumption and protection of health and the environment, adequate and timely repair and compensation of all material and moral damages in case of breach, and education for responsible consumption. In financial matters, the Pro-Consumer Law reinforced the right to go before the competent court. The same article sets duties for the consumer, such as informing themselves responsibly, dealing with established commerce and avoiding risks affecting their safety.

Two rules have immediate operational consequences. Silence never constitutes acceptance in consumer transactions; the provider cannot read a lack of response as a yes, nor charge for an additional service on that basis. And under the pro-consumer principle of Law No. 21,398, every provision of the law, and in particular the terms of an adhesion contract, is interpreted in the sense most favorable to the consumer, with the most favorable term prevailing over contradictory ones.

INFORMATIONANDADVERTISING

Duty of information and advertising

The LPDC requires the consumer to receive all basic commercial information relevant to an informed decision, including the price, taxes included, the contracting conditions and the characteristics of the good or service.

False or misleading advertising Article 28 sanctions anyone who, through any medium, induces error or deception regarding relevant elements of the good or service, including components and composition, suitability for the intended purposes, relevant characteristics, price and payment method or cost of credit, warranty conditions, and characteristics relating to environmental harm or recyclability or reusability. Article 28 A adds the prohibition of advertising that causes confusion about the identity of companies, brands or other distinctive signs. Advertising binds the provider; objective conditions communicated become part of the contract and are enforceable, and the rules also reach labels, signage, promotions, offers and contests.

CONSUMER CREDIT

Consumer credit, the CAE and total credit cost

The LPDC’s consumer credit section, reinforced by Law No. 20,555, imposes financial disclosure duties so the consumer can compare offers on a homogeneous basis. The credit provider must disclose the total cost of the credit, expressed as the Equivalent Annual Charge (CAE), an annual percentage indicator integrating the interest rate, commissions, expenses and associated insurance. It must also disclose the total cost of the credit in pesos, the interest rate, the number and amount of installments, and the product’s commercial and financial conditions.

These duties are developed in regulations. Decree No. 43 of 2012 of the Ministry of Economy approved the Regulation on consumer credit information; Decree No. 44 of 2012 that on bank and non-bank credit cards; and Decree No. 48 of 2020 that on the content and information of the settlement certificate, in addition to amending Decrees Nos. 42, 43 and 44 of 2012. For mortgage loans, Decree No. 42 of 2012 applies, whose current version should be checked against the rules applicable to the transaction.

ADHESION CONTRACTS

Abusive clauses and adhesion contracts

An adhesion contract is one whose clauses have been drafted and imposed unilaterally by the provider, with no ability for the consumer to alter them. The LPDC regulates it from two angles.

Formally, it must be legibly written, in Spanish, in a font size no smaller than 2.5 millimeters, and the consumer must be able to know its full content before being bound; the Pro-Consumer Law reinforced the requirement to make them available to the enforcement authority.

On substance, Article 16 declares abusive clauses to be entirely without effect and lists prohibited categories. These include clauses empowering the provider to unilaterally void, modify or suspend the contract; those establishing price increases for services, accessories, financing or surcharges unless the consumer can accept or reject them in each case; those charging the consumer for deficiencies, omissions or administrative errors not attributable to them; those reversing the burden of proof to their detriment; absolute liability limitations depriving them of redress for deficiencies affecting the product’s or service’s essential utility or purpose; those including blanks not filled in before signing; and those limiting their rights. It closes with a general clause condemning stipulations contrary to good faith that cause a significant imbalance to the consumer’s detriment.

Articles 16 A and 16 B regulate the consequences. Once a judge declares one or more abusive clauses void, the contract survives with the rest, unless that is impossible given its nature or the parties’ intent, and the pro-consumer principle also governs its interpretation.

LEGALWARRANTY

Legal warranty: the triple option

The legal warranty, regulated in Articles 19 to 21 of the LPDC, gives the consumer a remedy when a product is faulty or unfit for ordinary use. Faced with a defective product, they may choose, at their discretion, between free repair of the good, its replacement or a refund of the amount paid — the so-called triple option. This choice belongs to the consumer, not the provider, and the Pro-Consumer Law required it to be communicated in stores, branches and websites.

THE TRIPLE OPTION APPLIES IN THE FOLLOWING CASES:

When a product subject to mandatory safety or quality When the materials, parts, pieces or components making standards fails to meet the corresponding specifications. up the product do not match the specifications they display or the label’s statements.

When, due to deficiencies of manufacture, preparation, When the provider and consumer agreed the product materials, structure, quality or sanitary conditions, the would meet certain specifications and it does not. product is not fully fit for its intended use or the use the provider advertised.

When, after the warranty is exercised and technical When the item has hidden defects or vices that make its service provided, deficiencies persist that prevent normal habitual use impossible. use of the good.

· Metal fineness lower than indicated in gold work and jewelry

The term was one of the points reformed by Law No. 21,398. The current general term for durable goods is six months from the consumer’s receipt of the product; before the reform it was three months. For food and perishables, the warranty is determined by the date on the packaging or, absent that indication, by a maximum of seven days, per Article 21, paragraph 7 of Law No. 19,496. If the good is sold with a voluntary warranty longer than six months, the longer term prevails. SERNAC systematized these terms in its Interpretive Circular on exercising the legal warranty, approved by Exempt Resolution No. 779 of 2023.

W I T H D R AWA L

Voluntary warranty and right of withdrawal

Interaction between legal and voluntary warranties The voluntary or contractual warranty is what the provider or manufacturer offers above the legal minimum. It neither replaces nor diminishes the legal warranty, which cannot be waived. SERNAC clarified in its Administrative Ruling on the application of legal and voluntary warranties, of November 18, 2021, referring to Articles 20 and 21 of Law No. 19,496, that where a compliant voluntary warranty exists, the consumer must first exhaust it before exercising the legal triple option.

Right of withdrawal The right of withdrawal allows the consumer to unilaterally terminate the contract within 10 days from receipt of the product or from contracting the service and before its provision, without stating cause. It is regulated by Article 3 bis of the LPDC and operates in the following cases:

That period extends to ninety days when the provider fails to send the written confirmation of the contract required by Article 12 A. For higher education services provided by professional institutes, universities and technical training centers, Article 3 ter regulates a special withdrawal, whose ten-calendar-day period runs from the first publication of admission results for the Council of Rectors universities.

E-COMMERCE

E-commerce and distance selling

E-commerce today concentrates most consumer litigation, and the LPDC applies rules combining the duty of information, the adhesion contract regime and the right of withdrawal. A provider selling through electronic means must, at a minimum:

Inform clearly, comprehensibly and unambiguously of the contract’s general conditions and allow them to be stored or printed before contracting.

Confirm Send written confirmation once the consumer accepts.

Honor the conditions, terms and timelines offered or advertised, including delivery.

Not refuse unjustifiably the sale or service publicly offered.

Its terms and conditions are an adhesion contract, subject to Article 16 review and the pro-consumer principle, and breach of the offered dispatch time is an infringement and, as the case may be, a source of liability.

INSTITUTIONS

Institutions and SERNAC’s role

The National Consumer Service, SERNAC, oversees LPDC compliance. It enforces consumer regulation, interprets it administratively through circulars and rulings, proposes to the President the enactment, amendment or repeal of rules, manages complaints and conducts the voluntary procedure for protecting collective or diffuse interests. It may mediate and litigate, but does not impose fines itself — that decision belongs to the competent court. The administrative interpretation power, granted by Law No. 21,081, matters because its circulars and rulings set criteria guiding its enforcement, though their ultimate legal weight is defined by the courts.

Alongside SERNAC operate Consumer Associations, independent organizations that defend collective and diffuse interests and may bring the law’s actions on behalf of consumers. The LPDC also created the SERNAC Seal, a certification the service may grant, at the provider’s request, to adhesion contracts for financial products and services that comply with the law; its use has been limited.

ACTIONS

Types of action and procedural route

Breach of the LPDC gives rise to actions seeking to sanction the infringement, void abusive clauses, demand performance, stop the act and obtain compensation, classified into three categories according to the interest they protect.

The individual interest action defends the rights of a specific consumer. It is generally heard by the Local Police Court of the place where the contract was made, the infringement committed or its performance began, at the plaintiff’s choice; for electronic contracts, when those places cannot be determined, the law provides a special rule tied to the consumer’s commune of residence. No attorney is required, and clauses purporting to extend jurisdiction beyond the legal options are inadmissible.

The collective interest action defends the common rights of a determined or determinable group of consumers linked to a provider by a contractual bond, and the diffuse interest action protects an undetermined set. Both follow the special procedure of Articles 51 et seq., and may only be initiated by SERNAC, a legally constituted Consumer Association or a group of no fewer than fifty consumers. Once the suit begins, other affected parties may join, and the complaint interrupts the limitation period for damages actions.

Added to these routes is the voluntary procedure for protecting collective or diffuse interests, regulated in Articles 54 H et seq., a collective mediation SERNAC manages to reach an out-of-court agreement with the provider that repairs the harm. If the provider does not participate or the solution does not resolve the problem, SERNAC may bring the class action.

SANCTIONS

Sanctions and limitation periods

Fines imposed by the court go to the Treasury and do not compensate the consumer, whose redress is obtained through damages. The LPDC contains no single schedule but scattered sanctions, and the general rule is a fine of up to 300 UTM, unless a specific sanction applies. False or misleading advertising can carry fines of up to 750 UTM, rising to 1,500 UTM when it concerns characteristics affecting public health or safety or the environment. Omitting instructions, warnings or safety measures for dangerous products, and other serious infringements, can reach fines of up to 2,250 UTM.

Law No. 21,081 introduced a system of mitigating and aggravating circumstances the court must weigh. Selfreporting and substantial cooperation with SERNAC operate as mitigating factors; being sanctioned for the same infringement within the previous twenty-four months, causing serious economic harm, affecting the consumer’s physical or mental integrity, and endangering their safety or the community’s operate as aggravating factors.

Actions to pursue infringement liability generally lapse after two years, though the computation depends on how the infringement is configured, especially for continuing ones. That period is suspended when the consumer files a complaint with the provider’s customer service, a mediator or SERNAC. The LPDC also provides for the publication and registration of Local Police Court judgments, adding a reputational cost to the economic one.

R E G U L AT E D S E C TO R S

Sectors with reinforced consumer regulation

Some industries bear an additional layer on top of the LPDC. In financial services, SERNAC — with the Law No. 20,555 powers over credit disclosure and adhesion contracts — coexists with the Financial Market Commission (CMF) as prudential regulator. The Pro-Consumer Law added obligations to assess the consumer’s solvency when contracting credit or financing products, and to disclose the result.

In telecommunications, Subtel regulates service provision, while the LPDC governs the consumer relationship in matters not covered by the special rules and in relation to collective or diffuse interests and individual compensation. In health and insurance, the Superintendence of Health and the CMF regulate providers and insurers, and the LPDC applies with the exclusions proper to benefits governed by special laws. In real estate, the LPDC reaches certain aspects of home sales by developers and construction companies, excluding construction quality, governed by the General Urbanism and Construction Law.

channel comply with Law No. 19,496?

