The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.


All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Venture capital: Chilean reforms fail the entrepreneur test

Government’s attempt to develop venture capital industry lack clarity.

A reform of company law in Chile designed to create a strong venture capital market does not go far enough, according to leading Chilean financial experts.

In July, the government of Michelle Bachelet, who became Chile’s first female president in March, introduced a bill to congress that would allow the creation of limited partnership companies. The new type of company, called sociedad por acciones (equities company), would more clearly separate the role of shareholders and managers.

Under the proposed law – expected to be approved by congress before December – shareholders in the new type of company would not be subject to capital gains tax (CGT) if they sold their stock during the first three years of investment.

CGT is a progressive tax in Chile ranging from zero to 40% in line with the level of capital gain. Under the reforms, these rates would only apply to shareholders after three years.

However, Patricio Arrau, principal partner of Santiago financial consultants Gerens, who has been leading the business community’s push for a dynamic venture capital market, says: “The new reforms put too many requisites on entrepreneurs who wish to invest in this type of company

“Unfortunately, Chile’s taxation authorities are reluctant to take on the role necessary for this reform to work properly.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree