On 9 September 2026, the Chilean Executive Branch submitted a comprehensive Capital Markets Reform Bill to Congress. The initiative aims to further develop the Chilean capital markets by expanding access to a broader range of investors and financial instruments, while reducing transaction and compliance costs through amendments to various tax regulations.

The most relevant measures are summarized below.

Key measures of interest for foreign investors

Public debt securities: eliminating withholding tax and modernizing the tax regime

The bill proposes significant changes to the tax treatment of publicly offered debt instruments currently governed by Article 104 of the Income Tax Law.

Key changes include:

• Eliminating the current 4% withholding tax on interest
• Ceasing to treat interest earned by nonresident investors as Chilean-source income
• Removing the current one-year minimum holding period requirement
• Replacing the Fiscal Interest Rate mechanism with a market-based coupon rate requirement

According to the bill's explanatory background, the current rules may limit the inclusion of certain Chilean debt instruments in international trading and intermediation platforms. The proposed amendments seek to simplify the tax treatment of qualifying public debt instruments and facilitate access by nonresident investors.

Expanded capital gains exemption regime for listed securities

The bill would substantially broaden the scope of Chile's capital gains exemption regime under Article 107 of the Income Tax Law.

Most notably, the proposal would replace the existing "stock market presence" requirement with a minimum 15% free-float threshold (to be further developed by the Financial Market Commission).

The exemption would also be expanded to cover:

• Shares in publicly held corporations, closely held corporations and Chilean corporations that satisfy the acquisition, disposal, and free-float requirements established by the new Article 107
• Securities traded on exchange segments dedicated to emerging and growth companies
• Foreign public securities registered on Chilean exchanges
• Certain derivatives with underlying instruments that qualify under Article 107
• Mortgage-backed instruments traded on product exchanges

The proposed reform could considerably expand the range of Chilean and internationally linked securities eligible for capital gains relief.

Simplified entry for nonresident investors

One of the most practical changes for foreign investors is a proposed exemption from the requirement to obtain a Chilean tax identification number (RUT).

Under the proposal, nonresident investors investing exclusively in qualifying Article 104 debt instruments and/or Article 107 securities would not be required to obtain a RUT. Relevant withholding agents would continue to perform applicable withholding obligations.

According to the legislative proposal, the measure is intended to simplify market access for nonresident investors by removing the requirement to obtain a RUT in certain circumstances.

Stamp tax relief for foreign capital

The bill proposes several amendments to the stamp tax exemption regime, including extending certain exemptions currently available in funding and deposit operations to investors regardless of their residence status. Foreign investors or creditors are placed on an equal footing with local investors or creditors and are

granted the exemption.

The proposal also introduces a new exemption for certain publicly offered debt instruments intended for trading on exchange segments dedicated to emerging and growth companies.

VAT clarification for cross-border investment and wealth management services

The proposal would clarify that investment management, investment advisory and integrated wealth-management services rendered to nonresidents are deemed to be "used abroad," even if the managed assets are located or registered in Chile.

As a result, these services could qualify for Chile's value-added tax (VAT) exemption applicable to exported services.

What's next?

As the bill remains at an early stage of the legislative process, its final content, effective dates and scope remain subject to congressional discussion and potential amendment.

Companies, investors and financial institutions with exposure to Chilean capital markets may wish to continue monitoring the progress of the proposal as it moves through Congress.