Internationalization
Expanding your business outside Chile — or entering the Chilean market from abroad — involves much more than translating documents. It requires understanding different regulatory frameworks and anticipating risks that don't exist in your home market.
How we approach Internationalization
- →Regulatory diagnosis of the target market before committing resources
- →Optimal corporate structuring for international operations
- →Coordination with local advisors under single legal direction
- →Comprehensive review of international contracts focused on enforceability
- →Continuous monitoring of regulatory changes affecting cross-border operations
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Key services in our international expansion practice
Structuring cross-border operations (into and out of Chile)
Structuring cross-border operations means coordinating corporate, tax, regulatory and operational matters between Chile and the target jurisdiction. We advise Chilean companies expanding abroad and foreign companies entering the Chilean market. On the way out we design: the type of offshore vehicle (subsidiary, branch, joint venture, regional hub), the choice of jurisdiction (Delaware, the United Kingdom, Spain, Panama, the Netherlands, Miami, Singapore, depending on the objective), the capitalisation and financing structure, transfer pricing policy, repatriation of profits and dividends, and the optimal tax treatment under double taxation treaties.
On the way in we structure: a Chilean company with or without a foreign parent, capital contributions, intra-group agreements, VAT on cross-border services, withholding on payments abroad, and compliance with Chapter XIV of the Central Bank's Compendium of Foreign Exchange Regulations where it applies.
Bilateral treaties and double taxation agreements
Chile has a solid network of double taxation treaties with more than 35 countries, alongside free trade agreements and investment promotion treaties. We advise on applying them in practice: using reduced withholding rates on dividends, interest and royalties; applying the method for eliminating double taxation (credit or exemption); characterising services (professional services, software royalties, technical assistance) that attract different rates; non-discrimination clauses; and mutual agreement procedures to resolve disputes between tax administrations.
We also advise on permanent establishment planning, to avoid unexpected taxation in the other country. We work with tax advisers and local counsel to optimise structures within the law and within the anti-abuse rules in force (the Principal Purpose Test in modern treaties).
International contracts (Incoterms, governing law, international arbitration)
International contracts call for particular discipline in clauses that matter less in domestic deals. We advise on drafting and negotiating export and import contracts with the Incoterms 2020 rule that fits the risk and the logistics cost; the strategic choice of governing law (Chilean law, the buyer's law, or a neutral law such as New York, England or Switzerland) and the forum for disputes, with a preference for international arbitration (ICC, LCIA, CIAC, AAA, SIAC).
We also cover currency and hedging clauses; international payment mechanisms (letters of credit, bank guarantees); force majeure clauses that cover modern events (pandemics, international sanctions, export controls); and clauses requiring compliance with trade regulation (OFAC, dual-use goods, export controls). For international distribution we structure contracts with territory, exclusivity, minimum purchase and exit clauses adjusted to local law.
International compliance (FCPA, UK Bribery Act, sanctions)
Chilean companies operating in international markets —particularly the United States, the United Kingdom and the EU— fall within extraterritorial criminal compliance regimes. We advise on compliance with the Foreign Corrupt Practices Act and the UK Bribery Act, which prohibit payments to foreign public officials and have broad extraterritorial reach; international sanctions regimes (OFAC, EU, UN) affecting transactions with listed persons, countries or entities; export controls on dual-use technology; and anti-money laundering compliance under FATF standards.
We design policies integrated with Chile's Law 20,393: counterparty due diligence with sanctions screening, anti-corruption contractual clauses, training for teams working cross-border, periodic audits of high-risk transactions (emerging markets, extractive sectors, counterparties with political connections) and a whistleblowing channel with international coverage.
Setting up foreign subsidiaries and joint ventures
International expansion is usually structured through wholly owned subsidiaries or joint ventures with local partners. We advise on the strategic choice and the incorporation: a comparative analysis of jurisdictions against the objective (market access, regional hub, holding vehicle, tax efficiency, asset protection), incorporation coordinated with local counsel, initial capitalisation and the plan for future funding, corporate governance in the foreign subsidiary, intra-group agreements (services, trademark licence, intercompany financing), and compliance with the Central Bank's Chapter XIV for outbound investments above USD 10,000.
