Line a baking sheet with parchment paper and set aside.

In a large bowl, beat the softened cream cheese and butter together until smooth and creamy.

Gradually add the powdered sugar while mixing to prevent clumps from forming.

Stir in the shredded coconut until fully combined.

Chill the mixture in the refrigerator for 1 hour.

Dust your hands lightly with powdered sugar and roll the mixture into 1-inch balls.

Arrange the balls on the prepared baking sheet and freeze for 1 hour.

Melt the chocolate chips according to package instructions using either a microwave or double boiler.

Using a fork, dip each frozen coconut ball into the melted chocolate and allow excess chocolate to drip off.

Return the coated balls to the parchment-lined baking sheet.

Refrigerate for 5-10 minutes until the chocolate shell is set.

Serve immediately or store chilled in an airtight container.