Companies Should Use Chile as a Hub for Business Because of the Growing Economy
International agreements show a lot of the important aspects that need to be considered when choosing to venture into business, become involved, or invest in any international operation. Agreements about the taxing and commerce are probably the most important in these situations because they consider the movement of goods, payments, incomes, taxes and payments. There will be laid out of the information you must remember about the free trade agreement and their tax regulations. If you are an investor, considering Chile as a hub for business is one of the best moves you will ever make.
Free Trade Agreements Under the Corporate International Business Law
The estimates and statistics calculated that the population of Chile is about 18 million which constitutes an internal market that is small when it comes to commercial terms. Although, the growing population of Chile wants to have economical expansion and increased the trade of their national products. In the past years, negotiation processes are being implemented by the local authorities which are going to decrease international barriers in commerce. For instance, there has been a decrease in the cost of tariffs. Although, there also no barriers in the customs tariffs which are under the legalities of things. The barriers make it very difficult for merchandise, investment and goods to circulate and flow among different countries.
Negotiations about the free trade agreements among countries take into consideration the following things:
- Goods for trading
- Trading services
- Practices or disciplines of commerce
- Solutions to controversial problems
- Investments: They also allow Agreements on Reciprocal Promotion and Protection of Investments (APPI) to take effect in the country
- A couple of issues like intellectual property, electronic commerce, and environmental topics
Chile already signed to have a free trade agreement with these countries: Hong Kong, Thailand, Malaysia, Vietnam, Panama, Australia, Turkey, USA, Canada, China, Mexico, Peru, South Korea, Colombia, El Salvador, Costa Rica, Guatemala, Nicaragua, and Honduras.
Moreover, Chile has economic agreements which they signed with Japan, the European Community, Singapore, New Zealand, and Brunei. They also signed to have other types of agreements beneficial to their economy with Bolivia, Cuba, Venezuela, Ecuador, Indian and MERCOSUR countries (Brazil, Uruguay, Paraguay, and Argentina).
Avoiding Double Taxation Under Tax Management
They did not discuss and regulate the bookkeeping, taxes and income during free trade agreements to avoid double taxation. Chile uses it as nomenclature which is equal to the Internal Revenue Service in the country. These agreements tell which country is allowed to implement burdens and taxes to specific incomes, companies, individuals, payroll processes, tax management, tax declaration, and others.
They clearly mention the rules during the conventions choose investments and flow of commerce between members of the country since they provide legal certainties. These are only when accountancy management is going to benefit from them. However, conventions for preventing double taxation are mostly for income taxes, the tax issues are more tackled here.
Chile has agreed to be part of these conventions in Australia, Argentina, Austria, Brazil, Belgium, Canada, South Korea, Colombia, Croatia, Denmark, Spain, Ecuador, France, Italy, Ireland, Malaysia, Japan, Norway, Mexico, Paraguay, New Zealand, Poland, Peru, UK, Portugal, Czech Republic, South Africa, Russia, Sweden, Thailand, and Switzerland.
They sign but not enforce yet the conventions with USA and Uruguay.
These conventions that 2 countries sign are the international means that legally bind their internal legal system. Their goal is to remove or lessen double taxation that monitors trade having a better movement of goods, capital, services, technology people. This is how the individuals will mainly benefit and companies which reside or are based in the states that signed.
As mentioned before, the purpose of these conventions is to control income tax in several forms. The following considerations in guidelines or scenarios are:
- Only 1 state can legally apply and collect tax from income; the country is where the company resides or country where the income tax is coming from or generated.
- The signing states can apply and collect tax from income. But they enforce a cap on the state that generates or produces income.
- Both states can apply and collect income from tax. But there is a credit system for concessions or exceptions implemented.
When considering Chile as a hub for business, make sure to follow all of the regulations. You should be very knowledgeable about the right procedures, legalities and tax regulations you can apply. Furthermore, the growing economy of Chile has proven to be beneficial to businesses.