CHILE Law and Practice Contributed by: Ignacio Errazquin, Adolfo Romero and Florencia Anguita, CMS Carey & Allende
3. Spin-Offs 3.1 Trends: Spin-Offs
(spin-off and subsequent business combination) will be considered as a single transaction. Please see 5.5 Antitrust Regulations for further details. 3.4 Timing and Tax Authority Ruling The implementation of a spin-off typically requires between three and six months, depending on the cor- porate complexity and whether financial statements, independent valuations, or regulatory authorisations are required. The process involves preparing a spin-off balance sheet, approving the division in a sharehold- ers’ meeting held before a notary public, registering the new entity in the relevant commercial registry, and publishing an excerpt of the spin-off in the Official Gazette. Although not legally mandatory, obtaining a prior rul- ing ( consulta vinculante ) from the Internal Revenue Service ( Servicio de Impuestos Internos , or SII) is advisable to confirm the tax neutrality of the opera- tion, especially when significant assets, intercompa- ny loans, or foreign shareholders are involved. The SII generally issues such rulings within two to three months. Where regulated assets are affected (eg, by generation or transmission concessions), the CNE or the SEC may also require prior notification or verifi- cation to ensure compliance with sectoral ownership and operational requirements. 4. Acquisitions of Public (Exchange- Listed) Energy and Infrastructure Companies 4.1 Stakebuilding Acquiring a minority stake prior to a public offer is a common practice in Chile, including in sectors such as energy and infrastructure, where listed companies may operate under concessions or manage regulated assets. Stakebuilding allows investors to gain market visibility, test regulatory sentiment, and prepare for potential control transactions. Under Law No 18,045 (Securities Market Law), any person acquiring or disposing of 10% or more of a listed company’s shares must report the transac- tion to the CMF and to the relevant stock exchange no later than the day after the transaction has been
Spin-offs have become increasingly common in Chile’s energy and infrastructure sectors, particularly among companies seeking to separate regulated and non-regulated business lines. They are often used to ring-fence specific assets or projects – such as renew- able generation portfolios, transmission assets, or project development platforms – to attract dedicated investors or prepare for strategic sales. Typical drivers include corporate simplification before entering into joint ventures, facilitating project financ- ing (especially under non-recourse structures), and improving transparency for regulatory compliance. In the infrastructure sector, concessionaires and engi- neering, procurement and construction (EPC) contrac- tors also use spin-offs to isolate construction risks from operation and maintenance entities. 3.2 Tax Consequences Spin-offs can be structured as tax-free transactions, provided that the tax cost of the assets to be contrib- uted remains the same in the newco and that no cash flows are generated in favour of the contributing entity. 3.3 Spin-Off Followed by a Business Combination A spin-off immediately followed by a merger, acquisi- tion, or joint venture is permissible in Chile, provided that each step complies with the corporate and tax rules applicable to reorganisations. This structure is often used to carve out a specific project company or regulated business unit in preparation for a sale or capital contribution, particularly in energy genera- tion, transmission, or infrastructure concessions gov- erned by the National Energy Commission ( Comisión Nacional de Energía, or CNE) and the Superintend- ence of Electricity and Fuels ( Superintendencia de Electricidad y Combustibles , or SEC). The combined structure must be supported by legiti- mate business purposes and comply with competition law. If the transaction meets the thresholds for manda- tory merger control it must be notified to the Nation- al Economic Prosecutor’s Office ( Fiscalía Nacional Económica , or FNE) – in which case, both transactions
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