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Chile

Executive Summary

With the sixth largest GDP per capita in the Western Hemisphere, Chile has historically enjoyed levels of stability and prosperity among the highest in the region. Widespread civil unrest broke out in 2019, however, in response to perceived systemic economic inequality. Pursuant to a political accord, Chile held a plebiscite in October 2020 in which citizens chose to redraft the constitution. Uncertainty about the outcome may impact investment. Chile’s solid macroeconomic policy framework the country boasts one of the strongest sovereign bond ratings in Latin America has provided the fiscal space to respond to the economic effects of the COVID-19 pandemic through economic relief and stimulus packages and other measures. After a 5.8 percent contraction in 2020, the Chilean Central Bank forecasts Chile’s economic growth in 2021 will be in the range of 6.0 to 7.0 percent.

Chile has successfully attracted Foreign Direct Investment (FDI) despite its relatively small domestic market. The country’s market-oriented policies have created significant opportunities for foreign investors to participate in the country’s economic growth. Chile has a sound legal framework and general respect for private property rights. Sectors that attract significant FDI include mining, finance/insurance, energy, telecommunications, chemical manufacturing, and wholesale trade. Mineral, hydrocarbon, and fossil fuel deposits within Chilean territory are restricted from foreign ownership, but companies may enter into contracts with the government to extract these resources. Corruption exists in Chile but on a much smaller scale than in most Latin American countries, ranking 25 – along with the United States – out of 170 countries worldwide and second in Latin America in Transparency International’s 2020 Corruption Perceptions Index.

Although Chile is an attractive destination for foreign investment, challenges remain. Legislative and constitutional reforms proposed in response to the social unrest and the pandemic have generated concern about the potential impact on investments in the mining, energy, healthcare, insurance, and pension sectors. Importantly, the legislation enabling the constitutional reform process requires that the new constitution must respect Chile’s character as a democratic republic, its judicial sentences, and its international treaties (including the U.S.-Chile Free Trade Agreement). Despite a general respect for intellectual property (IP) rights, Chile has not fully complied with its IP obligations set forth in the U.S.-Chile FTA. Environmental permitting processes, indigenous consultation requirements, and cumbersome court proceedings have made large project approvals increasingly time consuming and unpredictable, especially in cases with political sensitivities. The current administration prioritizes attracting foreign investment and implemented measures to streamline the process.

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2020 25 of 170 http://www.transparency.org/research/cpi/overview 
World Bank’s Doing Business Report 2020 59 of 190 http://www.doingbusiness.org/en/rankings 
Global Innovation Index 2020 54 of 131 https://www.globalinnovationindex.org/analysis-indicator 
U.S. FDI in partner country (USD billion, historical stock positions) 2019 25.1 https://apps.bea.gov/international/factsheet/ 
World Bank GNI per capita (USD) 2019 15,010 http://data.worldbank.org/indicator/NY.GNP.PCAP.CD 

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

For more than four decades, promoting inward FDI has been an essential part of the Chilean government’s national development strategy. The country’s market-oriented economic policy creates significant opportunities for foreign investors to participate. Laws and practices are not discriminatory against foreign investors, who receive treatment similar to Chilean nationals. Chile’s business climate is generally straightforward and transparent, and its policy framework has remained consistent despite developments such as civil unrest in 2019 and the COVID-19 pandemic starting in 2020. However, the permitting process for infrastructure, mining, and energy projects is contentious, especially regarding politically sensitive environmental impact assessments, water rights issues, and indigenous consultations.

InvestChile is the government agency in charge of facilitating the entry and retention of FDI into Chile. It provides services related to investment attraction (information about investment opportunities); pre-investment (sector-specific advisory services, including legal); landing (access to certificates, funds and networks); and after-care (including assistance for exporting and re-investment).

Regarding government-investor dialogue, in May 2018, the Ministry of Economy created the Sustainable Projects Management Office (GPS). This agency provides support to investment projects, both domestic and foreign, serving as a first point of contact with the government and coordinating with different agencies in charge of evaluating investment projects, which aims to help resolve issues that emerge during the permitting process.

Limits on Foreign Control and Right to Private Ownership and Establishment

Foreign investors have access to all productive activities, except for the domestic maritime freight sector, in which foreign ownership of companies is capped at 49 percent. Maritime transportation between Chilean ports is open since 2019 to foreign cruise vessels with more than 400 passengers. Some international reciprocity restrictions exist for fishing.

Most enterprises in Chile may be 100 percent owned by foreigners. Chile only restricts the right to private ownership or establishment in what it defines as certain “strategic” sectors, such as nuclear energy and mining. The Constitution establishes the “absolute, exclusive, inalienable and permanent domain” of the Chilean state over all mineral, hydrocarbon, and fossil fuel deposits within Chilean territory. However, Chilean law allows the government to grant concession rights and lease agreements to individuals and companies for exploration and exploitation activities, and to assign contracts to private investors, without discrimination against foreign investors.

Chile has not implemented an investment screening mechanism for national security purposes. FDI is subject to pro forma screening by InvestChile. Businesses in general do not consider these screening mechanisms as barriers to investment because approval procedures are expeditious and investments are usually approved. Some transactions require an anti-trust review by the office of the national economic prosecutor (Fiscalía Nacional Económica) and/or sector-specific regulators.

Other Investment Policy Reviews

The World Trade Organization (WTO) has not conducted a Trade Policy Review for Chile since June 2015 (available here: https://www.wto.org/english/tratop_e/tpr_e/tp415_e.htm). The Organization for Economic Co-operation and Development (OECD) has not conducted an Investment Policy Review for Chile since 1997 (available here: http://www.oecd.org/daf/inv/investment-policy/34384328.pdf), and the country is not part of the countries covered to date by the United Nations Conference on Trade and Development’s (UNCTAD) Investment Policy Reviews.

Business Facilitation

The Chilean government took significant steps towards business facilitation during the past decade. Starting in 2018, the government introduced updated electronic and online systems for providing some tax information, complaints related to contract enforcement, and online registration of closed corporations (non-public corporations). In June 2019, the Ministry of Economy launched the Unified System for Permits (SUPER), a new online single-window platform that brings together 182 license and permit procedures, simplifying the process of obtaining permits for investment projects.

According to the World Bank, Chile has one of the shortest and smoothest processes among Latin American and Caribbean countries – 11 procedures and 29 days – to establish a foreign-owned limited liability company (LLC). Drafting statutes of a company and obtaining an authorization number can be done online at the platform https://www.registrodeempresasysociedades.cl/. Electronic signature and invoicing allow foreign investors to register a company, obtain a tax payer ID number and get legal receipts, invoices, credit and debit notes, and accountant registries. A company typically needs to register with Chile’s Internal Revenue Service, obtain a business license from a municipality, and register either with the Institute of Occupational Safety (public) or with one of three private nonprofit entities that provide work-related accident insurance, which is mandatory for employers. In addition to the steps required of a domestic company, a foreign company establishing a subsidiary in Chile must authenticate the parent company’s documents abroad and register the incoming capital with the Central Bank. This procedure, established under Chapter XIV of the Foreign Exchange Regulations, requires a notice of conversion of foreign currency into Chilean pesos when the investment exceeds $10,000 (USD). The registration process at the Registry of Commerce of Santiago is available online.

Outward Investment

The Government of Chile does not have an active policy of promotion or incentives for outward investment, nor does it impose restrictions on it.

3. Legal Regime

Transparency of the Regulatory System

Chile’s legal, regulatory, and accounting systems are transparent and provide clear rules for competition and a level playing field for foreigners. They are consistent with international norms; however, environmental regulations – which include mandatory indigenous consultation required by the International Labor Organization’s Indigenous and Tribal Peoples Convention (ILO 169) – and other permitting processes have become lengthy and unpredictable, especially in politically sensitive cases.

Four institutions play key roles in the rule-making process in Chile: The General-Secretariat of the Presidency (SEGPRES), the Ministry of Finance, the Ministry of Economy, and the General Comptroller of the Republic. However, Chile does not have a regulatory oversight body. Most regulations come from the national government; however, some, in particular those related to land use, are decided at the local level. Both national and local governments are involved in the issuance of environmental permits. Regulatory processes are managed by governmental entities. NGOs and private sector associations may participate in public hearings or comment periods. The OECD’s April 2016 “Regulatory Policy in Chile” report asserts that Chile took steps to improve its rule-making process, but still lags behind the OECD average in assessing the impact of regulations, consulting with outside parties on their design and evaluating them over time.

In Chile, non-listed companies follow norms issued by the Accountants Professional Association, while publicly listed companies use the International Financial Reporting Standards (IFRS). Since January 2018, IFRS 9 entered into force for companies in all sectors except for banking, in which IFRS 15 will be applied. IFRS 16 entered into force in January 2019. On January 12, 2021, Chile’s Financial Market Commission (CMF) published for consultation a regulation to implement the IFRS 17 accounting standards in the Chilean insurance market.

The legislation process in Chile allows for public hearings during discussion of draft bills in both chambers of Congress. Draft bills submitted by the Executive Branch to the Congress are readily available for public comment. Ministries and regulatory agencies are required by law to give notice of proposed regulations, but there is no formal requirement in Chile for consultation with the general public, conducting regulatory impact assessments of proposed regulations, requesting comments, or reporting results of consultations. For lower-level regulations or norms that do not need congressional approval, there are no formal provisions for public hearing or comment. As a result, Chilean regulators and rulemaking bodies normally consult with stakeholders, but in a less formal manner.

All decrees and laws are published in the Diario Oficial (roughly similar to the Federal Register in the United States), but other types of regulations will not necessarily be found there. There are no other centralized online locations where regulations in Chile are published.

According to the OECD, compliance rates in Chile are generally high. The approach to enforcement remains punitive rather than preventive, and regulators still prefer to inspect rather than collaborate with regulated entities on fostering compliance. Each institution with regulation enforcement responsibilities has its own sanction procedures. Law 19.880 from 2003 establishes the principles for reversal and hierarchical recourse against decisions by the administration. An administrative act can be challenged by lodging an action in the ordinary courts of justice, or by administrative means with a petition to the Comptroller General of the Republic. Affected parties may also make a formal appeal to the Constitutional Court against a specific regulation.

Chile still lacks a comprehensive, “whole of government” regulatory reform program. The World Bank´s Global Indicators of Regulatory Governance project finds that Chile is not part of the countries that have improved their regulatory governance framework since 2017.

Chile’s level of fiscal transparency is excellent. Information on the budget and debt obligations, including explicit and contingent liabilities, is easily accessible online.

International Regulatory Considerations

Chile does not share regulatory sovereignty with any regional economic bloc. However, several international norms or standards from multilateral organizations (UN, WIPO, ILO, among others) are referenced or incorporated into the country’s regulatory system. As a member of the WTO, the Chile notifies draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT).

Legal System and Judicial Independence

Chile’s legal system is based on civil law. Chile’s legal and regulatory framework provides for effective means for enforcing property and contractual rights. Laws governing issues of interest to foreign investors are found in several statutes, including the Commercial Code of 1868, the Civil Code, the Labor Code and the General Banking Act. Chile has specialized courts for dealing with tax and labor issues.

The judicial system in Chile is generally transparent and independent. The likelihood of government intervention in court cases is low. If a state-owned firm is involved in the dispute, the Government of Chile may become directly involved through the State Defense Council, which represents the government interests in litigation cases related to expropriations.

Regulations can be challenged before the court system, the National Comptroller, or the Constitutional Court, depending on the nature of the claim.

Laws and Regulations on Foreign Direct Investment

Law 20,848, of 2015, established a new framework for foreign investment in Chile and created the Agency for the Promotion of Foreign Investment (APIE), successor to the former Foreign Investment Committee and which also acts under the name of “InvestChile.” The InvestChile website (https://investchile.gob.cl/) provides relevant laws, rules, procedures, and reporting requirements for investors. For more on FDI regulations and services for foreign investors, see the section on Policies Towards Foreign Direct Investment.

Competition and Antitrust Laws

Chile’s anti-trust law prohibits mergers or acquisitions that would prevent free competition in the industry at issue. An investor may voluntarily seek a ruling by an Anti-trust Court that a planned investment would not have competition implications. The national economic prosecutor (FNE) is an active institution in conducting investigations for competition-related cases and filing complaints before the Free Competition Tribunal (TDLC), which rules on those cases.

In April 2020, Chile’s Supreme Court ruled on a collusion case introduced by the FNE in 2016 and more than doubled sanctions previously decided by the TDLC in 2019. Supermarket chains Walmart, Cencosud, and SMU were fined USD 7.9 million, USD 8.2 million, and USD 4.9 million, respectively. The ruling established that these retailers set up a minimum price accord in the market for fresh poultry.

