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[null,"Prepared By:","Contributors:"]
[null,"Claro & Cia., Abogados","Jose Maria Eyzaguirre"]
[null,null,"Rodrigo Ochagavía"]
[null,null,"Felipe Larrain"]
[null,null,"José Ambrosy"]
["Doing Business Latin America",null,"Isabella Mac-Auliffe"]
[]
["Report Generated: 4/28/2025"]
[]
["View your report results on next tab"]

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["Question","Chile"]
["Country Overview"]
["Country Overview"," Geography and Demographics Chile is an independent country located in the southern tip of South America, bordering Peru and Bolivia to the north and Argentina to the east. Extending 4,270 kilometers, it is surrounded by the Pacific Ocean to the west and the Andes mountains to the east, reaching a maximum width of 445 kilometers and a minimum of 90 kilometers. \n Its situation and length provide the country with a large variety of landscapes, climates and natural resources, from one of the driest places on Earth in the north, the Atacama Desert, to temperate rainforests and some of the largest ice fields on the planet in the south. Chile also controls certain islands in the Pacific Ocean, including Easter Island, and has a claim over an area of 1,250,000 square kilometers in Antarctica. According to the 2017 census, Chile has a population of 17,574,003 inhabitants, 40 percent of which live in the capital, Santiago. The estimates for 2024 are closing in at 20 million. \n Although a unitary and centralized country, Chile is administratively divided into 15 regions and a Metropolitan Region. \n Government and Politics Chile is a democratic republic, independent from Spanish rule since the early 19th century, and has had a history of relative political and economic stability. Between 1973 and 1989, after the coup d’état that toppled the Allende government, Chile was under military rule. In 1988, a popular referendum decided to put an end to military rule and return to the democratic election of presidents and members of Congress. \n The main legal text is the Political Constitution of the Republic[1] , which provides for and regulates the main rights and guarantees pertaining to all persons in Chile, and the main duties and functions of the branches of the State and other specific agencies of constitutional rank. The Constitution sits at the top of the hierarchy of laws, which is completed by laws, regulations, decrees, ordinances and technical norms, all of which must abide by, and cannot infringe, on the provisions of the Constitution . Certain international treaties are afforded constitutional rank and have priority over other bodies of law. \n The Chilean State is formed by three independent branches, the executive branch, headed by the president, the legislative branch, and the judicial branch: \n \n Executive Branch Chile is ruled by a president, who is the head of government and head of State, directly elected by popular vote every four years, without the possibility of reelection. The executive branch is completed by the ministers, all of whom are appointed and removed by the will of the president. The executive branch is in charge of the foreign relations of the country and its defense, and it has sole initiative in certain matters of law to be brought before Congress (e.g., matters related to budget and financing of the State, the creation of new taxes, the political division of the country, etc.). \n Legislative Branch The legislative branch is formed by a bi-cameral congress, with a Senate composed of 50 members, who last eight years and can be reelected up to twice, and a Chamber of Deputies composed of 155 members, who last four years and can be reelected up to twice. All members of Congress are democratically elected by popular vote in their respective geographical circumscriptions or districts. \n Judicial Branch The judicial branch is formed by the courts, at the top of which sits the Supreme Court, which is a national court with a seat in Santiago. The other two levels are formed by the Courts of Appeals and the courts of first instance, which are distributed by geographic scope. Certain matters, such as criminal, labor and environmental disputes have special first instance courts, but they are still subject to review by the Courts of Appeal and the Supreme Court within the scope of their competence according to the Constitution and the law. Also, certain State agencies, such as the Chilean Internal Revenue Service ( Servicio de Impuestos Internos ) and the Superintendencies have the power to resolve claims brought before them in the first instance, with their decisions being subject to direct review by the higher courts. \n \n Note that in Chile judicial decisions of the higher courts do not create binding precedents and are only applicable and enforceable on the parties to the relevant dispute. \n Arbitration proceedings are permitted, except in public policy matters such as criminal or labor law. Arbitral awards may be enforced by ordinary courts. Compulsory arbitration is provided for certain matters, such as conflicts between a company’s partners or shareholders. \n Constitutional Court The Constitution provides for the existence of a Constitutional Court, whose main role is to review and verify that (i) the bills of law brought into Congress are not contrary to the provisions of the Constitution and (ii) the application of law to a specific judicial dispute does not infringe the Constitution . The Constitutional Court only acts upon request, from members of Congress or from one of the parties to a dispute, respectively. The Constitutional Court, by special quorum, may decide that a certain legal precept brought to its attention is unconstitutional for all purposes. \n Other Agencies Other relevant agencies of the State are the General Comptroller of the Republic, who is in charge of controlling the legality and lawfulness of the acts of the State, and the Central Bank, in charge of the monetary policies of the country, which is an autonomous organism led by a board of five members appointed by the president and ratified by the Senate. \n Constitutional Developments In October 2019, Chile faced an unprecedented social and political crisis, which began with demonstrations to oppose the rise in the tariffs of the Santiago subway system and then extended and expanded to a period of daily protests and sometimes violent riots, amid demands for a radical change of the country’s economic and political system. This prompted the government and the political parties to hold discussions aimed at reaching an agreement on the manner to respond to those demands. The process culminated in an agreement signed on November 15 of that year by the government and all political actors represented in Congress (other than the Communist Party), whose main focus was to outline the steps to draft and approve a new Constitution. \n Thus, on October 25, 2020, the Chilean people, by a public referendum, approved the drafting of a new Constitution by a convention that would be publicly elected for that purpose (the elections for the convention were held in May 2021). The proposal for a new Constitution drafted by the convention was submitted to a referendum on September 4, 2022. The proposal was rejected by 61.89 percent of the votes. \n As a result of the rejection of the convention’s proposal, a new agreement was reached on December 12, 2022, by most political parties and movements in the country, which was dubbed an “ Agreement for Chile ” with a new process to draft and approve the new Constitution. This new agreement provided (i) certain basic institutional foundations that the new Constitution had to maintain and respect, including that Chile is a democratic republic and a unitary decentralized State; the separation of powers between the three branches of the State; the autonomy of certain agencies, such as the Central Bank; and the constitutional protection of certain rights, including property rights; and (ii) that the new Constitution was to be drafted by three bodies: a Commission of Experts (appointed by Congress), a Constitutional Council (elected by popular vote on May 7, 2023), and a Technical Admissibility Committee (appointed by Congress). On December 17, 2023, the new proposed Constitution was put to a public referendum and again rejected by 55.76 percent of the votes. \n Economy Chile’s geographic diversity offers a rich and varied distribution of natural resources which form the backbone of the country’s economy. Mining, agriculture, winemaking, fishing and forestry are among the main productive and exporting sectors in the country. \n In mining, Chile is the first producer and exporter of copper in the world (both ore and refined), holding the largest known reserve of that mineral. Extraction, production and exportation of copper is carried out to a large extent by the State-owned copper company, Corporación Nacional del Cobre or Codelco , but there is also an active participation of foreign mining firms in such activities. Other relevant participants in the Chilean mining industry are lithium, of which it holds the largest reserves in the world, molybdenum, with the second largest reserve in the world after China, iodine, second only to Japan, cobalt and silver. \n In agriculture, Chile is among the top exporters of fresh and dry fruits worldwide, being the number one exporter of cherries, dried apples, fresh grapes and plums, and consistently among the top five in the exports of avocados, blueberries, hazelnuts, peaches and raisins. As part of the agricultural industry, the Chilean winemaking business has found a particular success, profiting from the right mixture of soil, sunlight, temperature and humidity conditions. Chilean wines are exported to more than 80 countries and are regularly awarded prizes from the top international publications of the sector. \n Due to its extensive coastline, Chile has turned into a fishing and fish-farming powerhouse, being among the top exporters of salmon, crab, shellfish and fish meal in the world. The country’s strengths and competitive advantages lie in the rich fisheries extant within its 200-mile economic exclusion zone. \n Forestry is Chile’s second largest exporting industry due to its large areas destined to forestation, which mainly correspond to plantations of radiate pine, eucalyptus, poplars and other kinds of pine. Apart of the logging companies, the Chilean forestry industry includes lumber mills, particleboard manufacturers, construction suppliers, furniture makers, and pulp and paper mills. All of these products are sold in more than 100 countries. \n   \n [1] The current Constitution was originally drafted and approved by referendum in 1980, under military rule. It has been reformed on several occasions, with the most extensive reform being approved in 2005. However, the main principles of the Constitution remain the same. "]
["Establishing a Business: Cross-Cutting Matters"]
["Companies"," Chilean laws provide for the creation of different types of entities endowed with legal personhood, including corporations, stock companies, limited liability companies, partnerships (limited and unlimited), profit-sharing associations and non-profit organizations. \n In practice, for business and investment purposes, the following vehicle structures are used: \n \n Limited Liability Companies ( sociedades de responsabilidad limitada or “ SRL ”), which require at least two partners, are somewhat rigid in its management and require the written agreement of all partners for any amendment to the bylaws and other material decisions. SRL s are commonly used for structures where rigidity is an asset and changes over time are either unlikely or discouraged, e.g. wholly-owned holding companies for investments in an operating target company, family-owned entities, or where a minority partner manages the entity and desires to protect that structure. \n Corporations ( sociedades anónimas or “ SA ”), which can be private or public, require at least two shareholders and are managed by a two-tier structure of the board of directors and shareholders’ meeting (plus a committee in certain cases) based on majority voting rules. SA s used to be the main vehicle for investment at the operating level before the introduction of the SpA structure but are still preferred in cases where its less flexible management structure offers a greater degree of certainty over time and, more particularly, where the listing of the company is sought or expected (only SA s can go public). Public SA s are subject to the supervision of, and to the rules issued by, the Commission for the Financial Market (“ CMF ”) [1] . \n Stock Companies ( sociedades por acciones or “ SpA ”) have become the main investment vehicle in Chile, both at the holding and operating levels, since their creation in 2007. They can be created by one or more shareholders, offer great flexibility in their management structure, and provide more room to regulate matters regarding capital increases, preferred shares, shareholder resolutions and others [2] . \n \n Formation All common investment vehicles must be formed by the execution of a Chilean public deed or, alternatively in the case of an SpA , of a notarized private deed, and are subject to formalities of registration in the Registry of Commerce of their place of organization and publication in the Official Gazette . Amendments to their bylaws, as well as mergers, divisions, conversions and dissolution, are subject to similar requirements. \n Management and Supervision SRL s may be managed by one or more of the partners, or by one or more individuals, acting directly, through their representatives or through specially appointed attorneys-in-fact. Although less frequent, it is also possible to establish a board of directors subject to the rules as to numbers, composition and decision-making set forth in the bylaws. Amendments to the bylaws, mergers, divisions, conversions, dissolution (other than as a result of expiration of their statutory term) and transfers of equity rights require the written approval of all partners. \n SA s are managed by a board of directors composed of three or more members (five or more members for public SA s), elected by the shareholders’ meeting. Directors can be Chilean or foreign, can have alternates, and may be shareholders or representatives thereof. In public SA s over a specified net worth and ownership concentration, the election of at least one independent director is mandatory and the formation of a supervisory directors’ committee is required. The board controls the overall management and administration of the company, including the appointment of the general manager and the granting of powers to represent the company before third parties. Resolutions are passed by the majority of the directors in attendance unless the bylaws (or a shareholders’ agreement, enforceable only between the shareholders [3] ) provide otherwise. \n The top supervisory body of an SA is the shareholders’ meeting. Ordinary meetings take place once a year with the main goal of approving the financials of the previous year, appointing auditors or account inspectors, deciding upon the distribution of profits and, when required, renewing the board. Extraordinary meetings may be held any time the needs of the company so require and are mandatory for certain relevant decisions such as amendments to the bylaws, mergers, divisions, creation of guaranties in favor of third parties and dissolution. Resolutions are passed by the absolute majority of the issued voting shares in attendance at the meeting, except for amendments to the by-laws that require an absolute majority of all issued voting shares, certain material decisions that require two-thirds of all issued voting shares (or of the affected series of shares, if applicable), and the decision to distribute less than 30 percent of net profits in a public SA that requires unanimity of the issued voting shares. \n SpA s may be managed by one or more partners, one or more individuals, or a board of directors, or a combination of the foregoing, in each case appointed or elected, and with the functioning and powers, as provided in the bylaws. Rules governing the management of private SA s apply to the board of an SpA in the absence of specific regulation in the bylaws. Shareholder decisions may be made by resolution of the sole shareholder, when applicable, or by the shareholders’ meeting with the quorums set forth in the bylaws (or otherwise as applicable to the private SA s). \n Directors’ Liability Directors are mandated to act in the best interests of the company, regardless of the shareholder(s) who appointed them. In this sense, directors must (i) diligently comply with the provisions of the company’s bylaws and the applicable regulations (business judgment rule applies within the framework of the board’s fiduciary duties to the company as a whole), and (ii) refrain from creating conflicts of interest with the company (see \" Related Party Transactions\" below). \n Directors’ main responsibilities include: \n \n Refraining from approving any act or contract that would conflict with the bylaws or the applicable regulations. \n Establishing mechanisms and procedures to properly control and supervise the day-to-day management of the company. \n Requesting information and additional documentation when material issues are raised or may be reasonably presumed, in the exercise of their supervisory functions. \n Keeping information on the company and its businesses in strict confidentiality, except when disclosure is required by law or the CMF . \n In public SA s, providing the public and the CMF with truthful and updated information regarding the condition of the company determined by the law and/or the CMF . \n \n Related Party Transactions As a general rule, directors must refrain from using their position to obtain undue advantages or benefit from commercial opportunities of which they become aware as a result of their position, for themselves or their related persons. The approval of related transactions in SA s are subject to the following rules and procedures: \n \n Private SAs and SpAs (unless the bylaws provide otherwise): \n \n Material transactions [4] in which a director has a direct or indirect interest [5] must be approved by the board (without the interested director’s vote) and be at arm’s length conditions. No board approval is required for transactions approved by the shareholders’ meeting with the affirmative vote of two-thirds of the issued voting shares. \n Transactions between affiliated companies (parent and subsidiary, companies under the same controller) must be at arm’s length conditions and their respective administrators are personally responsible for damages caused by transactions not complying with such conditions. \n \n \n Public SAs: \n \n Transactions involving directors, managers, officers or liquidators of public SA s, directly or indirectly ( see footnote 5 ), those that held any such position within the last 18 months, affiliated companies to the SA, and others qualified as related transactions in the bylaws or by the directors’ committee, shall (i) contribute to the company’s interest, (ii) be at arm’s length conditions, and (iii) be approved by the majority of the board (without the votes of the interested members) or, if the majority of the board is barred from voting, by the unanimity of the non-interested members and the shareholders’ meeting with the affirmative vote of two-thirds of the issued voting shares (with a prior independent review of the transaction and its consequences for the company). \n \n \n \n Shareholder Rights and Protections Normally, shareholders’ voting rights are unlimited, and the relevant shareholder can exercise them at