Representing the seventh largest economy in the Western Hemisphere, the Chilean economy is considered by many economists to be the most stable and prosperous in Latin America and the Caribbean. The Organization of Economic Cooperation and Development (OECD) contends that Chile’s solid macroeconomic policy framework has smoothed adjustment to the end of the commodity boom, contributing to low unemployment, resilient household consumption, and a stable financial sector. Due to its attractive investment climate, participation in over 60 free trade agreements, and reputation for strong financial institutions and sound policies, Chile also boasts the strongest sovereign bond rating in South America. The country’s economy grew 1.4 percent in 2017, and following the election of President Sebastian Pinera, the International Monetary Fund (IMF) increased the forecast for Chile’s economic growth in 2018 from 2.5 percent to 3.0 percent.
Chile has a successful track record of attracting Foreign Direct Investment (FDI), despite the relatively small size of its domestic market. The country’s market-oriented policies have generated and supported significant opportunities for foreign investors to participate in the country’s economic growth. Chile has a sound legal framework, and private property rights, including foreign ownership and establishment, are generally respected. Sectors that tend to attract significant investment include mining, financial services, 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. While corruption exists, Chile consistently rates among the least corrupt countries in Latin America and ranked 24 out of 176 countries globally on Transparency International’s 2016 Corruption Perceptions Index.
Although Chile is an attractive destination for foreign investment, challenges remain. Intellectual property (IP) rights are generally respected, but Chile has not fully complied with its IP obligations set forth in the U.S.-Chile FTA. Reforms launched by the previous center-left administration have also increased the complexity of and costs to comply with corporate tax and labor regimes. Environmental permitting processes, indigenous consultation requirements, and court proceedings are increasingly unpredictable, especially in cases with political sensitivities. Communities can be hostile to large investment projects and are adept at using the court system and mandatory indigenous consultation requirements to obstruct them. The current administration has prioritized attracting foreign investment and is implementing measures to streamline the permitting process, including through the creation of the office of large investment projects.
|TI Corruption Perceptions
|2017||26 of 175||http://www.transparency.org/
|World Bank’s Doing Business Report “Ease of Doing Business”||2017||55 of 190||www.doingbusiness.org/rankings|
|Global Innovation Index||2017||46 of 128||https://www.globalinnovationindex.org/
|U.S. FDI in partner country (M USD, stock positions)||2016||29,428||http://www.bea.gov/
|World Bank GNI per capita||2016||USD 13,540||http://data.worldbank.org/
1. Openness To, and Restrictions Upon, Foreign Investment
Policies Towards Foreign Direct Investment
Chile has a successful track record of attracting foreign direct investment (FDI), despite the relatively small size of its domestic market. For over three decades, promoting FDI has been an essential part of the Chilean government’s national development strategy. The country’s market-oriented policies have generated and supported significant opportunities for foreign investors to participate in the country’s economic growth. While Chile’s business climate is generally straightforward and transparent, environmental permitting processes, indigenous consultation requirements, and court proceedings are increasingly unpredictable, especially in cases with political sensitivities.
Foreign investors receive treatment similar to Chilean nationals, and laws and practices are not discriminatory against foreign investment.
The Chilean Investment Promotion Agency (APIE), also known as InvestChile, implements Chile’s FDI attraction policy. It provides services in four categories: attraction (offer of investment opportunities and value propositions), pre-investment (specialized advisory services for decision-making), landing (advice for installation, matchmaking and management of inquiries related to other government agencies), and after-care (assistance for exporting and forging linkages with domestic suppliers). The latter is aimed at retaining FDI inflows by encouraging re-investment.
Limits on Foreign Control and Right to Private Ownership and Establishment
Foreign investors have access to all productive activities, except for the internal waterways freight transportation sector, in which foreign equity ownership of companies is capped at 49 percent. 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 to individuals and companies for exploration and exploitation activities, and to assign contracts to private investors. These concessions and contracts are assigned without discrimination against foreign investors.
FDI is subject to pro forma screening by InvestChile. Businesses in general do not consider these screening mechanisms barriers to investment because approval procedures are expeditious and, with the exception of a few sensitive sectors, investments are usually approved. InvestChile must approve all investments exceeding USD 5 million, as well as investments in the media and public services, and investments made by foreign governments or by foreign public entities.
U.S. investors are not disadvantaged or singled out by any of the ownership or control mechanisms, sector restrictions, or investment screening mechanisms, relative to other foreign investors.
Other Investment Policy Reviews
The Government of Chile conducted an investment policy review as part of the Trade Policy Review published by the World Trade Organization (WTO) in June 2015, available here: . The Organization for Economic Co-operation and Development (OECD) has not conducted an Investment Policy Review for Chile since 1997, and the country has not been covered by the United Nations Conference on Trade and Development’s (UNCTAD) Investment Policy Reviews.
The Chilean government took significant steps towards business facilitation, and according to the World Bank, Chile has the smoothest procedures to establish a foreign-owned company in Latin America and the Caribbean. The pace of reform has been particularly rapid since 2010.
Entrepreneurs have to go through six steps, some of them simultaneous, taking in total less than five days:
- Draft statutes of the company and obtain an authorization number. [Note: Since 2013, this step can be done online at the platform .];
- Register the company online, using an advanced electronic signature (a token) and obtaining a tax payer ID number (RUT), which is also the company Registration ID;
- Give online notice of initiation of activities to the Internal Tax Service ( );
- Print receipts/invoices in an authorized printing company and seal them, along with accounting books, and other documents at the Internal Tax Service. [Note: This step has been replaced by the mandatory use of electronic invoicing on August 1, 2016, for firms with annual sales over a threshold of nearly USD 100,000];
- Obtain a working license from the corresponding municipality for each of the enterprise’s establishments, offices, warehouses, etc.;
- Register to obtain labor-related accident insurance, which is mandatory for employers, either with the Institute of Occupational Safety (public) or with one of three private nonprofit entities.
Procedures to start a business in Chile are the same for men and women. No special assistance is offered for women and/or underrepresented minorities in the economy.
The Government of Chile does not have an active policy of promotion or incentives for outward investment, nor does it impose restrictions on it.
2. Bilateral Investment Agreements and Taxation Treaties
BITs or FTAs
According to ICSID, Chile has signed 55 Bilateral Investment Treaties (BITs), 36 of which are in force to date. There are agreements in force with Argentina, Austria, Belgium and Luxembourg, Bolivia, Colombia, Costa Rica, Croatia, Cuba, Czech Republic, Denmark, Ecuador (which will no longer be in force from May 22nd 2018), El Salvador, Finland, France, Germany, Greece, Guatemala, Honduras, Iceland, Italy, Malaysia, Nicaragua, Norway, Panama, Paraguay, Philippines, Poland, Portugal, Romania, South Korea, Spain, Sweden, Switzerland, Ukraine, the United Kingdom and Venezuela.
Chile has 26 FTAs with 64 countries. On January 1, 2004, the United States and Chile brought into force the investment chapter in our bilateral FTA. Chile has additional investment chapters in force under FTAs with Australia, Canada, China (Supplementary Investment Agreement to the FTA), Colombia, Japan, Mexico, Republic of Korea, Peru and the Pacific Alliance (composed of 4 countries: Chile, Colombia, Mexico and Peru). Chile also signed a new generation bilateral investment agreement with Uruguay that entered into force in 2012. FTAs with investment chapters that have been signed but have not entered into force include the Investment Agreement with Hong Kong SAR (Supplementary Investment Agreement to the FTA), the Comprehensive and Progressive Transpacific Partnership (CPTPP), and the Chile-Argentina FTA. Chile is currently negotiating investment chapters that are part of FTA negotiations between the Pacific Alliance and Associated States (Australia, Canada, New Zealand and Singapore), and between Chile and the European Union.
Bilateral Taxation Treaties
Chile and the United States signed in 2010 the U.S.-Chile Treaty to Avoid Double Taxation. The Chilean Congress ratified the treaty in September 2015. In May 2012, it was submitted to the U.S. Senate and is still pending ratification. Chile has 32 double taxation treaties in force with Argentina, Australia, Austria, Belgium, Brazil, Canada, China, Colombia, Croatia, Czech Republic, Denmark, Ecuador, France, Ireland, Italy, Japan, Malaysia, Mexico, New Zealand, Norway, Paraguay, Peru, Poland, Portugal, Russia, South Africa, South Korea, Spain, Sweden, Switzerland, Thailand and the United Kingdom. Chile’s double taxation treaty with Uruguay is also pending congressional ratification.
Chile’s 2014 tax reform increased the effective income tax rate on dividends or profits earned by Chilean residents in other countries up to 44.45 percent. This change is only applied to residents from countries without a bilateral taxation treaty in force with Chile (such as the United States), while residents from the 32 countries with such a treaty maintain this tax burden at 35 percent.
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 and permitting processes in particular have become lengthy and unpredictable, especially in politically sensitive cases, due to mandatory indigenous consultation requirements arising from Chile’s ratification of the International Labor Organization’s Indigenous and Tribal Peoples Convention (ILO 169).
Four institutions play key roles in the rule-making process in Chile: the Ministry 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 in its institutional set up. Most regulations are decided at the national level; however, some, in particular those related to permit processing for land use, are decided at the local level.
