CHILE Law and Practice Contributed by: Patrick Humphreys, Daniela Gazmuri Larraín, Paula Lühr, Ian Hinzpeter, Camila Leviante, Beatriz Riveros and José Luis Bravo, Garnham Abogados
The certificate may also be relevant to the exemp - tion from sales and services tax, on the importation of qualifying capital goods, where the statutory require - ments for that benefit are met. In addition, foreign investors have the right not to be subject to arbitrary discrimination, directly or indirectly. Generally, they are subject to the same ordinary legal regime that applies to Chilean investors. The certificate is therefore use - ful, but it is not normally a condition to closing the investment. Chile also benefits from a broad network of inter - national agreements that can be relevant to foreign investors. These include free trade agreements, dou - ble tax treaties and investment-related arrangements that may improve legal certainty, reduce tax friction and facilitate cross-border business. There are, however, sector-specific rules. These apply because the activity is regulated, not because the investor is foreign. Foreign investors should expect ordinary permits and approvals in regulated sectors such as energy, mining, telecoms, banking, insurance, health, infrastructure, environment, utilities, etc. 2.2 Procedure to Obtain Approval and Sanctions for Non-Compliance Because Chile has no general pre-closing foreign investment approval process, the first step for most investors is not a filing with an investment screen - ing authority. Instead, the practical focus is usually on corporate implementation, tax registration, banking arrangements, foreign exchange reporting, competi - tion clearance if applicable, and sectoral permits. Where the investor wants to obtain the InvestChile certificate under Law No 20,848, it must submit infor - mation showing that the investment has been made and describing its amount, destination and nature. InvestChile must issue the certificate within 15 days after receiving the complete application. Foreign capital transfers are also subject to Cen - tral Bank reporting rules. Transfers connected with loans, deposits, investments or capital contributions above the relevant threshold must generally be made through the formal foreign exchange market and
reported under the Central Bank’s foreign exchange regulations. Sanctions depend on the rule that has been breached. Failure to obtain an InvestChile certificate does not invalidate the investment, but it may prevent the inves - tor from relying on the specific benefits linked to that certificate. Failure to comply with foreign exchange reporting rules may trigger consequences under Cen - tral Bank regulations. The most serious exposure arises where a business operates in a regulated sector without the required sectoral permit, as each sector is governed by its own statutes and regulatory authorities. 2.3 Commitments Required From Foreign Investors Chile does not usually require foreign investors to make special commitments as a condition for invest - ing. The ordinary principle is that foreign investors operate under the same legal framework as Chilean investors, subject to the rules that apply to the rel - evant industry. Obtaining an InvestChile certificate is a documentary and does not involve the investor negotiating commit - ments with the authority. This is different from foreign investment regimes in some other jurisdictions where approval may be conditioned on behavioural under - takings or national security commitments. In practice, commitments may still arise in specific contexts. They usually come from sector regulation, concession contracts, public procurement rules, environmental approvals, tax or customs benefits, financing arrangements or agreements with public authorities. For example, a regulated energy or infra - structure project may have construction milestones, service obligations, environmental mitigation meas - ures, reporting duties and performance guarantees. Chile does not generally impose commitments because capital is foreign. However, a foreign-owned project may still be subject to extensive conditions because the underlying business is regulated, uses public resources, requires environmental approval, or receives a public benefit.
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