will, subject to (i) general good faith principles, and (ii) the duty to exercise its corporate rights considering those of the corporation and of the other shareholders [6] . Minority shareholders may bring claims against decisions that are so arbitrary and harmful that they might be considered passed by the majority shareholders with the main or sole intent of damaging the corporation or the minority shareholders. \n Additionally, in certain matters (conversion, merger, transfer of substantial part of the company’s assets, guaranties in favor of third parties, creation of preferences, delisting, etc.) dissenting shareholders have a withdrawal or appraisal right, pursuant to which they are entitled to tender their shares to the corporation (at book value or average floating price, as applicable). \n A special withdrawal or appraisal right is also provided to minority shareholders when a controller acquires more than 95% of the shares in a public SA . In this case, if any of the minority shareholders do not exercise such right, and the bylaws so provided prior to the acquisition, the controller may force such minority shareholders to sell their shares to the controller, provided that the latter had acquired the shares in a public tender offer ( see \"Public Tenders\" below ) for all shares in the company (or in the relevant series) and at least 15 percent of such shares were acquired in the relevant tender process. \n Disclosure Rules Other than those matters that require execution of a notarial deed and registration and publication formalities, there are no special public disclosure rules for SRL s, SpA s and private SA s. Only transfers of equity rights in SRL s are necessarily public, since they must be evidenced in a notarial deed, and registered and published, in each case including the names of the relevant sellers and buyers. \n Public SA s are subject to several disclosure rules under the Chilean Corporations Act , its Regulations and the rules and guidelines issued by the CMF . These disclosure rules include publication of certain corporate information in newspapers and on their institutional website, and making information available to the public, to the stock exchanges and to the CMF . \n For the mere fact of being registered in the Securities Registry of the CMF [7] a public SA will be required to disclose any “essential fact” (hecho esencial) that may be relevant to its business or considered of interest to the market. These essential facts are sent to the CMF and the stock exchanges where the company lists its securities and are made available to the public through the CMF ’s website. The board of directors of the disclosing entity, with the affirmative vote of three-quarters of its members, may determine that a specific fact should be subject to reserve. \n Share transactions involving persons holding 10 percent or more of a company’s capital (or that reach or exceed such threshold through the transaction) must be reported to the CMF , indicating if the transaction is made as a passive investment or is aimed at controlling the target ( see also \"Public Tenders \"). \n   \n [1] Public SA s are those that voluntarily or by legal requirement register their shares in the Securities Registry managed by the CMF . Companies that have had more than 2,000 shareholders (or such other number determined by the CMF by regulation) registered in their shareholders’ registry for 12 consecutive months must register their shares in the Securities Registry. \n [2] When not expressly stated or accepted, rules for private SA s apply to SpA s. The bylaws of an SpA may expressly exclude the application of any such rule. \n [3] Shareholders’ agreements may alter the management rules of an SA or SpA and provide for qualified quorum matters at the board and shareholders’ meeting level but may not lower the qualified quorums provided in the applicable law. \n [4] Transactions are deemed “material” if the amounts involved in the relevant act or contract exceed 1% of the company’s net worth, provided that amount is higher than the equivalent to UF 2,000 (approximately equivalent to USD$84,000), and in any case when it is higher than UF 20,000 (approximately equivalent to USD$840,000). Related transactions within a consecutive 12-month period are considered as a single transaction for these purposes. \n [5] Interest is deemed to exist when any of the following persons intervene in the relevant act or contract: (i) the spouse or relatives to the second degree of the director, (ii) companies in which he or she is also a director or owns 10% or more of the capital, (iii) companies in which any of (i) or (ii) own 10% or more of the capital, and (iv) the controller of the company, or its affiliates, if the director had not been elected without its votes. \n [6] Also, certain limited matters require the unanimity of the voting shares, such as the decision to not distribute dividends or distribute less than 30% of the net profits in public SA s, to pay dividends or liquidation proceeds in kind (or optionally in cash or in-kind), or to appraise contributions in kind without a prior expert review. \n [7] All entities seeking to issue equity or debt and offer it to the public must register in the Securities Registry of the CMF . Certain special purpose non-issuers may also be required by law to follow the disclosure rules of the CMF . "]
["Taxes",{"$cut":{"chars":26733,"head":" As a general rule, individuals or entities domiciled or resident in Chile, regardless of their nationality, are subject to income tax on their worldwide income. \n For purposes of Chilean Law , an individual is considered a Chilean resident if such individual has remained in Chile, continuously or not, for more than 183 days in any given 12-month period. An individual is domiciled in Chile if such an individual resides in the country with the purpose of staying in Chile (such purpose to be evidenced by circumstances such as the acceptance of employment within Chile or the relocation of the individual’s family to Chile). \n Foreign individuals or entities not domiciled or resident in Chile are subject to Chilean taxes over their Chilean source income. Income is deemed to be of Chilean source when it derives from assets located in Chile (e.g., real estate, personal property, shares issued by a Chilean corporation, etc.) or activities carried out in Chile, regardless of where the remuneration is paid and who pays it. \n Taxation of Individuals And Entities Domiciled Or Resident In Chile \n Individuals The general rule is that the taxpayer is the one responsible for determining the amount of taxes due. However, there are some situations in which it is the Chilean Internal Revenue Service ( Servicio de Impuestos Internos, or the “ IRS ”) itself that undertakes such procedure, and in other occasions, the law or even a judge is responsible for doing so. \n Individuals are required to pay an Overall Income Tax on their worldwide income. The Overall Income Tax is a progressive tax with rates ranging from 0 percent to 40 percent. In connection with the distributed profits that individuals receive from entities domiciled in Chile, individuals are allowed to fully or partially credit the First Category Tax paid by the corresponding entity, if any, against the Overall Income Tax . [1] Individuals also pay a Second Category Tax on their dependent work-related income, with rates ranging from 0 percent to 40 percent, which must be withheld by the employer. The amount of this tax is calculated based on an individual’s dependent work-related monthly earnings minus social security contributions. Individuals whose income comes solely from dependent work are not subject to Overall Income Tax . Individuals subject to both Second Category Tax and Overall Income Tax are allowed to use the former as a tax credit against the latter. \n Foreign individuals resident in Chile, on the other hand, are subject to taxes in Chile only on their Chilean source income during the first three years of residence. At the end of this period, foreigners may apply for an extension of such term. After the original three-year period or its extension, has elapsed, foreigners resident in Chile are subject to taxes in Chile on their worldwide income, the same as local residents. \n Entities Corporate income tax. Most companies are required to pay First Category Tax on their annual accrued income at a rate of 27 percent [2] . \n Corporations, stock companies, limited liability companies, limited liability individual enterprises, individual companies subject to First Category Tax on a complete-accounting basis and branches must pay taxes on their net taxable income (calculated on the basis of the accrual method of accounting, as a general rule). \n In this respect, there are certain matters that may be highlighted: \n \n in general, there are no restrictions on the carrying forward of tax losses. However, certain limitations may apply to acquisitions that result in the change of ownership of Chilean companies with tax losses (except for related-party acquisitions); \n assets and liabilities are adjusted to reflect changes in Chilean inflation; \n under certain conditions, imported or new tangible assets may be depreciated by one-third of their normal economic life; [3] \n dividends or profits from other Chilean companies are exempt from First Category Tax ; and \n a tax credit may be granted with respect to foreign taxes paid on certain types of foreign source income. \n \n Capital Gain"}}]
["Labor",{"$cut":{"chars":20389,"head":" In general, the Chilean Labor Code (the “ Labor Code ”) governs individual employment agreements and legal benefits for employees, trade unions and collective bargaining agreements, subcontracting and supply of personnel, as well as the special labor jurisdiction and legal procedure applicable to judicial actions. \n Employment Agreements Employment agreements are governed by the Labor Code . The Labor Code defines the employment agreement as a contract by which the employer and the employee are reciprocally committed: the employee to render personal services under dependence and subordination to the employer, and the employer, in turn, to pay a certain remuneration to the employee for the services thus rendered. Whenever such a relationship exists de facto between two persons, the Labor Code assumes that an employment agreement exists between them, even if no written evidence of such agreement can be produced. \n The employment agreement must be set forth in writing within a period of 15 days from the first day in which the employee starts to work (although in some special cases, the period is five days) and must contemplate, at least, such matters as: place and date of execution of the employment agreement; name of employer; name, nationality and birth date of the employee, as well as the date of initiation of work; description of the nature of the services and place or city where the services must be rendered; amount of the salary or remuneration agreed, and payment system; length and distribution of daily working hours, except when the employer has a shift system in place, in which case its own internal regulations shall apply; and the term of the employment agreement. \n If no written contract is produced within the referred fifteen-day term, or five-day term, as the case may be, the employer could be punished with a fine of one to five UTM (approximately equivalent to USD$74 to USD$370). If the employee refuses to sign, the employer can send the written contract to the Inspección del Trabajo (the government agency in charge of labor compliance). If the employee maintains his refusal to sign, he can be fired without compensation, unless he provides evidence that the written contract does not reflect the conditions in which he was hired. If the written contract is not signed in the referred 15-day term, or five-day term, as the case may be, and the employer does not exercise its right to send it to the Inspección del Trabajo, then the law presumes that the stipulations of the agreement are those alleged by the employee. In the latter case, the employer shall bear the burden to prove otherwise. \n Nationality of Employees In the case of companies with more than 25 employees, at least 85 percent of the employees hired by any employer must be Chilean, such percentage must be calculated as a fraction of their total labor force in Chile. This restriction, however, does not apply to foreign technical experts and, therefore, such a category of foreign employees is excluded from the percentage mentioned above. For these purposes, those foreigners whose spouses or children are of Chilean nationality (or who are widows or widowers of a Chilean citizen) are considered Chileans. Similarly, foreigners with residence in Chile for more than five years are also considered Chileans for the purpose of this special rule. \n Remunerations In the Labor Code , remuneration is understood to be any payment of money or in kind that the employee receives from his employer pursuant to an employment agreement. The following items, among others, are considered remuneration: salary in cash, payment for overtime, commissions over sales or purchases, or over such operations which the employer performs with the employee’s collaboration, participation bonuses or a proportion of profits; and voluntary bonuses. Employees must be paid for any overtime worked with a 50 percent premium over the regular salary. \n The monthly amount of remuneration must be equal to or higher than the minimum monthly salary, which currently is stated at CLP 500,000 (approximatel"}}]
["Foreign Exchange and International Investment Regime","Foreign Exchange and Foreign InvestmentsForeign Exchange\nUnder the law governing the \nCentral Bank of Chile (the “\nCentral Bank Act”), any person may freely enter into foreign exchange transactions. Foreign exchange transactions are defined under the \nCentral Bank Act as any purchase and sale of foreign currency and, generally, any act or agreement that creates, amends or terminates an obligation payable in any foreign currency, regardless of whether there are any actual transfers or remittances from or to Chile. For these purposes, “foreign currency” includes bills and coins from foreign countries, whichever their denomination or characteristics, bills of exchange, checks, letters of credit, payment orders, promissory notes, money withdrawals, and any other document evidencing obligations in such currency, and gold.\nHowever, under the \nCentral Bank Act, the Central Bank is empowered to require certain foreign exchange transactions to be reported to it and/or to be carried out in the “formal foreign exchange market”. The formal foreign exchange market is exclusively composed of the banks established in Chile and the exchange entities, stockbrokers and broker-dealers authorized for such purposes by the Central Bank. The \nCentral Bank Actalso allows the Central Bank to impose certain conditions on foreign exchange transactions, such as the obligation to return and convert foreign currency, impose a mandatory deposit or \nencaje and others, for a period of time not to exceed one year, but which may be indefinitely renewed at the end of such period for successive one-year periods. As of the date of this document, no restrictions other than making certain transactions in the formal foreign exchange market and some reporting obligations are currently in force.\nForeign Investment\nForeign investments may be brought into Chile under two regimes: (i) the regime of \nChapter XIV of the Compendium of Foreign Exchange Regulations of the Central Bank (the “\nCompendium”), and (ii) the direct foreign investment scheme set forth in the \nDirect Foreign Investment Act (the “\nDFI Act”).\nUnder the Central Bank’s regime, foreign investors (with investments exceeding USD$10,000) are only required to report their investments following the rules in the Compendium. Investments must be settled through the formal exchange market, unless the transactions occur exclusively abroad, in which case only reporting is required. Access to the formal exchange market, however, will be subject to the regulations enacted by the Central Bank from time to time, including the restrictions imposed by the \nCentral Bank Act.\nThe \nDFI Act was enacted in June 2015 and became effective in January 2016\n[1]. This law created a new regime applicable to “direct foreign investment”, i.e., the transfer to Chile of foreign capitals or assets, owned or controlled by a foreign investor, for an amount equal to or higher than USD$5 million or their equivalent in other currencies, through freely convertible foreign currency, physical assets of any kind, reinvestment of profits, capitalization of credits, technology in all its forms which is susceptible of being capitalized, or credits associated to foreign investment coming from a related company. It will also be considered a direct foreign investment the one that, within the amount previously mentioned, is transferred to the country, and is materialized through the acquisition or participation in a company’s equity or the capital of the receiving entity of the investment, organized in Chile according to its laws, and which directly or indirectly gives to the investor control of at least 10 percent of the voting stock of the company, or any equivalent percentage in the participation of the company’s capital if it is not a stock company, or in the equity of the relevant enterprise.\nForeign investors shall have the right to remit abroad the transferred capital and the net profits their investments generate, once their tax obligations are fulfilled according to Chilean legislation. It also grants access to the formal exchange market in order to liquidate the currencies constitutive of their investments or to obtain the necessary currencies to remit the invested capital or net profits obtained from direct foreign investment. The foreign exchange transactions carried out in the context of foreign investment are subject to the regulations enacted by the Central Bank from time to time.\nThe \nDFI Act guarantees the foreign investor that it will be subject to the same legal framework as a national investor, without the possibility of any kind of arbitrary discrimination, neither directly nor indirectly. It also exempts the foreign investor from paying value-added tax on the importation of goods into Chile, subject to certain requirements and procedures set forth in the \nValue Added Tax Act.\nTo qualify for this direct foreign investment regime and benefit from the rights indicated above, the foreign investor must obtain a certificate from the Agency for the Promotion of Foreign Investment.\n \n[1] Prior to January 2016, foreign investment could be subject to Chapter XIV of the Compendium or the regime under Decree Law No. 600, of 1974 (“DL600”). DL600 provided for the execution of a foreign investment contract between the investor and the State of Chile, which set forth the rights and privileges pertaining to the foreign investor, which could not be unilaterally altered by the Chilean State. DL600 also provided an option for the investor to benefit from an invariable income tax regime (invariability that had become less attractive for most investors in the final years of the DL600 because of the lowering of corporate tax burdens) and from certain special devices designed to encourage project financing. Foreign investment contracts executed prior to January 1, 2016, continue in effect, subject to the same rights and rules. Also, the DFI Act allowed foreign investors to submit requests for entering into a foreign investment contract during a term of four years following January 1, 2016, benefitting from an invariable tax regime at a rate of 44.45 percent."]