In March 2020 and March 2021, respectively, after completing separate anti-trust reviews, the FNE cleared a Chinese state-owned enterprise’s acquisitions of two Chilean energy companies. In May 2020, the FNE approved the acquisition of a domestic e-commerce and delivery services digital platformby a U.S. ridesharing technology technology company. In August 2020, the Supreme Court ruled on a collusion case related to maritime transportation of cars into Chile between 2010 and 2013. In April 2019, the TDLC previously applied fines on two Japanese shipping and transport companies. – The Court accepted FNE’s complaint and extended fines to three other Chilean, Japanese, and Korean firms that participated in the agreement. Total fines amount to USD 30.5 million.

In September 2020, the FNE requested fines amounting to USD 4.1 million on a U.S. entertainment company and its subsidiary for failing to provide accurate information and to adopt adequate mitigation measures during the approval process for its acquisition of a U.S. multimedia company.

In December 2020, the FNE approved the merger between Fiat Chrysler Automobiles and Peugeot, provided that some remedies provided by the companies would mitigate the risks to competition in the retail car market.

Expropriation and Compensation

Chilean law grants the government authority to expropriate property, including property of foreign investors, only on public interest or national interest grounds, on a non-discriminatory basis and in accordance with due process. The government has not nationalized a private firm since 1973. Expropriations of private land take place in a transparent manner, and typically only when the purpose is to build roads or other types of infrastructure. The law requires the payment of immediate compensation at fair market value, in addition to any applicable interest.

Dispute Settlement

ICSID Convention and New York Convention

Since 1991, Chile has been a member state to the International Centre for the Settlement of Investment Disputes (ICSID Convention). In 1975, Chile became a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention).

National arbitration law in Chile includes the Civil Procedure Code (Law Num. 1552, modified by Law Num. 20.217 of 2007), and the Law Num. 19.971 on International Commercial Arbitration.

Investor-State Dispute Settlement

Apart from the New York Convention, Chile is also a party to the Pan-American Convention on Private International Law (Bustamante Code) since 1934, the Inter-American Convention on International Commercial Arbitration (Panama Convention) since 1976, and the Washington Convention on the Settlement of Investment Disputes between States and Nationals of Other States since 1992.

The U.S.-Chile FTA, in force since 2004, includes an investment chapter that provides the right for investors to submit claims under the ICSID Convention, the United Nations Commission on International Trade Law (UNCITRAL) arbitration rules, or any other mutually agreed upon arbitral institution. So far, U.S. investors have filed no claims under the agreement.

Over the past 10 years, there were only two investment dispute cases brought by foreign investors against the state of Chile before the World Bank’s International Center for Settlement of Investment Disputes (ICSID) tribunal. In the first case, a Spanish-Chilean citizen demanded USD 338.3 million in compensation for the expropriation of a Chilean newspaper company in 1975 by Chile’s military regime. Despite an ICSID decision from 2016 in favor of the Chilean state, the claimant requested the nullification of the ruling, which extended the total duration of the case to 22 years. On January 7, 2020, ICSID issued a final ruling in favor of the Chilean state and rejecting the claimant’s case. The second case was brought in 2017 by a Colombian firm, which held concession contracts as operators of Transantiago, the public transportation system in Santiago de Chile. The Columbian firm claimed USD 347 million for Chilean government actions that allegedly created unfavorable operating conditions for the claimants’ subsidiaries and resulted in bankruptcy proceedings. On January 7, 2021, ICSID ruled in favor of the Chilean state, rejecting the claims.

Local courts respect and enforce foreign arbitration awards, and there is no history of extrajudicial action against foreign investors.

International Commercial Arbitration and Foreign Courts

Mediation and binding arbitration exist in Chile as alternative dispute resolution mechanisms. A suit may also be brought in court under expedited procedures involving the abrogation of constitutional rights. The U.S.-Chile FTA investment chapter encourages consultations or negotiations before recourse to dispute settlement mechanisms. If the parties fail to resolve the matter, the investor may submit a claim for arbitration. Provisions in Section C of the FTA ensure that the proceedings are transparent by requiring that all documents submitted to or issued by the tribunal be available to the public, and by stipulating that proceedings be public. The FTA investment chapter establishes clear and specific terms for making proceedings more efficient and avoiding frivolous claims. Chilean law is generally to be applied to all contracts. However, arbitral tribunals decide disputes in accordance with FTA obligations and applicable international law. The tribunal must also accept amicus curiae submissions.

In Chile, the Judiciary Code and the Code of Civil Procedure govern domestic arbitration. Local courts respect and enforce foreign arbitral awards and judgments of foreign courts. Chile has a dual arbitration system in terms of regulation, meaning that different bodies of law govern domestic and international arbitration. International commercial arbitration is governed by the International Commercial Arbitration Act that is modeled on the 1985 UNCITRAL Model Law on International Commercial Arbitration. In addition to this statute, there is also Decree Law Number 2349 that regulates International Contracts for the Public Sector and sets forth a specific legal framework for the State and its entities to submit their disputes to international arbitration.

No Chilean state-owned enterprises (SOEs) have been involved in investment disputes in recent decades. A Chilean government agency filed an arbitration case in February 2021 against a U.S. firm at the International Chamber of Commerce International Court of Arbitration. The case remains pending.

Bankruptcy Regulations

Chile’s Insolvency Law from 1982 was updated in October 2014. The current law aims to clarify and simplify liquidation and reorganization procedures for businesses to prevent criminalizing bankruptcy. It also established the new Superintendence of Insolvency and created specialized insolvency courts. The new insolvency law requires creditors’ approval to select the insolvency representative and to sell debtors’ substantial assets. The creditor also has the right to object to decisions accepting or rejecting creditors’ claims. However, the creditor cannot request information from the insolvency representative. The creditor may file for insolvency of the debtor, but for liquidation purposes only. The creditors are divided into classes for the purposes of voting on the reorganization plan; each class votes separately, and creditors in the same class are treated equally.

4. Industrial Policies

Investment Incentives

The Chilean government generally does not subsidize foreign investment, nor does it issue guarantees or joint financing for FDI projects. There are, however, some incentives directed toward isolated geographical zones and to the information technology sector. These benefits relate to co-financing of feasibility studies as well as to incentives for the purchase of land in industrial zones, the hiring of local labor, and the facilitation of project financing. Other important incentives include accelerated depreciation accounting for tax purposes and legal guarantees for remitting profits and capital. Additionally, the Start-Up Chile program provides selected entrepreneurs with grants of up to USD 80,000, along with a Chilean work visa to develop a “startup” business in Chile over a period of four to seven months. Chile has other special incentive programs aimed at promoting investment and employment in remote regions, as well as other areas that suffer development lags.

Foreign Trade Zones/Free Ports/Trade Facilitation

Chile has two free trade zones: one in the northern port city of Iquique (Tarapaca Region) and the other in the far south port city of Punta Arenas (Magallanes Region). Merchants and manufacturers in these zones are exempt from corporate income tax, value added taxes (VAT) – on operations and services that take place inside the free trade zone – and customs duties. The same exemptions also apply to manufacturers in the Chacalluta and Las Americas Industrial Park in Arica (Arica and Parinacota Region). Mining, fishing, and financial services are not eligible for free zone concessions. Foreign-owned firms have the same investment opportunities in these zones as Chilean firms. The process for setting up a subsidiary is the same inside as outside the zones, regardless of whether the company is domestic or foreign-owned.

Performance and Data Localization Requirements

Chile mandates that 85 percent of a firm’s workers must be local employees. Exceptions are described in Section 11. The costs associated with migration regulations do not significantly inhibit the mobility of foreign investors and their employees.

Chile does not follow “forced localization.” A draft bill that is pending in Chile’s Congress could result in additional requirements (owner’s consent) for international data transfers in cases involving jurisdictions with data protection regimes below Chile’s standards. The bill, modeled after the European Union’s General Data Protection Regulation (GDPR) also proposes the creation of an independent Chilean Data Protection Agency that would be responsible for enforcing data protection standards.

Neither Chile’s Foreign Investment Promotion Agency nor the Central Bank applies performance requirements in their reviews of proposed investment projects. The investment chapter in the U.S.–Chile FTA establishes rules prohibiting performance requirements that apply to all investments, whether by a third party or domestic investors. The FTA investment chapter also regulates the use of mandatory performance requirements as a condition for receiving incentives and spells out certain exceptions. These include government procurement, qualifications for export and foreign aid programs, and non-discriminatory health, safety, and environmental requirements.

5. Protection of Property Rights

Real Property

Property rights and interests are recognized and generally enforced in Chile. Chile ranked 63 out of 190 economies in the “Registering Property” category of the World Bank’s 2020 Doing Business report. There is a recognized and generally reliable system for recording mortgages and other forms of liens.

There are no restrictions on foreign ownership of buildings and land, and no time limit on the property rights acquired by them. The only exception, based on national security grounds, is for land located in border territories, which may not be owned by nationals or firms from border countries, without prior authorization of the President of Chile. There are no restrictions to foreign and/or non-resident investors regarding land leases or acquisitions. In the Doing Business specific index for “quality of land administration” (which includes reliability of infrastructure, transparency of information, geographic coverage and land dispute resolution), Chile obtains a score of 14 out of 30.

Unoccupied properties can always be claimed by their legal owners and, as usurpation is a criminal offense, several kinds of eviction procedures are allowed by the law, though they can sometimes be onerous and lengthy.

Intellectual Property Rights

According to the U.S. Chamber of Commerce’s International IP Index, Chile’s legal framework provides for fair and transparent use of compulsory licensing; extends necessary exclusive rights to copyright holders and maintains a voluntary notification system; and provides for civil and procedural remedies. However, intellectual property (IP) protection challenges remain. Chile’s framework for trade secret protection has been deemed insufficient by private stakeholders. Pharmaceutical products suffer from relatively weak patenting procedures, the absence of an effective patent enforcement and resolution mechanism, and some gaps in regulation governing data protection.

Two important IP-related laws that made progress in 2019 in the Chilean Congress and are still pending passage. A draft bill submitted to Congress in October 2018 would reform Chile’s Industrial Property Law. The new IP bill aims to reduce timeframes, modernize procedures, and increase legal certainty for patents and trademarks registration. On April 9, 2019, the bill was passed by the Lower Chamber and sent to the Senate. Meanwhile, a reform bill on Chile’s pharmaceutical drugs law called “Ley de Fármacos II”, originated in the Senate but was extensively amended by the opposition-controlled Lower Chamber, and is under review by a mixed committee of both houses of the Chilean Congress. The pharmaceutical industry contends that the bill, in its current version, could put Chile in non-compliance with its international trade obligations. Industry’s main IP concerns about the bill are related to: a labeling requirement by which a medication must include its International Nonproprietary Name (INN) in a size that occupies at least one-third of one of the main faces of its package, while limiting the size of the trademark to one-fifth of the main faces; a requirement that physicians prescribe a pharmaceutical product exclusively by INN, unless it contains three or more “active ingredients,” regardless of interchangeability and/or bioequivalence; a requirement that drugs may only be distributed if they are double registered under both generic and brand names; a provision allowing the government to issue compulsory licenses permitting the sale of generics based on “economic inaccessibility or lack of supply”; and a pathway toward a system of “price regulation” that will “prevent economic or financial inaccessibility of pharmaceutical products.” A mixed committee of senators and deputies is seeking to reconcile changes to the draft legislation introduced by the Chamber of Deputies. While the pharmaceutical industry reports that the reconciliation process addressed many of their concerns regarding the new regulations, especially those related to compulsory licenses, it identified the lack of coverage being offered in price regulations as the most significant outstanding issue.

The Intellectual Property Brigade (BRIDEPI) of the Chilean Investigative Police (PDI) reported that it seized 39,021 counterfeit products in 2020, worth a total of US$ 850,000, and arrested seven individuals on charges related to intellectual property rights (IPR) infringement. Additionally, the National Customs Service reported that, between January and September 2020 (latest data available), it seized more than 5.2 million counterfeit products worth a total of US$ 49 million.

Chile’s IPR enforcement remains relatively lax, particularly in relation to piracy, copyright, and patent protection, while prosecution of IP infringement is hindered by gaps in the legal framework and a lack of expertise in IP law among judges. Rightsholders indicate a need for greater resources devoted to customs operations and a clearer procedure for dealing with small packages containing infringing goods. The legal basis for detaining and seizing suspected transshipments is also insufficiently clear.

Chile has been included on the U.S. Trade Representative’s (USTR) Special 301 Priority Watch List since January 8, 2007, and remains on the 2021 Priority Watch List. In October 2018, Chile’s Congress successfully passed a law that criminalizes satellite piracy. However, other challenges remain, related to longstanding IPR issues under the U.S.-Chile FTA: the implementation of measures against circumvention of technological protection; pending implementation of UPOV 91; the implementation of an effective patent linkage in connection with applications to market pharmaceutical products; adequate protection for undisclosed data generated to obtain marketing approval for pharmaceutical products; and amendments to Chile’s Internet Service Provider liability regime to permit effective action against Internet piracy.

Chile is not listed in the USTR’s Review of Notorious Markets for Counterfeiting and Piracy. For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at: http://www.wipo.int/directory/en/.

6. Financial Sector

Capital Markets and Portfolio Investment

Chile’s authorities are committed to developing capital markets and keeping them open to foreign portfolio investors. Foreign firms offer services in Chile in areas such as financial information, data processing, financial advisory services, portfolio management, voluntary saving plans and pension funds. Under the U.S.-Chile FTA, Chile opened up significantly its insurance sector, with very limited exceptions. The Santiago Stock Exchange is Chile’s dominant stock exchange, and the third largest in Latin America. However, when compared to other OECD countries, it has lower market liquidity.

Existing policies facilitate the free flow of financial resources into Chile’s product and factor markets and adjustment to external shocks in a commodity export-dependent economy. Chile accepted the obligations of Article VIII (sections 2, 3 and 4) and maintains a free-floating exchange rate system, free of restrictions on payments and transfers for current international transactions. Credit is allocated on market terms and its various instruments are available to foreigners. The Central Bank reserves the right to restrict foreign investors’ access to internal credit if a credit shortage exists. To date, this authority has not been exercised.

Money and Banking System

Nearly one fourth of Chileans have a credit card from a bank and nearly one third have a non-bank credit card, but less than 20 percent have a checking account. However, financial inclusion is higher than banking penetration: a large number of lower-income Chilean residents have a CuentaRut, which is a commission-free card with an electronic account available for all, launched by the state-owned Banco Estado, also the largest provider of microcredit in Chile.

The Chilean banking system is healthy and competitive, and many Chilean banks already meet Basel III standards. The new General Banking Act (LGB), published in January 2019, defined general guidelines for establishing a capital adequacy system in line with Basel standards, and gave the CMF the authority to establish the capital framework. All Basel III regulations were published by December 2020. Due to the pandemic, the CMF decided on March 2020 to postpone the implementation of Basel III requirements for one year. The system’s liquidity position (Liquidity Coverage Ratio) remains above regulatory limits (70 percent). Capital adequacy ratio of the system equaled 14.3 percent as of October 2020 and remains robust even when including discounts due to market and/or operational risks. Non-performing loans decreased after August 2020 due to government relief measures for households, including legislation authorizing two rounds of withdrawals from pension accounts. As of December 2020, non-performing loans equaled 1.58 percent compared to 2 percent at the end of 2019) when measured by the standard 90 days past due criterion.

As of December 2020, the total assets of the Chilean banking system amounted to USD 454.3 billion, according to the Superintendence of Banks and Financial Institutions. The largest six banks (Banco de Crédito e Inversiones, Banco Santander-Chile, Banco Estado, Banco de Chile, Scotiabank Chile and Itaú-Corpbanca) accounted for 88 percent of the system’s assets. Chile’s Central Bank conducts the country’s monetary policy, is constitutionally autonomous from the government, and is not subject to regulation by the Superintendence of Banks.

Foreign banks have an important presence in Chile, comprising three out of the six largest banks of the system. Out of 18 banks currently in Chile, five are foreign-owned but legally established banks in Chile and four are branches of foreign banks. Both categories are subject to the requirements set out under the Chilean banking law. There are also 21 representative offices of foreign banks in Chile. There are no reports of correspondent banking relationships withdrawal in Chile.

In order to open a bank account in Chile, a foreigner must present his/her Chilean ID Card or passport, Chilean tax ID number, proof of address, proof of income/solvency, photo, and fingerprints.

Foreign Exchange and Remittances

Foreign Exchange

Law 20.848, which regulates FDI (described in section 1), prohibits arbitrary discrimination against foreign investors and guarantees access to the formal foreign exchange market, as well as the free remittance of capital and profits generated by investments. There are no other restrictions or limitations placed on foreign investors for the conversion, transfer or remittance of funds associated with an investment.

Investors, importers, and others are guaranteed access to foreign exchange in the official inter-bank currency market without restriction. The Central Bank of Chile (CBC) reserves the right to deny access to the inter-bank currency market for royalty payments in excess of five percent of sales. The same restriction applies to payments for the use of patents that exceed five percent of sales. In such cases, firms would have access to the informal market. The Chilean tax service reserves the right to prevent royalties of over five percent of sales from being counted as expenses for domestic tax purposes.

Chile has a free floating (flexible) exchange rate system. Exchange rates of foreign currencies are fully determined by the market. The CBC reserves the right to intervene under exceptional circumstances to correct significant deviations of the currency from its fundamentals. This authority was used in 2019 following an unusual 20.5 percent depreciation of the Chilean peso (CLP) after six weeks of civil unrest, an unprecedented circumstance that triggered a similarly unusual USD 20 billion intervention (half of the CBC foreign currency reserves) that successfully arrested the currency slide.

Remittance Policies

Remittances of profits generated by investments are allowed at any time after tax obligations are fulfilled; remittances of capital can be made after one year following the date of entry into the country. In practice, this permanency requirement does not constitute a restriction for productive investment, because projects normally need more than one year to mature. Under the investment chapter of the U.S.–Chile FTA, the parties must allow free transfer and without delay of covered investments into and out of its territory. These include transfers of profits, royalties, sales proceeds, and other remittances related to the investment. However, for certain types of short-term capital flows this chapter allows Chile to impose transfer restrictions for up to 12 months as long as those restrictions do not substantially impede transfers. If restrictions are found to impede transfers substantially, damages accrue from the date of the initiation of the measure. In practice, these restrictions have not been applied in the last two decades.

Sovereign Wealth Funds

The Government of Chile maintains two sovereign wealth funds (SWFs) built with savings from years with fiscal surpluses. The Economic and Social Stabilization Fund (FEES) was established in 2007 and was valued at USD 8.7 billion as of February 2021. The purpose of the FEES is to fund public debt payments and temporary deficit spending, in order to keep a countercyclical fiscal policy. The Pensions Reserve Fund (FRP) was built up in 2006 and amounted to USD 10.1 billion as of February 2021. The purpose of the FRP is to anticipate future needs of payments to those eligible to receive pensions, but whose contributions to the private pension system fall below a minimum threshold.

Chile is a member of the International Working Group of Sovereign Wealth Funds (IWG) and adheres to the Santiago Principles.

Chile’s government policy is to invest SWFs entirely abroad into instruments denominated in foreign currencies, including sovereign bonds and related instruments, corporate and high-yield bonds, mortgage-backed securities from U.S. agencies, and stocks.

7. State-Owned Enterprises

Chile had 29 state-owned enterprises (SOEs) in operation as of 2019. Twenty-eight SOEs are commercial companies and the newest one (FOINSA) is an infrastructure fund that was created to facilitate public-private partnership projects. 26 SOEs are not listed and are fully owned by the government, while the remaining three are majority government owned. Ten Chilean SOEs operate in the port management sector, seven in the services sector, three in the defense sector, three in the mining sector (including CODELCO, the world’s largest copper producer, and ENAP, an oil and gas company), two in transportation, one in the water sector, one is a TV station, and one is a state-owned bank (Banco Estado). The state holds a minority stake in four water companies as a result of a privatization process. In 2019, total assets of Chilean SOEs amounted to USD 74.2 billion, while their total net income was USD 556.7 million. SOEs employed 50,208 people in 2019.

Twenty SOEs in Chile fall under the supervision of the Public Enterprises System (SEP), a state holding in charge of overseeing SOE governance. The rest – including the largest SOEs such as CODELCO, ENAP and Banco Estado – have their own governance and report to government ministries. Allocation of seats on the boards of Chilean SOEs is determined by the SEP, as described above, or outlined by the laws that regulate them. In CODELCO’s corporate governance, there is a mix between seats appointed by recommendation from an independent high-level civil service committee, and seats allocated by political authorities in the government.

A list of SOEs made by the Budget Directorate, including their financial management information, is available in the following link: http://www.dipres.gob.cl/599/w3-propertyvalue-20890.html.

In general, Chilean SOEs work under hard budget constraints and compete under the same regulatory and tax frameworks as private firms. The exception is ENAP, which is the only company allowed to refine oil in Chile. As an OECD member, Chile adheres to the OECD Guidelines on Corporate Governance for SOEs.

Privatization Program

Chile does not have a privatization program.

8. Responsible Business Conduct

Awareness of the need to ensure corporate social responsibility has grown over the last two decades in Chile. However, NGOs and academics who monitor this issue believe that risk mapping and management practices still do not sufficiently reflect its importance.

The government of Chile encourages foreign and local enterprises to follow generally accepted Responsible Business Conduct (RBC) principles and uses the United Nations’ Rio+20 Conference statements as its principal reference. Chile adhered in 1997 to the OECD Guidelines for Multinational Enterprises. It also recognizes the ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy; the UN Guiding Principles on Business and Human Rights; the UN Global Compact’s Ten Principles and the ISO 26000 Guidance on Social Responsibility. The government established a National Contact Point (NCP) for OECD MNE guidelines located at the Undersecretariat for International Economic Relations, and has a Responsible Business Conduct Division, whose chief is also the NCP. In August 2017, Chile released its National Action Plan on Business and Human Rights based on the UN Guiding Principles. Separately, the Council on Social Responsibility for Sustainable Development, coordinated by Chile’s Ministry of Economy, is currently developing a National Policy on Social Responsibility. On January 31, 2020, the CMF closed the public comments period on proposed new annual reporting requirements on social responsibility and sustainable development by publicly traded companies.

Regarding procurement decisions, ChileCompra, the agency in charge of centralizing Chile’s public procurement, incorporates the existence of a Clean Production Certificate and an ISO 14001-2004 certificate on environmental management as part of its criteria to assign public purchases.

No high profile or controversial instances of corporate impact on human rights have occurred in Chile in recent years.

The Chilean government effectively and fairly enforces domestic labor, employment, consumer, and environmental protection laws. There are no dispute settlement cases against Chile related to the Labor and Environment Chapters of the Free Trade Agreements signed by Chile.

Regarding the protection of shareholders, the Superintendence of Securities and Insurance (SVS) has the responsibility of regulating and supervising all listed companies in Chile. Companies are generally required to have an audit committee, a directors committee, an anti-money laundering committee and an anti-terrorism finance committee. Laws do not require companies to have a nominating/corporate governance committee or a compensation committee. Compensation programs are typically established by the board of directors and/or the directors committee.

Independent NGOs in Chile promote and freely monitor RBC. Examples include NGO Accion RSE (http://www.accionrse.cl/), the Catholic University of Valparaiso’s Center for Social Responsibility and Sustainable Development VINCULAR (http://www.vincular.cl/) , ProHumana Foundation and the Andres Bello University’s Center Vitrina Ambiental.

Chile is an OECD member, but is not participating actively in the implementation of the OECD Due Diligence Guidance for Responsible Supply Chains of Minerals from Conflict-Afflicted and High-Risk Areas. Chile is not part of the Extractive Industries Transparency Initiative (EITI). Chile joined The Montreux Document on Private Military and Security Companies in 2009.

Additional Resources 

Department of State

Department of Labor

9. Corruption

Chile applies, in a non-discriminatory manner, various laws to combat corruption of public officials, including the 2009 Transparency Law that mandated disclosure of public information related to all areas of government and created an autonomous Transparency Council in charge of overseeing its application. Subsequent amendments expanded the number of public trust positions required to release financial disclosure, mandated disclosure in greater detail, and allowed for stronger penalties for noncompliance.

In March 2020, the Piñera administration proposed new legislation aimed at combatting corruption, as well as economic and electoral crimes. The four new pieces of legislation, part of the Piñera administration’s “anti-abuse agenda” launched in December 2019 in response to societal demands to increase penalties for white-collar crimes, seeks to strengthen enforcement and increase penalties for collusion among firms; increase penalties for insider trading; provide protections for whistleblowers seeking to expose state corruption; and expand the statute of limitations for electoral crimes.

Anti-corruption laws, in particular mandatory asset disclosure, do extend to family members of officials. Political parties are subject to laws that limit campaign financing and require transparency in party governance and contributions to parties and campaigns.

Regarding government procurement, the website of ChileCompra (central public procurement agency) allows users to anonymously report irregularities in procurement. There is a decree that defines sanctions for public officials who do not adequately justify direct contracts. The Corporate Criminal Liability Law provides that corporate entities can have their compliance programs certified. Chile’s Securities and Insurance Superintendence (SVS) authorizes a group of local firms to review companies’ compliance programs and certify them as sufficient. Certifying firms are listed on the SVS website.

Private companies have increasingly incorporated internal control measures, as well as ethics committees as part of their corporate governance, and compliance management sections. Additionally, Chile Transparente (Chilean branch of Transparency International) developed a Corruption Prevention System to provide assistance to private firms to facilitate their compliance with the Corporate Criminal Liability Law.

