On January 23rd, Chile’s entrepreneurial community cheered as legislators passed a law changing the way businesses in the country are built. Now, it is possible for Chileans to create a company with one simple online process that is completely free of charge.
It is estimated that nearly one million entrepreneurs will benefit from the law. Currently, there are 370,000 “informal” entrepreneurs who can register in the system to access support programs sponsored by the state and the financial sector. Moreover, there are 670,000 companies incorporated as individuals that could soon be constituted as limited liability companies or societies.
Minister of Economy Pablo Longueira said in reference to the passage of the law, “The possibility of creating companies with one process, in one day, at no cost is, without a doubt, one of the greatest incentives our government has developed in favor of entrepreneurship. We hope that this change allows us to double the number of new businesses created in the country each year.”
The electronic form required for the creation of a business will be available online 24 hours a day, 365 days a year. All one needs is access to the internet – no law firms, notaries, real estate inscriptions or official publications are required.
The system will be up and running as of May and accessible through the Ministry of Economy website. There, users will find a portal connected to the Servicio de Impuestos Internos (Chile’s tax collection body, referred to with the acronym SII), where they can obtain a tax ID number (RUT), initiate activities, request electronic invoices and constitute a business.
Through this new electronic system, it will also be possible to modify, transform, merge, divide, dissolve and close down companies and businesses in a way that is easy, inexpensive and fast.
It is important to keep in mind that a user must possess an advanced electronic signature to create or modify a business. Otherwise, he or she will have to work through a notary. It will still be possible to complete the traditional process as well.
To constitute a company today, Chilean entrepreneurs must complete a process that takes eight business days and costs anywhere from US$500 to US$750 – and that’s just in Santiago. In other areas, the process takes more time, and the cost is nearly double.
Once the new law is enacted, the process will be greatly simplified. Users must go to the Ministry of Economy website and visit the designated portal for creating a company. There, they will find the forms necessary for creating various types of businesses. In a step-by-step process, they’ll complete the information required – the characteristics of the business, the identity of its founders, the name of the company, etc.
The individuals who will compose the society will be identified by way of electronic signatures, meaning no intervention from lawyers or notaries will be required. All of the information submitted will be converted into a final document and immediately sent to the SII so that activities may be initiated and the RUT can be assigned. Finally, with the use of an SII electronic invoice, the business can start selling.
See below an infographic created by the Chilean government (in Spanish) outlining the process of creating a company in one day:
This text has been translated and adapted into English by Emily Stewart from its original Spanish publication.