DUAL SYSTEM

A dual system of protection

Industrial property is governed by Law No. 19,039 and covers trademarks, invention patents, utility models, industrial drawings and designs, layout designs or topographies of integrated circuits, geographical indications, appellations of origin and trade secrets. The authority is the National Institute of Industrial Property (INAPI), created by Law No. 20,254.

Copyright is governed by Law No. 17,336 and protects works of the intellect in the literary, artistic and scientific domains, including software, together with the related rights of artists, performers, phonogram producers and broadcasting organizations. The authority is the Intellectual Rights Department, under the National Cultural Heritage Service (Art. 90, Law No. 17,336).

The distinction matters in practice. Most industrial property rights require a title or registration before INAPI; trade secrets are not registered and are protected while kept confidential; and copyright protects the work from its creation, without formality, with a registry that serves evidentiary rather than constitutive purposes.

Above both regimes sits constitutional recognition. Article 19 No. 25 of the Constitution protects both copyright over scientific, literary, artistic or intellectual creations and ownership of inventions, trademarks, patents and other forms of industrial property, for the term the law establishes.

Access for foreign owners The system does not discriminate by nationality. A foreign applicant must appoint an agent domiciled in Chile, but since accession to the Trademark Law Treaty (TLT) a simple power of attorney suffices, without legalization or consular authentication. The rights are transferable, licensable and chargeable, and their assignment is formalized by private instrument in Spanish, without protocolization or consular authentication.

TRADEMARKS

Trademarks

A trademark is a representable sign that distinguishes one person’s products, services or establishments from another’s, and includes words, figurative elements, color combinations and advertising slogans associated with a registered mark (Art. 19, Law No. 19,039). A sign without inherent distinctiveness may be registered if it acquired distinctiveness through sustained use (acquired distinctiveness or “secondary meaning”). Law No. 21,355 extended the concept to non-traditional signs; today three-dimensional, sound, olfactory, position, pattern, motion and holographic marks can be registered, provided they admit clear and precise representation.

Non-registrable signs include, among others, those generic or descriptive of the product or service, those misleading as to origin or quality, those contrary to morals and public order, official flags and emblems, and those graphically or phonetically identical or similar to a mark already registered or applied for covering identical or related products, such that confusion may arise. A well-known foreign mark enjoys reinforced protection and its owner may oppose similar signs and even seek the annulment of an already granted registration.

Chile applies the Nice Classification; the mark protects only the products or services in the covered classes. Since July 4, 2022, Chile is part of the Madrid Protocol, which allows foreign owners to designate Chile in an international application before WIPO.

Registration lasts ten years from its recording and is renewable for equal ten-year periods indefinitely. Renewal may be requested during the six months before expiry and up to six months after, with payment of fees and surcharges. Once that grace period lapses, the mark is lost and must be applied for anew. The owner must use “Marca Registrada,” “M.R.” or “®”; omitting the marking does not invalidate the mark, but bars criminal infringement actions and reduces protection to the civil route.

TRADEMARKS

The use requirement introduced by Law No. 21,355

For decades Chile was the only country in Latin America where use was not a requirement to register or maintain a mark. Law No. 21,355 introduced revocation for non-use (Arts. 27 bis A and 27 bis B, Law No. 19,039). Total or partial revocation applies if, five years after grant, the mark has not been the subject of real and effective use in the national territory by its owner or a third party with its consent, or if use was suspended uninterruptedly for the same period. It does not proceed ex officio, but at the request of anyone with a legitimate interest, and the burden of proving use falls on the owner.

The change reorders portfolio strategy. Defensive registration and letting the mark sleep is no longer enough; you must document real use (invoices, advertising, points of sale) and, for licenses, register them and preserve evidence of the licensee’s use.

5 years 10 years ® without real and effective use since of registration validity, renewable without marking there are no grant enable revocation indefinitely criminal actions, only civil protection

PAT E N T S

Invention patents

An invention is any solution to a technical problem giving rise to an industrial activity, whether a product or a process; the patent is the inventor’s exclusive right to prevent its commercial exploitation by third parties for a limited term (Title III, Law No. 19,039). Inventions in all fields of technology are patentable if they meet three requirements: novelty, i.e. not forming part of the state of the art; inventive step, i.e. not obvious to a person skilled in the art; and industrial applicability.

Protection lasts twenty years from the filing of the application, is not renewable and is subject to payment of maintenance fees. The territoriality principle applies; patenting in your home country does not protect you in Chile by that fact alone.

The law provides a grace period. Disclosures made within the twelve months before the application do not affect novelty or inventive step if they come from the applicant or inventor themselves, or from an abuse against them. The law also provides supplementary protection for unjustified administrative delays in prosecution, for a term equal to the proven delay (Paragraph 2 of Title III, Arts. 53 Bis 1 et seq.). For criminal actions, the object must bear “Patente de Invención” or “P.I.” followed by the number, except process patents, which are exempt; omission limits remedies to the civil action.

Chile has been a party to the Patent Cooperation Treaty (PCT) since June 2009. The PCT does not grant international patents; it unifies filing, and the applicant has thirty months from the priority date to enter the national phase in Chile. INAPI was designated an International Searching and International Preliminary Examining Authority under the PCT.

Employee inventions When the invention arises from an employment or services relationship, ownership is defined by the nature of the relationship and the use of the employer’s resources (Title VI, Law No. 19,039). If the contract’s purpose is inventive activity, the right to seek registration and exploit the invention belongs to the employer, unless agreed otherwise. If the worker was not hired to invent, the right is theirs, but if they used the company’s knowledge or means, ownership passes to the employer, who must compensate them in an amount agreed between the parties.

OTHER FIGURES

Models, designs, secrets and indications

Utility models The utility model protects instruments, apparatus, tools, devices and objects, or parts of them, whose configuration gives them a utility or technical effect previously nonexistent for their function (Title IV, Law No. 19,039). It is patentable if it meets novelty and industrial applicability. Protection lasts ten years, is not renewable and runs from filing. The marking is “Modelo de Utilidad” or “MU” followed by the number, with the same consequence as patents if omitted.

Trade secrets and know-how Law No. 19,039 protects trade secrets, defined as any knowledge about products or industrial processes whose confidentiality gives its holder a competitive advantage (Title VIII, Arts. 86 et seq.). It sanctions their unlawful acquisition, unauthorized disclosure or exploitation, and breach of confidentiality by anyone with legitimate access, when acting with intent to gain undue advantage or cause harm. Law No. 21,355 strengthened this regime. Unlike a patent, a secret requires no registration and has no term. It lasts while kept confidential, so its protection depends entirely on the holder’s measures; a secret leaked for lack of control ceases to be protected. Its legal value is built with confidentiality agreements, restricted-access policies, contractual clauses and access traceability. The law also protects undisclosed information submitted to the Public Health Institute or the Agriculture and Livestock Service on the safety and efficacy of pharmaceutical or agro-industrial products with a new chemical entity. That information is confidential and cannot be used to grant sanitary registrations to third parties for five years for pharmaceuticals and ten years for agro-chemicals (Arts. 89 et seq., Law No. 19,039).

Geographical indications and appellations of origin A geographical indication identifies a product as originating in a country, region or locality when a given quality, reputation or other characteristic is attributable to its geographical origin; the appellation of origin adds that those characteristics stem from natural or human factors specific to the area (Title IX, Law No. 19,039). INAPI administers their recognition and registration at the request of anyone representing a significant group of the area’s producers or the territory’s authorities.

TERMS AND FIGURES

Summary table Marking for

Figure Protected subject matter Term Renewal criminal action

Trademark Distinctive sign for products, 10 years from recording in the registry Indefinite, in «M.R.» o «®» services or establishments, equal 10-year including non-traditional marks periods

Invention patent New technical solution, with 20 years from filing Not renewable «P.I.» + inventive step and industrial número applicability

Utility model Configuration of an object pro‐ 10 years, non-renewable, from the filing Not renewable «MU» + viding technical utility of the application or from first commernúmero cial exploitation anywhere in the world, as applicable

Industrial drawing or New shape or ornamentation of Up to 15 years from filing Not renewable «DI» + design a product número

Layout design or Three-dimensional arrangement 10 years from filing or first exploitation Not renewable Per law topography of an integrated circuit

PROCEDURE

Procedure before INAPI and the TDPI

Registration begins with the application before INAPI, which verifies formal requirements and orders publication of an extract in the Official Gazette. From publication runs the third-party opposition period: thirty days for trademarks and forty-five for patents, utility models, designs, topographies and geographical indications; for the latter figures an expert is also appointed to prepare a report. The INAPI Director decides at first instance, and the decision is appealed before the Industrial Property Court (TDPI) within fifteen days of notification, whether or not there was opposition. The TDPI is a special collegiate court, and its rulings admit cassation before the Supreme Court for errors of law affecting the operative part.

The law distinguishes two challenge actions: Both are heard by INAPI with appeal to the TDPI. For trademarks, annulment must be brought within five years of registration, unless the registration was obtained in bad faith, in which case it never lapses (Art. 27, Law No. 19,039).

Revocation. Introduced forcefully by Law No. 21,355 for trademarks, it applies for lack of real and effective use. Both actions are heard by INAPI with appeal to the TDPI.

Processing time varies. An unopposed trademark is resolved in about six months and an opposed one in around a year; an unopposed patent takes on the order of three years due to substantive expert examination. These are reference figures, depending on INAPI’s workload and case complexity.

COPYRIGHT

Copyright Protected works and birth of the right

Law No. 17,336 protects works of the intellect in the literary, artistic and scientific domains, whatever their form of expression (Art. 1). The Art. 3 catalog is broad and illustrative, including books, musical, dramatic, audiovisual and photographic works, works of art, architectural projects and, expressly, computer programs, databases and compilations. Protection arises with creation, without registration or formality. The law distinguishes moral from economic rights. The moral right includes claiming authorship of the work and opposing distortions that harm it; it is inalienable and nontransferable (Arts. 14 to 16). The economic right entitles the owner to use the work and authorize its use by third parties, and that one is transferable (Arts. 17 et seq.).

Term of protection Protection extends for the author’s entire life and seventy years from their death (Art. 10). If ownership belongs to a legal entity, it lasts seventy years from first publication. These are among the longest terms in comparative law, in line with Chile’s free trade agreements.

The software regime A computer program is protected as a work from its creation, like any other under Law No. 17,336. Article 8 contains special ownership rules, always subject to written agreement to the contrary. For programs produced by employees in the course of their duties, the copyright owner is the employing company; for those produced on a third party’s commission to be marketed at its own account and risk, the rights are deemed assigned to that third party. For a technology company, the contract governs software better than registration, and it should regulate economic ownership, use, modification, sublicensing, code exploitation and third-party components.

Registration, transfer and enforcement Registering the work with the Intellectual Rights Department is not constitutive, but documents the creation date and authorship, useful for proving ownership (Arts. 72 et seq.). Transfer of economic rights, in whole or in part, must be made by public deed or a private instrument certified before a notary, and recorded in the registry within the legal period. Law No. 17,336 provides civil and criminal actions against unauthorized use. Law No. 20,435 of 2010 expanded the catalog of offenses and introduced a liability-limitation regime for internet service providers, with content-removal decisions entrusted to the ordinary courts (Arts. 85 L et seq.).