Chile signed and ratified the Organization of American States (OAS) Convention against Corruption. The country also ratified the UN Anticorruption Convention on September 13, 2006. Chile is also an active member of the Open Government Partnership (OGP) and, as an OECD member, adopted the OECD Anti-Bribery Convention.

NGOs that investigate corruption operate in a free and adequately protected manner.

U.S. firms have not identified corruption as an obstacle to FDI.

Resources to Report Corruption

David Ibaceta Medina
Acting Director General
Consejo para la Transparencia
Morande 360 piso 7
(+56)-(2)-2495-2000
contacto@consejotransparencia.cl

Alberto Precht
Executive Director
Chile Transparente (Chile branch of Transparency International)
Perez Valenzuela 1687, piso 1, Providencia, Santiago, Chile
(+56)-(2)-2236 4507
chiletransparente@chiletransparente.cl

Octavio Del Favero
Executive Director
Ciudadania Inteligente
Holanda 895, Providencia, Santiago
(+56)-(2)-2419-2770
https://ciudadaniai.org/contact 

Pía Mundaca
Executive Director
Espacio Publico
Santa Lucía 188, piso 7, Santiago, Chile
T: (+56) (9) 6258 3871
contacto@espaciopublico.cl

Observatorio Anticorrupción (Run by Espacio Publico and Ciudadania Inteligente)
https://observatorioanticorrupcion.cl/ 

Paula Díaz
Executive Director
Observatorio Fiscal (focused on public spending)
Don Carlos 2983, Oficina 3, Las Condes, Santiago, Chile
(+562) (2) 4572 975
contacto@observatoriofiscal.cl

10. Political and Security Environment

Pursuant to a political accord in response to the 2019 civil unrest, Chile held a plebiscite in October 2020 in which citizens voted to draft a new constitution. The process to create and ratify the new constitution will begin in 2021 and continue until at least mid-2022. Uncertainty over what changes could be made to Chile’s political and regulatory environment could negatively impact investor confidence. Importantly, the legislation enabling the constitutional reform process requires that the new constitution must respect Chile’s character as a democratic republic, its judicial sentences, and its international treaties (including the U.S.-Chile Free Trade Agreement). The coronavirus pandemic and government measures led to a reduction of vandalism and attacks on businesses that began in 2019.

Prior to 2019, there were generally a few incidents of politically motivated attacks on investment projects or installations with the exception of the southern Araucania region and its neighboring Arauco province in the southwest of Bio-Bio region. This area, home to nearly half a million indigenous inhabitants, has seen a growing trend of politically motivated violence and organized criminal activity. Land claims and conflicts with forestry companies are the main grievances underneath the radicalization of a relatively small number of indigenous Mapuche communities, which has led to the rise of organized groups that pursue their demands by violent means. Incidents include arson attacks on churches, farms, forestry plantations, forestry contractors’ machinery and vehicles, and private vehicles, as well as occupation of private lands, resulting in over a half-dozen deaths (including some by police forces), injuries, and damage to property. The indigenous issue has been further politicized due to anger among landowners, forestry transport contractors, and farmers affected by violence, as well as the illegal killing of a young Mapuche activist by special police forces in 2018 and the controversy over accusations of fraud by the police during the investigation of indigenous organized groups. In March 2020, a truck driver died in an arson attack on his vehicle.

Since 2007, Chile has experienced a number of small-scale attacks with explosive and incendiary devices, targeting mostly banks, police stations, and public spaces throughout Santiago, including ATM’s, metro stations, universities, and churches. Anarchist groups often claim responsibility for these acts, as well as violent incidents during student and labor protests. In January 2017, an eco-terrorist group claimed responsibility for a parcel bomb that detonated at the home of the chairman of the board of Chilean state-owned mining giant. The same group detonated a bomb of similar characteristics in 2019 at a bus stop in downtown Santiago, causing five injuries, and sent a letter bomb to the office of the president of the Metro system, which was defused by police. One suspect was arrested in 2019 and the investigation of the crimes is ongoing. Another group sent a package bombs to a police station in the Santiago metro area, wounding 8 police officers, and to a former Interior Minister, which was defused by police. Two suspects were arrested in 2020, and the investigation remains ongoing at the time of this report.

On occasion, illegal activity by striking workers resulted in damage to corporate property or a disruption of operations. Some firms have publicly expressed concern that during a contentious strike, law enforcement has appeared to be reluctant to protect private property.

Chilean civil society is active and demonstrations occur frequently. Although the vast majority of demonstrations are peaceful, protestors have veered off pre-approved routes. In a few instances, criminal elements have taken advantage of civil society protests to loot stores along the protest route and have clashed with the police. Demonstrations to mark March 29, the Day of the Young Combatant, and September 11, the anniversary of the 1973 coup against the government of President Salvador Allende, have resulted in damage to property.

11. Labor Policies and Practices

Unemployment in Chile averaged 10.7 percent of the labor force during 2020, while the labor participation rate was 56.1 percent of the working age population. Data on the labor participation of migrants is still pending. Chilean workers are adequately skilled and some sectors such as mining, agriculture, and fishing employ highly skilled workers. In general, there is an adequate availability of technicians and professionals. Estimates made by the National Institute of Statistics (INE) suggest informal employment in Chile constitutes 25.6 percent of the workforce.

Article 19 of the Labor Code stipulates that employers must hire Chileans for at least 85 percent of their staff, except in the case of firms with less than 25 employees. However, Article 20 of the Labor Code includes several provisions under which foreign employees can exceed 25 percent, independent of the size of the company.

In general, employees who have been working for at least one year are entitled to a statutory severance pay, upon dismissal without cause, equivalent to 30 days of the last monthly remuneration earned, for each year of service. The upper limit is 330 days (11 years of service) for workers with a contract in force for one year or more. The same amount is payable to a worker whose contract is terminated for economic reasons. Upon termination, regardless of the reason, domestic workers are entitled to an unemployment insurance benefit funded by the employee and employer contributions to an individual unemployment fund equivalent to three percent of the monthly remuneration. The employer’s contributions shall be paid for a maximum of 11 years by the same employer. Another fund made up of employer and government contributions is used for complementary unemployment payments when needed.

Labor and environmental laws are not waived in order to attract or retain investments.

Information on the current number of active unions and collective bargaining agreements is not available. During 2019 (latest data available), the Labor Directorate data showed that 11,926 unions were active. In the same period, 433,381 workers (around 5 percent of Chilean workers) were covered by collective bargaining agreements. Collective bargaining coverage rates are higher in the financial, mining, and manufacturing sectors. Unions can form nationwide labor associations and can affiliate with international labor federations. Contracts are normally negotiated at the company level. Workers in public institutions do not have collective bargaining rights, but national public workers’ associations undertake annual negotiations with the government.

The Labor Directorate under the Ministry of Labor is responsible for enforcing labor laws and regulations. Both employers and workers may request labor mediation from the Labor Directorate, which is an alternate dispute resolution model aimed at facilitating communication and agreement between both parties.

Labor Directorate data shows that 845 legal strikes occurred in 2019, involving 124,250 workers during the same period. As legal strikes in Chile have a restricted scope and duration, in general they do not present a risk for foreign investment.

Chile has and generally enforces laws and regulations in accordance with internationally recognized labor rights of: freedom of association and collective bargaining, the elimination of forced labor, child labor, including the minimum age for work, discrimination with respect to employment and occupation, and acceptable conditions of work related to minimum wage, occupational safety and health, and hours of work. The maximum number of labor hours allowed per week in Chile is 45. In September 2020, Chile raised its monthly minimum wage to CLP 326,500 – USD 444 – for all occupations, including household domestic staff, more than twice the official poverty line. Workers older than 64 or younger than 19 years old or younger are eligible for a special minimum wage of CLP 243,561 (USD 331) a month. There are no gaps in compliance with international labor standards that may pose a reputational risk to investors.

Collective bargaining is not allowed in companies or organizations dependent upon the Defense Ministry or whose employees are prohibited from striking, such as in health care, law enforcement, and public utilities. Labor courts can require workers to resume work upon a determination that a strike causes serious risk to health, national security, the supply of goods or services to the population, or to the national economy.

The United States-Chile Free Trade Agreement (FTA) entered into force on January 1, 2004. The FTA requires the United States and Chile to maintain effective labor and environmental enforcement.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source* USG or international statistical source USG or International
Source of Data: BEA; IMF;
Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2019 $282.318 2018 $298.258 www.worldbank.org/en/country 
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international
Source of data: BEA; IMF;
Eurostat; UNCTAD, Other
U.S. FDI in partner country (USD billion, stock positions) 2019 $35.46 2019 25.08 BEA data available at
https://apps.bea.gov/
international/factsheet/ 
Host country’s FDI in the United States (USD billion, stock positions) 2019 $13.19 2019 2.9 BEA data available at
https://www.bea.gov/international/
direct-investment-and-
multinational-enterprises-
comprehensive-data 
Total inbound stock of FDI as % host GDP 2019 91.0% 2019 56.6% UNCTAD data available at
https://stats.unctad.org/handbook/
EconomicTrends/Fdi.html 

* Source for Host Country Data: Central Bank of Chile.

According to the IMF’s Coordinated Direct Investment Survey (CDIS), total stock of FDI in Chile in 2019 amounted to USD 254.3 billion, compared to USD 251.9 billion in 2018. Spain, the United States and Canada are the main sources of FDI to Chile with USD 34.5 billion, USD 34.4 billion and USD 34.2 billion, respectively, concentrating 40.6 percent of the total.

Chile’s outward direct investment stock in 2019 remains concentrated in South America, where Brazil, Peru, Argentina and Colombia together represented 33.4 percent of total Chilean outward FDI. The United States accounted for 9.2 percent of the total.

The data below is consistent with host country statistics. Although not included in the table below, tax havens are relevant sources of inward FDI to Chile, with the Cayman Islands and Bermuda ranking sixth and eighth in inbound sources of FDI, respectively, according to the Central Bank of Chile. The British Virgin Islands and Panama rank sixth and seventh, respectively, among Chile´s main outward FDI destinations.

Table 3: Sources and Destination of FDI
Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 254,252 100% Total Outward 130,234 100%
Spain 34,541 13.6% Brazil 21,458 16.5%
Canada 34,426 13.5% Peru 12,909 9.9%
United States 34,213 13.5% United States 11,944 9.2%
The Netherlands 20,494 8.1% Argentina 9,226 7.1%
United Kingdom 18,773 7.4% Colombia 9,071 7.0%
“0” reflects amounts rounded to +/- USD 500,000.

According to the IMF’s Coordinated Portfolio Investment Survey (CPIS), total stock of portfolio investment in Chile as of June 2020 amounted to USD 192.1 billion, of which USD 149.9 billion were equity and investment funds shares, and the rest were debt securities. The United States and Luxembourg (a tax haven) were the main sources of portfolio investment to Chile with US $69.3 billion and $54.3 billion, representing 36.1 percent and 28.3 percent of the total, respectively. Both countries also represent 68 percent of the total of equity investment. Ireland, the United Kingdom and Germany are the following top sources of equity portfolio investment to Chile, while the United States, Mexico and Japan are the top sources of debt securities investment.

Table 4: Sources of Portfolio Investment
Portfolio Investment Assets
Top Five Partners (Millions, current US Dollars)
Total Equity Securities Total Debt Securities
All Countries 192,070 100% All Countries 149,887 100% All Countries 42,183 100%
United States 69,304 36.1% Luxembourg 54,115 36.1% United States 21,263 50.4%
Luxembourg 54,327 28.3% United States 48,041 32.1% Mexico 4,018 9.5%
Ireland 17,048 8.9% Ireland 16,995 11.3% Japan 3,068 7.3%
United Kingdom 7,171 3.7% United Kingdom 5,756 3.8% Germany 2,406 5.7%
Germany 5,587 2.9% Germany 3,181 2.1% United Kingdom 1,415 3.4%

14. Contact for More Information

Alexis Gutiérrez
Economic Specialist
Avenida Andrés Bello 2800, Las Condes, Santiago, Chile
(56-9) 4268 9005
gutierrezaj@state.gov 

Ireland

Executive Summary

The COVID-19 crisis has already had a serious impact on Ireland’s economy and will continue to do so in 2021. Since March 2020, the Irish government has implemented varying degrees of lockdown measures in response to the COVID-19 pandemic, including restrictions to close non-essential businesses and services for extended periods of time. Ireland’s official unemployment rate has remained around five percent (currently at 5.8 percent as of January 2021) due to the unprecedented pandemic related assistance programs to businesses and workers furloughed due to COVID-19. Due to the high number of individuals receiving pandemic wage subsidies, the official unemployment rate is still roughly five percent, much lower than what the Irish government expects without these programs. Including workers furloughed by the pandemic, the real unemployment rate has fluctuated in line with the three separate nationwide lockdowns in 2020 and 2021, increasing the unofficial unemployment rate to average at an estimated high of 20 percent. Despite the prolonged difficulties, Ireland’s economic projections remain positive and the strongest among the Eurozone countries with three percent economic growth in 2020. This is due to continued growth in exports by technology, pharmaceutical, and other large multinational companies headquartered in Ireland. The government is hopeful its emergency measures will help businesses and its once-sound economy to quickly return from its COVID-19 enforced hibernation.