["Establishing a Business: Specific Matters"]
["Customs"," Export/Import Regulations The Central Bank Act provides that any merchandise can be freely exported from or imported into Chile, with the only condition being that all of the applicable laws and regulations in force as of the date of the relevant transaction are duly complied with. No mandatory cash deposit requirements may be imposed by any authority as a prerequisite to perform any of them, nor can quotas or limitations of other class or nature be established in connection therewith. Also, no import or export licenses are required. \n Nevertheless, the President of the Republic, by means of an Executive Decree issued through the Ministry of Finance, may prohibit the exportation or importation of goods to or from countries that have established restrictions on merchandise coming in or going out of Chile. In addition, certain regulatory restrictions may be imposed upon the import of certain goods, such as items hazardous to health or consisting of weapons, cattle, vegetables, pornography, etc. \n As a general rule and absent any free trade or commercial agreement applicable thereto (see International commerce treaties below), imports of new products are subject to customs duties and VAT as further explained in Chapter V. In addition, some “luxury” goods are subject to higher taxes in the form of VAT . Exports are not subject to any customs duties or taxes; instead, Chilean law provides certain incentives which will be analyzed in Export Incentives below. \n Procedure and Valuation The National Customs Service ( Servicio Nacional de Aduanas ) requires all importers and exporters to submit in advance certain documents named entry statement ( declaración de ingreso ) and exit statement ( declaración única de salida ), respectively. Some of these documents must evidence the relevant invoice and detail applicable information regarding the concerned transaction, inter alia, information regarding the types of goods imported/exported and their value, their country of origin, classification on the schedule of customs duties, place of acquisition, port of embarkation or destination, as the case may be, etc. Once these documents are received and approved by customs authorities, the import or the export will be deemed accepted and registered as such. \n If the value of the imported merchandise does not exceed USD$1,000 or if the exported merchandise does not exceed USD$2,000, the interested party may directly submit the documentation required by law to the relevant customs office. If the merchandise exceeds the respective maximum value, the interested party must hire a customs agent (agente de aduana), who will be in charge of submitting the relevant documents and following the clearance procedure. \n The customs value of a merchandise shall be determined in accordance with the applicable international standards in the matter, particularly, in compliance with the rules of the Agreement on Implementation of Article VII of the General Agreement on Tariffs and Trade (the “ Customs Valuation Code ”). Based on these principles, the acceptable customs value for determining customs duties and taxes on import shall be the “transaction value”, that is, the price actually paid or payable for the relevant good, including insurance, freight and similar expenses incurred until the place or location where the import into Chile is made. \n Among the various rules set forth in the Customs Valuation Code for defining an acceptable “transaction value” there is one requisite that relies on the buyer and seller to be independent from each other; provided that the transaction value may be still accepted for customs purposes if such relationship had not influenced or did not affect the price. \n If the local customs authorities determine that the valuation rules contained in the Customs Valuation Code (including that buyer and seller are independent entities, except where their relationship has not influenced or affected the price) have not been complied with, such authorities may reject the relevant transaction value as the basis for assessing the customs duties and may re-assess such value. \n Chilean law also provides for (i) the authority of the Central Bank to verify that the value of imported or exported goods is consistent with their current value in the international market, (ii) the ability of the President of the Republic to impose ad valorem surcharges over certain merchandise in specific circumstances [1] and upon previous recommendation by a special commission, for a period of one year renewable for another year; and (iii) the ability of the President of the Republic to impose compensation duties and anti-dumpling measures regarding those imports that may cause serious present or imminent damage to national production, when low prices are a consequence of artificial circumstances existing in the original market. \n Export Incentives Chilean legislation provides for several incentives for exports, including: \n \n A simplified drawback system that benefits, with certain exceptions, minor non-traditional exports. Generally, the simplified regime applies to exported goods that contain at least 50 percent of imported raw materials. The drawback is equivalent to three percent of the FOB value of the exported goods, excluding certain commissions and expenses. \n The regular customs duties drawback, under which any exporter shall be entitled to obtain the drawback of the duties and other customs charges previously paid in connection with raw material, elements partially produced or spare parts imported by the exporter or third parties, provided that, such items have been incorporated or consumed in the manufacture of the exported good. \n A deferred payment regime that provides an incentive on imports regarding certain goods qualified as destined for the production of other goods or services, whose capacity of production does not disappear with the first use and can survive for at least three years, and which have been included in a special decree. Maximum deferment is seven years from the entry of the imported goods into Chile, provided that goods imported under this regime cannot be sold or leased until the customs duties have been fully paid or the buyer or lessor assumes the obligation to pay for the outstanding balance. Even though this incentive was established in reference to imports, it has ultimately turned into a benefit for the export industry, since Chilean products can be manufactured with those imported capital goods and then exported to international markets on a competitive basis. \n A fiscal credit available for purchasers who acquire capital goods (first transference) locally manufactured (in the country) for an amount equivalent to 73 percent of the customs duties currently in effect and calculated on the net price of the invoice. The payment of the referred fiscal credit is subject to the same rules and modalities contemplated for the customs duties deferred payment regime, including deferred payment of the credit for up to seven years. As a consequence, this policy has turned into an incentive for national production in general, including exportations. \n Documents evidencing a credit facility that is to be used in the finance of an export may be exempted from stamp tax. The specific documents that benefit from the exemption are determined by the Commission for the Financial Market and, in any case, exporters must comply with the rules issued by the Chilean Internal Revenue Service aimed at avoiding abuses of this benefit. \n The National Customs Director may allow the temporary admission of certain goods to be kept and stored at specific premises and facilities. This benefit may apply to finished goods, or to raw materials, parts, pieces or elements, provided they are brought into the country to be manufactured, elaborated, integrated, assembled, transformed, refined, repaired, maintained, improved or subjected to similar processes, and then re-exported within the term of two years from entry (renewable for one year). If the goods (or some of them) are not exported within that term, the National Customs Service may authorize their importation, triggering the applicable duties and taxes. \n \n International Commerce Treaties Chile has entered into free trade agreements currently in force with Australia, Brazil, Canada, Central America (Costa Rica, El Salvador, Honduras, Guatemala and Nicaragua), China, Colombia, the European Free Trade Association, Hong Kong, Malaysia, Mexico, Panama, Peru, South Korea, Thailand, Turkey, United States, Uruguay and Vietnam. A partial free trade agreement has been signed with India. \n Also, Chile has entered into economic association agreements with the European Union, Japan, P4 (formed by Brunei, Chile, New Zealand and Singapore) and the United Kingdom; a commercial protocol with the Alliance for the Pacific (formed by Chile, Colombia, Mexico and Peru); commercial agreements with Argentina and Paraguay; economic complementation agreements with Bolivia, Cuba, Mercosur and Venezuela; economic integration agreements with Ecuador and Indonesia; and a digital economy association agreement with New Zealand and Singapore. \n Chile is part of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership together with Australia, Brunei, Canada, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam. A partial free trade agreement has been signed with India. \n Investment protection and promotion agreements have been signed with Austria, Belgium-Luxembourg, Costa Rica, Croatia, Cuba, Czechia, Denmark, El Salvador, Finland, France, Germany, Greece, Guatemala, Honduras, Hong Kong, Iceland, Italy, Malaysia, Nicaragua, Norway, Panama, Paraguay, Philippines, Poland, Portugal, Romania, Spain, Sweden, Switzerland, Ukraine, the United Kingdom, Uruguay and Venezuela. \n As of the date of this report, Chile is negotiating an economic integration agreement with the United Arab Emirates and a partial scope agreement with Trinidad and Tobago. \n   \n [1] Circumstances indicated in Article XIX of the General Agreement on Tariffs and Trade and in the World Trade Organization Agreement on Surcharges (mainly, increase in the imports in such an amount and conditions that cause or threaten to cause damage to national production). "]
["Migration"," Chilean immigration laws provide that all foreigners coming into the country must obtain a visa from the competent authority. \n Tourist visas allow foreigners to perform minor business activities, such as participating in meetings. Also, tourists could ask for a special permit to allow them to work in Chile for up to 90 days. \n In general, there is just one kind of resident visa available for businesspeople: \n Temporary resident visa for foreigners who carry out remunerative legal activities. Temporary-resident visas are granted to foreigners with family links, labor or business interests in Chile; or to foreigners whose residency in Chile may qualify as useful or advantageous for the country (typically, businessmen coming into Chile for business purposes for a period longer than 90 days). Foreigners holding this type of visa may undertake all kinds of lawful activities within Chile. Temporary resident visas are granted for up to a two-year period, renewable at the end thereof for another period of up to two years. However, at the end of the first term, a permanent-residence visa should be requested (it is advisable) by the interested party in order to be able to remain resident in Chile. \n In order to obtain a temporary resident visa, the following conditions must be considered: \n \n The institution, individual or company acting as the employer must have a domicile in Chile. \n A visa must be applied for by the foreigner from his/her country of residence and prior to entering Chile. \n The foreign employee shall enter into an employment agreement with the relevant institution, individual or company. This employment agreement must be executed by the employer (or a lawful representative of the employer) before a notary public. On the other side, the employee must execute the employment agreement before the Chilean Consul sitting in the city where the same is executed. Once executed, it shall then be apostilled by the Chilean Consul. \n In the case of technicians or other specialized professionals, their capacity shall be evidenced with a true and accurate copy of their university titles, which shall also be legalized with the Chilean Consul and then with the Ministry of Foreign Affairs in Santiago or apostilled. Otherwise, evidence of their capacity shall be submitted to the authorities by means of special working certificates or other supporting documentation. \n That the employee’s profession, activity, or services are indispensable or necessary for the development of Chile. Please note that for these purposes (even though unusual) a written report may be requested by the authorities from the relevant professional or technical local association or any other local authorities. \n That the profession, activity or services that the foreign employee will perform in Chile are not dangerous or otherwise perilous for the national security. \n The employment agreement’s terms and conditions regarding the services shall be within standard labor and social security practices. \n \n With regard to the procedure, such may be carried out before the Ministry of Foreign Affairs, through an online form provided by the Migration National Service. Please note that it is not possible to apply for a visa from inside Chile. \n All visas are processed by the Migration National Service. Once the visa is approved, the foreigner has a 90-day term, after the granting thereof, to enter the country. Nonetheless, the term of the relevant visa will start only upon actual entrance into Chile. \n Finally, it is important to underline that family members of the foreign businessperson will be granted the same visa obtained thereby, having them the possibility to render remunerated activities. "]
["Environmental",{"$cut":{"chars":32767,"head":" Environmental Regulation \n Governing Rules and Relevant Authorities The main rules of the Chilean environmental legislation are contained in the following regulations: \n \n Article 19 No. 8 of the Chilean Constitution , guarantees to all persons the right to live in a pollution-free environment. \n Law No. 19,300 (the “ Environmental Act ”), established a general framework to guarantee the referred constitutional right, the protection of the environment, the preservation of nature and the conservation of environmental heritage. It also regulates environmental management instruments such as the Environmental Impact Assessment System (“ EIAS ”) for projects or activities capable of causing environmental impact in any of their phases. \n Supreme Decree No. 40/12 (the “ EIAS Regulation ”), which regulates the operation of the EIAS . \n Law No. 20,417 , which, among other matters, created the Chilean Environmental Superintendence (the “ Environmental Superintendence ” or “ SMA ”). \n Law No. 20,600 , which creates and regulates the Environmental Courts. \n \n The Environmental Act created the Ministry of the Environment, an authority responsible for assisting the President of Chile in the design and implementation of environmental policies, plans and programs and responsible for national environmental protection. It also created the Environmental Assessment Service (the “ SEA ”), a sectorial authority in charge of the assessment of every project that, according to the Environmental Act , must be environmentally assessed prior to its execution through the EIAS . \n The Environmental Superintendence is the authority responsible for implementing, organizing and coordinating the monitoring and control of Environmental Qualification Resolutions (“ RCAs ”), Prevention and Decontamination Plans, Environmental Quality Standards and Emission Norms, Management Plans , and any other environmental instruments established by law and, in general, to oversee the fulfillment of the obligations established in the EIAS . Notwithstanding the foregoing, there are other public services with surveillance attributions in environmental matters that shall exercise their attributions only in connection with matters and instruments not subject to the jurisdiction of the SMA . As an oversight authority, it is entitled to inspect facilities and initiate sanctioning proceedings that could result in the imposition of sanctions that range from fines up to approximately US$9 million per breach, closure of facilities and revocation of the environmental qualification resolution. \n The Environmental Courts are special courts with jurisdiction over environmental matters. Its main competencies are to rule claims filed against the RCA, to rule environmental damage claims and claims filed against the resolutions of the SMA imposing sanctions. Their decisions on these competences are appealable before the Supreme Court. \n Regarding the regulatory framework, the Environmental Act is complemented by several other statutory provisions, such as: Supreme Decree No. 38/13 , which enacts the Regulations for the Issuance of Environmental Quality Standards and Emission Norms; Supreme Decree No. 29/12 , which enacts the Regulations on the Classification of Wildlife Species According to Their Conservation Status; Law No. 20,283, the Native Forestry Law; Supreme Decree No. 148/04, regulating Hazardous Waste Management; Supreme Decree No. 13/11, regulating Emission Standards for Thermoelectric Power Plants; Supreme Decree No. 38/12, which establishes Noise Emission Standards; Supreme Decree No. 28/13, regulating Emissions Standards for Copper Smelters and Arsenic Emitting Sources; Supreme Decree No. 1/23 which establishes a Standard for the Emission of Artificial Luminosity Generated by Outdoor Lighting [1] ; Law No. 20,920, establishing the Producer’s Extended Responsibility; Law No. 21,455, the Framework Law On Climate Change; Law No. 21,600, which establishes the Biodiversity and Protected Areas Service and the National System of Protected Areas; Law No. 21,595, the Law on Economic "}}]
