In Chile the most “common” type of companies are:

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• Sociedades Anonimas: This is the equivalent of U.S Corporation; in which the capital is divided into shares, which can be either publicly traded or closely held.

• Sociedad Por Acciones (SPA): This is the preferred type of entity for foreign entrepreneurs given the flexibility that it provides. It only requires one person to form it. It provides a wide scope of actions and flexibility, allowing the incorporation of new partners and the increase of capital without a complex change in the bylaws. In this type of company, the liability of the partners varies according to the amount contributed by each of them. As oppose to a Corporation, an SPA does not have to publish its financial statements.

• Sociedad de Responsabilidad Limitada (SRL): This type of company requires a minimum of two partners to establish it and the partners cannot exceed 50. As the SPA, to form this company it is needed to execute a public deed and register the company with the Registry of Commence and a publication in the Chilean Official Newspaper.

• Individual Limited Liability Companies (EIRL): This entity is formed by one individual, which represents and administrates the company in its entirety. The capital must be different than the one owned by the person.

• Subsidiary company of a foreign entity: A foreign company may establishing an agency or a subsidiary in Chile. However, many times it is more advantageous to incorporate a foreign subsidiary under a Chilean company model given that the procedures to set up an agency are rather complex, since it includes the translation of the original documents of the parent company and other tedious procedures.

Deciding the right type of company is key for the right and effective operation of a business in Chile.