Key Initial Planning Considerations | Chile | Cash Repatriation Heatmap

Generally speaking, assuming a straightforward process how long does it take to pay a dividend?

Once the distribution of dividends is agreed, and assuming that there are no specific requirements (e.g., Foreign Investments Promotion Agency’s approval) it should take no longer than one week.

Any timing restrictions on paying dividends?

As a general rule, no.

What accounts will be required to support payment of dividend and will these need to be audited?

The financial statements of the company should evidence that it has net profits or retained earnings that support the dividend payment.

Are there restrictions on the amount of dividends that can be paid?

In order to distribute dividends the company must have net profits (utilidades líquidas). Hence, there are no restrictions, unless the company carries accumulated losses, in which case dividends may not be paid.

Are there any ways to increase reserves, and if so, how long do these generally take?

Shareholders may agree not to distribute dividends and allocate the profits of the fiscal year to an Accumulated Reserve Account (Reservas Acumuladas).

Are foreign investment or other regulatory approvals required on payment of a dividend?

If a foreign shareholder invested/contributed capital under the regulations of the Decree Law 600 of 1974 (i.e., by means of a foreign investment agreement subscribed between the foreign shareholder and the State of Chile); said shareholder will need the approval of the Foreign Investments Promotion Agency (Agencia para la Promoción de la Inversión Extranjera) to remit the dividends born from such investment/capital contribution.

Are there any foreign exchange requirements on paying dividends to foreign parent companies?

No, Chilean foreign exchange regulations currently in force maintain the policy of the Chilean Central Bank to liberalize foreign exchange transactions.

Notwithstanding the above, the Chilean Central Bank is empowered to re-establish restrictions to foreign exchange operations (e.g., mandatory repatriation of funds, mandatory conversion of foreign currency into Chilean pesos, and reserve requirements).

Can cash be borrowed to settle a dividend?

Yes, it is possible.

Are dividends in kind possible?

Yes, it is possible.

Are there any other general considerations with a significant timing impact on payment of dividends?

We are not aware of any other general considerations in our jurisdiction which have a significant timing impact on payment of dividends.

Are there any restrictions on lending funds intra-group but cross border?

Intra-group operations, such as lending of funds, between parent companies, subsidiaries and/or affiliates, must observe the conditions of equity, similar to those that usually prevail in the market. The administrators of each involved entity will be responsible for the losses or damages caused to the company that they manage due operations carried out in violation of this restriction.

Cash Repatriation Heatmap

Chile

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