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 Abogado
ship (or any other right), possession or tenancy of real estate bordering a neighbouring country, which only applies to the nationals (persons or compa - nies) of the border country. This restriction could be raised by the President of the Republic of Chile, by passing a Supreme Decree based on national interests. • Chapter XIV of the International Exchange Stand - ards of the Central Bank of Chile regulates foreign capital transfers entering the country from loans, deposits, investments or capital contributions originating abroad and exceeding USD10,000, establishing that those transfers must be through the formal exchange market and reported to the Central Bank. • Law No 20,393 of 2009 establishes the criminal liability of legal entities. If an individual linked to a company commits an offence in a business context, the company can be held criminally liable. Penalties include fines, prohibition from contract - ing with the state, and even dissolution in severe cases. Companies can implement a crime preven - tion model to potentially exempt themselves from liability if it meets legal requirements and is prop - erly implemented and disseminated. • Law No 19,913 of 2003 requires certain economic sectors to implement a system to prevent money laundering and financing of terrorism (PLAFT or AML system). These sectors must comply with reg - istration, due diligence, and reporting obligations to the Chilean Financial Intelligence Unit (UAF). Non- compliance can result in administrative fines based on the severity of the non-compliance. Implement - ing these compliance programmes is mandatory for sectors such as financial, real estate, insurance, automotive, casino, and fintech. • Law No 18,168 of 1982 on Telecommunications considers the use of radio frequencies to be a stra - tegic resource. Its administration is therefore the responsibility of the Chilean state. In this regard, the law mandates that the holders of broadcast - ing service concessions (television channels with frequency) must be Chilean, or the concessionary companies must be incorporated in Chile, or the control of these entities must predominantly rest with Chilean individuals. • The Constitution of Chile grants the Chilean state exclusive, absolute and inalienable ownership and
control over the exploration, exploitation and use of all mines, including guano sites, metalliferous sands, salt pans, coal and hydrocarbon depos - its and other fossil substances, except surface clays. This principle implies that these resources cannot be subject to direct private ownership. Instead, the Chilean state maintains total control over their exploration, exploitation and use, as a means of ensuring that their utilisation aligns with the public and strategic interests of the country. Although private investment is not completely prohibited, investors must therefore operate under strict regimes authorised by the Chilean state. This restriction affects both local and foreign investors. • The Environmental Framework Law and the Supreme Decree No 40 of 2012 regulate environ - mental matters. Their main principle is to prevent the execution of certain projects or activities without having an environmental assessment and obtaining the mandatory permit. The SEA manages the SEIA, which evaluates projects and activities to ensure they comply with environmental laws and assess their potential negative impacts. Projects that may cause environmental impacts must be registered with the SEIA and obtain an environ - mental rating resolution (RCA), which sets condi - tions for project execution. Failure to register can result in fines or project closure. Resident companies in the country are generally sub - ject to a corporate tax on their net profits (income minus deductible expenses). The tax rate depends on the regime to which the entity is subject. • Large businesses (Article 14A of the Income Tax Law) – This tax regime is under full accounting records where the shareholders or quotaholders will be taxed on an accrual basis. They can deduct a partial amount (65%) of the corporate income tax paid up by the company as tax credit against their individual tax liability as Chilean tax residents or non-residents. • Small and medium-sized businesses (Article 14D(3) of the Income Tax Law) – This allows taxpayers to 9. Tax 9.1 Taxation of Business Activities
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