.CL DOMAINS

.CL domain names

Chile’s ccTLD is .CL, administered independently by NIC Chile (University of Chile), under the Regulations for the operation of the .CL Domain Name Registry and its resolutions. Any person, Chilean or foreign, can register .CL domains online through www.nic.cl; the registration is deemed filed upon confirmation of the annual fee payment and the domain is published on a list for thirty days. Domains renew indefinitely while the conditions are met.

Anyone who believes their rights are affected may seek revocation under the .CL Domain Name Dispute Resolution Policy. Within the thirty-day publication period they may invoke a preferential interest; after that period, they must show the registration was abusive, cumulatively proving that the domain is identical or confusingly similar to a name, mark or expression over which they have prior rights, that the holder lacks rights or legitimate interests, and that the domain was registered or used in bad faith. Disputes are resolved by online arbitration.

ENFORCEMENT

Enforcement, judicial protection and treaties

In copyright, Law No. 17,336 criminally sanctions infringements and enables civil damages actions. When the violation stems from an arbitrary or unlawful act affecting a constitutional guarantee, the constitutional protection action lies before the Court of Appeals within the Art. 20 constitutional deadline.

At the border, the National Customs Service is empowered to suspend the clearance of goods presumed to infringe industrial property rights, under Law No. 19,912, detaining allegedly counterfeit products while the dispute is resolved.

REGIME CHANGE

The regime change and why it matters

For twenty-five years, personal data processing in Chile was governed by Law No. 19,628 on the Protection of Private Life, published on August 28, 1999. A regional pioneer, it fell behind the digital economy. It allowed data processing with undemanding consent, provided no specialized supervisory authority and left compliance, in practice, to civil actions by affected parties before the ordinary courts. To a company accustomed to the EU’s General Data Protection Regulation (GDPR), the Chilean regime seemed lax — and that perception is about to end.

Law No. 21,719, which regulates the protection and processing of personal data and creates the Personal Data Protection Agency, substantially amends Law No. 19,628 and brings it close to the GDPR model. It introduces express processing principles, redefines consent, expands data subject rights, imposes documentary obligations on the controller, regulates international data transfers explicitly for the first time and creates an administrative authority with inspection and sanctioning powers. The text sets fines of up to 20,000 monthly tax units for the most serious infringements.

With a vacancy of nearly twenty-four months, Law No. 19,628 in its original wording remains in force until December 1, 2026; from that day the reformed framework applies in full. That gap defines the adaptation timeline for any company with operations or customers in Chile.

For a foreign company, the relevant point is territorial scope. When the controller is not established in Chile, subjection to the Chilean framework must be reviewed case by case under the territorial scenarios provided by the law and the processing’s effective connection with data subjects located in the country. A company headquartered abroad that offers services to people in Chile or monitors their behavior can fall within the law’s scope even without a local office — an extraterritoriality taken from the European model.

CONSTITUTIONAL GUARANTEE

The fundamental right of Article 19 No. 4

Personal data protection is a constitutional guarantee in Chile. Article 19 No. 4 of the Constitution, in the text fixed by Decree 100 of 2005, assures all persons respect and protection of private life and, after the reform introduced by Law No. 21,096, published on June 16, 2018, the protection of their personal data, whose processing is governed by law.

Law No. 21,719 is the legal development of that right. Article 1 of Law No. 19,628, as amended, declares that it regulates the form and conditions of personal data processing in accordance with Article 19 No. 4 of the Constitution. For a company, non-compliance is not just an administrative fine risk, but the impairment of a constitutional guarantee, with the reputational burden and exposure to actions that entails.

CORE CONCEPTS

Scope and core concepts

Law No. 21,719 works on four concepts that define who is accountable and why.

Personal data. Any information linked or referring to an identified or identifiable natural person. The identifiability standard is broad and not limited to a name or tax ID; an online identifier, an IP address or a combination of data that singles out a person can constitute personal data.

Sensitive personal data is a special category with a reinforced regime. It covers data revealing ethnic or racial origin, political, union or trade affiliation, socioeconomic status, ideological or philosophical convictions, religious beliefs, data on health, human biological profile, sex life, sexual orientation and gender identity, as well as biometric data. Its processing is allowed only with the data subject’s express consent or in the enumerated cases the law authorizes, and the burden of proving the lawful basis falls on the controller.

Data controller. The individual or legal entity that decides the purposes and means of the processing, and who answers to the data subject and the Agency. In the typical structure of a foreign company, the parent that defines what data is collected and for what purpose will, as a general rule, be the controller.

The data processor is whoever processes data on the controller’s behalf, under a contract. The cloud infrastructure provider, the mass-mailing platform or the payment processor usually act as processors. The law requires the relationship to be in writing and the processor to apply appropriate technical and organizational measures to ensure a level of security adequate to the risk.

PRINCIPLES

The processing principles

Article 3 of Law No. 19,628, as amended by Law No. 21,719, sets the principles governing all personal data processing. They are not statements of good intent, but enforceable, sanctionable standards of conduct.

Lawfulness and fairness Purpose limitation Lawfulness and fairness require processing data lawfully and Purpose limitation requires collecting data for specific, explicit fairly, with the controller able to prove the basis enabling the and lawful purposes, and limiting processing to those processing. purposes.

Proportionality Accuracy Proportionality restricts it to the data necessary, adequate Accuracy requires data to be exact, complete, current and and relevant to the purpose. relevant.

Accountability Security Accountability makes whoever processes the data legally Security requires guaranteeing adequate standards. responsible for complying with the principles.

Transparency and information Confidentiality Transparency and information require the controller to give Confidentiality imposes secrecy on those who process or the data subject what they need to exercise their rights. access the data.

Law No. 21,719 turns these principles — previously scattered and without ex officio enforcement — into the axis of the model, and hands them to an agency with sanctioning power.

LAWFULBASES

Lawful bases and consent

All personal data processing requires a lawful basis. Law No. 21,719 establishes a catalog of them, and the data subject’s consent is one, but not the only one.

Consent, under the new law, must be free, informed, purpose-specific and unambiguous, and be expressed prior to the processing. It is a higher standard than Law No. 19,628’s: tacit or presumed consent no longer suffices as a general rule, and the data subject may withdraw it at any time without affecting the lawfulness of processing prior to revocation. For sensitive data, consent must be express and given through a written or verbal declaration or an equivalent technological means, except in the special cases authorized by law.

Alongside consent, processing is lawful when necessary for entering into or performing a contract between the data subject and the controller, when expressly authorized or mandated by law, when necessary to fulfill a legal obligation of the controller, and when necessary to satisfy legitimate interests of the controller or a third party that do not override the data subject’s rights and freedoms. Legitimate interest as a standalone basis is one of the changes with the greatest operational impact, because it allows certain processing without gathering consent, under a balancing test the controller must be able to justify.

D ATA S U B J E C T R I G H T S

Data subject rights

Law No. 21,719 expands and systematizes the rights of the person whose data is processed. The following table summarizes each right and contrasts it, where relevant, with the Law No. 19,628 regime.

Right Content under Law No. 21,719 Status under Law No. 19,628

Access Obtain confirmation of whether their data is processed, access it Recognized more narrowly, focused on and learn its origin, purpose and recipients. knowing what data is stored and to whom it is disclosed

Rectification Demand correction of inaccurate, outdated or incomplete data. Recognized for erroneous, inaccurate or incomplete data.

Erasure Demand deletion when no basis justifies the processing or consent Recognized when storage lacked a legal has been withdrawn. basis.

Objection Object to specific processing, including profiling and direct Not regulated as a standalone, general right. marketing.

Blocking Request temporary suspension of processing operations while a Law No. 19,628 provided for blocking, but rectification, erasure or objection request is resolved. not with the new regime’s systematic scope.

These rights are exercised before the controller, which must respond within the deadlines and in the form the law sets; if it fails to respond or responds insufficiently, the data subject may complain to the Agency. Portability and objection to profiling are new rights, with no equivalent in Law No. 19,628, and especially sensitive for business models dependent on behavioral analytics.

OBLIGATIONS

Controller obligations

Law No. 21,719 shifts the weight of compliance onto the controller and makes it demonstrable through the following obligations.

The duty of information requires giving the data subject, at the time of collection, the controller’s identity and contact details, the processing purposes, the categories of data processed, the recipients or categories of recipients, the existence of international transfers and the rights available to them. It is the minimum content of a lawcompliant privacy policy.

The security duty requires the controller and processor to apply appropriate technical and organizational measures to ensure a level of security adequate to the risk. The law also incorporates privacy by design and by default, requiring data protection to be built into product and service design and only the data necessary for each purpose to be processed.

The record of processing activities requires maintaining a documentary inventory of processing operations, which the Agency may request and which is the first evidence of compliance a company must be able to produce.

A data protection impact assessment is required when processing, by its nature, scope, context, technology or purposes, may produce a high risk to data subjects’ rights. The law always requires it, among other cases, for systematic evaluations based on automated processing or decisions with significant legal effects, massive or large-scale processing, and systematic monitoring of publicly accessible areas. When it reveals a high risk the controller cannot mitigate, the Agency must be consulted.

The duty to report security breaches requires notifying the Agency of breaches affecting personal data and, depending on the severity and the type of data compromised, the affected data subject as well. A processor detecting a breach must report it to the controller.

The designation of a data protection officer is a figure the law contemplates to channel compliance and the relationship with the Agency. It is not a universal obligation for every controller, but should be assessed according to the operation and, especially, when the company adopts an infringement prevention model or certifiable compliance program. When designated, they act as a contact point and oversee observance of the framework.

TRANSFERS

Processors and international transfers

The relationship between the controller and its vendors processing data on its behalf must be set out in a processing agreement. The law requires the processor to process data only per the controller’s instructions, apply appropriate security measures, keep confidentiality and report any breaches it detects. When it subcontracts, the sub-processing chain is subject to the same requirements and liability is not diluted merely by subcontracting.

International data transfer receives, for the first time, express regulation. The general rule is that it is admissible when the destination country has an adequate level of protection, understood as a legal system with standards similar to Chilean law. When it lacks an adequate level, the transfer proceeds if the controller adopts safeguards justifying it, such as contractual clauses, binding corporate rules or other legal instruments. The Agency may issue recommendations, adopt precautionary measures and, in qualified cases, temporarily suspend the sending of data abroad.

On December 19, 2025, Exempt Resolution 202503748 of the Ministry of Economy was published, approving standard contractual clauses for international transfers, reducing the burden of negotiating instrument by instrument and giving predictability to companies moving data between Chile and other jurisdictions.

THE AGENCY

The Personal Data Protection Agency

Law No. 21,719 creates the Personal Data Protection Agency as an autonomous public-law corporation, technical in nature, decentralized, with its own legal personality and assets. It is the missing piece in the Law No. 19,628 regime and the one that fundamentally changes the incentive to comply.

The Agency oversees compliance with the law’s principles, rights and obligations, resolves data subjects’ complaints against controllers, investigates and determines infringements, imposes sanctions and adopts preventive or corrective measures. It also has powers over international transfers, where it can suspend data transmissions, and issues instructions and criteria clarifying how the law should be applied.

Institutional preparation is already under way. Decree 12, published on June 17, 2025, created a ministerial advisory commission for implementing Law No. 21,719.

FINES

The fines regime

Law No. 21,719 establishes a tiered sanctions regime based on the severity of the infringement, with the fine caps per category summarized in the following table.