["Real Estate"," Land Rights In Chile, any person, local or foreign (except as indicated in Foreign ownership below), can freely acquire all kinds of real estate provided the legal requirements established for these purposes are fulfilled. \n Real property may be acquired by means of a public deed, succession upon death or adverse possession, which requires the lapse of 10 continuous years of peaceful tenancy. All these acts must be registered in the property registry of the competent Real Estate Registrar. The transfer of the ownership of real estate will be materialized by the registration of the relevant title in the property registry of the competent Real Estate Registrar. The same prevention applies to the transfer of the rights of usufruct or use constituted over real estate, habitation census, and mortgage that may affect real estate. \n There is no centralized property registration system in Chile, with the registrars being distributed by geographic areas. Therefore, a single real estate may be registered in the registries of more than one Real Estate Registrar if the land covers more than one jurisdictional territory. The real estate registry system in Chile is public and, therefore, anyone can have access to it and request copies and/or certificates of the registrations made therein, paying the associated costs. \n Each Real Estate Registrar is comprised of the following registries: (i) the property registry: transfer of ownership, as well as property acquisition by the statute of limitations, must be registered in this registry; (ii) the mortgages and encumbrances registry: mortgages, easements, usufructs, rights of use and habitation and all encumbrances of similar nature shall be registered in this registry; (iii) the prohibitions and interdictions registry: all the prohibitions that may affect a property must be registered, such as prohibitions to sell, dispose or encumber, among others; and (iv) the litigation registry: lawsuits that may affect a property must be recorded in this registry. \n The possession and ownership of real estate may be limited or restricted by certain special laws and regulations. Among others, rules on national monuments and archaeological discoveries; on properties located in the southernmost areas of the country; and on properties belonging to native populations, may affect the rights of third parties to acquire real estate or the conditions under which such real estate is acquired, or its ownership exercised. \n Foreign Ownership In general, there is no governmental permission required for foreign investors to acquire real estate in Chile. However, nationals of bordering countries (including entities whose main offices are located in a bordering country, or which 40 percent or more of their capital belongs to nationals of a bordering country, or which effective control is in the hands of nationals of any such country) are prevented from acquiring the ownership of, or other in rem rights in, or holding in possession or tenancy, real estate totally or partially located in the zones of the national territory which the authority has declared as \"national borderland\". \n In the event of a national of a bordering country acquiring mortis causa any national borderland, such individual or entity must transfer the relevant real estate to an eligible acquirer within one year from the death of the original owner. If the affected person or entity does not comply with the referred obligation, the State will be entitled to expropriate the relevant real estate. \n The President of the Republic, on grounds of national interest, may release certain nationals of bordering countries from the aforementioned prohibition, on a case-by-case basis, authorizing them to acquire or transfer the ownership of, or other in rem rights in, or the possession or tenancy of one or more determined real estate located in national borderlands. \n Furthermore, the lands belonging to the State located up to 10 kilometers from the national border may only be acquired, leased or received under any other title, by Chilean individuals or entities. The same rule shall apply with respect to those lands belonging to the State located up to five kilometers from the seacoast, measured from the line of the highest tides. However, in the latter case, foreigners with domicile in Chile may acquire, receive in a lease, or obtain under any other title the aforementioned lands upon the prior favorable report of the Navy Under-Secretariat of the National Defense Ministry (Subsecretaría de Marina del Ministerio de Defensa Nacional ). \n There are no additional restrictions imposed on ownership of real estate by foreign investors. Note, however, that foreign investment in real estate, as any other foreign investment in Chile, must be performed through one of the foreign investment alternatives available in Chile (see Chapter II.1 above). \n \n Titles When evaluating the development of a project in Chile title over the relevant real estate is key. If the land is owned by the project developer, no agreement nor additional actions will be needed to obtain rights over it, and the owner will be entitled to build, erect or install any facilities, and carry out any lawful activity, in such land subject to compliance with the regulations applicable to the relevant activity. On the contrary, if the land is owned by a third party, it will be necessary to obtain rights over the real estate in order to be able to develop the project. The type of agreement that should be negotiated will depend on whether the property is privately owned or belongs to the State. Land control over such areas shall be secured mainly through lease agreements, usufruct agreements and/or easements in case of private real estate, and land concession authorizations ( concesiones de uso oneroso ), lease agreements and/or easements, in case of properties that belong to the State. \n Lease Agreements The formalities with which lease agreements are granted determine the level of protection the lessee has in case of a transfer of the real estate by the lessor. This is because lease agreements only create personal rights. In this sense, if they are granted by means of a public deed, they may be enforced against third-party purchasers of the real estate. If they are further registered before the Real Estate Registrar (possible only if granted by public deed), they may be enforced also against future mortgage-backed creditors (i.e., mortgages registered after the registration of the lease agreement), which means it is also binding on any acquirer of the real estate as a result of a foreclosure procedure on the lessor. If they are granted by means of a private instrument, they may not be registered before the Real Estate Registrar and thus may not be enforced against third-party purchasers. \n Usufruct Agreements This type of agreement shall be executed by means of a public deed and registered in the competent registry of mortgages and encumbrances. Once negotiated, a usufruct agreement enables the usufructuary to use and enjoy ( usar y gozar ) the property, while the landowner keeps the bare ownership (nuda propiedad), which allows it to sell and dispose of the property. Any future purchaser of the real estate shall be bound to honor the usufruct agreement. The term of a usufruct agreement may not exceed 30 years in case the usufructuary is a legal entity. \n Easements Easements are liens imposed on a property for the benefit of another property of a different owner. There are natural and legal easements and those that can be agreed upon voluntarily, provided that they do not go against public order or otherwise infringe the law. Easements must be created by means of a public deed and can also be acquired by a judge's ruling in the cases provided by law. Except for natural easements, they are subject to the payment of compensation in favor of the servient estate (although sometimes they can be free of charge). Although there is no obligation to register the easements in the respective mortgages and encumbrances registry, it is recommended to do so for purposes of publicity and its enforceability against third parties. \n Land Concession Authorization ( concesión de uso oneroso ) Through this type of agreement, the relevant authority (the Ministry of National Properties or Ministerio de Bienes Nacionales ) grants a special right to use and enjoy ( uso y goce ) a property of fiscal domain, with a pre-established objective, for a determined period of time, which that may not exceed 50 years, and against payment of an annual fee. Land concession authorizations can be granted (i) through public or private bidding processes, in both cases of national or international scope, or (ii) directly in qualified cases. Applicants who are foreign persons or entities will be required to incorporate a Chilean entity to execute the relevant concession agreement. The agreement, to be executed by public deed, must be registered in the respective mortgages and encumbrances registry. The concession can be revoked or terminated due to, among other reasons, a breach of the concessionaire’s obligations or the occurrence of any event or circumstance that would make it impossible to continue using the property for the purposes of the concession. \n \n Construction \n \n Construction Regulation In Chile, the real estate construction legal framework is mainly governed by the General Urbanism and Constructions Act ( Ley General de Urbanismo y Construcciones or “ LGUC ”), the General Ordinance of the LGUC ( Ordenanza General de la Ley General de Urbanismo y Construcciones ) and the technical norms issued by the Chilean Ministry of Housing and Planning ( Ministerio de Vivienda y Urbanismo ). Additionally, there are different territorial and urban planning instruments and regulations issued at the regional and local level, providing for urban development guidelines, zoning criteria, land uses, permitted and prohibited activities, etc. \n Permitting In order to carry out the construction of any building or facility, it is necessary to procure certain permits and authorizations and comply with certain steps and principles. In general, a construction permit or authorization from the relevant Municipal Works Bureau ( Dirección de Obras Municipales ) is required for the construction, reconstruction, repair, alteration, expansion and demolition of buildings, facilities and urbanization works of any nature, and their use and occupation will be subject to the final approval of the same authority. Such construction projects must also comply with the construction regulations mentioned in the previous paragraph and the specific town planning regulations of the relevant municipality. \n \n Also, the building or project may be subject to (i) the environmental assessment process ( see Environmental and Natural Resources section ) and/or (ii) the permits and authorizations granted by other sectorial authorities (e.g., the authorization of the Hydraulic Works Bureau of the General Water Bureau for certain works located in or near waterways), and having previously obtained the relevant environmental or sectorial permits will be a pre-requisite for obtaining the construction permit or the final approval from the DOM, as applicable. \n The LGUC expressly states that any work governed by its rules must be designed and executed by professional architects, civil engineers, construction engineers and civil constructors, who must be legally authorized to exercise their respective professions in Chile. Such authorized professionals must sign all plans, technical specifications, and other technical documents of any prospective or final project, together with the owner. The authorized professionals submitting the documents for approval in any stage are responsible for delivering all necessary documentation and for making the adjustments required by the DOM. Construction Contracts Other than the laws and regulations mentioned in the previous section, Chilean law does not regulate in detail construction agreements, which are therefore subject to the free negotiation and agreement between the relevant parties. \n EPC-style agreements are commonly used for large projects in Chile, including design, engineering and commissioning in the scope of the contractor. Standard form contracts (FIDIC, NEC, etc.), although occasionally used, are not the preferred formats for projects in Chile. \n Permitting is normally allocated to the contractor, with a few exceptions such as land rights and the main environmental permit for the project. Liquidated damages are usually stipulated for delay and performance shortfall, in a range of five to 15 percent of the contract price (if subject to Chilean law, these damages are treated as penalty clauses). \n Most construction contracts for large-scale projects are either subject to Chilean law or, especially if financed through a project finance deal including foreign banks, New York law. If subject to Chilean law, disputes are submitted to arbitration in Chile. \n Warranties are normally expressly regulated in the contract, to the express exclusion of any other warranty, and (other than specific product or equipment warranties) are limited to a warranty period of 12 to 24 months. If such exclusion of other warranties is not expressly stated, and the contract is subject to Chilean law, note that Article 2003 of the Civil Code will apply, and the owner will be entitled to pursue the contractor if the work collapses or threatens collapse for defects in the construction or the materials used by the contractor, or for ground conditions that the contractor knew or should have known, within five years from delivery (i.e. from provisional acceptance or substantial completion). \n Total liability for contractors ranges from 10 to 100 percent of the contract price, and the applicable percentage will determine the scope of the exceptions to such limit. Contractors will secure their obligations through bank bonds or, in a recent development in the market, first demand insurance policies, covering normally between 10 and 20 percent of the contract price. "]
["Intellectual Property"," Intellectual Property in Chile possesses explicit constitutional recognition and is mainly regulated by two major legislative bodies and their complimentary regulation: the Chilean Industrial Property Act ( the “ Industrial Property Act ”) and the Chilean Intellectual Property Act (the “ Copyright Act ”). As a result of the name given to the second Act, in Chile, intellectual property is understood as copyrights or derechos de autor , a specific branch of intellectual property rights, as well as the genre which also includes industrial property rights. Because of this, it is common to find in contracts an explicit mention of both industrial and intellectual property rights as opposed to a mere reference to intellectual property rights. \n Along with the mentioned legislative bodies and related regulations, Chile is also a member of several international treaties like the Paris Convention for the Protection of Industrial Property, the Patent Cooperation Treaty, the Madrid Protocol, the Agreement on Trade-Related Aspects of Intellectual Property Rights and the Berne Convention for the Protection of Literary and Artistic Works , among others. Chile is also a party to several bilateral free trade agreements, including those with the U.S.A., the European Union, Canada, Australia and China. \n Industrial Property The Industrial Property Act covers all usual industrial property rights that can be obtained, including trademarks, patents, utility models, designs, drawings, layout designs, geographical indications, designations of origin and trade secrets. It also provides basic default rules for determining ownership in case of developments made by workers or for hire. \n Trademarks, patents, utility models, designs, drawings, layout designs, geographical indications and designations of origin as industrial property rights are all prosecuted before and granted by the National Institute of Industrial Property (“ INAPI ”), an administrative body in charge of registrations, renewals (for trademarks) and keeping a public record of the industrial property rights. Trade secrets, nonetheless, are unregistrable. \n Prosecution times vary depending on the type of industrial property right pursued, with trademark registrations achievable within a year from filing and patent registrations taking four to five years on average. \n Registered trademarks are protected for ten years counted from the date of registration. Trademark registrations are renewable for additional periods of ten years. Neither registration nor renewal depends on the actual use of the mark. \n Registered patents are protected for twenty years counted from the date of filing of the application and are not renewable. They are subject to payment of annuities. \n Registered utility models are protected for ten years from the date of filing of the application and are not renewable. They are subject to payment of annuities. \n Registered industrial drawings and designs are protected for fifteen years from the date of filing of the application and are not renewable. They are subject to payment of annuities. \n It is not a validity requirement for assignments or licenses of industrial property rights to be recorded before INAPI . However, if the corresponding assignment or license is not recorded, it shall not be enforceable against third parties. \n The Industrial Property Act provides both criminal and civil remedies in case of infringement, including pre-set mechanisms for determining the amount of damages in case of infringement. Infringement lawsuits, nonetheless, are lengthy and reviewed by unspecialized civil judges, unlike opposition or cancellation cases, which are reviewed by INAPI , and can be then reviewed by a specialized court, the Industrial Property Court. It is unlikely to be able to suspend an infringement procedure based on a cancellation procedure held before a different entity. Pre-trial motions, injunctions and border measures may be available in case of infringement but are quite infrequent. \n A few additional relevant aspects are: \n \n It is not required to have a legal presence in the country in order to register industrial property rights, however, appointing a local representative with a Chilean address is mandatory. \n Parallel imports are allowed. \n The lack of corresponding marking prevents the owner from pursuing criminal actions for industrial property infringement (with civil actions still being available). \n Most of the known types of trademarks are allowed for registration, including 3D marks, holographic marks, sound marks, smell marks, pattern marks, and others. \n There are both absolute (e.g., generic or descriptive marks) and relative (e.g. prior similar marks for the same products) grounds for refusal. \n INAPI , ex officio, may