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. The OECD recommends that Chile create a regulatory oversight body to oversee the rule-making process currently managed by different government departments. It also recommends that Chile develop mandatory standards and guidelines for the preparation of laws and regulations, including compulsory consultation practices and forward planning, and the use of management tools such as regulatory impact assessments and ex-post evaluations.
Regulatory processes are managed by governmental entities. NGOs and private sector associations may participate in public hearings or comment periods.
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 1, 2018, IFRS 9 entered into force for companies in all sectors except for banking, in which IFRS 15 will be applied. IFRS 16 will enter into force in 2019.
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 (except as per ILO 169), conducting regulatory impact assessments of proposed regulations, requesting comments, or reporting results of consultations on proposed regulations. 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 regular manner.
All decrees and laws are published in the Diario Oficial (National Gazette), but other types of regulations will not necessarily be found there. There are no other centralized online locations where regulations in Chile are published, similar to the Federal Register in the United States.
According to the OECD, compliance rates in Chile are generally high, although there is no monitoring mechanism that can prove this finding. The approach to enforcement remains punitive rather than preventive, and regulators still prefer to inspect rather than collaborate with regulated entities on fostering compliance. In terms of sanctions, each institution with regulation enforcement responsibilities has its own 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. However, the Agriculture and Transportation Ministries have taken steps to create units designed to improve the preparation and implementation of regulations. In 2014, the government created the National Productivity Commission, which includes among its main functions the identification of regulatory constraints to increase productivity and recommendations to overcome them.
International Regulatory Considerations
Chile does not share regulatory sovereignty with any regional economic bloc. However, several international norms or standards are referenced or incorporated into the country’s regulatory system.
As a member of the WTO, the government notifies draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT). Chile ratified the Trade Facilitation Agreement (TFA) in November 2016. Chile implemented a new law modernizing the Customs Service in March 2017.
Legal System and Judicial Independence
Chile’s legal system is based on civil law. The basis for its public law is the 1980 Constitution, which was most recently reformed in 2005. 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.
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
See the section on Policies Towards Foreign Direct Investment.
Competition and Anti-Trust Laws
Foreign investors are not required to seek a ruling on the potential competition implications of a planned investment. 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 Antitrust Court that a planned investment would not have antitrust implications. The National Economic Prosecutor (FNE) is in charge of conducting investigations for competition-related cases and filing complaints before the Free Competition Tribunal (TDLC), which rules on those cases.
In October 2015, paper manufacturers CMPC and Sweden’s SCA subsidiary PISA were accused of having colluded for at least a decade to inflate prices in the Chilean tissue and toilet paper markets. The companies agreed to a compensation plan with the National Consumer Service to reimburse Chilean citizens in 2017.
In August 2016, the FNE accused two pharmaceutical companies, Laboratorio Biosano and Fresenius Kabi Chile and Laboratorio Sanderson (local subsidiaries of Germany-based Fresenius), of forming a cartel to rig bids in public tenders for the procurement of ampoules. Hearings took place during 2017 and will extend through 2018. The FNE is demanding that the TDLC impose fines on Sanderson and Fresenius Kabi Chile amounting to more than USD 18 million. Biosano has entered into a leniency agreement.
In 2015, the FNE opened an investigation into Oracle for potential abuse of market dominance regarding database management systems (DBMS software). On April 2018, the company agreed with the FNE on a plan to improve its practices related to information sharing with its users.
Expropriation and Compensation
Chilean law grants the government authority to expropriate property, including property of foreign investors, only for public or national interests, 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 have only taken place in a transparent manner, and generally when the purpose is to build roads or other types of infrastructure. The law requires the payment of compensation without delay at fair market value, in addition to any applicable interest.
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 has been in force since 2004 and includes an investment chapter. This chapter provides a mechanism for investors to pursue a claim against a host government that is in breach of the FTA’s investment obligations, an investment agreement, or an investment authorization. The investor pursuing a claim may by right submit a claim under the ICSID Convention or under the United Nations Commission on International Trade Law (UNCITRAL) arbitration rules, or any other mutually agreed upon arbitral institution. So far no claims have been filed by U.S. investors under the agreement.
Over the past 10 years, the only investment dispute involving a U.S. person or other foreign investor was one case brought by a Spanish-Chilean citizen against the state of Chile regarding the expropriation of a newspaper in 1975 by Chile’s military regime. On September 13, 2016, the World Bank’s Washington-based International Center for Settlement of Investment Disputes (ICSID) tribunal issued a final ruling in favor of the Chilean state, rejecting the claimant’s request for financial compensation. However, a new case was brought by the same person in April 2017 and is now pending resolution.
Local courts respect and enforce foreign arbitral 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 tribunal must also accept amicus curiae submissions. 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 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.