Up to 5,000 Up to 10,000 Up to 20,000 monthly tax monthly tax monthly tax units units units maximum fine maximum fine maximum fine

The data subject retains, in parallel to the administrative route, their civil action for damages caused by the unlawful processing, liability that may fall on the controller or the processor depending on their involvement in the infringement.

P R E PA R AT I O N P L A N

Effective-date timeline and preparation plan

From December 1, 2026, the new framework’s obligations and the Agency’s sanctioning powers are enforceable. A reasonable plan chains together, in order, the record of activities, the lawful basis of each processing operation, the privacy policy, processing agreements, enabling international transfers, high-risk impact assessments, the rights-request procedure and the breach-response protocol, and the eventual designation of a delegate.

LEGAL FRAMEWORK

The architecture of Chilean environmental law

The central statute is Law 19,300 on General Bases of the Environment, published on March 9, 1994 and thoroughly reformed in 2010. It sets the framework for the right to live in a pollution-free environment, environmental protection, nature preservation and conservation of environmental heritage, organizing under common principles the preexisting sectoral rules on water, air, soil or waste and creating the management instruments that structure the regulation today. Its constitutional basis is Article 19 No. 8 of the Constitution, which guarantees that right and imposes on the State the duty to protect it, backed by the Article 20 constitutional protection action before the respective Court of Appeals — a frequent route for challenging investment projects, so litigation risk does not end once permits are obtained.

Environmental institutions were born with Law 20,417, published on January 26, 2010, which created the Ministry of the Environment, the Environmental Assessment Service and the Superintendence of the Environment, and contains the Superintendence’s Organic Law (LOSMA), governing enforcement and sanctions. Two years later, Law 20,600, published on June 28, 2012, created the Environmental Courts as a specialized jurisdiction. These three laws assembled the current model, in which assessment, enforcement and judicial review sit with separate bodies.

Even so, environmental law remains scattered across numerous statutes and there is no single code, so anyone assessing a project must review Law 19,300, its regulation, the applicable quality and emission standards, sectoral permits and the industry’s regulation. That fragmentation complicates planning.

INSTITUTIONS

Environmental institutions and their role

Each body plays a different role and engages with the project holder at different stages. Creating or governing Institution Main function statute

Ministry of the Environment Law 20,417 (2010); Final Title Designs environmental policy and regulation, issues quality and (MMA) of Law 19,300 emission standards and prevention/decontamination plans, and coordinates the State’s environmental action

Environmental Assessment Service Law 20,417 (2010); Administers the Environmental Impact Assessment System, con‐ (SEA) Paragraph 6 of the Final Title ducts project assessment and standardizes technical criteria. of Law 19,300

Environmental Assessment Law 19,300, Paragraph 2 of Environmentally qualifies each project and issues the Commission / SEA Executive the Final Title Environmental Approval Resolution, regional or interregional as Director applicable

Biodiversity and Protected Areas Law 21,600 Conserves biodiversity, manages the National System of Protected Service (SBAP) Areas and inspects activities in protected areas within its competence

Environmental Courts Law 20,600 Resolve claims against environmental acts, environmental damage remediation lawsuits, and authorize certain SMA measures.

The design deliberately separates functions. The SEA assesses but does not enforce; the SMA enforces and sanctions but does not qualify projects; the Environmental Courts review both bodies’ decisions; and the Committee of Ministers acts as an administrative review body in the most sensitive matters. This prevents any single body from concentrating assessment, control and sanction.

SEIA

The Environmental Impact Assessment System

The SEIA is the country’s most important environmental management instrument and, for most investors, the first real contact with the regulation. It is governed by Law 19,300 and its regulation, Supreme Decree No. 40 of 2012, administered by the SEA. It is permeated by the preventive principle: certain projects cannot be executed without first being assessed and obtaining an Environmental Approval Resolution (RCA) authorizing them, so the SEIA is, above all, a market-entry condition.

Which projects must be filed Article 10 of Law 19,300 lists the types of projects or activities that, being capable of causing environmental impact, must be submitted to the SEIA, and Article 3 of Supreme Decree No. 40 develops them in greater technical detail, setting thresholds and conditions. These include major hydraulic infrastructure works, high-voltage electric transmission lines and their substations, generating plants above a certain capacity, nuclear reactors and facilities, transport works (airports, highways, public roads, ports and maritime terminals), urban or tourism development projects outside approved plans, industrial or real estate projects in areas declared latent or saturated, mining projects above a certain scale, oil and gas pipelines, industrial, agroindustrial, forestry, fishing and aquaculture projects above the applicable thresholds, handling of hazardous substances, waste treatment and disposal systems, and projects in national parks, protected areas or urban wetlands.

The list is exhaustive, but the thresholds and conditions of Supreme Decree No. 40 matter as much as the typology, because the same type of project may fall in or out depending on its size, location or capacity. Modifications to an already approved project are also assessed when they are significant changes, and a project holder may always voluntarily submit a project to obtain the legal certainty a favorable RCA provides.

Law 19,300 prohibits splitting projects in bad faith to change the filing instrument or avoid the SEIA. If the SMA detects this, it may open a sanctioning proceeding and, after an SEA report, require the holder to properly file the project; a project genuinely executed in stages is exempt, which the holder must be able to prove.

DIA Y EIA

Environmental Impact Statement or Study

Filing takes one of two routes, one of the earliest technical decisions of the project. The general rule is the Environmental Impact Statement (DIA); the exception, reserved for higher-impact projects, is the Environmental Impact Study (EIA). The dividing line is Article 11 of Law 19,300: if the project generates any of these effects, it must file through a Study.

Risk to public health from the quantity and quality of effluents, emissions Significant adverse effects on the quantity and quality of renewable or waste. natural resources, including soil, water and air.

Resettlement of human communities or significant alteration of the Location in or near population centers, protected areas, priority livelihoods and customs of human groups. conservation sites, protected wetlands and glaciers susceptible to being affected, and the territory’s environmental value. Significant alteration, in magnitude or duration, of an area’s scenic or Alteration of monuments or sites with anthropological, archaeological, tourism value. historical or, in general, cultural heritage value.

Criterion Environmental Impact Statement (DIA) Environmental Impact Study (EIA)

When it applies General rule. The project generates none of the Art. 11 effects of Exception. The project generates one of the Art. 11 effects of Law Law 19,300 19,300

Nature Sworn declaration by the project holder Detailed technical assessment with environmental baseline

Core content Project description, justification that it generates no Art. 11 effects, Project description, baseline, prediction and assessment of impacts, and regulatory compliance and required permits mitigation, remediation or compensation measures

Public participation May be ordered for 20 days in projects with environmental burdens Always applies, for a period of 60 business days from publication on nearby communities. The request must be filed within the statutory deadline, currently 30 days, and come from at least 10 individuals or 2 citizen organizations

Outcome Favorable or unfavorable RCA Favorable or unfavorable RCA

The difference is not minor. The Study requires a complete environmental baseline, a description of significant impacts and mitigation, remediation or compensation measures to address them. The Statement is a sworn declaration in which the holder certifies that the project complies with regulation and generates none of the Article 11 effects. The deadlines in the following table are those the law sets for qualification, not counting suspensions from requests for additional information, which usually extend the process.

P U B L I C PA R T I C I PAT I O N

Public participation and indigenous consultation

Public participation is a structural piece of the SEIA and one of those with the greatest bearing on a project’s viability. It is mandatory in Studies; in Statements it is not automatic, but may be ordered when the project generates environmental burdens on nearby communities, per the deadlines and requirements in the table above. Law 21,449 extended to 30 days the deadline to request it in Environmental Impact Statements. SEIA deadlines are counted in business days, unless stated otherwise.

The SEA must address citizen observations with reasoned grounds in the resolution qualifying the project, and failure to duly consider them is one of the defects most frequently alleged when challenging an RCA. Whoever submitted them and believes they were not properly considered has standing to appeal.

Added to this is indigenous consultation. Chile ratified ILO Convention 169, which requires consulting indigenous peoples when measures are contemplated that may directly affect them, a duty whose integration into the SEIA has been clarified mainly by the higher courts’ case law. Projects located in territories with indigenous presence must anticipate this component, because its omission or defective handling is a common cause of litigation.

PERMITS AND INSTRUMENTS

Sectoral permits and management instruments The one-stop window

The system’s great advantage is the so-called one-stop window. For the sectoral environmental permits covered by the SEIA Regulation, a favorable RCA resolves the environmental aspects assessed and certifies the corresponding requirements, so sectoral agencies cannot deny them on environmental grounds already resolved or impose new environmental requirements beyond those the RCA set, without prejudice to reviewing non-environmental requirements. Conversely, if the RCA is unfavorable, they must deny the permits.

Still, its scope should not be overstated. There are non-environmental permits — sanitary, construction, concession and others — handled independently of the SEIA, before municipalities or autonomous agencies, and the RCA does not replace them.

ENFORCEMENT

Enforcement and sanction by the SMA

Once a project is operating, the environmental relationship shifts from the SEA to the Superintendence of the Environment. The SMA enforces compliance with Environmental Approval Resolutions, prevention and decontamination plans, quality and emission standards and the other instruments. Its regime is in the LOSMA, contained in Law 20,417.

The sanctioning procedure The SMA brings charges when it detects breaches and conducts a sanctioning proceeding ending in a resolution. Infringements are classified, under Article 36 of the LOSMA, as very serious, serious and minor according to the severity of the breach and its effects, and that classification determines the sanction range.

The catalog of sanctions is in Article 38 of the LOSMA and includes written reprimand, a fine of one to 10,000 annual tax units, temporary or permanent closure, and revocation of the Environmental Approval Resolution. Article 39 assigns the ranges by severity. Minor infringements allow a reprimand or fine of up to 1,000 annual tax units; serious ones, up to 5,000; very serious ones, up to 10,000, in both latter cases with possible RCA revocation or closure. One annual tax unit equals twelve monthly tax units, so the 10,000 UTA ceiling represents, in major projects, billions of pesos.

The SMA may also adopt urgent, provisional measures to prevent imminent harm, and even suspend authorizations contained in an RCA, though the most significant ones require authorization from the competent Environmental Court.

reprimand or maximum fine possible RCA revocation or closure possible RCA revocation or closure

COMPLIANCE

Compliance program and self-reporting

The sanctioning regime does not end with the fine. The LOSMA provides two instruments that incentivize compliance and change strategy in the face of a proceeding.

The compliance program, regulated in Article 42 of the LOSMA, is a plan of actions and goals the holder submits once charges are filed to restore compliance with the infringed regulation and, where applicable, address its effects. If the SMA approves it and the holder executes it satisfactorily, the proceeding is suspended and may end with no fine; if the holder breaches the approved program’s commitments, the proceeding resumes and exposes it to a larger fine than would otherwise have applied.

Self-reporting (Art. 41 LOSMA) is the written communication in which the infringer informs the SMA that it is committing an infringement within its jurisdiction. Anyone self-reporting can obtain exemption from or reduction of the fine, provided they supply precise, truthful and verifiable information and immediately adopt measures to reduce or eliminate the negative effects. It rewards a holder who detects a problem and fixes it before the authority discovers it.