refuse a trademark based on both absolute or relative grounds, even if the owner of the allegedly similar trademark does not file an opposition or if the corresponding coexistence agreement is presented. \n It is possible to file oppositions against trademark applications based on similarity and likeliness of confusion with other trademarks, even if the second trademark is not registered in Chile, as long as the fame and notoriety of such trademark in the country of origin are proven for the same products or services. \n Both certification and collective marks, on the one hand, and geographical indications and designations of origin, on the other hand, are available as a mechanism of protection for these particular marks used by many different entities. \n The statute of limitations of five years does not apply to canceling trademarks registered in bad faith. \n Neither use nor intent to use declaration is needed for filing and registering a trademark, however, a trademark may be subject to cancellation if a party claims lack of use after the first five years that follow the registration (or renewal for the trademarks registered before May 9, 2022). \n Owners of prior unregistered and used trademarks in Chile may file oppositions or cancellation actions against similar trademark applications or registrations, as applicable. \n Actual use may support an application for a generic or descriptive mark that could otherwise be rejected, provided that such use has allowed the mark to acquire distinctiveness within the Chilean market. \n The three minimal requirements for patenting are the usual ones: worldwide novelty, inventive step, and industrial application. \n Divisional patent applications are available. \n Plant varieties shall only have the protection provided for in the Chilean Rights of Breeders of New Plant Varieties Act , but not under the Industrial Property Act . \n Discoveries, economic, financial, commercial, or business systems, methods, plans or principles and methods for diagnostics and for the surgical or therapeutic treatment of the human or animal body, among others, are notable exceptions for patenting. \n A new simple deposit system is available for industrial designs and drawings, although it does not provide the possibility of asserting rights, it will not allow third parties to register (due to lack of novelty) and may be activated later on in order to pursue regular registration. \n Foreign geographical indications and designations of origin can be registered under certain requirements. \n \n Copyrights The Copyright Act establishes that the rights of an author in an original or derivative work are recognized upon the independent creation of the work. No additional action by the author is necessary. Copyright notice and copyright registration are thus not mandatory but are advisable since both raise a presumption of ownership of the rights. To register a copyrighted work, a tangible copy of such work must be filed with the Intellectual Property Department (the “ DDI ”). \n Copyright licenses are not subject to formalities, but should define the term, scope and territory of the license, along with specifying if it is free or paid, exclusive or non-exclusive. \n The Constitution and the Copyright Act recognize and protect not only the economic or pecuniary derechos de autor or copyright but also the author’s moral rights. These rights include the right of attribution and the right to claim authorship of a work; the right regarding the work’s integrity as to avoid disrespect or unapproved adulteration; the right to keep the work unpublished; the right to authorize a third party to complete an unfinished work; and, finally, the right to maintain the work’s anonymity or to maintain a pseudonymous identity during the term of the copyright protection. These rights cannot be licensed, assigned or waived. \n The duration of the copyright is the author’s life, plus seventy years. The copyright on collaborative works lasts for seventy years after the last co-author died. In the case of anonymous works, the duration is seventy years from the date of their first publication. \n Software companies also count the 70-year duration of their copyright on the software written by their hired programmers from the date of the software’s first publication. The copyright of performing artists lasts for seventy years from the first publication of their performances as well. A copyright cannot be renewed. \n Both criminal and civil actions are available in case of infringement. \n A few additional relevant aspects are: \n \n Software is subject to copyright regulation. \n The transfer of copyrights is subject to formalities, including a mandatory registration of the transfer before the DDI . \n Reverse engineering of computer software for the sole purpose of achieving compatibility with other computer programs, or for research and development is allowed. However, the information thus acquired cannot be used to produce or commercialize similar software or for other conduct that may constitute copyright infringement. \n \n Domain Names In Chile, Internet domain names may be registered within the country-code top-level domain “.CL” managed by NIC Chile, the local network information center. NIC Chile acts both as domain name registrar and domain name registry operator. \n No formal domestic trademark rights are acquired upon registration. There are no restrictions regarding the number of domain names that an individual may register, nor are there restrictions concerning the registration of generic expressions. \n It is not possible to publicly search “.CL” domain names owned by a certain person. \n Domain names can be registered and renewed for any number of years between one and 10 years, as the owner may choose. The longer the term of protection, the higher the registration or renewal fee, as applicable. \n Even though there are no use restrictions, the lack of use of a domain name may, under certain conditions, be considered evidence of having obtained registration in bad faith or even for wrongful purposes. \n NIC Chile has a local alternative dispute resolution system similar to, but somewhat broader than, the Uniform Dispute Resolution Policy (“ UDRP ”) system. In dealing with domain name disputes, the “first come, first served” principle is altered when industrial property rights are invoked, and no strong counterarguments exist. NIC Chile’s system is broader than the UDRP because both registered and unregistered marks can potentially be relevant when deciding the matter. "]
["Consumer"," Regulatory Background The main rules on consumer rights protection are contained in the Chilean Consumer Protection Act, No. 19.496 (the “ Consumer Protection Act ”). \n The Consumer Protection Act sets forth the rights and obligations of suppliers and consumers, governs their relationship, describes infringements to consumers’ rights and establishes procedures to pursue remedies and/or fines. This Act applies to a wide range of everyday situations and introduces a regulation that not only diverts from the Civil and Commercial Codes but is moreover applied within regulated markets, such as banking, telecommunications, insurance, etc. The provisions of the Consumer Protection Act (as well as consumer contracts are to be construed in favor of the consumer. \n Consumer’s Rights The Consumer Protection Act establishes several basic rights for consumers, as well as various infringements that relate to them. Consumers cannot waive these rights. \n First, consumers have the right to a free decision regarding goods and services, which brings along a detailed regulation regarding boilerplate contracts that includes a “blacklist” of unfair terms and a general unfairness provision. \n Consumers also have the right to timely and truthful information, which is why the Consumer Protection Act includes mandatory disclosing duties, which are particularly detailed regarding financial products and services. The right to truthful information is also related to general provisions regarding advertisement, as well as to the duty of suppliers to abide by the terms under which goods or services are offered. \n Moreover, consumers have the right not to be arbitrarily discriminated against, which means that suppliers cannot deny without justification either the sale of goods or the services included in its business line under the offered conditions. \n The Consumer Protection Act also lays down the right to safe consumption, which relates to a series of detailed provisions on product liability and product safety, including administrative and judicial recalls. \n Finally, consumers have the right to claim damages in case they suffer harm, which covers both pecuniary and non-pecuniary losses. Damages can be claimed either through individual or collective actions (see below). The Consumer Protection Act does not establish a specific time limitation for damages claims, and thus the general statute of limitations provisions apply. \n In addition to damages, consumers may also seek various remedies based on the breach of the legal warranty, including the repair of a product, its replacement or the refund of the price paid. Rights under the legal warranty can be brought within three months after the delivery of the goods and can be exercised indistinctively against the manufacturer, the importer or the seller. More favorable terms provided for conventional warranties prevail over the legal warranty. \n Fines and other Administrative Sanctions Recent amendments have considerably increased the fines which derive from infringements to the Consumer Protection Act . The default rule is that an infringement can lead to a fine up to roughly USD$18,000, which is imposed by Communal Courts. However, there are specific provisions imposing higher fines, such as the following: \n \n Overbooking of public shows or means of transport: up to USD$135,000 approximately. \n Advertisement infringements: up to USD$60,000 approximately in case of misleading advertisement regarding certain essential aspects described in the statute; up to USD$135,000 approximately if the misleading elements concern the health or safety of the population or the environment. \n Suspension of service: up to USD$45,000 approximately in case of unjustified suspension; up to USD$90,000 approximately regarding utilities. \n Failure to comply with warning duties regarding hazardous products: up to USD$135,000 approximately. \n \n In case of collective actions ( see below ) the fines are imposed by Civil Courts. The court can impose one fine for each affected consumer, if the infringement, due to its nature, affects each of them. This will not apply when the supplier has effectively repaired all harm caused to consumers. Moreover, the fine can under no circumstances be higher than 30 percent of the sales pertaining to the product or service related to the infringement or than twice the economic profit obtained because of the infringement. In any case, the fine cannot exceed USD$34 million approx. \n In order to determine the amount of the fines, courts may consider certain aggravating circumstances, which include recidivism within the last two years, causing serious patrimonial damage to consumers, gravely harming consumers at a physical or psychological level –or even their dignity– among others. The court may consider mitigating circumstances as well, such as preventively repairing the damage caused, self-reporting, substantial collaboration during the investigation or trial, or not having been previously condemned for the same conduct in the last three years. \n Besides monetary fines, suppliers may be subject to other legal consequences, such as the declaration of unfair clauses as null and void or the recall of hazardous products. \n Fines are imposed on a negligence-based system. Claims pursuing administrative sanctions must be brought within two years of the infringement. \n Public and Private Enforcement The national agency in charge of the public enforcement of consumer law in Chile is the National Consumer Service ( Servicio Nacional del Consumidor,  “ SERNAC ”), a government agency that is present in each region in Chile. SERNAC has broad attributions that include (among others): (i) monitoring the supplier’s duties towards consumers –which may even seizing evidence on-premise investigations–; (ii) the administrative interpretation of the statutes on consumer protection; (iii) filing subpoenas on the supplier’s legal representatives or employees; (iv) conducting tests on products offered to consumers; (v) act as a plaintiff in judicial claims against suppliers; and (vi) conduct the Voluntary Collective Procedure (see below) in order to reach an agreement which affects a specific class of consumers. \n Besides SERNAC , the Consumer Protection Act also regulates Consumer Associations, non-profit organizations founded to promote consumer rights and educate consumers. Consumer Associations can carry out individual mediations between consumers and suppliers. Consumer Associations may also represent consumers in judicial procedures (either individual or class actions), as well as take part in Voluntary Collective Procedures. As a result, suppliers may have to deal with SERNAC and with Consumer Associations, either alternatively or simultaneously. \n Finally, consumers themselves may seek the enforcement of the Consumer Protection Act by pursuing fines and/or remedies (usually damages), either through individual or collective actions. In the latter case, a minimum of 50 consumers must take part in the collective action. \n Class Actions While consumers may individually seek administrative sanctions or remedies from a supplier at Communal Courts, during the last decade class actions before Civil Courts have become increasingly common when there is a large group of affected consumers. Chilean class actions operate on an opt-out basis and, since the number of consumers who opt out is usually negligible, plaintiffs normally have effective representation over the entire class. \n Recent amendments have aimed at favoring plaintiffs’ position in class actions. The class certification stage, which was originally designed to exclude unfounded claims, has been radically simplified. Regarding monetary fines, courts can impose one fine per affected consumer in certain cases, with a ceiling of approximately USD$34 million (see above). \n Concerning damages, the plaintiff may claim damages even in favor of an undetermined group of consumers. Consumers will be awarded an identical sum if they experience an identical form of harm, and the court may divide them into groups and subgroups in order to award different sums. \n Plaintiffs may seek not only the pecuniary loss suffered by consumers, but even non-pecuniary losses in case consumers may have been physically or psychologically harmed or have suffered harm to their dignity. \n Recent amendments have moreover introduced punitive damages –which led to a 25% increase of the reparation– in case the judge verifies certain aggravating circumstances. Another recent innovation is the compensation in favor of consumers who have suffered the suspension of utility services (e.g., water supply, telecommunication services, etc.). \n In case suppliers are condemned, the general rule is that consumers must judicially appear and prove their condition as members of the class in order to receive their awards. In case suppliers have the information to identify affected consumers, they may be condemned to directly compensate them, preventing consumers from having to come forward to claim their awards. \n Consumers have a second opt-out window to individually sue for damages in case of a condemnatory decision against the supplier. This opt-out right arguably also applies in cases of class-wide settlements. \n Parties may seek a settlement within a class action procedure, which must be approved by the court as long as it is not against the law or discriminatory. The order approving a settlement is equivalent to a final judgment on the merits for all legal purposes. As a result of recent amendments, the judicial approval of a settlement does not necessarily hinder the subsequent application of a fine. Accordingly, the court may continue with the proceedings for the purpose of determining the defendant’s administrative liability and imposing a fine. \n Voluntary Collective Procedures Recent amendments created the so-called Voluntary Collective Procedures as an alternative to class actions, in order to reach an out-of-court agreement that gives a swift and complete response to the needs of consumers. Taking part in these procedures hinders the possibility of filing a class action against the supplier, but a Voluntary Collective Procedure cannot take place if a class action has already been filed. Moreover, the Voluntary Collective Procedures does not involve any form of administrative sanction, nor acknowledge any liability or wrongdoing. \n Voluntary Collective Procedures may only be conducted by SERNAC , although Consumer Associations may take part as well, and affected consumers may provide observations of the agreement reached by the parties involved. The procedure is conducted by a separate department within SERNAC , in order to avoid that the information provided may be subsequently used against the supplier in a class action. \n This procedure cannot last longer than six months, during which the statute of limitation is suspended. If an agreement is reached, it must be judicially approved. Just as in class actions, consumers may opt out once the agreement is authorized. "]
["Compliance"," White Collar Crimes \n Novel Legal Framework On August 17, 2023, the new Chilean Economic Crimes Act (the “ ECA ”) entered into force for individuals. Its new rules on criminal liability of legal entities will come into effect on September 1st, 2024. \n The ECA established a new criminal sentencing system—with tougher penalties than the ordinary system—, which will be only applicable to what the ECA considers “economic crimes”. It also created new criminal offenses (most notably, environmental crimes) and modified other offenses already punishable under Chilean criminal law. Additionally, the ECA significantly modified certain provisions of the Criminal Liability of Legal Entities Act . \n The ECA contains a list of about 230 criminal offenses that are deemed to be normally committed by executives or employees of a company, or in favor of a company. Thus, the ECA covers crimes established in the Securities Act (e.g., submission of false information, insider trading, etc.), the Corporations Act (e.g., abusive agreement by the board, submission of false information to public authorities or third parties, etc.), the Banking Act , the Competition Act (e.g., collusion), the Criminal Code (e.g., illicit related-party transactions, fraudulent management, embezzlement, bribery, new environmental crimes, etc.), the Tax Code , the Customs Ordinance (e.g., smuggling), among others. Given certain conditions, these offenses are no longer punished according to the ordinary sentencing scheme of Chilean criminal law; rather, they are subject to the novel legal framework set forth by the ECA . \n The determination of a prison sentence under the general rules of Chilean criminal law normally depends on three factors: (i) the abstract range of prison time established by the law for each crime, (ii) the concurrence of mitigating and aggravating circumstances, and (iii) the possibility of applying for parole or probation. The fundamental aim of the ECA is that individuals who commit an economic crime effectively serve a prison term—even if it is the offender’s first conviction—and pay a considerably large fine. Hence, the ECA contains special sentencing rules that are applicable only to those who are convicted for an offense that qualifies as an economic crime. These special rules only recognize unique mitigating and aggravating circumstances that make it harder for the court not to apply the prison time established in the law. Additionally, the ECA ’s rules limit the application of parole or probation. The new system makes the granting of parole or probation highly unlikely for someone who has participated in an economic crime while holding a superior position within a business or corporation. \n Regarding fines, the ECA introduced a day-rate system. The number of applicable penalty days depends on the applicable prison sentence for each crime. In other words, the number of penalty days is directly proportional to the term of the prison sentence. In turn, the value of one penalty day is calculated based on the average income of the offender. The combination of both factors amounts to potential fines that range from USD$36 to USD$43.5 million (approx.). \n In addition, pursuant to the ECA , every economic crime shall always entail day-rate fines, and certain prohibitions and confiscations. The ECA established prohibitions from three to ten years, and they include the prohibition to hold public office or managerial positions in any company, and the prohibition to enter into agreements/contracts with Governmental entities. \n The ECA also regulates the confiscation of economic assets equivalent to the profits obtained through the crime or as a reward for the commission of the crime. This consequence is applicable to economic crimes every time there are goods of illegal origin, even if there is no conviction or if the accused is finally acquitted. Indeed, the ECA allows for the confiscation—without prior conviction—of profits obtained through an economic crime when: \n \n The case is temporarily dismissed due to the absence of the defendant. \n The defendant is acquitted because the court is not able to reach the beyond-reasonable doubt threshold for a conviction. \n The case is dismissed, or the defendant is acquitted because of exonerating circumstances that do not exclude the unlawfulness of the conduct. \n The case is dismissed, or the defendant is acquitted because of the concurrence of a circumstance that extinguishes his/her criminal liability or because of the occurrence of an event that terminates such liability. \n \n This confiscation “without prior conviction” may also affect people who did not participate in the offense but who acquired the crime’s profits gratuitously, who acquired them knowingly, or who obtained the profits through the commission of the offense and the participants acted in his/her interest. If the crime’s profits are transferred to a legal entity as a contribution of property, then such legal entity will also be subject to this sort of confiscation. \n The confiscation of profits is not, strictly speaking, a novelty of the ECA because it was introduced by Law No. 21,577 two months before the enactment of the ECA . This law added to the general rules of the Criminal Code a new section that establishes the following: “ Every criminal conviction shall include the confiscation of profits arising from the offense whenever those profits in fact exist. The confiscation of profits deprives a person of assets whose value corresponds to the amount of the proceeds obtained through the offense, or for or by committing it. ” \n Criminal Liability of Legal Entities \n Conditions for Criminal Liability Since 2009, legal entities may be criminally prosecuted and convicted under Chilean law, pursuant to the Criminal Liability of Legal Entities Act. For such an entity to be responsible for a crime, the following conditions must be satisfied: \n \n the offense must be one of the crimes specifically listed by the Act, \n the offense must be committed by certain members of the entity, and \n the offense must be a consequence of the entity’s failure to comply with its supervision duties (i.e., improper implementation of its crime prevention guidelines). \n \n The criminal liability of legal entities is autonomous from the liability of the individuals whose illicit behavior triggers the former. This entails that the legal entity can be convicted even if it is not possible to establish the involvement or participation of specific individuals, as long as the crime necessarily occurred within the scope of functions and powers of the entity’s relevant members. \n The Act currently recognizes approximately 20 offenses that may trigger a legal entity’s criminal liability. Some of the most relevant of those are the crimes of bribery, money laundering, handling of stolen goods, funding of terrorist activities, and fraudulent management. \n Applicable Penalties As of July 2024, legal entities may be subject to the following penalties, once convicted of an applicable crime: \n \n dissolution or cancellation of the legal entity, \n prohibition to enter into agreements/contracts with Governmental entities, \n loss of fiscal benefits or privation of the chance of receiving those benefits, \n fines, and \n confiscation of assets. \n \n Crime Prevention Manual or Guidelines One of the key elements of the criminal liability of legal entities is the so-called crime prevention model or guidelines ( modelo de prevención de delitos ), which companies must develop and apply to their organizational structures. Entities are exempt from criminal liability if they can show that, before the date of the crime, they had duly established and implemented suitable organizational guidelines to prevent the occurrence of criminal offenses within the entity’s structure. \n For those guidelines to have the exemption effect stated above, they must at least include the following items: \n \n the nomination of a compliance officer, with functional autonomy from the company’s management, \n the allocation of resources and powers to the compliance officer for an adequate exercise of his/her functions, and \n the establishment of a crime prevention system, which identifies the entity’s activities that involve risks of criminal behavior, defines specific protocols for those activities aimed at preventing the occurrence of those crimes and considers reporting procedures and internal penalties, among other aspects. \n \n The compliance officer, alongside the entity’s management, must make sure the guidelines are effectively applied, correct any of its weak points, and update it according to any changes in the relevant circumstances. \n The fulfillment of the aforementioned conditions for suitable crime prevention guidelines can be certified by auditing companies registered at the Commission for the Financial Market. However, compliance with those legal criteria is not an automatic guarantee against criminal liability. Chilean courts have interpreted that those conditions are a minimum, but further actions are necessary. Companies should be able to show that their guidelines are actually applied by the corresponding officers and known and followed in concrete ways by the entity’s members at large. \n The Impact of the ECA The ECA considerably modified the current law of criminal liability of legal entities. These changes will be enforceable starting on September 1st, 2024. \n In this regard, some of the key aspects to note are the following: \n \n The ECA expands the list of criminal offenses that can trigger the entity’s criminal liability. All offenses covered by the ECA will be added, so the list of relevant crimes for legal entities will increase from approximately 20 to around 240 offenses. \n The new law broadens the legal entity’s relationships with individuals (who commit the underlying crime) which can trigger criminal liability for legal entities. Legal entities will be criminally liable for the conduct of (i) those who hold an office, perform a function, or hold a position within the legal entity; (ii) those who manage the legal entity’s affairs with third parties, either with or without representation; and (iii) those who are (a) related in one of the two previous ways with a second legal entity that, in turn, (b.1.) provides services managing the first legal entity’s affairs with third parties, either with or without representation, or (b.2.) lacks any operational autonomy from the first legal entity, existing between those entities ownership or participation relationships (for example, a subsidiary whose decisions are made de facto directly by the parent company). \n The ECA considers the appointment of a monitor or supervisor to the legal entity as a new possible penalty or even as a protective order that may be adopted during the investigation stage of the criminal procedure. The court-nominated monitor or supervisor will be able to give mandatory instructions to the legal entity. \n The law will no longer require that the crime be committed in favor of the legal entity for it to be criminally responsible. The legal entity will only be exempt from this responsibility when the crime is committed exclusively against it. This means that a corporation could even be criminally liable for an offense committed to its own detriment by someone within the organization, as long as the offense also affects a third party. \n There will be a special day-rate system of fines for legal entities. The potentially applicable fines will range from US$ 725 to USD$145 million (approx.). \n \n Anti-Money Laundering \n Crime of Money Laundering Chilean criminal law penalizes two forms of money laundering. One of those forms is by concealment and the other by contact. The first form (money laundering by concealment) is the most common type. It consists of concealing or whitewashing the illegal origin of goods or the goods themselves. In contrast, money laundering by contact refers to the mere acquisition or possession, with a profit motive, of goods of illegal origin. In both cases, an individual may be punished even if he/she ignored, with “inexcusable negligence”, the origin of the goods. \n The illegal origin of the goods must be found in actions or conducts that are encompassed by one of the specific criminal offenses listed by Article 27 of Law No. 19,913 . For example, some of those offenses are drug trafficking, terrorist actions, fraud, bribery, embezzlement, illegal associations, kidnapping, fraudulent attainment of tax returns or state benefits, among others. For the purposes of a money laundering conviction, it is sufficient that the relevant goods come from certain “facts” that match the objective description of one of the offenses included in Article 27 , even if there is no criminal conviction for those original facts. \n In principle, the crime of money laundering may be punished by a prison term of 5-10 years. However, the actual time to serve cannot exceed the maximum prison term assigned by the law to the “crime of origin.” \n Governmental Oversight and Reporting Obligations The same law that regulates the crime of money laundering ( Law No. 19,913 ) created the Financial Analysis Unit ( Unidad de Análisis Financiero or UAF ), a governmental agency whose aim is to prevent the instrumentalization of the financial system or other economic activities for money laundering or for the financial support of terrorism. The UAF receives information relating to “suspicious transactions”, that is, any transaction that, according to the normal course of the relevant economic activity, seems unusual or apparently lacks an economic or legal basis. If the UAF finds indications or signs that point to a potential case of money laundering or financial support of terrorism, the UAF must send the relevant information to the Criminal Prosecutor (Ministerio Público). Likewise, the Criminal Prosecutor can request information from the UAF during the investigation of a case involving those offenses. \n In turn, Law No. 19,913 also established reporting obligations for several governmental and private institutions, which must send the relevant information to the UAF every time they come across any suspicious transaction. The UAF is responsible for specifying to each of those institutions what they should regard as suspicious transactions in their own activities. Some of those institutions are the following: public services of the central government, municipalities, decentralized governmental agencies, state-owned companies, banks, factoring companies, leasing companies, asset-management companies, money-exchange businesses, credit card issuers, assets and securities transport companies, stock-exchange companies, insurance companies, casinos, pension-funds management companies and real estate brokers. \n Non-compliance with the reporting obligations may be punished by fines of up to USD$200,000 (approx.) and up to USD$600,000 (approx.) in case of recidivism within a year. If a legal entity infringes its obligation, the fine may also be imposed on its directors or representatives who were involved in the entity’s non-compliance. "]
["Personal Data"," Data Protection Framework The Chilean Political Constitution guarantees the right to the protection of personal data ( Article 19 No. 4 ). Under the Chilean Data Privacy Act (“ DPA ”), which governs the processing of personal data and databases, the processing of personal data (“any information related to specific or identifiable individuals”) must be authorized by law or expressly in writing by the owner of the relevant information (i.e., the natural person or data subject). The data subject must be duly informed as to the purpose for which his/her personal data is collected and about the potential disclosure of such data to the public. The international transfer of personal data is not restricted nor regulated as a special type of personal data processing, so the regular restrictions of any data processing apply to it. \n Consumer Protection Framework Effective December 24, 2021, any infringement of personal data protection provisions within the framework of consumer relations is considered an infringement of the Consumer Protection Act ( see \"Consumer Protection\" above ). By this legal amendment, the SERNAC has been granted surveillance and enforcement attributions with regard to consumers’ data protection rights. Further, consumers have the right to seek enforcement of their data protection rights pursuant to the procedures set forth in the Consumer Protection Act . \n Unsolicited commercial or marketing communications. The Consumer Protection Act allows companies to send marketing communications to consumers, but individuals have the right to request that they stop doing so. In the case of advertising emails, the email must indicate the matter or subject on which it deals, the identity of the sender and contain a valid address to which the recipient can request the suspension of communications. shipments, which will be prohibited from then on. On the other hand, the DPA provides that the data subject may request the deletion or blocking of his/her data when the data is used for commercial communications and the data subject does not wish to continue appearing in the respective register or database. \n Use of cookies on websites or digital platforms of retail services. The Consumer Protection Act establishes the consumer’s right to “truthful and timely information on the goods and services offered” and every person´s right to be informed, in cases of “collection of personal data through surveys, market studies or public opinion polls or other similar instruments” about the obligatoriness to respond and “the purpose for which the information is being requested”. Based on the two provisions mentioned, SERNAC has issued several actions against companies in the e-commerce retail industry, requesting compliance with the above obligations through the publication of a proper Privacy Policy and Cookies Policy. SERNAC is increasingly monitoring this compliance with privacy regulations in e-commerce websites and digital platforms. \n Voluntary procedure for the protection of collective interests (collective mediation) and subsequent class-action lawsuits in cases of security breaches. SERNAC is actively seeking compensation in cases of consumers who have been affected by security breaches, such as disclosure of personal information, interruption of computer services, limiting users to carry out their transactions, and others that may cause damages. The proceeding can only begin if no class actions have been filed related to the same facts and, once the proceeding has commenced, no class actions can be filed concerning the same facts until the voluntary proceeding ends. This proceeding can be initiated by SERNAC or through a complaint from a consumer association. \n Cybercrime Framework Law 21,459 on Cybercrime , published on June 20, 2022, established new rules on cybercrime offenses and amended several regulations in order to adapt them to the Budapest Convention on Cybercrime Standards . The law included a new list of offenses to the catalog of criminal liability of corporations or legal entities. This implies that companies must review and update their crime prevention models, identifying the processes in which there is a risk of committing a cybercrime in their interest or for their benefit, and establishing the corresponding protocols, rules, or