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Investment funds and fund managers in Chile: AGF licensing, public and private funds, minimum size, guarantees, mandatory dividends and the 10 percent single tax for foreign investors

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Last verified: 2026-10-26 · Status: Changing

Public mutual and investment funds in Chile are run by Administradoras Generales de Fondos (AGF), special corporations with an exclusive object and equity of at least 10,000 UF that post a 10,000 UF guarantee for each fund; funds must reach 10,000 UF and 50 participants (or one institutional investor) within a year. Funds themselves are not subject to corporate income tax, and foreign investors pay a single 10 percent tax on distributions and unit gains from public funds, or nothing on funds that invest at least 80 percent abroad. Investment funds with fewer than 50 unrelated participants are private funds outside CMF supervision, whose foreign investors pay the ordinary 35 percent additional tax with credit for corporate tax.

USD figures use the Central Bank exchange rate of CLP 986.58 per US dollar published in the Diario Oficial for 23 October 2026 (Ley Nº 18.840 art. 44). UF figures use the SII value of CLP 41,221.08 per UF for 26 October 2026 and UTM figures the October 2026 value of CLP 72,151. Conversions are for orientation only; the legal thresholds are set in UF or UTM.

Key facts

Minimum equity of a fund manager (AGF)	10000 UFLey Nº 20.712 art. 4 c), as of 2026-10-26 · in force
Guarantee per fund posted by the manager	10000 UFLey Nº 20.712 art. 12, as of 2026-10-26 · in force
Minimum fund equity one year after launch	10000 UFLey Nº 20.712 art. 5, as of 2026-10-26 · in force
Minimum participants of a public fund (unless an institutional investor participates)	50 participantsLey Nº 20.712 art. 5, as of 2026-10-26 · in force
Minimum annual distribution of investment funds	30 % of net benefits receivedLey Nº 20.712 art. 80, as of 2026-10-26 · in force
Single tax on fund distributions and unit gains for non residents (public funds)	10 %Ley Nº 20.712 art. 82 B), as of 2026-10-26 · in force
Share of assets invested abroad for tax free distributions to non residents (330 days a year)	80 %Ley Nº 20.712 art. 82 B) iii), as of 2026-10-26 · in force

The rule

1. Fund managers must be special corporations (sociedades anónimas especiales) whose exclusive object is managing third party funds, with the words Administradora General de Fondos in their name, equity of at least 10,000 UF at all times, and CMF approval that they meet legal requirements and have the policies, procedures and controls the CMF requires before starting. Within a year of authorisation an AGF must manage at least one fund meeting the minimum size and participant rules, or dissolve. The name is reserved to these companies.
Cost to do it: AGF minimum equity 10,000 UF (about CLP 412,210,800 or US$417,818); CMF fee for authorisation of existence 34 UF and for each fund's internal rules 26 UF (DL Nº 3.538 art. 33).Ley Nº 20.712, administration of third party funds and individual portfolios (Diario Oficial 7 January 2014), Art. 3 and art. 4, 2014-01-07 official text · verified 2026-10-26

2. One year after the manager deposits a fund's internal rules, the fund must keep equity of at least 10,000 UF and at least 50 participants, unless one of them is an institutional investor. A shortfall must be reported the next business day; the CMF may grant up to one year to cure it and otherwise orders liquidation. The manager must also post a guarantee for each fund of initially 10,000 UF, in cash, bank guarantee or insurance policy, by the day it deposits the internal rules and until the fund ends.
Cost to do it: Guarantee per fund of 10,000 UF (about CLP 412,210,800 or US$417,818).Ley Nº 20.712, Art. 5 and art. 12, 2014-01-07 official text · verified 2026-10-26

3. A non redeemable fund is one that does not allow total and permanent redemption, or pays redeemed units in 180 days or more. Investment funds must distribute each year at least 30 percent of the net benefits received in the year, within 180 days after year end; contrary provisions in the internal rules or by the participants' meeting have no effect, and late dividends are indexed and earn interest at the manager's cost.Ley Nº 20.712, Art. 1 letter c) and art. 80, 2014-01-07 official text · verified 2026-10-26

4. Investment funds with fewer than 50 participants who are not members of the same family are private funds, not supervised by the CMF and governed by their internal rules and Chapter V of the law, plus the 30 percent dividend rule; they may not invest in assets the regulation prohibits, and are audited annually by registered auditors.Ley Nº 20.712, Art. 84, art. 85 and art. 87, 2014-01-07 official text · verified 2026-10-26

5. Investment funds and mutual funds are not taxpayers of first category (corporate) income tax and are subject only to the tax regime of the law. For participants without domicile or residence in Chile, distributions of amounts subject to additional tax, including through a reduction of unit value not charged to capital, and the gain on selling or redeeming units, pay a single 10 percent income tax without credit for corporate tax. The manager withholds on distributions and redemptions; on a sale of units the buyer or broker withholds 10 percent of the gain, or a provisional 5 percent of the price if the gain cannot be determined. Distributions of interest from art. 104 instruments bear 4 percent.
Example: A distribution of CLP 98,658,000 from a public Chilean investment fund to a foreign investor bears CLP 9,865,800 of single tax at 10 percent. / On a US$100,000 distribution, US$10,000; against a 35 percent additional tax, minus corporate tax credit, on direct dividends from a Chilean company.Ley Nº 20.712, Art. 81 Nº 1 and art. 82 letter B) i) and ii), 2014-01-07 official text · verified 2026-10-26