ENVIRONMENTALDAMAGE

Liability for environmental damage and crimes Environmental damage

Alongside the SMA’s administrative regime, Law 19,300 establishes a liability regime for environmental damage that operates in the courts and is independent of the administrative sanction. It provides two actions. The environmental remediation action, regulated in Article 53 et seq. of Law 19,300, seeks to have the responsible party restore, at its own cost, the damaged environment to a state similar to before, and may be brought by any individual or legal entity that suffered the damage, the local municipality and the State, through the State Defense Council. The damages action seeks economic compensation for the harm and belongs only to whoever was directly affected.

Liability for environmental damage generally requires intent or fault. Even so, the law presumes fault when the damage resulted from breach of environmental quality standards, emission standards, prevention or decontamination plans, or environmental regulation in general. That presumption reverses the burden and eases the plaintiff’s position. The environmental remediation action lapses after five years from the damage’s clear manifestation, and is heard, like claims against SEA and SMA resolutions, before the Environmental Courts.

CLIMATECHANGE

Climate change and its legal framework

Chile’s climate change framework is no longer a bill — it is law in force, with regulation underway. Law 21,455, the Climate Change Framework Law, was published on June 13, 2022 and forms the institutional basis of the country’s climate policy. This is worth clarifying because the idea persists that it remains a pending bill, and it is not.

Law 21,455 sets the goal of achieving greenhouse gas emissions neutrality — the balance between emissions and absorptions — by 2050 at the latest. To that end it structures climate change management instruments, including the Long-Term Climate Strategy, the Nationally Determined Contribution, sectoral mitigation and adaptation plans, and regional and municipal action plans, several under preparation since 2024. The law brings Chile’s commitments as a Paris Agreement party into domestic law and makes them enforceable through concrete instruments.

For investment projects, the practical consequence is that emissions management is no longer a voluntary or reputational matter, but is progressively integrated into regulation. The law provides for a certification system for greenhouse gases and water use, whose regulation has been under consultation, anticipating growing measurement and reporting requirements for large emitters.

TRENDS

Trends for investment projects

The most significant trend is the reform of “permisología” — the set of permits and authorizations a project must obtain. The underlying criticism, held for years by the productive sector, is that processing in Chile is slow and scattered. The response came through two laws. Law 21,755, published on July 11, 2025, introduced amendments on regulatory simplification and promotion of economic activity. Law 21,770, published on September 29, 2025, established a Framework Law on Sectoral Authorizations seeking to organize, digitize and set firm deadlines for sectoral permit processing through a Unified Sectoral Permits Information System. Its rollout is gradual; a February 2026 decree of the Ministry of Economy set the timeline for sectoral agencies’ obligations to take effect and for digital processing to be enabled. It is a young reform whose effect will depend on implementation.

A second trend is the institutionalization of biodiversity protection. Law 21,600 created the Biodiversity and Protected Areas Service and the National System of Protected Areas, and during 2026 decrees have been issued transferring staff from the National Forestry Corporation and the Undersecretariat of the Environment to the new service. For projects sited in or near protected areas, this adds a counterpart and a protection standard that was previously more scattered.

A third trend is the strengthening of enforcement and sanctions. The Council of Ministers for Sustainability and Climate Change approved a bill to reform the LOSMA aimed at strengthening the SMA’s powers; it is a bill, not law in force, but the direction points to more demanding environmental control, not less. Added to this is the amendment of the SEIA regulation. Supreme Decree No. 17 of 2025 of the Ministry of the Environment, published on January 21, 2026, amended Supreme Decree No. 40 of 2012, so those planning medium-term projects must review the current text before defining typologies, thresholds, admissibility and filing content, bearing in mind rules may change during development.

CONCESSION MODEL

The concession model and its legal framework

INSTITUTIONS

Institutions

Ministry of Public Works Bids, awards, oversees and supervises concessions and executes the contracts. Prepares the bidding terms, inspects the work and grants provisional and final commissioning authorizations.

Public Works Concessions General Directorate Unit specializing in infrastructure through public-private partnership. Created by Law No. 21,044, published on November 25, 2017, which raised the former Concessions Coordination Office to a general directorate.

Concessions Council Advisory body created by Law No. 20,410 that reviews projects and rules on the concession modality. Under Article 1 bis of MOP Supreme Decree No. 900, it comprises the Minister of Public Works, a councilor designated jointly by Public Works and Finance who chairs it, two Finance councilors and two Public Works councilors. It only advises.

Technical Panel and Arbitration Commission. The system’s two dispute-resolution bodies (see below). The system’s two dispute-resolution bodies, introduced and strengthened by Law No. 20,410. Developed further later in this chapter.

CONCESSION PROCESS

The concession process

Any person, individual or legal entity, Chilean or foreign, may participate. The process originates in two ways that define who bears the studies.

Public initiative. The project originates in the Ministry or another authority and is submitted to the Concessions General Directorate. Before the call for tenders, Finance and Social Development approval is required; once approved, the bidding process is called and published in the Official Gazette and a national newspaper.

Private initiative. A private party proposes the project to the General Directorate, which verifies it is unique, not already under development, and of public interest. Once so declared, a procedure is set with minimum studies, reporting deadlines, a government inspector and the guarantee under Article 10 of the Regulation. The proponent does not obtain the award; the project is tendered competitively, with reimbursement of studies and an evaluation bonus. Bidding terms, prequalification and award. For complex projects, Law No. 20,410 introduced a prequalification stage assessing technical, legal and financial capacity before allowing bids; the tender combines technical and economic offers.

Award rule. Transparent tender, with no direct bilateral negotiation, as a general rule to the bidder whose economic offer receives the best evaluation while meeting the technical requirements. Factors usually include the tariff, term, subsidies and payments for preexisting infrastructure. It is formalized by supreme decree of the Ministry of Public Works, cosigned by Finance. Concessionaire company. Once awarded the contract, the winning bidder protocolizes the decree and incorporates a Chilean single-purpose company or registers a local branch as the bidding terms require; only then does it execute the contract and become a concessionaire. The single-purpose requirement isolates assets, cash flows and risks.

ECONOMIC REGIME

Economic regime, guarantees and insurance

Tariffs or tolls. The primary income source in concessions charging the end user, such as highways. Their structure, adjustments and caps are set in the bidding terms and are an award variable.

State subsidies. Contributions the Treasury commits when demand does not sustain the investment; their amount is usually an award variable.

Minimum guaranteed income. Ensures the concessionaire a revenue floor and covers the shortfall if actual revenue falls below the threshold, shifting part of the demand risk to the Treasury. In exchange, the bidding terms usually incorporate revenue sharing in favor of the State when collection exceeds certain levels; check its formula case by case.

FINANCING

Financing and modification of works

Financing is generally structured under project finance principles: the concessionaire company takes on debt repaid from the project’s cash flows, not the sponsor’s balance sheet. The piece that sustains the scheme is the special pledge on the public works concession. The contract may be pledged in favor of financiers or bonds the concessionaire issues, and includes the rights arising from it, the concessionaire’s revenue and the payments the State has committed. The law also recognizes the procedure for changing the concessionaire and enforcement upon default, allowing creditors to protect their claim without halting the work.

TERMINATIONANDDISPUTES

Suspension, termination and dispute resolution

The Regulation allows the concession to be suspended for force majeure, destruction of the works preventing their use, or other causes set in the bidding terms. During suspension all payments to the concessionaire are paused, including subsidies and tariffs, and losses are compensated through term extension, greater contributions or tariff adjustment.

In the normal course, the concession ends upon expiry of its term or by mutual agreement. In early termination, especially with a special pledge in place, the pledgee creditors’ rights and release of the security must be considered. It may also end for serious breach; the Ministry requests the declaration from the Arbitration Commission, appoints an intervenor and, with Treasury approval, reassigns the remaining term through a new tender. Early termination for public interest during construction also applies, following a Concessions Council report and Public Works and Treasury decrees, when a change in circumstances makes the works unnecessary or adjustments require investments exceeding twenty-five percent of the official budget, with statutory compensation.

Two-tier dispute resolution The system offers a two-tier architecture, resolving technical and economic aspects first and only afterward, if the dispute persists, legal ones. Law No. 20,410 strengthened it. Technical Panel. It has existed since 2010 to resolve technical or economic discrepancies during execution. Either party may request it and it issues a reasoned recommendation with no binding force. It comprises five members, under Article 36 of MOP Supreme Decree No. 900: two lawyers, two engineers and one professional in economic or financial sciences.

Arbitration Commission. Regulated in Article 36 bis of Decree No. 900. Disputes over the contract’s interpretation or application may be brought to the Commission or, at the claimant’s choice, to the Santiago Court of Appeals; technical or economic aspects go first to the Technical Panel. It comprises three members appointed from panels of the Supreme Court, for the lawyers, and the Antitrust Tribunal, for the technical experts. It acts as an arbitrator ex aequo et bono and weighs evidence per sound judgment; its ruling is issued in accordance with law and admits no appeal.

R I S K A L LO C AT I O N

Risk allocation

The Chilean concessionaire faces recurring infrastructure risks, allocated through mechanisms in the bidding terms, such as time and cost relief provisions, cost-overrun sharing schemes and minimum guaranteed income, plus the Technical Panel and the Arbitration Commission.

· Incomplete engineering designs delivered by the · Delays in expropriations authority

· Delays in environmental authorizations · Conflicts with communities

· Rigidity of some contracts · Lack of a clear tariff policy

· Exposure to political-cycle changes

LEGAL FRAMEWORK

Legal framework

Water is a public good and its use by private parties requires a water use right constituted or recognized under the Water Code. That right is an asset distinct from the land where the water is captured, may be transferred, encumbered and recorded, and is subject to availability, effective use, registration, oversight and forfeiture. Since the title is independent of the land, buying the property does not guarantee the water; Chile ranks among the countries with the highest water stress in the world, with northern basins where no new rights are granted, so any waterintensive project must address it from the outset.

The Water Code was set by DFL No. 1,122 of 1981, of the Ministry of Justice, published on October 29, 1981, and defines water and the use right and how it is constituted, exercised and forfeited. The most profound amendment is Law No. 21,435, published on April 6, 2022: it made new rights temporary, raised human consumption and subsistence to legal priority, strengthened lapsing and forfeiture for non-use, and introduced non-extractive or in-situ rights; much of its effect operates through transitional provisions still in force.

Adjustment laws followed. Law No. 21,586 (July 13, 2023) extended the registration deadline and introduced title perfection under the DGA; Law No. 21,727 (February 18, 2025) extended the registration deadline to April 6, 2027; Law No. 21,740 (April 23, 2025) amended DGA enforcement and oversight.

The General Water Directorate (DGA), under the Ministry of Public Works, is the central regulator. It grants rights, declares availability or exhaustion of sources, sets the ecological flow, administers the Public Water Registry, applies the non-use fee and conducts lapsing and forfeiture. The risk lies in subsequent reforms and still-live transitional deadlines, so pin down the version and date of each deadline when deciding.

TYPES OF RIGHTS

Nature and types of rights

Water, in any of its states, is a public good (Article 5 of the Water Code), not subject to private appropriation. What is granted to private parties is the water use right (Article 6 of the Water Code), a real right entitling its holder to use and enjoy the resource. The final paragraph of Article 19 No. 24 of the Constitution grants ownership over those rights, with constitutional protection the 2022 reform did not remove for already-constituted rights. Three features define it.

