If you’re an entrepreneur, freelancer, or digital nomad, you know the frustration of navigating complex tax systems and the ever-present pressure of state-imposed costs. Chile’s approach to sole proprietorships in 2025 offers a refreshingly straightforward path—if you know how to leverage it. This guide breaks down the essentials, using the latest data to help you optimize your tax position and maintain your autonomy.
Understanding Sole Proprietorship Status in Chile (2025)
Chile recognizes the Persona Natural con Inicio de Actividades as its primary sole proprietorship status. This structure is open to all Chilean citizens and residents, and it’s the go-to option for anyone wanting to invoice clients without forming a separate legal entity. Whether you’re a consultant, developer, or small business owner, this status lets you operate with minimal bureaucracy and maximum flexibility.
Key Features at a Glance
| Feature | Details (2025) |
|---|---|
| Status Name | Persona Natural con Inicio de Actividades |
| Who Can Apply? | All Chilean citizens and residents |
| Legal Entity Required? | No (operate as an individual) |
| Registration Authority | Servicio de Impuestos Internos (SII) |
| Taxation for Professional Services | 12.25% withholding tax (Impuesto Único de Segunda Categoría) on honorarium receipts (boletas de honorarios) |
| Taxation for Commercial Activities | Pro Pyme regime: 10% tax rate (2024), subject to change |
| Invoicing Options | Boletas de honorarios (for services), Facturas (for goods/services) |
How to Register as a Sole Proprietor in Chile: Step-by-Step
Setting up as a Persona Natural con Inicio de Actividades is refreshingly simple. Here’s how to get started:
- Register with the SII: Visit the Servicio de Impuestos Internos (SII) and complete the Inicio de Actividades process online.
- Choose Your Activity: Specify whether you’ll be issuing boletas de honorarios (for professional services) or facturas (for commercial activities).
- Start Invoicing: Once registered, you can immediately invoice clients as an individual—no company formation required.
Pro Tip: Optimize Your Tax Burden
- For Professional Services: In 2025, the withholding tax on boletas de honorarios is 12.25%. This rate is set to increase annually, reaching 17% by 2028. Plan your cash flow accordingly and consider timing your income if you anticipate rate changes.
- For Commercial Activities: If your business qualifies for the Régimen Pro Pyme, you’ll benefit from a simplified accounting regime and a 10% tax rate (2024). Monitor for updates, as rates may adjust in future fiscal years.
Case Example: Freelance Developer in Santiago
Imagine you’re a freelance developer based in Santiago. You register as a Persona Natural con Inicio de Actividades and start issuing boletas de honorarios to international clients. In 2025, 12.25% of your invoiced amount is withheld as tax. If you earn CLP 10,000,000 (about $11,000 USD), your tax withheld would be CLP 1,225,000 (about $1,350 USD). You avoid the complexity and cost of forming a company, and you retain full control over your business activities.
Checklist: Setting Up and Staying Compliant
- ✔️ Register your Inicio de Actividades with the SII
- ✔️ Choose the correct invoicing method for your activity
- ✔️ Track your income and tax withholdings
- ✔️ Stay informed about annual tax rate changes (especially for 2025 and beyond)
Summary: Why Chile’s Sole Proprietorship Status Appeals to Global Entrepreneurs
Chile’s Persona Natural con Inicio de Actividades offers a streamlined, low-barrier route for individuals to operate businesses, invoice clients, and optimize their tax exposure. With transparent rules, accessible registration, and competitive tax rates, it’s a pragmatic choice for those seeking to minimize state interference and maximize personal freedom.
For more details, consult the official resources: