How to Register a Business in the US from Chile

Step 1: Benefits of starting your US business from Chile

Establishing a US business from Chile presents a multitude of opportunities and advantages that are both financially and strategically beneficial. One significant advantage is the access to the vast US market, one of the largest and most diverse consumer bases worldwide. With robust infrastructure and a business-friendly environment, the US offers a stable foundation for scaling operations. This expansive market can help Chilean entrepreneurs reach millions of potential customers, increasing the likelihood of business success and profitability. Additionally, US businesses can benefit from various funding opportunities, including venture capital, angel investors, and government grants, which are more readily available compared to other regions.

Another crucial benefit is the enhanced credibility and brand recognition that comes with being associated with the United States, known globally for its innovation and high standards. This can significantly boost the perception of your business among international clients and partners. Moreover, operating a business in the US allows access to advanced technology, skilled labor, and a wide network of industry professionals. The legal framework in the US, known for protecting intellectual property rights and providing a transparent business environment, further ensures that your business ideas and innovations remain secure. Together, these advantages can create a robust platform for long-term growth and global expansion, making the US an attractive destination for Chilean entrepreneurs looking to achieve significant business milestones.

Step 2: How to start your US business from Chile

Starting a US business from Chile requires several important steps to ensure compliance with both US and Chilean regulations and to facilitate a smooth launch. Begin by selecting the appropriate business structure, such as a Corporation (C-Corp or S-Corp) or Limited Liability Company (LLC). Each structure has different legal and tax implications, so consider consulting with a US-based attorney or accountant specializing in international business to determine the best option for your needs.

Once you have chosen the structure, you will need to register your business with the appropriate US state. This involves filing formation documents and paying the requisite fees. Additionally, you must obtain an Employer Identification Number (EIN) from the Internal Revenue Service (IRS). This number is essential for tax purposes and for opening a US bank account. It is also advisable to establish a US-based mailing address and virtual office service to manage correspondence efficiently. Finally, familiarize yourself with any industry-specific regulations and licensing requirements that may apply to your particular business to ensure full compliance.

Step 3: Opening a Business Bank Account

A business bank account is a separate account that is used exclusively for business transactions. But why is it important to open a business bank account?

Keeping your personal and business finances separate is crucial. A dedicated business bank account allows you to do just that, making it much easier to track your business’s income and expenses. This clear separation translates to simpler tax reporting come tax season.

But the benefits go beyond bookkeeping. Having a separate account can provide legal protection. It establishes your business as a distinct entity from yourself. In the unfortunate event of a lawsuit or bankruptcy, this separation can help shield your personal assets from business liabilities.

Furthermore, a business bank account can boost your credibility and project professionalism.

It demonstrates to clients and vendors that you take your business seriously and are committed to maintaining accurate financial records. This can be especially important in establishing trust with potential partners.

Finally, a business bank account is essential for accepting payments, even if you utilize a merchant account. Whether you use doola or another service, funneling those customer funds into a dedicated business account is necessary.

doola partners with banks that allow you to open a bank account remotely from anywhere in the world, like Mercury. Shop around and compare different banks’ fees and services.

Look for a bank that offers the features you need, such as online banking, mobile banking, or overdraft protection.

You may also want to consider working with a bank that specializes in small business banking.

Step 4: Understanding Your Compliance Requirements in Chile

Understanding Compliance Requirements for Running a US Business in Chile

Running a US business in Chile involves navigating a complex regulatory environment. It's essential to understand the local laws and requirements to ensure compliance and avoid legal complications. Below are key considerations that US businesses should keep in mind when operating in Chile.

1. Legal Structure

Choosing the appropriate legal structure for your business is crucial. Options include:

• Individual Limited Liability Company (EIRL): Suitable for sole proprietors.
• Limited Liability Company (SRL): Ideal for small to medium-sized businesses with multiple partners.
• Stock Corporation (Sociedad Anónima or S.A.): Common for larger enterprises.

Each structure has different compliance and reporting requirements, so select the one that aligns with your business goals.

2. Registration Process

The registration process involves several steps:

1. Obtain a unique tax number (Rol Único Tributario or RUT) from the Chilean Internal Revenue Service (SII).
2. Register your business with the Registro de Comercio.
3. Publish a summary of your company's articles of incorporation in the Official Gazette.
4. Register with the Social Security Office (Instituto de Previsión Social or IPS).

3. Tax Compliance

Chile has a well-defined tax system. Major taxes include:

• Corporate Income Tax: The standard rate is 27%.
• Value Added Tax (VAT): Levied at 19% on most goods and services.
• Withholding Tax: Applies to dividends, interest, and royalty payments to non-residents.

Filing and paying taxes on time is critical to avoid penalties.

4. Employment Laws

Chilean labor laws protect employees' rights. Key aspects include:

• Employment contracts must be in writing.
• Employee benefits such as minimum wage, healthcare, and pension contributions are mandatory.
• Employee termination requires adherence to legal procedures and may involve severance payments.

5. Intellectual Property

Protecting intellectual property (IP) is essential. Steps to consider:

• Register trademarks and patents with the National Institute of Industrial Property (INAPI).
• Monitor and enforce IP rights to prevent infringement.

6. Import and Export Regulations

If your business involves international trade, be aware of:

• Customs procedures and documentation requirements.
• Tariffs and duties on imported goods.
• Free Trade Agreements (FTAs) that may impact trade terms.

