Enhancing Asset Security for Businesses in Chile

Santiago, Chile - In a move to strengthen its business environment, Chile has introduced new regulations that simplify and streamline the process of securing assets for businesses. The changes aim to provide greater flexibility and certainty for companies seeking to secure their obligations, both domestically and internationally.

Simplified Pledge Agreements

The new regulations introduce a pledge agreement (Acuerdo de Pledge Sin Transmisión) that allows companies to secure their obligations with moveable assets, such as:

• Cash
• Securities
• Receivables

This agreement can be executed either by means of a public deed or a private instrument and must include the following information:

• Identifies of the parties involved
• Type of secured obligations
• Identification of the pledged assets

Security Over Real Estate

Mortgages are another popular option for securing real estate assets in Chile. A mortgage (Hipoteca) allows companies to secure their obligations with property rights over real estate, including:

• Mining concessions
• Water rights

The agreement must be registered in the corresponding registry to perfection.

Personal Guarantees

Personal guarantees (Fianzas) are also widely used in Chile. These agreements bind third-party guarantors to pay a company’s obligation if the debtor fails to do so. Joint and several guarantees (Fianzas y Codeudas Solidarias) allow multiple guarantors to be held equally liable for the debt.

Conditional Assignments of Rights

Conditional assignments of rights are another tool used by companies to safeguard their interests in the event of default. This agreement allows creditors to assign their rights to a third party in the event that the original debtor fails to meet their obligations.

Procedure for Granting Security Over Assets

The procedure for granting security over assets in Chile typically involves:

• Executing an agreement
• Notarizing the document
• Registering it with the relevant authorities

The specific requirements vary depending on the type of asset being pledged.

Fees Associated with Securing Assets

Notarization fees are common to all types of collateral agreements, while registration fees vary depending on the type of asset being pledged. Other fees, such as:

• Stamp duty
• Property taxes may also apply.

The new regulations aim to provide greater flexibility and certainty for businesses seeking to secure their obligations in Chile. Companies looking to expand their operations or access international markets are advised to seek professional guidance to ensure compliance with local laws and regulations.