The Irish government actively promotes foreign direct investment (FDI) and has had considerable success in attracting U.S. investment, in particular. There are over 900 U.S. subsidiaries in Ireland operating primarily in the following sectors: chemicals, bio-pharmaceuticals and medical devices, computer hardware and software, internet and digital media; electronics, and financial services.

One of Ireland’s many attractive features as an FDI destination is its 12.5 percent corporate tax (in place since 2003). Firms also choose Ireland for the quality and flexibility of the English-speaking workforce; the availability of a multilingual labor force; cooperative labor relations; political stability; and pro-business government policies and regulators. Additional positive features include a transparent judicial system; transportation links; proximity to the United States and Europe; and Ireland’s geographic location making it well placed in time zones to support investment in Asia and the Americas. Ireland benefits from its membership of the European Union (EU) and a barrier-free access to a market of almost 500 million consumers. In addition, the clustering of existing successful industries has created an ecosystem attractive to new firms. The United Kingdom’s (UK) departure from the EU, or Brexit, on January 1, 2021, leaves Ireland as the only remaining English-speaking country in the EU and may make Ireland even more attractive as a destination for FDI.

The Irish government treats all firms incorporated in Ireland on an equal basis. Ireland’s judicial system is transparent and upholds the sanctity of contracts, as well as laws affecting foreign investment. Conversely, Ireland’s ability to attract investment are often marred by: relatively high labor and operating costs (such as for energy); skilled-labor shortages; Eurozone-risk; a sometimes-deficient infrastructure (such as in transportation, housing, energy and broadband Internet); uncertainty in EU policies on some regulatory matters; and absolute price levels among the highest in Europe.

A formal national security screening process for foreign investment in line with the EU framework is still being developed. At present, investors looking to receive government grants or assistance through one of the four state agencies responsible for promoting foreign investment in Ireland are often required to meet certain employment and investment criteria.

Ireland uses the euro as its national currency and enjoys full current and capital account liberalization.

The government recognizes and enforces secured interests in property, both chattel and real estate. Ireland is a member of the World Intellectual Property Organization (WIPO) and a party to the International Convention for the Protection of Intellectual Property.

Several state-owned enterprises (SOEs) operate in Ireland in the energy, broadcasting, and transportation sectors. All of Ireland’s SOEs are open to competition for market share.

While Ireland has no bilateral investment treaties, the United States and Ireland have shared a Friendship, Commerce, and Navigation Treaty since 1950 that provides for national treatment of U.S. investors. The two countries have also shared a Tax Treaty since 1998, supplemented in December 2012 with an agreement to improve international tax compliance and to implement the U.S. Foreign Account Tax Compliance Act (FATCA).

Table 1: Key Metrics and Rankings
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2020 20 of 180 http://www.transparency.org/research/cpi/overview
World Bank’s Doing Business Report 2020 24 of 190 http://www.doingbusiness.org/en/rankings
Global Innovation Index 2020 15 of 131 https://www.globalinnovationindex.org/analysis-indicator
U.S. FDI in partner country ($M USD, historical stock positions) 2019 $354,940 https://apps.bea.gov/international/factsheet/
World Bank GNI per capita 2019 $64,000 http://data.worldbank.org/indicator/NY.GNP.PCAP.CD

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

The Irish government actively promotes FDI, a strategy that has fueled economic growth since the mid-1990s. The principal goal of Ireland’s investment promotion has been employment creation, especially in technology-intensive and high-skill industries. More recently, the government has focused on Ireland’s international competitiveness by encouraging foreign-owned companies to enhance research and development (R&D) activities and to deliver higher-value goods and services.

U.S. companies in particular are attracted to Ireland as an exporting sales and support platform to the EU market of almost 500 million consumers and other global markets. Ireland is a successful FDI destination for many reasons, including a low corporate tax rate of 12.5 percent for all domestic and foreign firms; a well-educated, English-speaking workforce; the availability of a multilingual labor force; cooperative labor relations; political stability; and pro-business government policies and regulators. Ireland also benefits from a transparent judicial system; good transportation links; proximity to the United States and Europe, and the drawing power of existing companies operating successfully in Ireland (a so-called “clustering” effect).

The stock of American FDI in Ireland stood at USD 355 billion in 2019, more than the U.S. total for China, India, Russia, Brazil, and South Africa (the so-called BRICS countries) combined. There are approximately 900 U.S. subsidiaries currently in Ireland employing roughly 180,000 people and supporting work for another 128,000. This figure represents a significant proportion of the 2.31 million people employed in Ireland. U.S. firms operate primarily in the following sectors: chemicals, bio-pharmaceuticals and medical devices, computer hardware and software, internet and digital media; electronics, and financial services.

U.S. investment has been particularly important to the growth and modernization of Irish industry over the past thirty years, providing new technology, export capabilities, management and manufacturing best practices, and employment opportunities. Ireland has more recently become an important R&D center for U.S. firms in Europe, and a magnet for U.S. internet and digital media investment. Industry leaders like Google, Amazon, eBay, PayPal, Facebook, Twitter, LinkedIn, Electronic Arts and cybersecurity firms like Tenable, Forcepoint, AT&T Cybersecurity, McAfee use Ireland as the hub or important part of their respective European, and sometimes Middle Eastern, African, and/or Indian operations.

Factors that challenge Ireland’s ability to attract investment include relatively high labor and operating costs (such as for energy); sporadic skilled-labor shortages; the fall-out from the COVID-19 pandemic; and sometimes-deficient infrastructure (such as in transportation, energy and broadband quality). Ireland also suffers from housing and high-quality office space shortages; and absolute price levels that are among the highest in Europe. The American Chamber of Commerce in Ireland has called for greater attention to a “skills gap” in the supply of Irish graduates to the high technology sector. It also has asserted that relatively high personal income tax rates can make attracting talent from abroad difficult.

In 2013, Ireland became the first country in the Eurozone to exit a financial bailout program from the EU, European Central Bank, and International Monetary Fund (EU/ECB/IMF, or so-called Troika). Compliance with the terms of the Troika program came at a substantial economic cost with gross domestic product (GDP) stagnation and austerity measures, while dealing with high unemployment (which hit 15 percent). Strong economic progress followed through government-backed initiatives to attract investment and stimulate job creation and employment. This helped economic recovery and Ireland’s economy was the one of the fastest growing economies in the Eurozone area annually to 2019. As a result, unemployment levels fell dramatically and by the end of 2019 reached 4.7 percent. In addition, the Irish government has successfully returned to international sovereign debt markets and successful treasury bonds sales, at low interest rates, exemplify renewed international confidence in Ireland’s economic progress. Despite the prolonged difficulties caused by the COVID-19 pandemic, Ireland’s economic performance continued to be the best in the Eurozone in 2020 with an estimated three percent growth, achieved on the back of strong exports from the food, pharmaceutical and med-tech sectors.

Brexit and its Implications for Ireland

The UK’s exit from the EU (Brexit) on January 1, 2021, leaves Ireland as the only remaining English-speaking country in the bloc. The UK is now a non-EU member that shares a land border with Ireland. . The December 2020 agreement dictates the future trading relationship between the UK and the EU and will likely have an affect on Ireland’s economic performance. The agreement allows for tariff-free Ireland – Great Britain (England, Scotland and Wales) trade but comes with increased customs procedures. Existing Ireland – Northern Ireland trade continues unimpeded. While some disruption has been noticed in the supply chain of retail and agricultural sectors (due to their traditional use of the UK “land-bridge” to move products to and from the EU), Irish companies have generally been able to find alternate routes (i.e., using ferries from Ireland directly to continental Europe, though this has raised costs in some sectors.

With Brexit, Ireland has lost a close EU ally on policy matters, particularly free trade and business friendly open markets. Ireland continues to be heavily dependent on the UK as an export market and source especially for food products, and the full effect of Brexit may yet hit sectors such as food and agri-business with disruptions to supply chains and increased red-tape. Irish trade with its EU colleagues has already seen a dramatic switch to direct shipping rather than using Great Britain as a land-bridge for trucking products. A number of UK-based firms (including U.S. firms) have moved headquarters or opened subsidiary offices in Ireland to facilitate ease of business with other EU countries. The Irish Department of Finance and the Central Bank of Ireland (CBI) have estimated Brexit will cut Ireland’s economic growth modestly in the near term but such models are complicated with the ongoing COVID-19 pandemic.

Industrial Promotion

Six government departments and organizations have responsibility to promote investment into Ireland by foreign companies:

  • The Industrial Development Authority of Ireland (IDA Ireland) has overall responsibility for promoting and facilitating FDI in all areas of the country. IDA Ireland is also responsible for attracting foreign financial and insurance firms to Dublin’s International Financial Services Center (IFSC). IDA Ireland maintains seven U.S. offices (in New York, NY; Boston, MA; Chicago, IL; Mountain View, CA; Irvine, CA; Atlanta, GA; and Austin, TX), as well as offices throughout Europe and Asia.
  • Enterprise Ireland (EI) promotes joint ventures and strategic alliances between indigenous and foreign companies. The agency assists entrepreneurs establish in Ireland and also assists foreign firms that wish to establish food and drink manufacturing operations in Ireland. EI has six existing offices in the United States (Austin, TX; Boston, MA; Chicago, IL; New York, NY; San Francisco, CA; and Seattle, WA and has offices in Europe, South America, the Middle East, and Asia.
  • Shannon Group (formerly the Shannon Free Airport Development Company) promotes FDI in the Shannon Free Zone (SFZ) and owns properties in the Shannon region as potential green-field investment sites. Since 2006, the responsibility for investment by Irish firms in the Shannon region has passed to Enterprise Ireland while IDA Ireland remains responsible for FDI in the region.
  • Udaras na Gaeltachta (Udaras) has responsibility for economic development in those areas of Ireland where the predominant language is Irish, and works with IDA Ireland to promote overseas investment in these regions.
  • Department of Foreign Affairs (DFA) has responsibility for economic messaging and supporting the country’s trade promotion agenda as well as diaspora engagement to attract investment.
  • Department of Enterprise, Trade and Employment (DETE) supports the creation of jobs by promoting the development of a competitive business environment where enterprises can operate with high standards and grow in sustainable markets.

Limits on Foreign Control and Right to Private Ownership and Establishment

Irish law allows foreign corporations (registered under the Companies Act 2014 or previous legislation and known locally as a public limited company, or plc for short) to conduct business in Ireland. Any company incorporated abroad that establishes a branch in Ireland must file certain papers with the Companies Registration Office (CRO). A foreign corporation with a branch in Ireland has the same standing in Irish law for purposes of contracts, etc., as a domestic company incorporated in Ireland. Private businesses are not competitively disadvantaged to public enterprises with respect to access to markets, credit, and other business operations.

No barriers exist to participation by foreign entities in the purchase of state-owned Irish companies. Residents of Ireland may, however, be given priority in share allocations over all other investors. There are no recent example of this, but Irish residents received priority in share allocations in the 1998-sale of the state-owned telecommunications company Eircom. The government privatized the national airline Aer Lingus through a stock market flotation in 2005, but chose to retain about a one-quarter stake. At that time, U.S. investors purchased shares in the sale. The International Airlines Group (IAG) purchased the government’s remaining stake in the airline in 2015, and subsequently took an overall controlling interest which it continues to hold.

Citizens of countries other than Ireland and EU member states can acquire land for private residential or industrial purposes. In the past, all non-EU nationals needed written consent from the Department of Agriculture, Food and the Marine before acquiring an interest in land zoned for agricultural use but these limitations no longer exist. There are many equine stud farms and racing facilities owned by foreign nationals. No restrictions exist on the acquisition of urban land.

Ireland does not yet have formal investment screening legislation in place but is in the process of drafting the legislation which is expected to be enacted in 2021. (The bill was delayed due to the government’s efforts to respond to the COVID-19 pandemic.) As a member of the EU, Ireland is required to implement any common EU investment screening regulations or directives such as the EU Framework.

Other Investment Policy Reviews

The Economist Intelligence Unit and World Bank’s Doing Business 2020 provide current information on Ireland’s investment policies.

Business Facilitation

All firms must register with the Companies Registration Office (CRO online at www.cro.ie). The CRO, as well as registering companies, can also register a business/trading name, a non-Ireland based foreign company (external company), or a limited partnership. Any firm or company registered under the Companies Act 2014 becomes a body corporate as and from the date mentioned in its certificate of incorporation. The CRO website permits online data submission. Firms must submit a signed paper copy of this online application to the CRO, unless the applicant company has already registered with www.revenue.ie (the website of Ireland’s tax collecting authority, the Office of the Revenue Commissioners).

