Chile is a
long country of approximately 756.000 km2 located in the extreme southwest of
Latin America with 15 milions of population. Most of the population is
concretated in urban areas, especially in Santiago de Chile.
According
to official data, Chile is the second highest GDP per capita in Latin America.
The summer
time corresponds to January to February, offices and government administration
take holidays mainly in February.
Chilean
legislation has been based on the influence of Continental Law, also calle
civil law as opposed to common law.
In many
business transactions, lawyers are adopting an Anglo-Saxon approach to resolve
legal problems and to carry out transactions.
It is very
difficult to predict what will be the position of Chilean court of justice
toward this Americanization not only of Chile’s main business legal framework
but also of legal practice. Chilean judges might not be well informed and
prepared to construe contracts or transactions that have “imported” clauses and
provisions from other jurisdictions that neither taught at local law schools
nor covered by previous decisions of locals courts.
DIFFERENCES
IN INTERORETATION OF CONTRACTS
It is also
important to bear in mind that inclusion of common law terms and clauses in
local contracts does not mean that those terms and clauses will be interpreted
as expected in common law jurisdiction.
EXECUTION
OF CONTRACTS
In Chile,
execution of contracts tends to be very formal and legalistic. Agreements by
e-mail or signature of contracts by fax
could be easily challenged before Chilean courts, because the value is
weak.
It is recommended
that foreign companies that will be entering into a contract that is governed
by Chilean law and subject to Chilean jurisdiction should draft their contract
in Spanish, in the form of a public deed, because under this formality the
document will be authorized by a notary public.
THE CHILEAN
BUSINESS COMMUNITY
Santiago de
Chile is the center of Business, politics, academia and cultural events. Chile
is extremely centralized, and Santigo is where all important decisions are
made.
Santiago as
a business center is relatively small, and it s not difficult to get to know
most of the people. Chilean executives, bankers and lawyers know each other due
to the rather small size of this business community.
JUDICIAL
LITIGATIONS
Negotiations
and transactions are commonly carried out smoothly a friendly environment.
Chileans tend not to enter into judicial proceedings against other Chileans as
a consequence of a breach or default of an international transaction executed
in Chile.
There has
been a recent trend toward local companies and businesspeople suing foreigners,
and viceversa, and foreign investors bringing judicial proceedings against
other foreign investors located in Chile. But is very unusual for a big Chilean
company to sue another big Chilean company.
FOREIGN
EXCHANGE RULES
Foreign currency
can be brought into Chile under two legal regimes, as follows:
- Foreign Investment Statute. The foreign investor files a foreign investments application with the Foreign Investments Committee. Members of this Committee are of cabinet level and also include the chairman of the Chilean Central Bank.
The committee has discretion to approve or reject applications. If the
application is approved, the foreign investor enters into a foreign investments
contract with the state of Chile as mentioned above.
- Chapter XIV of the Compendium of Foreign Exchange Regulations of the Chilean Central Bank. This is a special regime applicable only to foreign currency (from 10.000 US) to be entered into Chile, whether as a foreign loan or as a capital contribution. Foreign currency must be brought through a commercial bank operating in Chile, unless the amount is less than 10.000 US.
Loans must be recorded at the Chilean Central Bank prior to the
disbursement and arrival into Chile. Capital contributions must also be
approved by the Chilean Central Bank.
