CHILE LAW AND PRACTICE Contributed by: Fernando Lathrop Aubert, Francisco Cárcamo Valdés, Jimena Illanes Diez, Joyce Jankelevich Mayer, Macarena Jaramillo Solís, Michelle Niedbalski Ramírez, Nicolás Maldonado Leyton and María Fernanda Heusser Errázuriz, Lathrop Mujica Herrera & Diez Abogados 1. Legal System and Regulatory Framework 1.1 Legal System cy exchange, reinvestment of profits, or technology transfer. Investments must grant at least 10% control over the recipient company’s voting rights.
Chile has a civil law system, characterised by laws and rules written into comprehensive legal codes, including the following: • Civil Code, governing matters such as purchase agreements, usufruct, inheritance and succession; • Commercial Code ( Código de Comercio ), focusing on various business activities; and • Labour Code ( Código del Trabajo ), addressing employer–employee relations. While they may influence future cases, judicial deci - sions do not have binding precedent as in common law jurisdictions. The Chilean judiciary is structured hierarchically, with lower courts resolving most disputes, appellate courts reviewing these decisions, and the Supreme Court serving as the highest judicial authority. In addition, specialised courts address labour, family, and consti - tutional matters, among others. For businesses operating in Chile, key regulatory and oversight bodies include the following: • Central Bank; • Financial Market Commission ( Comisión para el Mercado Financiero or CMF), overseeing financial markets and corporate activities; • Internal Revenue Service (SII), responsible for tax compliance and enforcement; and • Labour Directorate (DT), a decentralised public ser - vice regulating labour relations between employees and employers. 1.2 Regulatory Framework for FDI Chile’s Law No 20,848 (the “Foreign Investment Pro - motion Law”) establishes the legal framework for FDI, ensuring equal treatment for foreign and domestic investors (principle of non-discrimination), promot - ing transparency and ensuring legal certainty. FDI is defined as the transfer of foreign capital or assets to Chile, amounting to at least USD5 million. This can occur through various mechanisms, such as curren -
Furthermore, the Foreign Investment Promotion Law, establishes the Foreign Investment Promotion Agen - cy, known as InvestChile (formerly Agencia de Pro- moción de la Inversión or APIE), which is tasked with positioning Chile as an attractive destination for global FDI. The Agency acts as a link, connecting interna - tional investors with the diverse business opportuni - ties available in the country. For other sectors or industries subject to particular rules, please see 8.1 Other Regimes . 2. Recent Developments and Market Trends 2.1 Current Economic, Political and Business Climate Chile’s economic outlook for 2026 reflects a gradual recovery underpinned by strong macroeconomic fun - damentals. According to Central Bank of Chile, GDP growth is expected to be between 2% and 2.5% in 2026, driven by a rebound on domestic consump - tion, renewed private investment, and a more favour - able international environment for copper and lithium exports. Inflation is expected to close 2025 at approxi - mately 4%, and converge to the Central Bank’s 3% target during the second half of 2026, supported by monetary normalisation and a moderation of energy costs. From a political perspective, Chile continues to advance its structural reform agenda addressing the pension system, tax regime and public security. Lack of consensus in Congress has hindered these reforms, creating uncertainty for investors seeking stability. Additionally, challenges related to state efficiency and security (particularly in sectors such as forestry and energy) limit investment. Despite these challenges, Chile retains its reputation for macroeconomic stabil - ity, institutional transparency, and respect for the rule of law, all of which continue to underpin its attractive - ness as an investment destination in Latin America.
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