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ENLaw 20.848, in force since 2015, sets Chile’s statutory framework for foreign direct investment. Foreign status alone isn’t enough to access its specific regime: the investment must meet the definitions and requirements in the law, including the US$ 5,000,000 threshold in Article 2. A smaller investment can still be made and operated in Chile under the generally applicable rules.
Law 20.848 replaced the general use of the former Decree Law 600 framework for new investments and created the Foreign Investment Promotion Agency (InvestChile) as the legal successor to the former Foreign Investment Committee. Unlike Decree Law 600, the Law 20.848 regime isn’t structured around an investment contract negotiated with the State.
Who qualifies as a foreign investor?
Article 3 defines a foreign investor as an individual or legal entity incorporated abroad, neither resident nor domiciled in Chile, that transfers capital into the country under the terms of Article 2.
For the purposes of the specific statutory regime, Article 2 requires a transfer of at least US$ 5,000,000 —or its equivalent in other currencies— made through freely convertible foreign currency, physical assets, reinvestment of profits, capitalisation of credits, capitalisable technology, or credits associated with related-company foreign investment.
When the investment is made by acquiring or taking a stake in a company incorporated in Chile, the second paragraph of Article 2 adds a requirement specific to that modality: the investment must grant control of at least 10% of the voting rights, or an equivalent share of capital or net assets, as applicable.
A qualifying investor may voluntarily apply to InvestChile for a Foreign Investor Certificate. Article 4 states that the certificate’s purpose is to enable access to the law’s specific regime. InvestChile states that the certificate is issued within 15 business days after the complete set of required documents has been filed.
What changed from the prior regime?
A key difference from the former Decree Law 600 is that Law 20.848 doesn’t require the investor to enter into an investment contract with the State. A qualifying investor may apply for InvestChile’s Foreign Investor Certificate and, if it wants to access the law’s specific statutory regime, that certificate is the instrument that enables access.
An investment that doesn’t meet Article 2 isn’t prohibited. It can still be structured and operated in Chile under the generally applicable corporate, tax, foreign-exchange and sector-specific rules.
Investment contracts validly entered into under Decree Law 600 before that regime closed to new investments retain the rights and obligations that apply under their terms and the relevant transitional provisions.
Why does this matter from day one?
Distinguishing the general ability to invest in Chile from the specific Law 20.848 regime avoids treating every foreign-owned company as automatically entitled to the statutory rights reserved for investors that meet the law’s requirements and access the regime through the corresponding certificate. Incorporating a Chilean company, by itself, doesn’t activate the regime in Articles 5 and 6.
Frequently asked questions
Is there a minimum investment amount to qualify under Law 20.848?
Yes. To qualify as foreign direct investment for the purposes of Law 20.848, the transfer must reach at least US$ 5,000,000 and meet the other requirements in Article 2. A smaller investment can still be made and operated in Chile under the generally applicable rules, but it doesn’t access the law’s specific regime on that basis.
Is the former Decree Law 600 still in force?
Decree Law 600 is no longer available as the ordinary framework for new investments, without prejudice to contracts entered into under that statute that retain their applicable rights and obligations. New investments that meet the requirements of Law 20.848 can access its specific regime through the InvestChile certificate; other investments are structured under the generally applicable Chilean rules.
What replaced the former Foreign Investment Committee?
The Foreign Investment Promotion Agency, InvestChile, created by Law 20.848.
How Izquierdo Deramond Consultores can help
IDC assists foreign investors and international companies with the legal, tax, accounting and operational structuring of their entry into Chile. If you’re evaluating a project, you can book a meeting or contact us on WhatsApp.
Legal notice: This article is provided for general informational purposes only. It doesn’t constitute legal, tax, accounting or other professional advice and shouldn’t replace advice tailored to a specific case.