Non-consumptive. Require the water to be returned per Permanent. Authorize capture at any time subject to the constituting act (run-of-river hydropower). availability.

Contingent. Only authorize use of surplus water once Continuous, discontinuous or alternating. Depending permanent rights are satisfied; over a stressed source they on whether use is uninterrupted, by periods or by turns. are worth far less than their nominal flow.

Surface and groundwater. The groundwater regime is more demanding; a 200-meter protection radius applies against third-party wells.

Non-extractive or in-situ. Introduced by Law No. 21,435 for environmental conservation, sustainable tourism or recreational projects; they keep the water in its channel and, requiring no works, are not subject to the non-use fee.

THE 2022 REFORM

Constitution of rights and the reform

There are two routes: applying for the right before the DGA or acquiring it from a holder. Original constitution proceeds if third-party rights are not harmed, water is available and the public interest is respected. Availability is the hardest condition. It has a physical dimension — water existing at the source — and a legal one, since rights cannot be constituted over those already recognized to third parties, and a minimum ecological flow must be respected. Scarcity has made two restrictive figures on groundwater frequent. In restriction areas the DGA only grants provisional rights; in prohibition zones it grants no new ones. In both cases, by operation of law a Groundwater Community (CASUB) is constituted. When several applications compete for insufficient water, the DGA resolves by auction (Articles 142, 143 and 144 of the Water Code).

FEE AND FORFEITURE

Ecological flow, non-use fee and lapsing

Three mechanisms give effect to the reform and operate in a chain.

Minimum ecological flow. The water that must remain at the source to preserve the ecosystem. The DGA sets it under Article 129 bis 1 of the Water Code, as a limit on legal availability.

Non-use fee. Charged to a holder who does not make effective use of the resource for failing to build the capture or return works (Arts. 129 bis 4 et seq.). The reform raised it and scaled it up over time; if unpaid, it can end in a judicial auction of the right.

Forfeiture for non-use. The final step, when the holder does not build the works. The period is five years for consumptive rights and ten for non-consumptive ones, counted from publication of the resolution first including the right on the fee-subject list. For rights constituted before the reform that have not built the Article 129 bis 9 works, forfeiture of the not-effectively-used portion operates ten years after the law’s publication. The holder has 30 days to object; once remedies are exhausted, the DGA requests the Registrar to cancel the recording. Exceptions exist (rural sanitary services, agricultural and indigenous communities).

REGISTRY AND TRANSACTIONS

Registration, disclosure and transactions

The reform turned registration into an obligation with severe consequences. Rights constituted as of the publication date of Law No. 21,435 are subject to forfeiture if not recorded in the competent Registrar’s Water Property Registry and registered in the DGA’s Public Water Registry within the legal deadline. The original 18-month deadline was extended by Law No. 21,586 and further extended by Law No. 21,727 to April 6, 2027. Non-compliance can result in forfeiture by operation of law, subject to the same exceptions.

Added to this is the obligation under the fifteenth transitional article of the Water Code, granting five years from the publication of Law No. 21,435 to make a marginal annotation on the recording, evidencing registration in the Registry. That deadline also expires on April 6, 2027; until it is made, the Registrar cannot record transfers of ownership. Law No. 21,586 also introduced the title-perfection procedure under the DGA, to determine each right’s data and incorporate it into the Registry.

O R G A N I Z AT I O N S A N D S E C TO R S

Users’ organizations and sectoral relevance

DESALINATION

Desalination: Law No. 21,813

Desalination has become a central response to scarcity; by 2025 more than 30 desalination plants were operating in Chile, with mining as the main consumer. Previously it was governed by the general rules on maritime concessions, because the Water Code governs continental, not maritime, waters.

That framework changed with Law No. 21,813 on the use of seawater for desalination, published on May 12, 2026, which creates a special regime of maritime concessions and allocations, a National Desalination Strategy and rules on enforcement, sanctions, renewal, lapsing and termination. For ongoing projects, review the transitional rules and their effective dates.

TWO LEVELS

Two intersecting compliance levels

Two logics coexist in Chile. Criminal compliance is mandatory insofar as the law attributes criminal liability to the company for certain crimes perpetrated within the scope of its activity, when the act is favored or facilitated by the lack of effective implementation of an adequate prevention model. Sectoral regulatory compliance arises from the antitrust, data protection, consumer, environmental, anti-money laundering and financial markets frameworks.

The two intersect. The same undue payment to an official to speed up a permit can simultaneously trigger a bribery crime implicating the legal entity and a regulatory infringement before the sectoral agency. Compliance is no longer just the lawyer’s domain; it has become a business risk-management variable.

L AW N O. 2 0 , 3 9 3

Corporate criminal liability

Corporate criminal liability was introduced by Law No. 20,393, published on December 2, 2009, “Establishing the criminal liability of legal entities for the offenses it specifies” (Law 20,393, BCN, idNorma 1008668), to close Chile’s gap against OECD bribery standards, with an original catalog later expanded by subsequent laws.

This liability is autonomous from the individual’s. The company can be convicted even if the specific individual is not identified, or even if that person’s liability lapses, so it cannot hide behind “it was an employee acting on their own.” The line between “for its benefit” and “against it” is proven with internal records, controls and the reaction upon detecting the act, so detecting, reporting and cooperating leaves the company in a better position than concealing it.

L AW N O. 2 1 , 5 9 5

The change brought by the Economic Crimes Law

The 2009 regime was transformed by Law No. 21,595, the “Economic Crimes Law,” enacted on August 7, 2023 and published on August 17, 2023 (Law 21,595, BCN, idNorma 1195119), which did three things. It systematized economic crimes into four categories with their own penalty regime, harsher than the ordinary one. It expanded the catalog of offenses for which the legal entity answers, from a handful of figures to more than 250 base offenses per available counts, a figure that should be checked against the current legal catalog at each update. And it amended Law No. 20,393 itself through its Title IV, revising attribution criteria, demanding more of the models, and introducing new penalties, including submission to a court-appointed supervisor.

The effective date matters decisively. The rules affecting individuals apply from publication, in August 2023, but the amendments to Law No. 20,393 — and thus corporate liability — began to apply on September 1, 2024. The supervisor’s introduction was made subject to Decree 97 of the Ministry of Justice, published on September 26, 2024.

CATEGORIESOFOFFENSES

The categories of economic offenses

Category Inclusion logic Examples of base offenses

First Always an economic offense, by its nature. Collusion, insider trading, false information to the market or the CMF, bribery, money laundering, disloyal management.

Second Economic only if committed while holding a company position Fraud, tax and customs crimes, cybercrimes, or for its benefit. offenses against intellectual and industrial property.

Third Public official offense involving someone from the company Bribery, incompatible negotiation, illicit or benefiting it. enrichment.

Fourth Receiving stolen goods and laundering assets from economic Receiving stolen goods, money laundering of assets offenses in the other categories. of illicit economic origin.

The category defines criminal treatment and access to alternatives to prison, and lets the company map its exposure. Law No. 21,595 also provides an inapplicability rule for micro and small enterprises regarding certain offenses in the second, third and certain fourth-category scenarios, assessed case by case, considering whether the company belongs to a business group, since group revenue must then be added to determine its size under Law No. 20,416 (Prelafit, BH Compliance).

That logic classifies the offense as economic, but criminal attribution to the legal entity also requires meeting the conditions of Art. 3 of Law No. 20,393. The Economic Crimes Law added an environmental layer to this catalog, with new offenses such as illegal waste disposal, omitting an environmental impact assessment when required, and unauthorized water extraction in scarcity areas. For an industrial, mining, agricultural or waste-management company, this layer is an unavoidable part of the criminal risk map and connects to this report’s environment chapter.

PREVENTION MODEL

The crime prevention model

Adopting and effectively implementing the model, prior to the offense, allow the company to be exempted from or have mitigated its criminal liability by showing it fulfilled its direction and supervision duties. It is not an automatic shield and does not stop the Public Prosecutor’s Office from investigating, but to convict, it must prove the perpetration was favored or facilitated by the lack of effective implementation of an adequate model. What decides its value in court is real quality, not mere existence. Article 4 requires a set of minimum elements, and the reform raised the standard above the 2009 one.

Identification of risk activities. Mapping processes at risk of committing the catalog offenses, with a living criminal risk matrix, specific to the business line and updated after the 2023 reform.

Prevention and detection protocols and procedures. Concrete rules to prevent and detect risk conduct, with a secure whistleblowing channel and internal sanctions for breach, communicated to workers and service providers and built into contracts, backed by written policies, operational controls and an enforced disciplinary regime.

Crime prevention officer. One or more persons responsible for applying the protocols, with autonomy and independence, effective direction and supervision powers and direct access to management, with traceable staffing and budget.

Periodic evaluation and update. Periodic evaluations by independent third parties and improvement mechanisms based on them, with reports, executed plans and traceability of updates.

Added to this is counterparty due diligence, which although Art. 4 does not name it is now part of the standard, because much criminal risk enters through third parties. A distributor, agent or supplier who pays bribes can drag down the company that hired them, so a serious model incorporates integrity screening before contracting, compliance clauses and monitoring. A model that does not look at counterparties sees only half the problem. This layer also connects to M&A due diligence, where hidden liabilities can pass to the acquirer under liability-succession rules in mergers, conversions and spinoffs.

PENALTIES

Penalties applicable to the legal entity

A company cannot go to prison, so its penalties differ from an individual’s. The catalog of Law No. 20,393, reinforced by the Economic Crimes Law, includes the following. Day-fine. The amount results from multiplying the number of day-fines by the value of each. The legal entity’s own scale is in Law No. 20,393, with a minimum of 2 and a maximum of 400 day-fines, unless a special legal rule applies (the general scale of Law No. 21,595, of up to 300 day-fines, applies to the responsible individual). The day-fine value is tied to the convicted party’s average daily net income in the year before the investigation targeted it, so it scales with the company’s economic size and is the main financial consequence.

Prohibition from contracting with the State. Temporary or permanent depending on severity, sensitive for State suppliers or those bidding on public tenders.

Loss of tax benefits. Total or partial, relevant for companies with franchises, exemptions or tax incentives.

Submission to a court-appointed supervisor. Imposable as a precautionary measure or a penalty, with a corrective purpose for the prevention system, to fix the organization without dissolving the company.

Dissolution or cancellation of legal personality. Extinction of the company, in cases of maximum severity or recidivism.

Confiscation of proceeds and publication of the judgment. Seizure of the offense’s proceeds and disclosure of the conviction; it applies even without a prior conviction in certain cases.

Under Articles 6 and 7 of Law No. 20,393, self-reporting, substantial cooperation in clarifying the facts, and adopting effective measures to prevent recurrence, among others, operate as mitigating factors. The prevention model, beyond its exempting role, weighs in mitigation when it falls short of exempting.

SECTORAL COMPLIANCE

Sectoral regulatory compliance

Criminal compliance coexists with regulatory compliance spread across regimes with their own enforcer and frequent, fast and, in several sectors, substantial administrative sanctions. Most of these matters have their own chapter. This is the cross-cutting map that integrates them into a common matrix.

Antitrust. Collusion is a first-category offense under the Economic Crimes Law, so a price agreement, market allocation or output limitation adds, to the administrative exposure before the Antitrust Tribunal and the National Economic Prosecutor’s Office, criminal exposure for individuals and the company. Its compliance program is both regulatory and criminal defense.

