Letter of Intent Chile (Carta de Intención de Negocio)

A Letter of Intent Chile (Carta de Intención de Negocio — LOI) is a preliminary commercial document governed by Article 1545 of the Código Civil (enacted 14 December 1855) and Article 1 of the Código de Comercio (enacted 23 November 1865), through which one or more parties formally express their intention to enter into a business transaction, merger, acquisition, joint venture, or commercial partnership, setting out the key terms contemplated and the framework for subsequent definitive negotiations in Chile.

Under Article 1545 of the Código Civil, lawfully executed contracts bind the parties as a law (ley para los contratantes), and the Letter of Intent occupies a nuanced position in Chilean contract law: its non-binding preliminary terms do not create enforceable obligations to complete the transaction, but any provisions expressly designated as binding — most commonly confidentiality, exclusivity during the negotiation period, allocation of due diligence costs, and governing law — carry full contractual force. The Corte Suprema de Justicia has recognized in its jurisprudence that pre-contractual obligations of good faith (buena fe precontractual) arise under Código Civil Article 1546 from the moment parties commence serious negotiations, meaning that even where an LOI is expressly non-binding as to the main transaction, a party that withdraws from negotiations in bad faith after inducing reliance may be liable for pre-contractual damages under Article 2314 of the Código Civil (cuasidelito civil — culpa aquiliana).

The Código de Comercio Article 1 defines commercial acts (actos de comercio) and establishes that commercial law governs acts performed by traders (comerciantes), supplemented by the Código Civil where the Código de Comercio is silent. Letters of Intent relating to business acquisitions, joint ventures, or commercial agreements fall within the scope of both bodies of law, and disputes may be brought before the Juzgados de Letras en lo Civil — which exercise jurisdiction over both civil and commercial matters in first instance — with appeal to the Cortes de Apelaciones and cassation to the Corte Suprema.

For transactions involving publicly listed companies (Sociedades Anónimas Abiertas under Ley 18.046 of 1981), Letters of Intent may trigger disclosure obligations to the Comisión para el Mercado Financiero (CMF) under Ley 18.045 (Ley de Mercado de Valores) and the Norma de Carácter General No. 30 issued by the CMF — publicly listed issuers must disclose material information (hecho esencial) that could affect the price of their securities, and a signed LOI for a significant transaction typically qualifies as a hecho esencial requiring immediate publication through the CMF's Sistema de Envío de Información (SEIL).

For transactions involving mergers and acquisitions that may meet the notification thresholds of Decreto Ley 211 Article 48 — based on combined Chilean revenue exceeding approximately CLP 100 billion or individual revenues above CLP 10 billion — the LOI should acknowledge the requirement to obtain FNE (Fiscalía Nacional Económica) clearance before consummating the transaction, and the binding exclusivity period should be long enough to accommodate the FNE review process, which may take 30 to 90 days under the expedited procedure or up to one year in Phase 2 investigations.

In Chile's private equity and venture capital ecosystem — active through organizations such as the Asociación Chilena de Administradoras de Fondos de Inversión (ACAFI) and supported by CORFO (Corporación de Fomento de la Producción) through its various investment programs — LOIs are standard instruments preceding term sheets and share purchase agreements in investment transactions involving Fondos de Inversión Privado (FIP) governed by Ley 18.815 and Ley 20.712 (Ley Única de Fondos).

A Letter of Intent Chile is needed at the outset of any significant commercial negotiation where parties require a structured framework before committing resources to full due diligence, legal documentation, and transaction execution under the Código Civil and Código de Comercio.

Mergers and acquisitions involving Chilean Sociedades Anónimas (regulated by Ley 18.046/1981 and supervised by the CMF), Sociedades por Acciones (SpA) formed under Articles 424–446 of the Código de Comercio, or Sociedades de Responsabilidad Limitada (SRL) under Ley 3.918 of 1923 routinely begin with an LOI. The document establishes the preliminary purchase price or valuation methodology, the scope of the due diligence process including access to SII tax records, Conservador de Bienes Raíces registrations, and Registro Civil employment records, and the expected timeline for signing the definitive compraventa or transfer agreement.

Joint venture negotiations between Chilean and foreign partners exploring investments in Chile's key economic sectors — copper and lithium mining supervised by SERNAGEOMIN (Servicio Nacional de Geología y Minería), salmon aquaculture regulated by SERNAPESCA (Servicio Nacional de Pesca y Acuicultura), renewable energy projects under Ley General de Servicios Eléctricos (DFL No. 4/2006), and agribusiness regulated by the SAG — require LOIs to define each party's proposed contribution, governance structure, and exit rights before engaging lawyers to draft full joint venture agreements.