The Ireland pages in the following links gives the most up-to-date information:

https://www.doingbusiness.org/en/data/exploretopics/starting-a-business#close  and https://investmentpolicy.unctad.org/country-navigator/102/ireland 

Outward Investment

Enterprise Ireland assists Irish firms in developing partnerships with foreign firms mainly to develop and grow indigenous firms.

3. Legal Regime

Transparency of the Regulatory System

Ireland’s judicial system is transparent and upholds the sanctity of contracts, as well as laws affecting foreign investment. These laws include:

  • The Companies Act 2014, which contains the basic requirements for incorporation in Ireland;
  • The 2004 Finance Act, which introduced tax incentives to encourage firms to set up headquarters in Ireland and to conduct R&D;
  • The Mergers, Takeovers and Monopolies Control Act of 1978, which sets out rules governing mergers and takeovers by foreign and domestic companies;
  • The Competition (Amendment) Act of 1996, which amends and extends the Competition Act of 1991 and the Mergers and Takeovers (Control) Acts of 1978 and 1987, and sets out the rules governing competitive behavior; and,
  • The Industrial Development Act (1993), which outlines the functions of IDA Ireland.

The Companies Act (2014), with more than 1,400 sections and 17 Schedules, is the largest-ever Irish statute. The Act consolidated and reformed all Irish company law for the first time in over 50 years.

In addition, numerous laws and regulations pertain to employment, social security, environmental protection and taxation, with many of these keyed to EU regulations and directives.

International Regulatory Considerations

Ireland has been a member of the EU since 1973. As a member, it incorporates all EU legislation into national legislation and applies all EU regulatory standards and rules. Ireland is a member of the World Trade Organization (WTO) and follows all WTO procedures.

Legal System and Judicial Independence

Ireland’s legal system is common law. Courts , are presided over by judges appointed by the President of Ireland (on the advice of the government). The Commercial Court is a designated court of the High Court which deals with commercial disagreements between businesses where the value of the claim is at least €1 ($1.2) million. The Commercial Court also oversees cases on intellectual property rights, including trademarks and trade secrets.

Laws and Regulations on Foreign Direct Investment

Ireland treats all firms incorporated in Ireland on an equal basis. With only a few exceptions, no constraints prevent foreign individuals or entities from ownership or participation in private firms/corporations. The most significant of these exceptions is that, in common with other EU countries, Irish airlines must be at least 50 percent owned by EU residents to have full access to the single European aviation market. Citizens of countries other than Ireland and EU member states can acquire land for private residential or industrial purposes.

One of Ireland’s many attractive features as an FDI destination is its low corporate tax rate. Since 2003, the headline corporate tax rate is 12.5 percent, among the lowest in the EU.

In 2014, the government announced firms would no longer be able to incorporate in Ireland without also being tax resident. Prior to this, firms could incorporate in Ireland and be tax resident elsewhere, making use of a tax avoidance arrangement colloquially known as the “Double Irish” to reduce tax liabilities.

The Irish government has indicated it will adhere to future decisions reached through the OECD’s Base Erosion and Profit Sharing (BEPS) negotiations and ratified the BEPS Multilateral Instrument in January 2019. The government implemented a Knowledge Development Box (KDB), effective 2016, which is consistent with OECD guidelines. The KDB allows for the application of a tax rate of 6.25 percent on profits arising to certain intellectual property assets that are the result of qualifying research and development activities carried out in Ireland.

Competition and Antitrust Laws

The Competition and Consumer Protection Commission (CCPC) is an independent statutory body with a dual mandate to enforce competition and consumer protection law in Ireland. The CPCC was established in 2014, following the amalgamation of the National Consumer Agency and the Competition Authority. The CPCC enforces Irish and EU competition law in Ireland. It has the power to conduct investigations and can take civil or criminal enforcement action if it finds evidence of breaches of competition law.

The Competition Act of 2002, subsequently amended and extended by the Competition Act 2006, mandates the enforcement power of the CCPC. The Act introduced criminal liability for anti-competitive practices, increased corporate liability for violations, and outlined available defenses. Most tax, labor, environment, health and safety, and other laws are compatible with EU regulations, and they do not adversely affect investment. The government publishes proposed drafts of laws and regulations to solicit public comment, including those by foreign firms and their representative trade associations. Bureaucratic procedures are transparent and reasonably efficient, in line with the general pro-business approach of the government.

The Irish Takeover Panel Act of 1997 gives the ‘Irish Takeover Panel’ responsibility for monitoring and supervising takeovers and other relevant corporate transactions. The minority squeeze-out provisions in the legislation, allows a bidder who holds 80 percent of the shares of the target firm (or 90 percent for firms with securities on a regulated market) to compel the remaining minority shareholders to sell their shares. There are no reports that the Irish Takeover Panel Act has prevented foreign takeovers, and, in fact, there have been several high-profile foreign takeovers of Irish companies in the banking and telecommunications sectors in the past. Although not recent, Babcock & Brown (an Australian investment firm) acquired the former national telephone company, Eircom in 2006 which it subsequently sold to Singapore Technologies Telemedia in 2009.

The EU Directive on Takeovers provides a framework of common principles for cross-border takeover bids, creates a level playing field for shareholders, and establishes disclosure obligations throughout the EU. Irish legislation fully implemented the Directive in 2006, though the Irish Takeover Panel Act 1997 had already incorporated many of its principles.

Companies must notify the CCPC of mergers over a certain financial threshold for review as required by the Competition Act 2002, as amended (Competition Act).

Expropriation and Compensation

The government normally expropriates private property only for public purposes in a non-discriminatory manner and in accordance with established principles of international law. The government condemns private property in accordance with recognized principles of due process.

The Irish courts provide a system of judicial review and appeal where there are disputes brought by owners of private property subject to a government action.

Dispute Settlement

There is no specific domestic body for handling investment disputes apart from the judicial system. The Irish Constitution, legislation, and common law form the basis for the Irish legal system. DETE has primary responsibility for drafting and enforcing company law. The judiciary is independent, and litigants are entitled to trial by jury in commercial disputes.

ICSID Convention and New York Convention

Ireland is a member of the International Center for the Settlement of Investment Disputes (ICSID) and a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, meaning local courts must enforce international arbitration awards under appropriate circumstances.

Some U.S. business representatives have occasionally called into question the transparency of Irish government tenders. According to some U.S. firms, lengthy procedural decisions often delay the procurement tender process. Unsuccessful bidders have expressed concerns over difficulties receiving information on the rationale behind the tender outcome. In addition, some successful bidders have experienced delays in finalizing contracts, commencing work on major projects, obtaining accurate project data, and receiving compensation for work completed, including through conciliation and arbitration processes. Some successful bidders have also subsequently found that the original tenders may not have accurately described conditions on the ground.

Bankruptcy Regulations

The Companies Act 2014 is the most important body of law dealing with commercial and bankruptcy law, which Irish courts consistently apply. Irish company bankruptcy legislation gives creditors a strong degree of protection. Ireland is ranked 18 (of 190) for ease of resolving insolvencies in World Bank’s Doing Business Report 2019.

4. Industrial Policies

Investment Incentives

Three Irish organizations – IDA Ireland, EI, and Udaras – have regulatory authority for administering grant aid to investors for capital equipment, land, buildings, training, and R&D. Foreign and domestic business enterprises seeking grant aid from these organizations must submit detailed investment proposals. These proposals typically include information on fixed assets (capital), labor, and technology/R&D components, and establish targets using criteria such as sales, profitability, exports, and employment. The submitted information is business confidential, and each investment proposal is subject to an economic appraisal before support is offered or denied.

Ireland’s investment agencies and foreign investors jointly establish employment creation targets, which usually serve as the basis for performance requirements. The agencies only pay grant aid after the foreign investors have attained externally audited performance targets. Grant-aid agreements generally have a repayment term of five years after the date on which the last installment is paid. Parent companies of the investor generally must also guarantee repayment of the government grant if the grant-aided company closes before an agreed period of time elapses, normally ten years after the grant was paid. There are no requirements foreign investors must procure locally, or allow nationals to own shares.

The current EU Regional Aid Guidelines (RAGs), due to expire in 2020, were prolonged until the end of 2021. The RAGs govern the maximum grant-aid the Irish government can provide to firms/businesses which are graded based on their location. The differences in the various aid ceilings reflect the relative development status of business/infrastructure in regions outside the greater Dublin area.

Investors are generally free, subject to planning permission, to choose the location of their investment, however IDA Ireland has actively encouraged investment in regions outside Dublin since the 1990s. Investment regionalization became government policy in 2001. IDA Ireland set out its plan to secure 800 investments and generate 50,000 new jobs by 2025 in its Driving Recovery and Sustainable Growth 2021 – 2024 strategy. IDA Ireland’s goal is to locate over 50 percent of all new FDI investments outside the two main urban centers of Dublin and Cork, and has developed regional hubs to facilitate clusters of activity around the country. IDA Ireland has in the past supported construction of business parks in counties Galway and Louth, to encourage biotechnology sector activity in those counties.

There are no restrictions on participation by foreign firms in government-financed and/or -subsidized R&D programs on a national basis. In fact, the government strongly encourages and incentivizes (via a partial tax break) foreign companies to conduct R&D as part of its national strategy to build a more knowledge-intensive, innovation-based economy. Science Foundation Ireland (SFI), the state science agency, has been responsible for administering Ireland’s R&D funding since 2000. Under its current strategy, SFI is investing over USD 200 million annually in R&D activities. SFI targets leading researchers in Ireland and overseas to promote the development of biotechnology, information and communications technology; and energy. SFI has specific research centers of excellence – hubs that draw researchers from all of Ireland’s universities together for research on specific themes.

The U.S.-Ireland Research and Development Partnership (UIRDP), launched in 2006, is a unique initiative involving funding agencies across three jurisdictions: the United States, Ireland, and Northern Ireland (NI). Under the program, a ‘single-proposal, single-review’ mechanism is facilitated by the National Science Foundation and National Institutes of Health in the United States, which accept submissions from tri-jurisdictional (U.S., Ireland, and NI) teams for existing funding programs. All proposals submitted under the auspices of UIRDP must have significant research involvement from researchers in all three jurisdictions. In 2015, the UIRDP program topics expanded to include agricultural research; and in 2019 cybersecurity research was also incorporated as a topic.

A key aspect of government support is a tax credit on the cost of eligible research, development, and innovation (RDI) activity; and on buildings used for RDI activity. A tax credit of 25 percent is subject to certain conditions and is available for R&D activities carried out in a wide variety of science and technology areas such as software development, engineering, food and beverage production, medical devices, pharmaceuticals, financial services, agriculture and horticulture. A number of U.S. firms have already used these tax credits to build and operate R&D facilities.

The Irish government’s Knowledge Development Box (KDB), introduced in 2016, also offers a lower tax rate for certain R&D activities carried out in Ireland.

Foreign Trade Zones/Free Ports/Trade Facilitation

The government established Shannon duty-free Processing Zone under legislation in 1957. Firms operating in the area were at the time entitled to a number of taxation and duty-free benefits not available elsewhere in Ireland. Nowadays, all firms in Ireland are treated equally and the Shannon Free Zone (SFZ) as it is now called, continues to operate albeit without any additional tax benefits.

All firms operating in the SFZ area have the same investment opportunities and tax incentives as indigenous Irish companies. More than 150 companies operate within the 254-hectare business park. U.S. companies are located in SFZ include: Benex (Becton Dickinson), Connor-Winfield, Digital River, Enterasys Networks, Extrude Hone, GE Capital Aviation Services, GE Money, Sensing, Genworth Financial, Intel, Illinois Tool Works, Kwik-Lok, Lawrence Laboratories (Bristol Myers Squibb), Le Bas International, Magellan Aviation Services, Maidenform, Melcut Cutting Tools (SGS Carbide Tools), Mentor Graphics, Phoenix American Financial Services, RSA Security, Shannon Engine Support (CFM International), SPS International/Hi-Life Tools (Precision Castparts Corp), Sykes Enterprises, Symantec, Travelsavers Corp, Viking Pump, Western Well Tool, Xerox, and Zimmer Biomet.

The Shannon Group currently operates the SFZ, as well as Shannon Airport.

Performance and Data Localization Requirements

Visa, residence, and work permit procedures for foreign investors are non-discriminatory and, for U.S. citizens (as investors or employees), generally liberal. No restrictions exist on the numbers of, and duration of employment for, foreign managers brought in to supervise foreign investment projects, though all work permits must be renewed annually. There are no discriminatory export policies or import policies affecting foreign investors.

Data Storage

The government does force localization nor does it require foreign information technology providers to turn over source code and/or provide access to surveillance (e.g., backdoors into hardware and software, or encryption keys). There are no rules on maintaining minimum amounts of data storage in Ireland. Many U.S. firms already operate, and are planning for additional, data centers in Ireland

5. Protection of Property Rights

Real Property

The government recognizes and enforces secured interests in property, both chattel and real estate. The Department of Justice and Equality (DJE) administers a reliable system of recording such security interests through the Property Registration Authority (PRA) and Registry of Deeds. The PRA registers a person’s interest in property on a public register. All property buyers must since 2010 register their acquisition with the PRA.