procedures. \n Commission for the Financial Market (\"CMF\") This public regulator ( see \"Foreign Exchange and International Investment\" above ) has issued several orders on cybersecurity requirements for banks and financial institutions under its surveillance, including regulations on the outsourcing of data processing services providers. The main provisions seek to raise security standards and obtain accurate and fast information about security breaches. Some examples: (i) the obligation of banks and financial institutions to report cybersecurity incidents to CMF , including a 30-minute term to report the first information about any incident; (ii) handling of cybersecurity incidents by banks or financial institutions are considered a relevant factor to determine their evaluation and classification as financial institutions; (iii) permanent monitoring of operational risk; investments in technology. \n Cybersecurity Act Enacted on April 8, 2024, Law 21,663 on Cybersecurity introduces principles, objectives and definitions that will affect the activities and operations of the entities bound by its provisions, particularly in cybersecurity matters. It creates a new organizational and institutional structure, whose salient feature is the establishment of the National Cybersecurity Agency (\" ANCI \"), which will be empowered to sanction the entities subject to the Cybersecurity Act who fail to comply with the duties set forth therein. The entry into force of the Cybersecurity Act is subject to the issuance of a decree by the President of the Republic. The decree must be issued within a year from the publication of the Act . In any case, the Act will enter into force no earlier than six months after the publication of the presidential decree. \n Open Banking in the Fintech Act The Fintech Act introduces an Open Finance System consisting of a series of remote and automated access interfaces. These interfaces enable designated financial market participants to access the information of financial customers. The sole legal basis for processing the personal data of customers is their explicit consent. \n New Data Privacy Act On August 26, 2024, the Chilean Congress approved an amendment to the DPA which, for all purposes, creates a new personal data protection framework, bringing Chile into a standard similar to that of the European Union in these matters. These amendments will come into effect two years from its publication in the Official Gazette . Below are the most relevant aspects of this new regulation: \n Key legal definitions: \n \n Personal Data Any information linked or referred to an identified or identifiable natural person. A person is considered identifiable if the person’s identity can be determined, directly or indirectly, particularly through one or more identifiers such as name, ID number, or analysis of elements related to physical, physiological, genetic, psychological, economic, cultural, or social identity. \n \n Sensitive Personal Data Personal data that refers to the physical or moral characteristics of individuals, or to facts or circumstances of private life or intimacy, revealing ethnic or racial origin, political, union, or guild affiliation, socioeconomic status, ideological or philosophical convictions, religious beliefs, health data, human biological profile data, biometric data, and information related to sexual life, sexual orientation, and gender identity of a natural person. \n Data Controller Any natural or legal person, public or private, who determines the purposes and means of personal data processing, regardless of whether the data is processed directly by the person or through a third-party agent or data processor. \n Data Processor The natural or legal person who processes personal data on behalf of the data controller. It is the third-party agent who acts and processes personal data according to the instructions of the data controller. \n \n \n Legal Bases for Personal Data Processing The general rule is that the processing of personal data will be lawful when the data subject provides consent. This consent must be freely given, informed, and specific regarding its purpose and must be expressed prior to processing in a clear manner (a verbal or written statement, or expressed through an equivalent electronic means, or through an affirmative act that clearly indicates the data subject’s intention). Additional legal bases permit the processing of personal data without the data subject’s consent, such as when processing is necessary for: (i) entering into or executing a contract between the data subject and the data controller or for pre-contractual measures adopted at the request of the data subject; (ii) satisfying the legitimate interests of the data controller or a third party, provided that in the latter case the rights and freedoms of the data subject are not affected; (iii) complying with a legal obligation or as provided by law; (vi) for the formulation, exercise, or defense of a right before the courts of justice or public bodies; and (vii) relating to data concerning obligations of an economic, financial, banking or commercial nature and carried out in accordance with the rules of this new act, including data relating to the socio-economic situation of the data subject. Additionally, the law incorporates an additional catalog of legal bases that allow the processing of sensitive data without the data subject’s consent, in relation to public interest, order, security, and health. The data controller must always have the means to demonstrate the lawfulness of the data processing. \n Data Subject Rights The new law includes non-waivable rights for data subjects that can be enforced against the data controller: (i) access; (ii) rectification; (iii) erasure; (iv) objection; (v) blocking; and (vi) data portability. The latter involves requesting and obtaining a copy of personal data in a structured, generic, and commonly used electronic format that can be operated by different systems and being able to communicate or transfer it to another data controller when the requirements established by law are met. \n Data Protection Agency A new supervisory authority for personal data protection is created as a decentralized entity with sanctioning powers. \n Processing of Personal Data by a Data Processor The legal relationship between the data controller and data processor is regulated, requiring a formal contract between the two that must establish the scope of the mandate, its duration, the purpose of the processing, and the type of personal data processed, among other considerations established by law (data processing agreement). \n Transfer of Personal Data The transfer of personal data must be carried out with the consent of the data subject and for the fulfillment of the purposes for which the data subject has authorized the processing. Personal data may also be transferred when the transfer is necessary for the performance or execution of a contract to which the data subject is a party; when there is a legitimate interest of the transferring or receiving party (as provided by law), or when required by law. The law regulates the formalities of the transfer agreement, which must at least be in writing and specify the data being transferred and the intended purposes of the processing. \n International Transfer of Personal Data The international transfer of personal data is deemed lawful only under certain circumstances, such as when the transfer: (i) is made to a person, entity, or public or private organization subject to the legal system of a country that provides adequate levels of personal data protection in accordance with the provisions of the law; (ii) is covered by contractual clauses, binding corporate rules, or other legal instruments signed between the data controller who makes the transfer and the data controller or data processor receiving it, and in them adequate guarantees are established as provided by law; (iii) is between parties that have adopted a binding and certified compliance or self-regulation model according to the applicable law for each of them; (iv) is expressly authorized by the data subject; (v) pertains to specific banking, financial, or stock market transfers carried out in accordance with the laws regulating these transfers; (vi) is made by a natural or legal person, public or private, expressly authorized by law for a specific purpose; and (vii) is necessary for the conclusion or performance of a contract between the data subject and the data controller, or for pre-contractual measures taken at the request of the data subject. \n Retention of Personal Data Personal data may only be retained for as long as necessary to fulfill the purposes of processing. Once those purposes have been achieved, the data must be erased or anonymized. \n Security Obligations and Notification of Security Breaches The new law imposes significant and strict security obligations on both the data controller and data processor, considering the nature of the data, the current state of technology, implementation costs, the nature, scope, context, and purposes of processing, the likelihood of risks occurring, etc. Failure to adopt security measures may be considered an aggravating circumstance in cases of violations. The data controller must promptly inform the agency of any security breach that results in the destruction, leakage, loss, or unlawful alteration of personal data, or unauthorized access to such data. In the event of security breaches involving sensitive data the data controller must also notify the data subject. \n Severe Penalties Depending on the Nature of the Violation/Breach. Minor Violation Fines up to the higher of approximately USD$5,000; Serious violation: fines up to the higher of approximately USD$710,000; Very serious violation: fines up to the higher of approximately USD$1,420,000. In the event of repeated offenses, the agency may increase the fine up to three times. Repetition of serious offenses by large companies may be sanctioned with a fine of up to two percent of annual revenue from sales and services. The fine for the repetition of very serious offenses by large companies may reach up to four percent of annual revenue from sales and services. \n "]
["Antitrust"," Competition Law The Chilean competition system’s backbone is set out in Decree-Law No. 211 (the “ Chilean Competition Act ”). Broadly speaking, it regulates anticompetitive practices, the powers of competition law authorities, and procedural matters for administrative investigations and judicial proceedings. The main purpose of the Chilean Competition Act is to promote and defend free competition in the markets. All affronts to competition in economic activities will be corrected, prohibited and repressed in the manner and with the sanctions established in the Chilean Competition Act . \n The main authorities involved in competition law matters in Chile are the Competition Agency ( Fiscalía Nacional Económica or “ FNE ”), the Competition Court ( Tribunal de Defensa de la Libre Competencia or “ TDLC ”) and the Supreme Court. \n Anticompetitive Practices Pursuant to the Chilean Competition Act , whoever executes or enters into, individually or collectively, any deed, practice or agreement that impedes, restricts or thwarts competition, or tends to produce such effects, will be sanctioned as provided therein (see Sanctions Regime below). The following deeds, practices, or agreements, among others, will be deemed to impede, restrict or thwart competition, or to tend to produce such effects: \n \n Agreements or Concerted Practices Involving competitors, which consists of fixing sale or purchase prices, limiting output, assigning market zones or quotas, affecting the outcome of tender processes, as well as agreements or concerted practices that, confer market power to the competitors, consist of the determination of marketing terms and conditions, or the exclusion of current or potential competitors. \n Abuse of a Dominant Market Position By an economic agent or a group thereof, fixing purchase or sale prices, tying the sale products, assigning market zones or quotas, or imposing other similar forms of abuse. \n Predatory Pricing or Unfair Competition Practices are deployed to obtain, maintain or increase a dominant position. \n Interlocking, that is, the simultaneous participation of an individual as a relevant executive or director in two or more competing firms, provided that the annual income of the aforementioned firms’ respective business groups exceeds UF 100,000 (approximately equivalent to USD$4.2 million) from sales, services, and other activities of their line of business during the last calendar year. However, this infringement will only be deemed to have occurred if such simultaneous participation is still ongoing after a term of 90 calendar days has elapsed, calculated as from the end of the calendar year when the threshold has been surpassed. \n \n Other infringements relate specifically to the merger control procedure (mainly procedural and substantive gun-jumping violations). \n Authorities \n \n FNE The FNE ’s main role is to investigate and prosecute anticompetitive behavior. In addition, the FNE acts as the main authority in charge of merger control review. The FNE also possesses additional powers to, for example, review and grant leniency applications in collusion cases, conduct market studies and propose regulatory amendments to the executive branch in order to enhance or preserve competition. The FNE ’s investigations may commence ex officio or following a complaint by any party with a legitimate interest. The FNE has an ample toolkit to investigate anticompetitive conduct. Its general powers include issuing requests for information to market players or public entities, as well as summoning executives to depositions. Non-compliance could lead to sanctions both administrative and criminal in nature. An investigation by the FNE could conclude through (i) dismissal; (ii) a settlement or consent decree between the FNE and the parties under investigation (which would require subsequent TDLC approval); or (iii) the FNE taking action before the TDLC , of either contentious or non-contentious nature (e.g., a complaint or a consultation, respectively). \n TDLC The TDLC ’s main role is to adjudicate on competition law matters. This includes hearing contentious cases on anti-competitive behavior, several ad hoc non-contentious faculties, and ruling on damages stemming from competition law infringements. Claims regarding anticompetitive behavior are adjudicated by TDLC through a contentious procedure, which applies indistinctly to unilateral conduct or collusion infringements. The FNE or individuals and companies with a legitimate interest have standing to initiate these proceedings. The TDLC may also (i) hear non-contentious cases, such as consultations on whether certain current or future acts or agreements comply with competition law (excluding acts or agreements that are subject to mandatory merger control by the FNE ), or proceedings to mandate general instructions that must be complied with by private parties in order to safeguard competition in a certain market; (ii) rule on damages claims, including class actions, following a prior judgment by the TDLC of anti-competitive behavior through a contentious procedure; and (iii) perform a judicial review of decisions by the FNE in the context of the merger control regime ( recurso de revision especial ). \n Supreme Court The court reviews the TDLC ’s decisions, mainly through a recourse known as recurso de reclamación . The Supreme Court has interpreted its competence under said recourse as broad in scope. Because of this, it is common for the Supreme Court to review both points of law and the merits of the case. \n \n Sanctions Regime The Chilean Competition Act provides that the TDLC and/or the Supreme Court can impose significant sanctions and penalties for anti-competitive practices. These include: \n \n Fines Up to a maximum of either: (i) 30 percent of the defendant’s revenue from the product line involved in the alleged infringement, during the period in which said infringement took place; or (ii) double the economic benefit obtained as a consequence of the alleged infringement. If neither alternative can be applied to a specific case, the TDLC and/or the Supreme Court can impose fines up to (iii) 60,000 UTA (approximately equivalent to US$55 million). Fines may be imposed on corporate entities and on individuals who intervened in the infringement. \n Injunctions Including the termination of acts, systems or agreements that infringe competition law, as well as the dissolution of corporate entities that have participated in anticompetitive behavior. \n Prohibition to participate in public tenders or enter into agreements with the Chilean State This additional penalty may only be applied in cartel infringements and for a maximum of five years. \n In case of a breach of the filing duty under the mandatory merger control procedure, the TDLC may impose a fine of up to 20 UTA (approximately equivalent to USD$17,760) for each day of delay, as from the day on which the concentration is consummated. \n In the case of a cartel infringement, the Chilean Competition Act also considers criminal prosecution for individuals (natural persons). \n \n Merger Control Regime The Chilean competition merger control regime considers both a pre-closing and a post-closing filing process. \n Pre-Closing System The filing must be made before closing the transaction. Accordingly, a transaction caught by this system is barred from closing until a final decision has been reached by the Chilean competition authorities: \n \n Triggering Elements There are two essential conditions that when simultaneously met trigger a mandatory pre-closing merger control filing before the FNE :\n \n The transaction must be considered a “concentration”, i.e., any event, action or agreement, or a combination of them, which causes two or more economic agents not belonging to the same business group and previously independent from one another, to cease to be independent with regard to any part of their business, including through mergers, acquisitions of decisive influence over an existing economic agent, associations intended to create new undertakings (e.g., a full-function joint venture), and acquisitions of assets; and \n The concerned undertakings’ turnover must meet the following simultaneous thresholds [1] : (i) a joint turnover in Chile –generated during the year preceding the closing of the transaction– equal to or higher than UF 2,500,000 (approximately equivalent to USD$105 million), and (ii) an individual turnover in Chile –generated during the year preceding the closing of the transaction– of at least two of the undertakings concerned in the concentration equal to or higher than UF 450,000 (approximately equivalent to USD$19 million). The calculation of the thresholds will look at the net sales in Chile of the relevant undertaking in the year preceding the closing of the transaction and, in general, will consider the turnover obtained by the concerned undertakings at a business group level. Concentrations that do not reach or exceed the thresholds referred to above may still be investigated by the FNE , in which case, the FNE has one year from the closing of the relevant concentration to launch the investigation. Also, concentrations that do not reach or exceed the thresholds referred to above, could be voluntarily filed (pre-closing) before the FNE . \n \n \n Procedure The pre-closing system can be summarized as follows: \n \n Filing Before the FNE The FNE has 10 business days to assess whether the filing is complete. If the FNE declares the filing as incomplete, the parties have 10 business days to supplement the filing, after which the FNE will again have 10 business days to decide whether the filing is complete or incomplete. This process could be repeated more than once until the filing is deemed complete or withdrawn by the notifying parties. If the FNE declares the filing as complete, phase 1 starts (see below). \n FNE’s Investigation In potentially two phases: (i) phase 1 (up to 30 business days), involving a market investigation by the FNE , and which can finish with unconditional approval, an approval subject to remedies offered by the parties, or the decision to move to phase 2 if it concludes that the transaction may substantially lessen competition, and, where applicable, (ii) phase 2 (up to 90 business days), in which third parties (such as customers and competitors) will be able to actively participate in the process, and which can finish with unconditional approval, an approval subject to remedies offered by the parties, or a ban on the transaction if it concludes that it can substantially lessen competition. \n Review by the TDLC ( see \"Authorities – TDLC \" above ). \n Review by the Supreme Court ( see \"Authorities – Supreme Court\" above ). \n \n \n Post-Closing System The Chilean Competition Act establishes a post-closing reporting obligation for investments of more than 10 percent in a competitor.