Real estate development partnerships involving significant projects regulated by the Ministerio de Vivienda y Urbanismo (MINVU) under the Ley General de Urbanismo y Construcciones (LGUC, DFL No. 458/1976) and subject to Dirección de Obras Municipales (DOM) permit requirements use LOIs to align commercial terms before negotiating promesas de compraventa under Código Civil Article 1554.

Franchise and licensing negotiations where a foreign brand seeks a Chilean master franchisee or licensee — requiring registration of the trademark with INAPI under Ley 19.039 and compliance with SERNAC (Servicio Nacional del Consumidor) regulations on franchise disclosure under Ley 19.496 — begin with an LOI defining territory, royalty rates, and exclusivity periods before the parties invest in formal franchise agreement drafting.

Strategic partnerships between Chilean companies and international technology providers, where the Chilean entity seeks exclusive distribution or integration rights, use LOIs to protect their negotiating position with binding exclusivity and confidentiality during the negotiation window while avoiding premature binding commitments on price, scope, or governance terms.

A well-structured Letter of Intent Chile under Código Civil Article 1545 and Código de Comercio Article 1 must distinguish clearly between binding and non-binding provisions, include all key transaction parameters, and comply with the good-faith obligations of Article 1546 — ensuring parties can rely on the document without inadvertently creating premature contractual obligations.

Party Identification: Full legal details of each party — corporate name, RUT (Rol Único Tributario assigned by the SII), Registro de Comercio inscription number and date, registered domicile, and identification of the authorized signatory with reference to the mandate (mandato) under Código Civil Articles 2116–2173. For Sociedades Anónimas, the signatory's authority must derive from the company's Estatutos and board resolution (acta de directorio) authorized under Ley 18.046.

Transaction Description: A clear narrative description of the proposed transaction — acquisition of shares or assets (compraventa de acciones or activos), joint venture structure (contrato de asociación), licensing arrangement (contrato de licencia), or strategic partnership (alianza estratégica). Where the transaction involves real property, reference to the Conservador de Bienes Raíces registration (Folio Real) and applicable LGUC permits is appropriate.

Preliminary Terms (Non-Binding): The indicative commercial parameters — purchase price or valuation range, equity split in a joint venture, licensing royalty rate, geographic scope — expressly stated as non-binding preliminary estimates subject to due diligence and definitive agreement. Chilean lawyers typically include the phrase "sin carácter vinculante, salvo en los aspectos expresamente indicados" to distinguish preliminary terms from binding obligations.

Binding Obligations: The provisions that carry immediate legal force under Código Civil Article 1545 — confidentiality obligations governed by Ley 19.628 and Ley 19.039 (trade secrets), exclusivity (exclusividad) during the negotiation period prohibiting the parties from negotiating equivalent transactions with third parties, cost allocation for due diligence expenses (gastón de due diligence), and governing law. These binding provisions must be drafted with sufficient specificity to satisfy Article 1545 requirements.

Due Diligence Scope and Timeline: Description of the information to be provided, access procedures, timeline for completion, and the party responsible for preparing the data room (sala de datos). For transactions subject to SII or CMF regulatory scrutiny, the due diligence scope should explicitly include tax, labor (Código del Trabajo compliance), environmental (SEIA — Sistema de Evaluación de Impacto Ambiental under Ley 19.300), and regulatory permits.

Exclusivity Period: A defined exclusivity window — typically 30 to 90 days for straightforward transactions and up to 180 days for complex cross-border deals — during which the parties commit not to negotiate competing transactions. The exclusivity clause should specify the termination trigger (expiry of the period, mutual agreement, or breach) and any break-up fee (indemnización por ruptura) payable if the exclusivity is violated.

Conditions to Closing: The material conditions precedent (condiciones suspensivas) to signing a definitive agreement — regulatory approvals from the CMF, FNE, or sector regulators (ISP, SAG, SERNAPESCA), board or shareholder approvals, third-party consents under existing contracts, and satisfactory completion of due diligence. Each condition should have a specific long-stop date and consequences for non-satisfaction.

Governing Law and Dispute Resolution: Express submission to Chilean law (Código Civil and Código de Comercio) and to the jurisdiction of the Juzgados de Letras en lo Civil of a specified city, or alternatively to arbitration before the Centro de Arbitraje y Mediación de Santiago (CAM Santiago). Forms-legal.com provides this Letter of Intent Chile template as a practical starting framework for structuring preliminary business negotiations under Chilean law. Transactions above a certain materiality threshold — particularly those involving publicly listed entities, regulated industries, or cross-border elements — require review by a licensed Abogado experienced in Chilean corporate and commercial law before execution. Los usuarios de forms-legal.com pueden descargar este documento de forma gratuita en formato PDF o DOCX, completar los campos del formulario guiado y obtener un documento listo para firma.