The objective of this study is to identify the reasons why startups decide to incorporate in certain foreign jurisdictions rather than in their home country in Latin America. It also seeks to determine which jurisdictions are preferred when making the decision, according to their restrictions and benefits.
From a public policy point of view, Chile is on the right track with respect to the creation of tools that reduce the gaps in the financing of investment in the country. Indeed, although there is still a pending debt with the development of initiatives such as the fund of funds, the Venture Capital Chile brand and ScaleX are projects that go in the right direction.
Beyond the possibility of obtaining financing, the global dimension of the economy and the need for companies to save, among other reasons, mean that the internationalization of startups and VC funds continues to be a priority in the industry. In consideration of the above, this study has sought to contribute to discern the motivations and characteristics of this phenomenon, highlighting among them the external conditions or requirements that force startups to incorporate outside their country of origin to raise larger rounds, as well as the exit of funds to find bigger and better networks. All this shows the need for internationalization, but also opens an opportunity to create conditions that allow a balance between the urgency of going out to look for markets and networks, and the need to obtain financing in the country of origin.
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