Personal data protection. Practically every company processes personal data and must fulfill lawfulness, information and security duties. In a multinational group this intersects with transfers to the parent or cloud vendors, which require a lawful basis.

Consumer protection. Companies selling to end consumers are subject to Law No. 19,496 and SERNAC, whose infringement generates individual complaints and collective proceedings.

Environmental compliance. The Superintendence of the Environment imposes severe fines for breach of environmental approval resolutions and sectoral rules, and the Economic Crimes Law criminalized serious environmental conduct, so the same act can generate an administrative sanction and criminal liability at once, requiring environmental compliance to be integrated into the model.

Labor compliance. Compliance has centered on preventing workplace harassment, sexual harassment and violence at work, under Law No. 21,643, known as the Karin Law, published on January 15, 2024 and amended by Law No. 21,687, enacted on July 31, 2024 (Law 21,643, BCN, idNorma 1200096; Law 21,687, BCN, idNorma 1205338), which requires the employer to have a prevention protocol and an investigation and sanction procedure. Added to this are subcontracting rules, with joint-and-several or subsidiary liability for the principal. Public procurement. Disqualifications, supplier registries and ChileCompra rules define who can bid. The connection is direct, because the prohibition from contracting with the State is a penalty for the legal entity, and a conviction can close it out of the public market.

MONEY LAUNDERING

Anti-money laundering prevention and the UAF

The anti-money laundering and counter-terrorism financing regime is cross-cutting and affects a broad universe of obligated entities. Law No. 19,913 created the Financial Analysis Unit (UAF) and established the preventive system, and was one of the statutes originally amended by Law No. 20,393, showing the link between anti-moneylaundering prevention and corporate criminal liability (Law 20,393, Art. Third, BCN, idNorma 1008668). Obligated entities are numerous and include banks and financial institutions, factoring and leasing companies, fund managers, exchange houses, insurance companies, casinos, customs agents, real estate brokers, notaries and real estate registrars, among others. Their main obligations are three.

Report suspicious transactions to the UAF: those lacking apparent economic or legal justification, regardless of amount and with confidentiality never serving as an excuse.

Keep records for five years of cash transactions exceeding ten thousand dollars, available to the UAF.

Comply with the instructions the UAF issues through circulars, such as Circular 62, of March 19, 2025, addressed to the obligated entities under Art. 3 (UAF Circular 62, BCN, idNorma 1212282).

Added to this is declaring to the National Customs Service the carrying of cash or bearer negotiable instruments exceeding ten thousand dollars when entering or leaving the country. A good-faith report releases the obligated entity from liability; non-compliance is punished with fines depending on the infringement, and can reach directors and legal representatives who voluntarily took part in the conduct.

GOVERNANCE

Governance, evidence and program audit

A compliance program is worth what its evidence is worth. In an investigation or inspection, the company does not defend itself by asserting it “had a program,” but with the documents proving it operated. Governance starts at the board, because the reform reinforced that compliance is senior management’s responsibility and not a task simply delegable to a subordinate position. The board must know the risk map, approve the model, resource it and review its operation, and evidence of that oversight, in minutes and reports, is part of the model itself. Periodic legal audit by independent third parties closes the cycle Article 4 requires.

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MARCO LEGAL

Legal framework and proceedings

The system provides three central insolvency proceedings.

Reorganization. Restructures liabilities and assets so the viable company continues operating.

Liquidation. Orders the sale of the non-viable debtor’s assets to pay its creditors.

Debtor renegotiation. An administrative procedure allowing individuals to restructure their debts.

Added to these, since the reform, are a simplified reorganization and a simplified liquidation for micro and small enterprises.

INSTITUTIONS

Institutions of the insolvency system

The system rests on three pillars.

Superintendence of Insolvency and Reentrepreneurship (Superir) Superintendence of Insolvency and Reentrepreneurship (Superir). Regulatory body. It oversees liquidators, receivers, intervenors, insolvency auctioneers and other persons under its control. It administers debtor renegotiation, the only central administrative-track procedure. It maintains the Receivers’ Roster and the Liquidators’ Roster, public registries of certified, supervised professionals. It administers the Insolvency Bulletin, a free public platform where resolutions are published. Notices are served through the Bulletin, not the Official Gazette, and deadlines to verify claims run from that electronic publication.

Receiver and liquidator They are the technical bodies. The receiver takes part in reorganization, fosters agreements and safeguards creditors’ interests; it does not take over management, since the debtor retains control. The liquidator takes part in liquidation, realizes the debtor’s assets and pursues payment per the statutory priority order; unlike the receiver, it does take over representation of the debtor’s assets once liquidation is declared.

Tribunales ordinarios Chilean law has no special insolvency courts. The court of the debtor’s domicile has jurisdiction. Banks, financial institutions, insurance companies and other regulated entities are subject to special regimes, separate from the general regime of Law No. 20,720.

REORGANIZATION

Reorganization insolvency proceeding

Reorganization is the heart of the system. It seeks an agreement between the debtor company and its creditors allowing it to keep operating, because creditors recover more from a going concern than from a liquidated one.

Commencement. Filing by the debtor company before the competent court, with an inventory of assets and liabilities and a list of creditors. In parallel, the debtor requests the Superintendence to appoint a receiver (Art. 22, Law No. 20,720). Once requirements are met, the court issues the Reorganization Resolution (Art. 57, Law No. 20,720).

Insolvency financial protection. From notification, and for an initial period of sixty days, no liquidation may be commenced against the debtor, nor executory proceedings, enforcement of any kind, or repossession in lease proceedings. The period may be extended, under Article 58, by up to one hundred twenty additional days, subject to the creditor support the law requires. During protection, existing contracts remain in force and the law prohibits early unilateral termination, early acceleration of obligations and enforcement of security based solely on the commencement of the proceeding. A creditor breaching this prohibition is subordinated in the payment order.

Forms of the agreement. The judicial reorganization agreement is reached within the proceeding. The out-of-court one is negotiated outside the procedural framework and, to be enforceable against non-parties, must be submitted for judicial approval.

Simplified reorganization. The 2023 reform introduced a simplified version for micro and small enterprises (Law No. 21,563).

REORGANIZATION

Creditor deadlines and agreement quorum

Creditor deadline. After the Reorganization Resolution, creditors have fifteen days from notification to prove their standing, indicating their representatives’ powers to review, amend and adopt the agreement (Art. 57 No. 6, Law No. 20,720). The liabilities are determined based on the list of claims the debtor submits and the objection regime of Articles 70 and 71.

Meeting decisions are adopted by weighted majorities. The general rule is an absolute majority of creditors entitled to vote. For the most important decisions, such as approving the agreement, the law requires a special quorum of two-thirds of total verified or recognized liabilities entitled to vote (Art. 79). Once reached, the agreement must be approved by the court, and the judicial reorganization agreement binds all parties, even creditors who did not participate. If no agreement is reached, the company is declared in liquidation.

15 days 60 + 120 2/3 to prove standing from notification days of insolvency financial of voting liabilities to approve the protection, initial and extendable agreement

LIQUIDATION

Liquidation insolvency proceeding

Liquidation applies when the company is not viable. The liquidator realizes the assets and distributes the proceeds per the statutory priority order.

Voluntary or forced commencement. In the voluntary case, the debtor starts the proceeding if it meets the requirements and has not already commenced a reorganization. In the forced case, any creditor may sue to commence it only if a ground under Article 117 of Law No. 20,720 exists, including ceasing to pay an obligation evidenced by an executory title. The 2023 reform added a simplified liquidation shortening deadlines and eliminating creditor meetings, unless requested (Law No. 21,563). Effects of the declaration. The court appoints the liquidator, who takes over representation of the debtor’s assets. All judicial actions consolidate before the court hearing the liquidation. The debtor loses administration of its attachable assets; the declaration does not transfer ownership to creditors, but suspends the power to dispose until claims are paid. Individual enforcement is suspended. As an exception, pledge and mortgage creditors retain the right to separately pursue their security, but must likewise verify their claims.

Creditor deadline. Thirty business days from publication of the declaration in the Insolvency Bulletin to verify claims with supporting evidence. Day periods are computed in business days under Article 7 of Law No. 20,720. Only claims on the recognized-claims list take part in the distribution. This period differs from the fifteen-day period in reorganization.

CREDITOR PRIORITY

The creditor priority order

The debtor’s assets form the estate, which the liquidator realizes to pay creditors. As a general rule, claims are paid pro rata, unless a statutory preference applies. The priority order is set by the Civil Code (Arts. 2470 et seq.) and Law No. 20,720 itself.

First class (Art. 2472 Civil Code). General privilege. Includes court costs in creditors’ general interest, proceeding administration and asset realization costs, worker wages and family allowances, unpaid social security contributions and certain Treasury claims for withholding and surcharge taxes.

Second class. Pledge claims, paid from the proceeds of the pledged asset.

Third class. Mortgage claims, paid from the proceeds of the mortgaged property.

Fourth class and beyond. Other preferred claims. Common or unsecured claims are paid only from the remainder.

The law allows a payment plan alternative to the default statutory order, provided it does not contravene the preference order or the recognized amounts. Once the proceeding ends, obligations predating its commencement are extinguished by operation of law, and the debtor regains administration of any remaining assets.

CROSS-BORDERINSOLVENCY

Renegotiation and crossborder insolvency

Debtor renegotiation Debtor renegotiation is the route for individuals who do not qualify as a debtor company. Unlike reorganization and liquidation, which are judicial, it is an administrative procedure before the Superintendence of Insolvency and Reentrepreneurship, allowing personal debts to be restructured with its mediation. For a foreign company or investor it matters when the counterparty is an individual, such as a guarantor, surety or sole proprietor, whose insolvency is channeled through this route rather than the company proceedings.

FOREIGN CREDITORS

Foreign creditors and security

Law No. 20,720 makes no distinction between Chilean and foreign creditors. The resolution declaring liquidation may be served on creditors located outside Chile, inviting them to appear and verify their claims within the statutory deadline, on equal terms with local creditors and subject to the same priority order.

Foreign creditors in Chile. They may appear in Chilean insolvency proceedings and exercise the rights the law recognizes, including claim verification. If a foreign insolvency proceeding must have effect in Chile, its recognition is requested under Chapter VIII, normally by the foreign representative with counsel in Chile; once recognized, the representative may seek measures to protect related assets or interests.

Chilean creditors abroad. They may request the Superintendence of Insolvency and Reentrepreneurship to act on their behalf, and Chilean courts may communicate directly with foreign courts. Where cooperation is not accepted under the foreign jurisdiction’s framework, they must resort to traditional recognition through an international letter rogatory.

For recognition and enforcement of foreign judgments, including those issued in insolvency proceedings, the Chilean system applies a framework based mainly on the international treaties signed with the jurisdiction of origin. Absent a treaty, the principle of reciprocity governs. Without a treaty or reciprocity, enforcement may proceed on the basis of general principles of law, provided the judgment does not contravene Chilean public policy or jurisdiction rules. Once the requirements are met, there is no restriction preventing the return of assets to a foreign representative, on the same terms as to a Chilean one.

