The world is more connected than ever, and mining technology and service companies are no exception. As they expand their reach globally, they need to follow their clients to new markets, from a copper mine high in the Andes to the icey cold winters of Northern Canada. When exploring new markets, it’s the classic “chicken or egg” dilemma: You want to see success before committing to the expenses of a local operation, but as soon as you start generating revenue, the risk of being classified as a PE increases.
When companies begin operations in Chile, they often start with a small local team. Given the geographic distance and significant time differences between Chile and head offices located in other countries, local staff often operate with minimal day-to-day oversight. One common oversight in the early stages of incorporating an entity in Chile is neglecting corporate governance. However, the way powers are granted in the beginning can significantly impact the company’s operational efficiency and the protection of foreign shareholders.
All companies and foreign shareholders operating in Brazil require a local legal representative. It is common for foreign companies to not understand the legal representative role and are often apprehensive about providing a power of attorney to a third party. Check out our guide to make sure you get it right.
All companies and foreign shareholders operating in Chile require a local legal representative. It is common for foreign companies to not understand the legal representative role and are apprehensive about providing a power of attorney to a third party. Check out our guide to make sure you get it right.
Chilean Congress approved a bill earlier this year to expand criminal liability for economic and environmental crimes which will have implications for foreign companies operating in Chile. The new legislation means that for the first-time, corporate executives and directors can be personally liable for a wide range of misconduct.
Mining technology and service companies are looking at Peru for good reason. The country has a significant number of operational mines that are investing in new equipment and technology. As suppliers develop new opportunities in Peru, they will need to decide how they will service the market. Understanding the incorporation process and timeframes is an important part of the process.
When companies initially incorporate an entity in Chile, corporate governance is not always a priority in the beginning stages of opening the business. The reality is that how we grant powers will play an important role in how efficiently the company will operate and whether the foreign shareholder is protected.
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