Administrative formalities that must be met before operations in Chile begin.
All individuals or entities that start a business activity in Chile must comply with certain administrative requirements. The principal requirements are:
• Taxpayer number ("Rol Único Tributario" or "RUT"): this number must be obtained when the individual or entity is registered with the Internal Revenue Service and no business can operate without a taxpayer number.
• Declaration of initiation of activities: this declaration is made to the Internal Revenue Service within the two months following the month that activities start; the declaration must contain a description of the nature and amount of the enterprise's capital.
• Municipal license: a separate license must be obtained from the corresponding Municipality for each of the enterprise's establishments, offices, warehouses, etc.; no activity can be started without the applicable license.
• Sectored permits: some businesses require special permits depending on the nature of the activities to be developed, such as: health permits (SNS); environmental permits (SESMA); foresting permits (CONAF); agricultural and livestock permits (SAG); mining permits (SERNAGEOMIN); marine permits (DMM); air navigation permits (DGAC); and telecommunications permits (MTT), among others.
Notwithstanding the above, for investment in certain kind of securities, foreign investors can be released from the obligation of maintaining complete accounting records and from filing yearly tax returns.
Accounting and bookkeeping requirements
The entity's financial year cannot exceed twelve months and can end on any day chosen by the shareholders. However, for tax purposes, a December 31 year-end must be used, although the Internal Revenue Service can authorize the use of a June 30 year-end. Usually, such authorization is not granted.
In general any business or taxpayer is required to maintain complete accounting records: a cashbook, a journal, a ledger and a balance sheet register, or their equivalents. In addition, the following records must be kept for tax purposes:
Sales and purchases journals.
Payroll register (required only when there are five or more employees).
Tax withholding register.
Inventory register.
Taxable profits ledger (FUT).
All the accounting and tax books must be stamped by the Internal Revenue Service. The records can be loose leaf, prepared either manually or by data processing equipment, if they have been previously authorized by the Internal Revenue Service.
Enterprises that operate in the free trade zones (Arica, Iquique and Punta Arenas) and in areas subject to incentives (currently the I, XI and XII Regions and Chiloé Province) must maintain a separate set of accounting records for those operations.
Accounting entries must conform to Chilean accounting principles and practices. However, Chile has gradually adopted IFRS as of January 1, 2009 and they will be fully implemented as of January 1, 2014.
Recent changes to the Tax Code have made it simpler to keep accounting records in foreign currency when certain requirements are met. Rules for paying taxes in foreign currency have also been relaxed.
Independent statutory audits
In general, only certain types of entities are required to appoint independent auditors. Such entities include banks, financial institutions, insurance companies, pension plans, publicly-traded corporations, and cooperatives. Almost all other entities are usually free to appoint auditors or to establish other means of control.
Public availability of financial statements
Certain entities (principally banks, financial institutions, insurance companies, pension plans, and publicly-traded corporations) are required to file quarterly and annual financial statements with the appropriate regulatory agency (Superintendency). These statements are publicly available.
In addition, the annual financial statements filed in the Superintendency and those of an agency or branch of a foreign corporation must be published in a newspaper.
Other entities are not required to file financial statements with any Government agency.