Ireland also operates a document registration system through the Registry of Deeds in which deeds (as distinct from titles) may be registered, priority obtained, and third parties placed on notice of the existence of documents of title. An efficient, non-discriminatory legal system is accessible to foreign investors to protect and facilitate acquisition and disposition of all property rights

Ireland ranks 26 (of 190) in the latest World Bank’s Doing Business Index for registering property.

Intellectual Property Rights

Ireland is a member of the World Intellectual Property Organization (WIPO) and party to many of its treaties, including the Berne Convention, the Paris Convention, the Patent Cooperation Treaty, the WIPO Copyright Treaty, and the WIPO Performances and Phonograms Treaty.

Legislation enacted in 2000 brought Irish intellectual property rights (IPR) law into compliance with Ireland’s obligations under the WTO Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement. The legislation gave Ireland one of the most comprehensive legal frameworks for IPR protection in Europe. It also addressed several TRIPs inconsistencies in prior Irish copyright law that had concerned foreign investors, including the absence of a rental right for sound recordings, the lack of an anti-bootlegging provision, and low criminal penalties that failed to deter piracy. The legislation provides for stronger penalties on both the civil and criminal sides, but it does not include minimum mandatory sentencing for IPR violations. As part of this comprehensive legislation, revisions were also made to non-TRIPS conforming sections of Irish patent law.

Specifically, the IPR legislation addressed two outstanding concerns of many foreign investors in the previous legislation:

  • The compulsory licensing provisions of the previous 1992 Patent Law were inconsistent with the “working” requirement prohibition of TRIPs Articles 27.1 and the general compulsory licensing provisions of Article 31; and,
  • Applications processed after December 20, 1991 did not previously conform to the non-discrimination requirement of TRIPs Article 27.1.

The government continues to crack down on the sale of illegal cigarettes smuggled into the country by international and local organized criminal groups. High taxation on tobacco products makes illegal trade in counterfeit and untaxed cigarettes highly lucrative. Ireland became the first European country, and fourth globally, to enact legislation on plain packaging for tobacco products via The Public Health (Standardized Packaging of Tobacco) Act in 2015. In practice, all tobacco packaging is devoid of branding, and health warnings cover nearly the entire box with only the producer/product name otherwise visible. The legislation has been in force since September 2018.

The Irish government has transcribed the 2012 EU Copyright and Related Rights Regulations into law. This legislation makes it possible for copyright holders to seek court injunctions against firms, such as internet service providers (ISPs) or social networks, whose systems host copyright-infringing material. Irish courts ensure any remedy provided will uphold the freedom of ISPs to conduct their business. The legislation ensures that the government cannot mandate any ISP to carry out monitoring of information. The legislation also ensures that measures implemented are “fair and proportionate” and not “unnecessarily complicated or costly.” The law also states that the Courts must respect the fundamental rights of ISP customers, including the customers’ right to protection of personal data and the freedom to receive or impart information.

The government enacted the Copyright and Other Intellectual Property Law Provisions Act in 2019. The legislation improves provision for copyright and other IPR protection in the digital era, and its enables rights holders to better enforce their IPR in the courts.

DETE is expected to issue draft legislation implementing the EU’s 2019 Copyright Directive in the near future, having held four consultations in 2019 and with June 2021 as the implementation deadline. Some parts of the Irish Copyright and Other Intellectual Property Law Provisions Act, enacted in 2019, already reflect aspects of the 2019 EU Copyright Directive, but it does not make specific reference to the Directive itself and further implementation is, therefore, required.

Ireland is the main European, Middle East and Africa (EMEA) headquarters for many global technology companies, and while the government says it is fully committed to the intentions of the 2019 EU Copyright Directive, it says it is also conscious of the need to strike the right balance in doing so.

Ireland is not included on the U.S. Trade Representative’s (USTR’s) Special 301 Report or the Notorious Markets List.

For additional information about Ireland’s legislation and IP points of contact, please see WIPO’s country profiles at https://www.wipo.int/directory/en/details.jsp?country_code=IE 

6. Financial Sector

Capital Markets and Portfolio Investment

Capital markets and portfolio investments operate freely with no discrimination between Irish and foreign firms. In some instances, development authorities and commercial banks facilitate loan packages to foreign firms with favorable credit terms. All loans are offered on market terms. There was limited credit available, especially to small and medium-sized enterprises (SMEs), after the financial crisis of 2008. Bank balance sheets have since improved with lending levels increasing as the health of the economy improved. The government established the Strategic Banking Corporation of Ireland (SBCI) to ensure SMEs had access to credit available at market terms. Irish legal, regulatory, and accounting systems are transparent and consistent with international norms and provide a secure environment for portfolio investment. The current capital gains tax rate is 33 percent (since December 2012).

Euronext, an EU-based grouping of stock exchange operators in 2018 acquired and operates the Irish Stock Exchange (ISE), now known as Euronext Dublin.

Money and Banking System

The Irish banking sector, like many worldwide, came under intense pressure in 2007 and 2008 following the collapse of Ireland’s construction industry and the end of Ireland’s property boom. A number of Ireland’s financial lenders were severely under-capitalized and required government bailouts to survive. The government, fearing a flight of private investments, introduced temporary guarantees (still in operation) to personal depositors in 2008 to ensure that deposits remained in Ireland. Anglo Irish Bank (Anglo), a bank heavily involved in construction and property lending, failed and was resolved by the government. The government subsequently took majority stakes in several other lenders, effectively nationalized two banks and acquired a significant proportion of a third. The National Asset Management Agency (NAMA), established in 2009, acquired most of the property-related loan books of the Irish banks (including Anglo) at a fraction of their book value.

The government, with its increased exposure to bank debts and a rising budget deficit, had difficulty in placing sovereign debt on international bond markets following the economic crash of 2008. Ireland had to seek assistance from the Troika (International Monetary Fund (IMF), EU and European Central Bank (ECB)) in November 2010. A rescue package of EUR 85 ($110) billion with EUR 67.5 ($88) billion of this provided by the Troika was agreed to cover government deficits and costs related to the bank recapitalizations.

The government then took effective control of Allied Irish Bank (AIB), following a further recapitalization by the end of 2010. The government took into state control, and then resolved, two building societies, Irish Nationwide Building Society and Educational Building Society. The government helped re-capitalize Irish Life and Permanent (the banking portion of which was spun off and now operates under the name Permanent TSB) and the Bank of Ireland (BOI).

Irish banks were forced to deleverage their non-core assets in line with Troika bailout program recommendations and were effectively limited to service domestic banking demand. BOI succeeded in remaining non-nationalized by realizing capital from the sale of non-essential portfolios and by imposing some targeted burden sharing with some of its bondholders. The government sold just over 28 percent of its shareholding in AIB Bank in July 2017, but it still retains the remainder of the shareholding.

Soon after it exited the Troika program in 2013, Ireland re-entered sovereign debt markets. International financing rates continued to fall to record lows for Irish debt, and Ireland was able to fully repay all of it’s IMF loans by securing bond sales at less expensive rates. Ireland also paid off some bilateral loans extended to it by Denmark and Sweden ahead of schedule in 2017. Currently, Ireland is placing its debt at very low, and sometimes negative, interest rates.

Ireland’s retail banking sector rebounded from the crisis and is now healthy and well capitalized in line with ECB rules on bank capitalizations. The stock of non-performing loans on bank balance sheets remains high; and banks continue to divest themselves of these loans through bundle sales to investors. Ulster Bank, part of the UK-based NatWest Banking group and Ireland’s third largest retail bank, announced its withdrawal from retail banking in Ireland, in early 2021. Ulster Bank, which has not yet set its date for full departure, is expected to sell its loan books to other financial institutions including to Ireland’s remaining retail banks

The Central Bank of Ireland (CBI) is responsible for both central banking and financial regulation. The CBI is a member of the European System of Central Banks (ESCB), whose primary objective is to maintain price stability in the euro area.

There are a large number of U.S. banks with operations in Ireland, many of whom are located in Dublin’s International Financial Services Center (IFSC) Dublin. The IFSC originally functioned somewhat like a business park for financial services firms. U.S. banks located in Ireland provide a range of financial services to clients in Europe and worldwide. Among these firms are State Street, Citigroup, Merrill Lynch, Wells Fargo, JP Morgan, and Northern Trust. The regulation of the international banks operating throughout Ireland falls under the jurisdiction of the CBI.

Ireland is part of the Eurozone, and therefore does not have an independent monetary policy. The ECB formulates and implements monetary policy for the Eurozone and the CBI implements that policy at the national level. The Governor of the CBI is a member of the ECB’s Governing Council and has an equal say as other ECB governors in the formulation of Eurozone monetary and interest rate policy. The CBI also issues euro currency in Ireland, acts as manager of the official external reserves of gold and foreign currency, conducts research and analysis on economic and financial matters, oversees the domestic payment and settlement systems, and manages investment assets on behalf of the State.

Foreign Exchange and Remittances

Foreign Exchange

Ireland uses the euro as its national currency and enjoys full current and capital account liberalization. Foreign exchange is easily available at market rates. Ireland is a member of the Financial Action Task Force (FATF).

Remittance Policies

There are no restrictions or significant reported delays in the conversion or repatriation of investment capital, earnings, interest, or royalties, nor are there any announced plans to change remittance policies. Likewise, there are no limitations on the import of capital into Ireland.

Sovereign Wealth Funds

The National Treasury Management Agency (NTMA) is the asset management bureau of the government. NTMA is responsible for day-to-day funding for government operations normally through the sale of sovereign debt worldwide. NTMA is also responsible for investing Irish government funds, such as the national pension funds, in financial instruments worldwide.

Ireland suspended issuing sovereign debt upon entering the Troika bailout program in 2010 but has been successfully placing Irish debt since Ireland’s 2013 exit from the Troika program,

The NTMA also has oversight of the National Asset Management Agency (NAMA), the agency established to take on, and dispose of, the property-related loan books of Ireland’s bailed-out banks.

The Ireland Strategic Investment Fund (ISIF) established in 2014 has the statutory mandate to invest on a commercial basis to support economic activity and employment in Ireland. The dual objective mandate of the ISIF – investment return and economic impact –requires all of its investments to generate returns as well as having a positive (i.e. job-creating) economic impact in Ireland. The ISIF assisted a number of small and medium sized enterprises during Ireland’s economic revival.

7. State-Owned Enterprises

There are a number of SOEs in Ireland operating in the energy, broadcasting, and transportation sectors.

Eirgrid is the SOE with responsibility of managing and operating the electricity grid on the island of Ireland. (Eirgrid has a sister company SONI in Northern Ireland). There are two energy SOEs – Electric Ireland (for electricity) and Ervia, formerly Bord Gáis Eireann, (for natural gas). Raidió Teilifís Éireann (RTE) operates the national broadcasting (radio and television) service while Córas Iompair Éireann (CIE) provides bus and train transportation throughout the country.

The government privatized both Eircom (the national telecommunication service) and Aer Lingus (the national airline). CIE remains wholly owned by the government. Irish Water (which operates as a subsidiary of Ervia) began operations in 2013 to serve as the state-owned entity delivering water services (previously delivered by local authorities) to homes and businesses. New residential water charges (previously funded from general government revenue) were introduced by Irish Water in 2015 and subsequently suspended in 2016. Irish Water continues to deliver water services with the cost of domestic water supplies paid by the government.

All of Ireland’s SOEs are open to competition for market share and can, as in the case of Electric Ireland and Ervia, compete with one another. The SOEs do not discriminate against, or place unfair burdens on, foreign investors or foreign-owned investments. There has been a statutory transfer of responsibility for the regulatory functions for the energy sector from the government to the Commission for Regulation of Utilities. This statutory body is required to not discriminate unfairly between participants in the sector, while protecting the end-user.

SOEs generally pay their own way, finance their operations and fund further expansion through profits generated from their own operations. Some SOEs pay an annual dividend to the government. A board of directors usually governs a SOE with some of these directors appointed by the government.

Privatization Program

Ireland does not have a formal privatization program but the government agreed in 2010, as part of the Troika program, to privatize some of its state-owned and semi-state owned enterprises. The government nominated but has not yet sold some non-strategic elements of Ervia (formerly Bord Gais Eireann, the gas supply company). The government indicated that it may sell the electricity generating arm of Electric Ireland, an electricity supply company, but has not yet done so.

8. Responsible Business Conduct

A growing awareness of corporate social responsibility (CSR) in Ireland is mainly driven by a number of independent organizations and multinational corporations. According to “Business in the Community–Ireland,” an organization at the forefront of promoting CSR in Ireland, many of the participant firms believe CSR-oriented policies can play a major role in rebuilding Ireland’s corporate reputation. Companies advertise their participation in such programs as the Fairtrade Certification Mark. The American Chamber of Commerce in Ireland has also released its own report documenting the widespread CSR efforts of American affiliate firms in the country.