The law also regulates set-off of related obligations, relevant for international financial creditors. The general rule prohibits set-off not carried out before notice of the liquidation resolution, with an exception for related obligations: those which, even in different currencies, derive from derivative transactions — futures, options, swaps and forwards — entered into between the same parties under the same master agreement. The rule authorizes the Central Bank to set the general terms applicable to those agreements. When valid set-off yields a net amount payable by the debtor company, that amount is added to the liabilities.

COMPARISON

The insolvency proceedings, side by side

↳ Comparison table available in the PDF

LEGAL FRAMEWORK

Market structure and regulator

The market is developed, with international groups operating through local subsidiaries and two segments, life insurance and general insurance. Given the country’s high seismic exposure, local retention of catastrophic risk is limited and cross-border reinsurance is structural.

Insurance law rests on two statutes plus the regulator’s rules. The first is Decree with Force of Law No. 251 of 1931, of the Ministry of Finance, on Insurance Companies, Stock Corporations and Commodity Exchanges, which governs who may insure risks in Chile, the incorporation and operation of companies, their capital and solvency requirements and reinsurance. The second is the Commercial Code, which governs the insurance contract in Book II, Title VIII, Articles 512 et seq., entirely replaced by Law No. 20,667, published in the Official Gazette on May 9, 2013 and in force since December 1, 2013. On top of both sits the administrative regulation of the Financial Market Commission (CMF).

GIRO EXCLUSIVO

Incorporation, exclusive purpose and line separation

Under DFL 251, only Chilean insurance and reinsurance companies, with a corporate purpose exclusively for insurance, may insure risks in Chile. A narrow exception exists for foreign insurers, who may operate without local incorporation in limited areas such as international marine and aviation insurance, international transit cargo transport, and satellite-related risks. Outside these cases, a company incorporated in the country is required.

DFL 251 classifies companies into two groups and an entity may not operate in both. The first group, general insurance, covers damage to property or financial interests, such as fire, theft, civil liability or transport, with short-term obligations. The second, life insurance, covers personal risks, such as death, survival or disability, and includes annuities and savings, with long-term obligations. The financial regime imposes minimum capital, technical reserves and risk-based capital.

INSURANCE CONTRACT

The insurance contract and the pro-insured rule

Article 512 of the Commercial Code defines insurance as the contract under which the insurer undertakes to indemnify a loss or provide a capital sum, annuity or other benefit upon the occurrence of the risk, in exchange for the payment of a premium. Following the reform, the contract is consensual and the policy evidences it without being a requirement for its existence.

The system is organized around protecting the insured, the weaker party in an adhesion contract. The provisions are, as a general rule, mandatory; the parties cannot modify them to the insured’s detriment, except where the law authorizes it, and the version most favorable to the insured prevails, including in cases of ambiguity. Mandatory status admits enumerated exceptions, with negotiable terms and models not filed with the CMF: under Article 542, in the first group for hull and marine and air transport insurance, and in contracts where the insured and beneficiary are legal entities and the annual premium exceeds UF 200, in which cases the policy must be signed by the contracting parties.

Good faith is the contract’s axis. Article 525 requires the policyholder to disclose, per what the insurer requested, the facts relevant to assessing the risk; if the insurer does not request that disclosure, it cannot later allege errors, omissions or inaccuracies. Policies operate on general conditions, filed with the CMF, and specific conditions, which prevail in case of conflict, and exclusions are a frequent focus of dispute.

SINIESTROS

Auxiliaries and claims settlement

Distribution and settlement are channeled through insurance trade auxiliaries, supervised by the CMF. Their core categories are:

Insurance brokers. Independent intermediaries registered with the CMF. They can place insurance with any authorized insurer and the law imposes on them a duty of informed advice to the client throughout the contract’s term. Alternative channels coexist, such as the sales agent, bancassurance and InsurTech platforms.

Claims adjusters. Also registered and supervised by the CMF, they investigate the loss to determine coverage and assess the indemnity. They must act with independence and impartiality; although paid by the insurer, their opinion is objective, non-binding and challengeable before the adjuster and then before an arbitrator.

Alternative channels also coexist, such as the sales agent, bancassurance and InsurTech platforms.

The settlement procedure is detailed in Supreme Decree No. 1,055 of 2012, of the Ministry of Finance, which approved the Regulation on Insurance Trade Auxiliaries and the Claims Settlement Procedure, amended by Decree No. 1,393 of 2013. Once the loss is reported, the insurer settles directly or appoints a registered adjuster, and the insured may reject direct settlement. The adjuster issues its report within 45 days, extendable to 180 days for marine hull or general average, and to 90 days for certain property damage claims with an annual premium above UF 100. Once the report is issued, the indemnity is paid within the regulatory deadline, and reinsurance cannot delay it.

If a dispute arises, the general rule is mandatory arbitration, unless the disputed amount is below UF 10,000, in which case the insured may go to the ordinary courts. The AACh also administers the Insured’s Ombudsman for claims up to UF 500 in general insurance and UF 250 in life; its decisions bind only the insurers and the insured retains the right to sue before the courts or SERNAC.

REASEGURO

Reinsurance and foreign reinsurers

The 2013 reform set mandatory rules. Reinsurance does not alter the contract between the direct insurer and the insured, and payment to the insured cannot be delayed by pending reinsurance collection; the “funds withheld” clause was banned. Direct insurance and reinsurance disputes are subject to Chilean jurisdiction, and any agreement to the contrary is void; however, reinsurance disputes may be submitted to Law No. 19,971 on International Commercial Arbitration.

S E G U R O S O B L I G ATO R I O S

Mandatory insurance and parametric insurance

Chilean law imposes certain mandatory insurance policies. Two are especially relevant for a company operating in the country: Social insurance against workplace accidents and occupational diseases (Law No. 16,744). Mandatory, borne by the employer from the first worker, administered by employer mutual associations and the Labor Safety Institute. Covered in more detail in Chapter 7. Mandatory Personal Accident Insurance (SOAP, Law No. 18,490). Required to operate any motor vehicle. Covers, within the statutory limits, death and bodily injury from accidents involving the insured vehicle. Its policy is standard and drafted by the CMF.

In the financial sector, insurance tied to mortgage loans is governed by Article 40 of DFL 251 and CMF General Rule No. 469.

MARKET ENTRY

Entry of foreign insurers and investors

Anyone assessing entry into the Chilean insurance market faces three linked decisions. The first is structural: incorporating a Chilean exclusive-purpose company for each group in which it operates, with its own capital and reserves and CMF authorization to exist. The second is solvency and reinsurance, where each foreign reinsurer must meet the minimum BBB rating and appoint a representative in Chile. The third is market conduct, with most of the book under the mandatory regime and CMF texts, distribution through registered brokers and arbitration above UF 10,000. Anyone entering as an investor in an existing company must also consider foreign investment and corporate control rules; DFL 251 requires authorization to transfer a significant stake. See the Business legal structures and Foreign investment chapters.

CLOSING

2026 regulatory developments

Regulatory and legislative status verified as of June 22, 2026. No investment decision should rely on a bill as if it were law in force.

Executive matrix · Reconstruction Bill · Permitting reform · Personal data · Cybersecurity · Pensions · How to get ahead

The developments, by actual status Matter Status Key date Regulatory impact

Personal data protection (Law Published, pending Dec. 1, 2026 New Agency, higher lawfulness and security standards, No. 21,719) effect data subject rights and sanctions regime.

Permitting reform / LMAS (Law In force, gradual 2026+ Common permitting system, maximum deadlines, enabling No. 21,770) implementation techniques, administrative silence, SUPER platform and regulatory stability.

Cybersecurity (Law No. 21,663) In force, technical 2026 Risk management duties, standards and incident reporting; development technical regulation under public consultation.

Pension reform (Law No. 21,735) In force, gradual 2025–2033 Additional employer contribution rising in stages to its full rate.

Working-hours reduction (Law In force, gradual 2026 / 2028 Dropped to 42 hours on April 26, 2026, on track toward No. 21,561) 40 hours, with no pay cut.

Desalination (Law No. 21,813) Published, deferred 2026 Framework for seawater use; key for water-intensive effect projects.

National Reconstruction Bill In Congress 2026 IDPC reduction and reintegration, tax invariability, formal (Bulletin No. 18,216-05) employment credit and transitional windows. Not yet law.

The 2023 Economic Crimes Law No. 21,595 is not a 2026 development, but remains a compliance priority because its effects on prevention models and corporate criminal liability keep consolidating. The law substantially expanded the catalog of offenses that can trigger that liability and reorganized the penalty regime. Its detailed treatment is in the compliance chapter. The practical consequence is that the prevention model stopped being a formal document and became an operational defense; companies that designed it under the previous framework should review it in light of the new catalog.

National Reconstruction Bill The broadest potential change for 2026 is a bill, not a law. On April 22, 2026, the Executive submitted to the Chamber of Deputies, with utmost urgency, the National Reconstruction and Economic and Social Development Bill (Message No. 018-374, Bulletin No. 18,216-05). As of June 22, 2026, it was moving through Congress and did not constitute law in force. Its content may change or it may not pass at all. Despite its name, it gathers more than forty measures on reconstruction, tax competitiveness, formal employment, housing, permits and investment. Everything that follows is legislative proposals still in Congress.

The most significant piece is the reduction of the First Category Tax (IDPC) and the reintegration of the tax system. The bill proposes a single 23% IDPC rate for the general regime and SMEs, with a staged phase-in for the general regime reaching 23% from business year 2029, and moving toward reintegrating the semi-integrated regime by gradually eliminating the IDPC credit clawback obligation.

Business year Proposed IDPC rate for the general regime Comment

2026 27% Current rate maintained.

2027 25.5% First proposed reduction step.

2028 24% Second proposed reduction step.

2029 onward 23% Proposed steady-state rate.

All of the above are legislative proposals still in Congress, not law in force.

Permanent measures and transitional windows The bill includes other permanent measures. It proposes eliminating the special 10% tax on capital gains from exchange-traded securities, restoring the treatment prior to Law No. 21,420. It creates a tax invariability statute for investments above USD 50 million. It introduces a formal employment credit of up to 15% of pay in the lowest bracket, phasing down to 0% above 12 UTM, and eliminates the SENCE training franchise. In housing, it proposes a voluntary, temporary 12-month VAT exemption on the sale of new homes with final occupancy permits, and a single 5% tax on gross rent from the third DFL 2 home onward.

On the transitional front it opens short-window opportunities. A twelve-month extraordinary voluntary declaration to regularize undeclared assets, foreign currency, crypto-assets and foreign income, with a single 10% tax dropping to 7% if the assets enter Chile and stay invested for at least five years. A 10% substitute tax on accumulated profits (as of December 31, 2025 or 2026) and pending withdrawals, exercisable within eight months of the eventual law’s publication. And a Treasury power to waive up to 100% of interest and up to 80% of fines on lumpsum payment, for obligations due through December 31, 2025, for 180 days from publication. On permits, it proposes streamlining procedures and reimbursing expenses when a favorable RCA is annulled.

This chapter is informational and does not constitute legal advice for any particular case. A substantial part of its content refers to bills still in Congress, which are not law in force and may be amended or fail to pass. The already-published rules mentioned here are, in several cases, subject to a vacancy period, regulations or gradual implementation. Figures, rates, deadlines and legislative status should be verified against the official source in force at the time of acting. For any specific decision, consult a lawyer to assess your particular situation.

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