On April 22, 2026, the Chilean government submitted to Congress the Bill for National Reconstruction and Economic and Social Development (the “Bill”), a package of more than 40 measures aimed at reactivating the economy, strengthening fiscal sustainability and restoring Chile's appeal as a destination for foreign investment.
The Bill is built around four pillars: physical reconstruction (areas affected by the 2024–2026 wildfires), economic reactivation, institutional modernization, and fiscal responsibility.
Currently under review by Congress with high legislative urgency, this initiative has already generated significant political debate.
For foreign investors, the most relevant features fall into three categories: (i) tax incentives; (ii) a structural reform of the environmental permitting system (the long-criticized permisología); and (iii) legal certainty mechanisms. The sections below outline some of the key proposals in each of these areas.
Tax Incentives for Investment
- Return to a fully integrated tax system: the corporate income tax (First Category Tax) becomes fully creditable against shareholders' final taxes, eliminating the economic double taxation introduced in 2014.
- Gradual reduction of the corporate income tax from 27% to 23% by 2029.
- Elimination of the capital gains tax on transactions executed on the Chilean stock exchange.
- Voluntary capital repatriation regime: the Bill establishes a temporary, voluntary and extraordinary 12-month regime for the declaration and/or repatriation of assets or income held abroad that were not timely declared in Chile, subject to a single substitute tax replacing all taxes that would otherwise have been due. The general rate is 10% on previously undeclared foreign assets (including crypto-assets) acquired before January 1, 2025, reduced to 7% if the assets are effectively brought into Chile within 3 years of the law's publication and kept invested locally for at least 5 years.
Tackling "Permisología"
A central diagnosis of the Bill is that excessive permitting delays (not weak standards) have paralyzed investment. The reforms include:
- Shorter invalidation window: the administrative authority's power to invalidate sectoral permits drops from 2 years to 6 months, delivering early certainty for mining, energy, public works and construction projects.
- Comprehensive reform of the Environmental Impact Assessment System (SEIA): new exemptions for modifications to projects already holding a favourable Environmental Qualification Resolution (RCA), limits on iterative agency requests, and a new voluntary simplified assessment regime.
- Restrictions on judicial precautionary measures: court orders suspending projects with a favourable RCA may not exceed 30 days (extendable by reasoned ruling), are subject to an absolute cap of 6 months, and become appealable before the Court of Appeals.
- Reimbursement mechanism: holders of RCAs annulled by final court ruling will be entitled to reimbursement of direct and effective expenses incurred, provided the annulment is not attributable to false or incomplete information from the holder.
Legal Certainty as a Strategic Asset
Beyond the technical reforms, the Bill's underlying message is one of predictability. Through these measures, the Bill seeks to address what the Government identifies as one of the structural causes of Chile's recent decline in investment: regulatory uncertainty.
Author:
Nicolás Yuraszeck, Partner, Projects and Infrastructure
nyuraszeck@prieto.cl