CHILE Law and Practice Contributed by: Francisco Barreda, Barreda Legal Tech
7.2 Restrictions There are no significant restrictions preventing a foreign VC investor from investing in a local growth-stage company or withdrawing their profits, but there are some regulatory consid - erations to keep in mind: • Foreign investors can invest freely in Chile under the foreign investment regime estab - lished by Decree Law No 600 (now repealed but still applicable to older investments) or, currently, under the Foreign Investment Stat - ute contained in Law No 20.848. • Investments do not require prior authorisa - tion, except in strategic or regulated sectors (eg, defence, telecommunications, energy). • Chile does not impose exchange controls. Foreign currencies can be brought into and withdrawn from the country freely, as long as they comply with Central Bank regulations.
The same applies to the profits or earnings generated by these investments. It is impor - tant to review the tax implications this may have. Additionally, foreign investors can trade currencies in the formal foreign exchange market. • There are some specific restrictions in regulated sectors (such as banking, media, defence, or fishing), but these usually do not affect typical VC investments. • The foreign investor must meet certain tax and legal identification requirements in Chile (eg, having an ID, appointing a legal repre - sentative with an address in the country). • Finally, if the investor channels their invest - ments through entities subject to the UAF (eg, banks, stockbrokers, AGFs, etc), the Chilean entity must apply KYC procedures and report suspicious transactions if applicable.
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