\n \n Triggering Elements There are three conditions that when simultaneously met, trigger a mandatory post-closing notification in Chile: \n \n The acquiring firm and the target firm must be competitors (for these purposes, the acquiring firm includes its business group, and the target firm includes the entities over which, directly or indirectly, it owns more than 10%). \n The investment by the acquiring firm, or an entity belonging to its business group, represents more than 10 percent of a direct or indirect stake in the competing company’s equity, considering both directly held interests as well as third-party managed holdings. \n The parties’ turnover surpasses the following thresholds: (i) the acquiring firm and its business group’s turnover is higher than UF 100,000 (approximately equivalent to USD$4.2 million) in the last calendar year, and (ii) the target’s turnover (considering the entities directly or indirectly controlled by it) is higher than UF 100,000 (approximately equivalent to USD$4.2 million) in the last calendar year. \n \n \n \n \n Procedure Acquisitions that meet these requirements must be reported to the FNE within 60 days from the date the transaction is completed. There is no waiting period under the Chilean post-closing reporting regime. If the FNE decides to open an investigation, such inquiry does not follow a standard procedure (e.g., there is no ‘phase 1’ or ‘phase 2’) nor does it involve fixed deadlines. \n \n Statutes of Limitation In general, actions contemplated by the Chilean Competition Act are subject to a statute of limitation of three years from the execution of the infringing conduct, a term that is interrupted by a lawsuit filed before the TDLC by the FNE or a third party. In the case of cartels or concerted practices among competitors, the statute of limitation is five years and this term will only commence once the effects of the questionable conduct have disappeared. \n Civil actions for damages expire in four years from the relevant conduct (as a general rule) or four years from the final ruling of the TDLC or Supreme Court that punishes the violation of the Chilean Competition Act (if such a ruling exists). \n Leniency Program The Chilean Competition Act considers a leniency program pursuant to which individuals or companies involved in cartel violation might receive full or partial immunity from certain sanctions. Up to two applicants may receive leniency benefits, subject to compliance with certain requirements. The first applicant may be granted full immunity from fines, the dissolution of corporations, and criminal prosecution, while the second applicant may receive partial immunity from fines and criminal prosecution. \n   \n [1] Pursuant to the FNE ’s Guidelines on the Calculation of Thresholds, the conversion rate must be revised yearly. "]
["Infrastructure and Public Utilities",{"$cut":{"chars":20048,"head":" Energy \n Electricity Industry Overview The electricity industry in Chile is mainly regulated by the General Law of Electricity Services (the “ Electricity Law ”). The goal of the Electricity Law is to provide incentives to maximize efficiency and provide a simplified regulatory scheme and tariff-setting process that limits the discretionary role of the government by establishing objective criteria for setting prices. The expected result is an economically efficient allocation of resources. The regulatory system is designed to provide a competitive rate of return on investment to stimulate private investment while ensuring the availability of electricity service to all who request it. \n The main electricity system in Chile is the National Electric System (“ SEN ”), which was created through the interconnection, in November 2017, of the formerly known Central Interconnected System (\" SIC \") and the Northern Interconnected System (\" SING \"), which supplies electricity to over 98.5% of the national population, with a length of 3,100 kilometers. Additionally, there are a few medium and small electricity systems in the regions of Los Lagos, Aysen and Magallanes and one small system on Easter Island, none of which have an aggregate capacity higher than 110 MW. \n Business Segments The Chilean electricity industry is divided into three business segments: generation, transmission and distribution. In general terms, generation is subject to market competition, while transmission and distribution, given their natural monopoly character, are subject to price regulation. Final customers may be regulated or unregulated depending on their demand. Only unregulated customers may freely choose a provider and freely agree to the energy price. Regulated customers are forced to contract with distribution companies and pay them a tariff defined by the Ministry of Energy. \n The generation segment is comprised of companies that own generating plants, whose energy is transmitted and distributed to final customers. Generation companies produce electricity and sell their production at the spot market price, mainly, as explained in Electricity Market Remunerations below. No concession or particular approval is required to engage in electricity generation (except for the development and operation of geothermal generation facilities, which do require a concession). \n The transmission segment is comprised of a combination of lines, substations and equipment for the transmission of electricity from generators' production points to the centers of consumption or distribution. In Chile, transmission is defined as the conveying of electricity over lines or substations with a voltage or tension higher than 23 kV. The transmission system is divided into the main following segments: (i) the National Transmission System, the high voltage backbone of the whole system, which supplies energy to the entire electricity demand and permits the connection with other transmission systems; (ii) the Zonal Transmission Systems, which supply energy to regulated customers; and (iii) the Dedicated Transmission Systems, through which unregulated customers receive energy and generators inject the energy produced into the grid. National and Zonal Transmission Systems are considered as a public service. \n Additionally, Law No. 20,936 created two other transmission segments: (iv) the Development Zones Systems, destined for areas with resources or conditions of high potential for the production of electricity using a single transmission, which is of general public interest and economically efficient; and (v) the International Systems, destined for exportation or importation of electricity. \n The Chilean electricity legal and regulatory framework does not require an electricity concession to build and operate transmission facilities. However, in case it is difficult to process and obtain rights to use or occupy third-party land affected by the transmission facility’s layout, transmission companies may request and obtain electric concession that grants the possibility of enforcing t"}}]
["Termination of a Business "]
["Voluntary Liquidation","See \"\nInsolvency and Bankruptcy Regime\".\n"]
["Insolvency and Bankruptcy Regime","The \nReorganization and Liquidation Act (the “\nInsolvency Act”) governs the procedures applicable to insolvent entities and individuals. The proceedings for entities are summarized below.\nReorganization Procedure\nThe purpose of this proceeding is to reorganize and restructure an insolvent entity’s assets and liabilities by means of an agreement with its creditors.\nFinancial Protection\nOnce the court resolves the commencement of the reorganization procedure, the insolvent entity will benefit from a special financial protection (\nprotección financiera concursal) for a period of 30 days, extendable for up to 60 additional days. During this protection period, (i) it is forbidden to declare the insolvent entity’s liquidation or to file liquidation, foreclosure, or restitution proceedings against it, and any such proceeding and the relevant statute of limitation will be suspended, (ii) the term of all contracts entered by the insolvent entity shall not be altered, and such contracts may not be terminated or accelerated, or any guaranty enforced against the debtor, (iii) if the insolvent entity appears in a public registry as a subcontractor or supplier of a service, it may not be discriminated by the authority with its deletion or forbiddance to participate in public tenders, as long as it has complied so far with its related obligations, (iv) the insolvent entity’s management will be under the supervision of an observer (\nveedor), (v) the insolvent entity is unable to create security interests over its assets or to alienate them, except within its ordinary course of business, (vi) the insolvent entity will not be able to amend its bylaws, articles of association or power of attorney structure, and (vii) any transfer of shares in order to be registered in the insolvent entity’s register will require the observer’s authorization, except in the case of public SAs.\nReorganization Proposal\nIn the reorganization resolution, the court will order the insolvent entity to publish a reorganization agreement proposal. The insolvent entity may propose any measure to restructure its liabilities and assets, including proposing different agreements to its secured and non-secured creditors or even proposing one or more alternatives to a specific category of creditors. The only limitation established by the \nInsolvency Act is that the agreement proposal and its conditions or modalities must be the same for all creditors of the same category. If approved, compliance with the reorganization agreement will be supervised by the observer for a period of at least one year.\nThe proposal shall be voted on in a creditors’ meeting and its approval requires the debtor’s consent and the affirmative vote of the creditors representing two-thirds of the total debt with the right to vote attending the meeting corresponding to the relevant category. Once the agreement has been approved and not been challenged by one of the creditors for grounds set forth in the law (or any such challenges have been dismissed by the court), the debtor and all creditors of the relevant category (whether they voted or not) will be bound by it, except for secured creditors who did not attend the meeting.\nIf the agreement’s proposal is rejected by the creditors, the court will immediately pronounce a liquidation resolution, unless creditors representing at least two thirds of the total credits of the debtor agree in allowing the latter to submit a new proposal.\nAny of the creditors affected by the debtor’s lack of performance or conduct that has aggravated its poor state of business is entitled to file a lawsuit against it. However, the law allows the debtor to comply in a specific time frame in order to avoid the consequences of the breach.\nIf the court declares that there was a breach or that the agreement was void, once the sentence is final and subject to no further appeal, it will pronounce a liquidation resolution.\nOut-of-Court or Simplified Reorganization Agreement\nAny insolvent entity can enter into a simplified reorganization agreement with its creditors and submit it to the competent court for its approval. Once the simplified reorganization agreement is submitted to the court, it will pronounce a simplified reorganization resolution. Its effects are more limited than the reorganization resolution described above.\nThe signature of two or more creditors representing at least three-quarters of the total credits of a category is required for the approval of a simplified reorganization agreement. It will also require a prior positive report from an observer regarding the probability of compliance by the debtor and a comparison with how much the creditors would receive if the insolvent entity was liquidated instead.\nLiquidation Proceedings\nThe \nInsolvency Act distinguishes between a voluntary and a compulsory liquidation proceeding. The compulsory proceeding may be requested by a creditor in certain cases and even declared by the court ex-oficio under certain circumstances. Voluntary liquidation is requested by the debtor subject to the requirements provided by the law.\nIn each case, the resulting liquidation resolution will produce the following effects: (i) the insolvent entity is immediately inhibited to manage its current assets, and a liquidator will be appointed to take charge of them, except for the assets acquired by the debtor pursuant to non-gratuitous title after the resolution, (ii) the liquidation resolution irrevocably determines the rights of all creditors as of the date it was issued, (iii) all debts become due and payable for the sole purpose of enabling the creditors to intervene in the liquidation proceeding and receive the dividends up to the current value of their respective credits, (iv) any set-off of reciprocal obligations between the insolvent entity and the creditors which would not have operated by virtue of law prior to the resolution is forbidden, except for related liabilities derived from the same agreement or negotiation, (v) all pending civil cases against the insolvent entity before any court shall join to the liquidation proceeding, except for those contemplated by law (e.g. compulsory arbitral proceedings), (vi) all injunctions and seizures ordered prior to the resolution will become immediately void, and (vii) the right of all creditors to individually foreclose the entity’s assets is suspended, except for secured creditors with respect to the foreclosure of the relevant collateral (subject to the requirement of guaranteeing their contribution to the payment of certain preferred credits in case the other assets are insufficient to cover them).\nActs and Contracts prior to Proceeding\nThe \nInsolvency Act provides that, subject to certain conditions, all acts, agreements or payments that had been entered into or performed within a time frame prior to commencement of a reorganization or liquidation proceeding and which jeopardize the debtor’s estate, may be challenged with the aim of its unenforceability being declared. The relevant lawsuits may be filed by any of the creditors or, under certain circumstances, by the liquidator or the observer within one year counted from the reorganization or liquidation resolution.\nConditions for this challenge action depend on the nature of the acts, agreements or payments which may be subject to an objective (i.e., without defenses such as good faith and lack of knowledge being available) or subjective (i.e., admitting such defenses) regime.\nThe following acts are subject to the objective regime, as long as, they were executed within one year previous to the commencement of the insolvency proceedings: (i) all anticipated payments, whichever manner they were executed, (ii) all payments of a matured debt made in a manner different from the original terms of the contract, (iii) all mortgages and pledges created to secure previously existing obligations, and (iv) acts and agreements for no consideration. Also, all amendments to the by-laws of the debtor in liquidation that have meant a decrease of the debtor’s equity, executed within the six months prior to the commencement of an insolvency procedure, are also subject to this regime.\nOn the other hand, any other acts or contracts that had been entered into, performed or executed within two years before the reorganization or liquidation proceeding was initiated, may be declared unenforceable against the debtor’s creditors in case the plaintiff proves the fulfillment of the following requirements: (i) knowledge of the counterparty of the poor state of the debtor’s business, and (ii) that the act or contract has jeopardized the creditors or altered their equal position in the insolvency proceedings. The Insolvency Act considers that an act or contract which was not entered into arm’s length conditions causes damages to the creditors.\n"]