By understanding and addressing these compliance requirements, US businesses can successfully navigate the Chilean market and operate in accordance with local laws.

doola offers a Total Compliance package, including bookkeeping services, to help you stay on top of your compliance requirements. This ensures your business operates smoothly and adheres to all legal and regulatory standards.

Step 5: Understanding Your Tax Obligations in Chile

Understanding Tax Obligations for Running a US Business in Chile

Opening a business in Chile as a US entrepreneur involves navigating a range of tax obligations and regulatory requirements. This guide provides an overview of key considerations to help you comply with Chilean tax laws while managing a US business in the country.

1. Corporate Income Tax

Chilean companies are subject to corporate income tax, known locally as Impuesto de Primera Categoría. This is levied on worldwide income for resident companies and Chile-sourced income for non-resident companies. The rate can vary, so it's crucial to stay updated on current rates and applicable treaties.

2. Value-Added Tax (VAT)

Chile imposes a Value-Added Tax (VAT) of 19% on the sale of goods and services. If you plan to sell products or services in Chile, you will be required to register for VAT and ensure timely reporting and payment.

3. Double Taxation Agreements

Chile has signed Double Taxation Agreements (DTAs) with several countries, including the United States. These agreements help prevent double taxation and may provide relief and reduce tax rates on certain income types such as dividends, interest, and royalties.

4. Withholding Taxes

When remitting payments abroad, such as royalties, dividends, and interest, Chilean businesses must withhold taxes at source. The applicable rates can be influenced by DTAs, so it's important to verify rates and ensure compliance.

5. Transfer Pricing

Chile enforces transfer pricing regulations to ensure transactions between related parties are conducted at arm’s length prices. Proper documentation and compliance with these regulations are essential, especially for multinational companies.

6. Local Payroll and Employment Taxes

If you employ staff in Chile, you will be responsible for withholding and remitting payroll taxes, social security contributions, and ensuring compliance with labor laws. Employee-related taxes include contributions to health insurance, pension funds, and unemployment insurance.

7. Filing Requirements

Chilean tax authorities require businesses to file annual returns, VAT declarations, and other periodic reports. Ensuring timely and accurate filing is critical to avoid penalties and interest.

8. Professional Advice

Navigating Chilean tax obligations can be complex, especially for US businesses. Engaging with local tax professionals or legal advisors specializing in international taxation can help you understand and comply with all local requirements.

Understanding these key tax considerations is essential when running a US business in Chile. Staying informed and compliant will help you avoid legal issues and optimize your business operations in the country.

It’s a good idea to consult with a tax professional or an accountant (or to hire these roles in-house) to make sure you’re not missing anything.

doola's Total Compliance package can handle your tax filings for you, ensuring you remain compliant with federal, state, and local tax requirements.

Step 6: How doola Can Assist

doola simplifies the incorporation and setup process for your company, ensuring you’re ready to charge customers, hire your team, and raise funds as quickly as possible.

Fill out your company details in the doola form in less than 10 minutes. Then, we’ll incorporate your company in any of the 50 US states, get your IRS tax ID (EIN) for you, and file your 83(b) tax election if needed. 

doola can also help you open a bank account and start accepting payments even before the IRS assigns your tax ID.

doola founders also gain access to exclusive discounts at leading software partners, one-click onboarding with select partners, and free CPA consultations.

The doola Application

It takes less than 10 minutes to fill out the details of your new company. You’ll choose your company structure (C corporation, limited liability company) and pick a company name.

Our instant company name checker will let you know if it’s available before you submit your application. You’ll add an address and phone number and review and sign your EIN SS4 letter in one click.

Forming the Company

doola will review your application and file your formation documents in the state within one business day. doola charges $297 for our Starter Plan and your first year of registered agent services (a state compliance requirement), and $297 each year thereafter to maintain your registered agent. 

You can also opt for our Total Compliance plan.

Getting Your IRS Tax ID (EIN)

After your formation in the state is complete, doola will file for your company’s IRS tax ID. Founders who provide a US Social Security number, US address, and US phone are eligible for expedited processing. All other users will receive standard processing. 

For standard orders, doola will fax your form SS4 to the IRS and then call the IRS to retrieve the EIN for you to expedite the process if we can, using real-time IRS data to determine when your filing is likely to be available.

Filing Your 83(b) Tax Election

Many startup founders choose to file an 83(b) tax election to potentially save on future personal taxes. doola can file and mail your 83(b) tax election in one click for both US and non-US founders — no trip to the post office required.

We’ll file it using USPS Certified Mail with tracking, and you’ll get a copy of your signed 83(b) election and proof of filing in your Dashboard.

Partner Perks and Discounts

doola partners with a range of third-party tools to offer special pricing or access to founders. We offer discounts on engineering, tax and finance, compliance, and operations tools, including Amazon Web Services.

doola also partners with Mercury to provide faster, automatic onboarding using your doola company information so you can get ready to bank and fundraise even faster.

Founders may also access discounts on other doola products, including up to one year of free credits toward payment processing.

Read our guides for startup founders, or learn more about doola and how we can help you set up your new business quickly and easily.

Turn your entrepreneurship dream into reality today!

We do our best to provide accurate and up to date information, however the information provided here are just guidelines. Please speak with a tax and compliance professional in your country