The government promotes responsible business conduct in Ireland. Its national action plan “Towards Responsible Business – Ireland’s National Plan on Corporate Social Responsibility 2017- 2020″ aims to support businesses in Ireland to create sustainable jobs; embed responsible practices in the marketplace; embrace diversity and promote responsible workplaces; and encourage enterprises to consider their businesses’ impacts on the environment. It gives effect to the UN Guiding Principles on Business and Human Rights and sets out the Irish government’s commitments to promoting responsible business practice at home and overseas.

Ireland, as an adherent to the OECD Guidelines for Multinational Enterprises, established a National Contact Point (NCP) responsible for promoting CSR/RBC and facilitating mediation when complaints arise regarding a company not observing the Guidelines. Contact information for the NCP is: https://enterprise.gov.ie/en/What-We-Do/Trade-Investment/OECD-Guidelines-NCP/ 

Additional Resources

Department of State

Department of Labor

9. Corruption

Corruption is not a serious problem for foreign investors in Ireland. The principal Irish legislation relating to anti-bribery and corruption is the Criminal Justice (Corruption Offences) Act of 2018. The Act consolidates all previous legislation for the prevention of corruption. The legislation makes it illegal for Irish public servants to accept bribes. The Ethics in Public Office Act, 1995, provides for the written annual disclosure of interests of people holding public office or employment.

The law on corruption in Ireland gives effect in domestic law to the OECD Anti-Bribery Convention and other conventions concerning criminal corruption and corruption involving officials of the European Union and officials of EU member states. Irish legislation ensures there are strong penalties in place with prison terms of up to ten years and an ‘unlimited’ fine, for those found guilty of offenses under the Act, including convictions of bribery of foreign public officials by Irish nationals and companies that takes place outside of Ireland.

Irish police (An Garda Siochana, or Garda) investigate all allegations of corruption. The Director of Public Prosecutions is responsible for preparing files for prosecution, on detection of sufficient evidence of criminal activity. The government has, in the past, convicted a small number of public officials for corruption and/or bribery. In 1996, Ireland established the Criminal Asset Bureau (CAB), an independent body responsible for seizing illegally acquired assets. CAB has the powers to focus on the illegally acquired assets of criminals involved in organized crime by identifying criminally acquired assets of persons, and taking the appropriate action to deny such people of these assets. Any CAB action is primarily taken through the application of the Proceeds of Crime Act, 1996 legislation. Ireland is a member of the Camden Asset Recovery Inter-Agency Network (CARIN).

UN Anticorruption Convention, OECD Convention on Combatting Bribery

Ireland signed the UN Convention on Corruption in December 2003 and ratified it in 2011. Ireland is also a participating member of the OECD Working Group on Bribery.

Resources to Report Corruption

Government agency responsible for combating corruption:

Department of Justice and Equality, Crime and Security Directorate
94 St. Stephen’s Green
Dublin 2
Telephone: + 353 1 602-8202
E-mail: info@justice.ie 
Website: www.justice.ie 

Contact at Transparency International:

John Devitt
Chief Executive
Transparency International
Floor 2
69 Middle Abbey St
Dublin 2
Telephone: +353 1 554 3938
E-mail: Admin@transparency.ie 

10. Political and Security Environment

There has been no significant spillover of violence from Northern Ireland since the ceasefires of 1994 and the signing and implementation of the Good Friday Agreement (GFA) in 1998. The cessation of violence in Northern Ireland led to increased business investment and confidence in Northern Ireland which also benefited Ireland. The GFA designated funding to develop cross-border cooperation on R&D collaboration, create energy and transportation infrastructure linkages, and for joint trade missions participation. No violence related to the situation in Northern Ireland has been specifically directed at U.S. citizens or firms located in Ireland.

Other Acts of Political Violence

There have been some incidents of criminal terrorism and gangland violence attributed to cross-border groups believed to be involved in the black market. There is considerable Garda and Police Service Northern Ireland (PSNI) cooperation to stem any illegal activity.

There have been no recent incidents involving politically motivated damage to foreign investment projects and/or installations in Ireland. There were some instances of damage to U.S. military assets transiting Shannon Airport in 2003 and later in 2011 by a small number of Irish citizens opposed to wars in Iraq and Afghanistan. In 2017, two anti-war activists defaced a U.S. aircraft with graffiti. The Garda arrested two peace protesters as they attempted to gain illegal access to Shannon airport runways in 2019. Other than these incidences of anti-military acts, there have been no acts against U.S. firms or private interests in Ireland.

11. Labor Policies and Practices

Ireland’s population reached 4.98 million in April 2020 an increase of 55,900 on 2019 levels. Net migration in the year to April 2020 was 28,900 persons. The total number of persons employed at the end of 2019 was 2.36 million but this contracted to 2.31 by the end of 2020 following the onset of the COVID-19 pandemic. Employment opportunities continue to attract inward migrations particularly for employees with language skills. Ireland’s unemployment rate peaked at 15.1 percent in early 2012 following the 2008 collapse of Ireland’s construction industry. In the following years employment levels rebounded, the unemployment rate improved and by February 2020 had fallen to 5.0 percent (which for Ireland is considered near full-employment levels).

The onset of the COVID-19 pandemic brought with it three lockdowns of the economy (in April, October and December 2020) with maximum restrictions on movements and a sharp rise in the numbers receiving temporary government employment supports. Temporary government unemployment supports (pandemic unemployment payments) were put in place to keep employees linked to their employers to assist in a rapid return to operations following the lockdowns. The COVID-19 adjusted unemployment rate for Ireland stood at 24.8 percent (with an underlying unemployment rate of 5.8 percent) in February 2021. The Central Bank of Ireland forecasts Ireland’s unemployment rate will average of 9.3 percent in 2021 before declining to 7.8 percent in 2022 contingent on the full re-opening of the economy and a successful vaccination roll-out.

Average hourly labor costs in Ireland increased by 5.5 percent in 2020. During 2020, average industrial earnings increased by 5.4 percent to 964 euro (USD 1,101) per week. The government mandated minimum wage rate was increased by 0.10 euro to 10.20 euro ($12.50) per hour from January 2021, with lower rates set for younger and less experienced workers.

The government regulates the Irish labor force less than governments in most continental EU countries. The workforce has a high degree of flexibility, mobility, and education. There is relative gender balance in the workforce, with 1,245,200 males and 1,061,000 females employed in 2020. The gender balance reflects a societal change and government support that facilitated a surge in female employment from the mid-1980s. There are no restrictions on the hiring of non-national labor, and many firms, especially in the technology sector, hire young professionals with a diverse range of language and technology skills.

Ireland, since the mid-1990’s, is an attractive destination for foreign investment due to the availability of a young, highly educated workforce. The removal of tuition fees for third-level (university) education in 1995 resulted in a rapid increase of third-level qualified graduates. While tuition fees are paid by the government, students must still pay registration fees, currently capped at 3,000 euro ($ 3,675) per academic year. The availability of highly educated and qualified potential employees in Ireland is an attractive feature for employers looking to locate in the EU and has been a significant factor in attracting the already large number of multinational companies located in Ireland. Over 60 percent of new third-level students in Ireland undertake business, engineering, computer science, or science courses. The focus of government strategy has shifted to upgrading skills and increasing the number of workers in technology-intensive, high-value sectors to ensure the availability of an educated workforce.

The onset of the COVID-19 pandemic introduced mass teleworking to Ireland. The huge change in work practice came almost overnight and despite the immense change, workers and their employers seem to have adapted well. Key to Ireland’s teleworking success was the access to good broadband services. Adequate broadband is already available in most urban areas while the government’s national broadband plan to bring high speed broadband to all areas is still rolling out. It is likely that these plans may be accelerated to get earlier delivery of broadband services in more rural parts of the island.

The Irish system of industrial relations is voluntary. Employers and employees generally agree on pay levels and conditions of employment through collective bargaining. There are generally good industrial relationships and very few industrial disputes. There were just seven labor disputes in 2020 down from nine in 2019. (Note: Pandemic measure are likely to have affected the number of disputes in 2020. End note). A series of agreements between the government and public service labor unions in place since 2010 have in general reduced public service labor disputes.

Employers typically resist trade union demands for mandatory trade/labor union recognition in the workplace. While the Irish Constitution guarantees the right of citizens to form associations and unions, Irish law also affirms the right of employers to withhold union recognition and to deal with employees on an individual basis. One quarter of all workers are unionized but there is much higher participation by public sector workers in unions. The government estimates up to 80 percent of workers in foreign-owned firms do not belong to unions. This may reflect more attractive pay, benefits, and conditions by these employers compared with domestic firms. DBEI explicitly addressed the country’s collective bargaining rights through an amendment of existing legislation in the Industrial Relations (Amendment) Act 2015.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

U.S. and foreign companies with major foreign direct investments in Ireland include: Abbott, AdRoll, Adobe, Alcatel-Lucent/Bell Labs, Aldi, Alexion, Allianz, Analog Devices, AOL, Apple, Aramark, Avolon, AWS, Axa, BAM, Bank of America Merrill Lynch, Biotrin, BNY Mellon, Boots, Boston Scientific, BT, Citi, Coca Cola, Consensys, DellEMC, Dropbox, eBay, Eli Lilly,  Ericsson, Etsy, Facebook, Fidelity, Generali, Gilead, Google, GSK, Heineken, HPE, Huawei, Hubspot, IBM, Indeed, Intel, Johnson & Johnson, JP Morgan, Kellogg’s, Lidl, Liebherr, LinkedIn, Mastercard, Microsoft, Merit Medical, MSD (Merck Sharp & Dohme), Northern Trust, Oracle, PayPal, Pfizer, Qualtrics, Quantcast, Regeneron, Salesforce.com, Sanofi, SAP, ServiceSource, Servier, Siemens, State Street, Stream Global Services, Tesco, Teva, Twitter, UnitedHealth Group, United Technologies Research Centre, Vodafone, Waters, Wuxi Biologics, Yahoo!, Zeus, and Zurich.

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source* USG or international statistical source USG or International Source of Data:
Economic Data Year Amount Year Amount
Host Country Gross Domestic Product (GDP) ($M USD) 2019 $406,681 2019 $406,681 Eurostat
https://ec.europa.eu/eurostat 
Foreign Direct Investment Host Country Statistical source* USG or international statistical source USG or international Source of data: 
U.S. FDI in partner country ($M USD, stock positions) 2019 $354,940 BEA
Host country’s FDI in the United States ($M USD, stock positions) 2019 $343,538 BEA
Total inbound stock of FDI as % host GDP 2019 20.2% UNCTAD     

Note:  Host country’s FDI inbound and outbound data is not shown as it relates to 2018

*Source for Host Country Data: Central Statistics Office (www.cso.ie)

Table 3: Sources and Destination of FDI
Direct Investment from/in Counterpart Economy Data
From Top Five Sources/To Top Five Destinations (US Dollars, Millions)
Inward Direct Investment Outward Direct Investment
Total Inward 1,152.371 100% Total Outward 1,085,924 100%
United States 248,888 21% Luxembourg 472,418 44%
Bermuda 197,855 17% United States 140,077 13%
Netherlands 101,017  9% United Kingdom 108,392 10%
Switzerland 98,356  9% Netherlands 66,429  6%
Luxembourg 77,777  7% Bermuda 52,293  5%
“0” reflects amounts rounded to +/- USD 500,000.
Table 4: Sources of Portfolio Investment
Portfolio Investment Assets
Top Five Partners (Millions, current US Dollars)
Total Equity Securities Total Debt Securities
All Countries 3,820,372 100% All Countries 1,563,928 100% All Countries 2,256,444 100%
United States 1,198,777 31% United States 579,573 37% United States 619,203 27%
UK 780,126 20% UK 178,595 11% UK 601,531 27%
France 221,546 6% Luxembourg 114,016 7% France 171,849 8%
Germany 150,597 4% Japan 79,379 5% Germany 99,121 4%
Japan 129,518 3% Cayman Islands 71,568 5% Netherlands 95,774 4%

14. Contact for More Information

Peter Lee
Economic Affairs Chief
American Embassy, Dublin, Ireland
Telephone: +353-1-630 6274 / Cell Phone: +353-87-623-1201
Email: LeePH@state.gov 

Michael Hanley
Economic Specialist
American Embassy, Dublin, Ireland
Telephone: +353-1-630-6254 / Cell Phone: +353-86-014-4040
Email: HanleyMJ@state.gov 

Finola Cunningham
Senior Commercial Representative
Foreign Commercial Service
American Embassy, Dublin, Ireland
Telephone: +353-1-237-5849 / Cell Phone: +353-87-258-7740
Email: Finola.cunningham@trade.gov 

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