6. Distributions to non resident participants are not income, and unit gains are not taxed, when during the year (and for gains, also in the two previous years) at least 80 percent of the fund's total assets were invested for at least 330 days in foreign issued securities, assets located abroad or qualifying derivatives with no Chilean underlying, the investment policy matches, and the internal rules require distributing all Chilean source income in the year or within 180 days; Chilean source income distributed this way pays the 10 percent single tax. Non resident entities with Chilean resident owners of 5 percent or more lose this treatment unless they are individuals, qualifying institutional investors or listed on qualifying markets, and the manager must file an annual declaration. Management fees attributable to non resident holders are exempt from VAT.
Example: A Chilean feeder fund investing 95 percent in US equities pays nothing in Chile on distributions of foreign source profits to its Argentine or other foreign investors. / A foreign investor redeeming units of such a fund with a US$50,000 gain owes no Chilean tax if the fund met the conditions this year and the two previous years.Ley Nº 20.712, Art. 82 letter B) iii), 2014-01-07 official text · verified 2026-10-26

7. Private investment funds are taxed like public funds at fund level, but their participants follow the general rules: non residents pay additional tax under the income tax law as recipients of art. 58 Nº 2 income, with withholding and the credit for corporate tax of art. 63 where applicable. Interest the fund earns on loans to persons related to its participants, above market terms, is taxed at the fund with first category tax at the art. 14 A rate, payable by the manager; the SII cannot challenge rates up to the current rate plus 10 percent.Ley Nº 20.712, Art. 86, 2014-01-07 official text · verified 2026-10-26

8. Until 31 December 2026, gains on qualifying units of investment funds and mutual funds with stock market presence bought and sold under art. 107 conditions pay a 10 percent single tax; Ley Nº 21.850 replaces this with treatment as non taxable income from 1 January 2027.Decreto Ley Nº 824, art. 107 Nº 3, as amended by Ley Nº 21.850 (Diario Oficial 17 October 2026), DL 824 art. 107 Nº 3.1 and 3.2; Ley Nº 21.850 art. 8 Nº 4 letters b) and c), 2026-10-17 official text · verified 2026-10-26 · changed: Ley Nº 21.850, published 17 October 2026, makes gains on qualifying listed fund units non taxable income from 1 January 2027.

Vehicle	Chilean tax	Withholding agent
Public fund, Chilean investments	10 percent single tax: US$10,000 (CLP 9,865,800)	Manager
Public fund meeting the 80 percent foreign asset test, foreign source income	None	None
Public fund, interest from art. 104 bonds	4 percent: US$4,000	Manager
Private fund	Additional tax at 35 percent with corporate tax credit where applicable	Manager under DL Nº 824 art. 74 Nº 4

Chilean tax on a US$100,000 payout to a foreign investor by vehicle (Ley Nº 20.712 art. 82 and 86). Treaty relief and home country tax not included.

Worked example

A foreign asset manager sets up a Chilean AGF with equity of 10,000 UF (about US$417,818) and launches a public fund that invests in Chilean listed shares, posting a 10,000 UF guarantee (Ley Nº 20.712 art. 4 and 12). Within a year it gathers 10,000 UF and 50 participants, or a single Chilean pension fund as institutional investor (art. 5).
The fund pays no corporate tax (art. 81). It must distribute at least 30 percent of net benefits each year (art. 80); a US$1,000,000 distribution to non resident investors bears the 10 percent single tax, US$100,000, withheld by the manager (art. 82 B).

Step by step

1. Decide public or private: 50 or more unrelated participants means a supervised public fund.
2. Incorporate the AGF as a special S.A., capitalise it with at least 10,000 UF, and obtain CMF authorisation.
3. Draft and deposit the fund's internal rules (26 UF fee) and post the 10,000 UF guarantee the same day.
4. Reach 10,000 UF and 50 participants, or an institutional investor, within a year.
5. For foreign investors, decide whether the fund will meet the 80 percent foreign asset test and build the distribution clause into the internal rules.
6. File the annual SII declaration on non resident participants and their Chilean ownership.

Common traps

Running a fund with 50 or more unrelated participants as private: it falls under CMF supervision (art. 84).
Using a private fund for foreign investors expecting the 10 percent single tax: private fund investors pay the ordinary additional tax (art. 86).
Missing the 80 percent for 330 days test in a single year: distributions fall back to the 10 percent tax (art. 82 B iii).
Foreign investor entities with 5 percent or more Chilean resident ownership lose the special regime unless an exception applies.
Selling units without giving the buyer cost information: a provisional 5 percent of the price is withheld.

Sources

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