Chilean economic and corporate law reforms

Chile is undergoing significant economic and legal reforms. Initial discussions focused on the National Reconstruction and Economic and Social Development Law, or ‘Megareforma’, which includes a gradual reduction of the First Category tax from 27% to 23% by 2029. Experts noted that the impact of this reform depends on how companies manage the phase-out of tax credit restitution and the application of a 10% substitute tax on historical profits (ISFUT).

Following these fiscal discussions, Chile updated its Corporations Law as part of a broader capital markets reform. This amendment to Article 44 introduces the ‘business judgment rule’, providing legal protections for corporate directors. Under the new provisions, directors are deemed to have met their duty of care if they act in good faith, with sufficient information, and with a reasonable conviction of serving the company’s interests, provided there is no personal interest in the decision. This change shifts the burden of proof in legal disputes, protecting directors from liability for decisions judged retrospectively by courts if the decision-making process was sound.