For international joint ventures we draft the JV agreement with the clauses that matter: contributions and their valuation, reserved matters, deadlock, non-compete, transfers, exit (drag, tag, right of first refusal), governing law and international arbitration. The structure has to be robust enough to survive a change of partner, currency swings and eventual disputes.
Frequently asked questions about international expansion and cross-border operations
What steps does expanding internationally from Chile involve?
International expansion requires planning on four fronts at once. First, commercial strategy: the target market, the entry model (direct export, distributor, subsidiary, joint venture, acquisition), and the size and horizon of the investment. Second, legal and tax structure: the vehicle's jurisdiction, capitalisation, transfer pricing, treaty application and repatriation. Third, regulatory: sector licences and permits in the destination, company and trademark registrations, international compliance (FCPA, sanctions), foreign exchange rules and reporting to the Central Bank of Chile. Fourth, operational: the HR structure (expatriates or local hires, withholding), banking, systems and adapted commercial contracts. The typical timeline from decision to live operation is 6 to 18 months depending on the market and the model. Coordination between Chilean and local advisers is critical to avoid surprises.
Which double taxation treaties does Chile have?
Chile has double taxation treaties in force with more than 35 countries, including the United States (in application since 2024), Spain, the United Kingdom, Brazil, Mexico, Colombia, Argentina, Peru, China, Japan, Australia, Canada, Germany, France, Italy, Switzerland, the Netherlands, Sweden and Belgium. Each treaty sets reduced withholding rates on dividends, interest and royalties, the method for eliminating double taxation (credit or exemption), permanent establishment rules and mutual agreement procedures for resolving disputes. Modern treaties include anti-abuse clauses such as the Principal Purpose Test, which require genuine commercial purpose. International tax planning has to combine legitimate use of the treaties with compliance with the anti-abuse rules in force.
Which law should govern an international contract?
The choice of governing law is strategic and depends on several factors. For contracts with counterparties in civil law jurisdictions similar to Chile's (Spain, Peru, Mexico, Colombia), Chilean law is often efficient. For counterparties in common law jurisdictions (the United States, the United Kingdom, Singapore, Hong Kong), that jurisdiction's law may be preferable, because the counterparty knows it and the forum is predictable. A frequent alternative is a neutral international law such as New York, English or Swiss law, particularly alongside international arbitration. The choice of law should be matched by a consistent choice of forum: ideally international arbitration before a recognised institution (ICC Paris, LCIA, SIAC, AAA). Choosing a law without accessible courts is inefficient.
How do you comply with the FCPA and the UK Bribery Act?
Compliance requires an integrated programme covering prevention, detection and response. The essential elements are: a published anti-bribery policy signed off by senior management; risk assessed periodically, especially in emerging markets and extractive sectors; counterparty due diligence with sanctions screening and verification of beneficial ownership; contractual clauses requiring counterparties to comply and allowing audit and termination; training for key teams (sales, procurement, public affairs, finance); internal controls (spending limits, approvals, hospitality for officials); an international whistleblowing channel; internal investigation of alerts and voluntary disclosure where appropriate. The fines and collateral consequences (debarment from public tenders, reputational harm, civil claims) make prevention substantially cheaper than sanction.
How do you set up a subsidiary abroad?
Setting up a foreign subsidiary from Chile requires legal, tax, foreign exchange and operational coordination. The general steps are: selecting the jurisdiction against the objective (market, regional hub, holding), choosing the corporate form in the destination (LLC, Inc, GmbH, SL and so on), incorporation through local counsel with apostilled powers of attorney from Chile, capitalisation (direct contribution, intercompany financing, or a mix), reporting to the Central Bank of Chile under Chapter XIV where the investment exceeds USD 10,000, intra-group agreements (services, trademark licence, financing) with documented transfer pricing, appointing the local board and management, opening bank accounts (usually the bottleneck, both in emerging markets and in strict developed ones), sector registrations where applicable, and going live. The process typically takes 2 to 6 months depending on the jurisdiction and the preparation done beforehand.
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