Company Formation in South America: 2025 Guide for Entrepreneurs and Investors

Introduction

South America has become an increasingly attractive destination for international entrepreneurs, digital nomads, and expanding enterprises. With a mix of emerging markets, low entry barriers, skilled labor, and favorable tax regimes, company formation in South America is a strategic move for startups and global investors alike.

In this 2025 guide, we’ll explore the benefits, legal requirements, best jurisdictions, and step-by-step instructions on how to start a business in South America.

Why Start a Company in South America?

✅ Strategic Location

South America connects North America, Europe, and Asia via trade routes, making it ideal for logistics, manufacturing, and services.

✅ Emerging Economies

Countries like Brazil, Chile, Colombia, and Uruguay are experiencing rapid digital and economic growth, attracting both foreign capital and technological innovation.

✅ Low Entry Costs

Company setup in many South American countries is affordable and fast, with low minimum capital and simple registration processes.

✅ Skilled Workforce

South America offers a highly educated, multilingual workforce, especially in urban centers like São Paulo, Santiago, and Bogotá.

✅ Market Access

Through trade agreements like Mercosur, Pacific Alliance, and free trade agreements with the EU and US, companies gain access to over 600 million consumers.

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Best Countries for Company Formation in South America (2025)

🇧🇷 Brazil

• Largest economy in South America

• Ideal for manufacturing, fintech, and e-commerce

• Legal structure: LTDA (Limited Liability Company)

• Foreign ownership: 100% allowed

• Requires local tax representative and Portuguese documentation

• Timeframe: 4–6 weeks

🇨🇱 Chile

• Known for startup-friendliness and low bureaucracy

• “Start-Up Chile” program attracts global tech founders

• Legal forms: SpA (Simplified Joint Stock Company) and EIRL (Individual Limited Liability Company)

• Setup can be done 100% online via “Empresa en un Día”

• Timeframe: 2–5 business days

🇨🇴 Colombia

• Fast-growing economy with strong government support for SMEs

• Legal structure: SAS (Simplified Stock Company)

• 100% foreign ownership allowed

• Easy banking and visa access

• Timeframe: 5–10 business days

🇺🇾 Uruguay

• Politically stable and economically liberal

• No restrictions on capital repatriation

• Ideal for holding and trading companies

• Legal entity: SRL (Sociedad de Responsabilidad Limitada)

• Timeframe: 2–3 weeks

🇦🇷 Argentina

• Large domestic market, tech-savvy population

• Volatile economy, but attractive for exporters and tech firms

• Entity types: SRL and SA (Corporation)

• Requires local representative

• Timeframe: 3–5 weeks

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Types of Legal Entities in South America

1. Limited Liability Company (LLC / SRL / LTDA / SAS)

Most popular for small to medium businesses. Easy setup and low compliance costs.

2. Corporation (SA)

Best for larger enterprises, public companies, and those seeking investors or listing shares.

3. Simplified Stock Company (SpA / SAS)

A hybrid structure offering flexibility, low cost, and limited liability. Ideal for startups and joint ventures.

4. Branch Office

For foreign companies expanding regionally without creating a new entity. Subject to parent company liability.

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Steps to Register a Company in South America

While procedures vary by country, the basic process generally includes:

✅ Step 1: Choose Jurisdiction and Legal Form

Evaluate your business goals, industry, and tax structure preferences.

✅ Step 2: Reserve a Company Name

Conduct a name availability search in the chosen country’s business registry.

✅ Step 3: Draft Articles of Incorporation

This document outlines the company’s name, purpose, capital structure, and governance.

✅ Step 4: Appoint Shareholders and Directors

Foreigners can often own 100% of the company, but some countries require a local legal representative.

✅ Step 5: Obtain Tax ID Number

Register with the local tax authority (e.g., SII in Chile, DIAN in Colombia, Receita Federal in Brazil).

✅ Step 6: Open a Corporate Bank Account

May require in-person presence or local documentation. Some countries accept EMIs or fintech banks.

✅ Step 7: Register for Social Security and Labor Compliance

Mandatory if hiring employees, including registration with health, pension, and labor authorities.

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Company Formation Costs in South America

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Taxation for Companies in South America

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Banking for Foreign-Owned Companies

Banking setup requires:

• Legalized company documents

• Proof of shareholders’ identity

• Local tax registration

• Minimum deposit (varies)

Digital banks and EMIs such as Revolut Business, Wise, or Payoneer can offer alternative solutions, especially during initial setup.

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Visas & Residence for Business Owners

Many South American countries offer entrepreneur or investor visas, often leading to residency or citizenship.

Example programs:

• Chile Startup Visa

• Colombia Business Visa (M type)

• Brazil Investor Visa (VITEM II)

• Uruguay Investment Residency

Visa applicants typically need:

• Proof of company formation

• Local address

• Minimum capital investment

• Clean background check

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Free Trade Zones and Special Regimes

Several countries offer Free Zones or tax-incentivized regions for exporters, IT companies, or financial services.

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Industries with High Growth in South America

• Fintech & Blockchain – Supported by regional demand for alternative banking

• Agribusiness – Strong export-oriented markets

• eCommerce – Booming in urban centers

• BPO & IT Outsourcing – Affordable and skilled workforce

• Tourism & Real Estate – Especially in Uruguay, Brazil, and Colombia

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Challenges of Doing Business in South America

• Bureaucracy and regulations

• Language barriers (mostly Spanish/Portuguese)

• Currency fluctuations and inflation risks

• Import/export controls in some countries

• Banking hurdles for foreign founders

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FAQ – Company Formation in South America

❓ Can a foreigner open a company in South America?

Yes, most countries allow 100% foreign ownership and provide legal structures for foreign investors.

❓ What’s the fastest country to open a company in?

Chile and Colombia offer online company registration and low setup times.

❓ Do I need to be in South America to start a company?

Not always. Some countries allow remote setup via local agents or online platforms.

❓ What language are legal documents in?

Mostly Spanish or Portuguese. Certified translations may be needed for foreign use.

❓ Can I get residency through company formation?

Yes, most countries offer investor visas with options to obtain residency and even citizenship.

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Conclusion: Is South America Right for Your Business?

If you’re seeking growth markets, low-cost operations, and access to a diversified economy, forming a company in South America in 2025 could be a smart strategic move.

With the right support, it’s possible to:

• Start a legally compliant entity

• Tap into regional and global trade

• Access skilled labor and investment incentives

• Expand into Latin America with credibility and scalability