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 is not given the right to 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.
Chile’s credit reporting system is a negative-only system with some positive data elements, which distributes data on both firms and individuals, including data from retailers, utility companies, as well as banks and financial institutions. Chile has a competitive commercial credit bureau industry in which agencies not owned by creditors (the largest of which is Equifax) coexist with non-commercial, creditor association reporting such as the National Chamber of Commerce.
4. Industrial Policies
The Chilean government generally does not subsidize foreign investment. There are, however, some incentives directed to 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, Start-Up Chile programs provide selected entrepreneurs with grants for USD 15,000 to USD 80,000, along with a Chilean work visa to develop a “startup” business in Chile over a period of 4 to 7 months. Chile has other special incentive programs aimed at promoting investment and employment in remote regions (Arica and Parinacota, Tarapaca, Aysen, Magallanes, Chiloe and Palena provinces of the Los Lagos region), 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. Zofri is the main FTZ located in Iquique.
Performance and Data Localization Requirements
Chile mandates that 85 percent of workforces must be local employees. Exceptions are described in Section 12. 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 currently pending approval by 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 also proposes the creation of an independent Chilean Data Protection Agency that would be responsible for enforcing data protection standards. Private sector legal experts believe that this draft legislation would impose fewer restrictions on the international transfer of commercial data compared to current U.S. law.
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
Secured interests in real property are recognized and generally enforced in Chile. Chile ranked 61 out of 190 economies in the “Registering Property” category of the World Bank’s 2017 Doing Business report. There is a recognized and generally reliable system for recording mortgages and other forms of liens.
There are no time limits for the property rights acquired by foreigners to remain in force, nor are there restrictions on foreign ownership of buildings and land. The only exception, based on national security grounds, is for land located in border territories, which may not be owned by nationals of border countries, or by juridical persons who have their head office in such country or are owned 20 percent by nationals of such country, or controlled by them, without prior authorization of the President of Chile.
In the 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. There are no restrictions to foreign and/or non-resident investors regarding land lease or acquisition.
Unoccupied properties can always be claimed by their legal owners and, as usurpation is criminalized, several kinds of eviction procedures are allowed by the law.
Chile has significant housing credit depth for its income level. The mortgage market as a share of GDP has grown around one percentage point of GDP per year since 1990 and currently is at nearly 20 percent, well above other South American countries and similar to markets in Poland and the Czech Republic. Mortgage bonds are regulated by the Central Bank’s financial rules and specific regulations by the SBIF. Endorsable mortgage loans are regulated by the General Law on Banks and specific SBIF regulations.
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 voluntary notification system; and provides for civil and procedural remedies. However, IP protection challenges remain. Chile has been on USTR’s Special 301 Priority Watch List (PWL), determined in an annual review of the global state of IP protection and enforcement, since January 2007. (See Section C for more details.) Chile’s framework to promote action against satellite piracy, as well as trade secret protection, has been deemed insufficient by private stakeholders. Pharmaceutical and agrochemical 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. Additional challenges have arisen within the pharmaceutical industry of late, particularly Resolution 398 signed in March 2018, which grants non-voluntary licensing to Hepatitis C drug Sofosbuvir, patented in Chile, for reasons of public health. See section B below for more details.
According to the World Intellectual Property Organization (WIPO) Country Profile study, Chile has modified its IP law several times during the past two decades, adapting it to the standards set forth in the TRIPS Agreement and several of its FTAs. The last amendment to Chile’s IP Law, from February 2012, incorporated certain provisions agreed by Chile through the signature of the Trademark Law Treaty (TLT) and the Patent Cooperation Treaty (PCT). A pending draft bill submitted to Congress in April 2013 would replace Chile’s Industrial Property Law. According to the National Institute of Industrial Property (INAPI), the new IP law would reduce timeframes for patent-related procedures, eliminates unnecessary formalities and promotes online procedures. The bill has received numerous modifications in the Senate and is awaiting further passage, but no urgency has been assigned to it by the Executive Branch.
On March 9, 2018, Chile’s Ministry of Health issued a resolution citing sufficient “public health reasons” to support a compulsory license on Sofosubuvir, a drug patented in Chile for the treatment of Hepatitis-C, following a petition from an NGO and pressure from legislators in the Chilean Congress. The pharmaceutical industry maintains that granting a non-voluntary license on patented drugs sends a clear message to innovators that they cannot rely on IP protection in this market.
The Intellectual Property Brigade (BRIDEPI) of the Chilean Investigative Police (PDI) reported that in 2017 Chile seized 546,721 items with a total value of USD 7.1 million, and arrested 108 individuals on charges related to IPR infringement. Additionally, as a result of the implementation of the Illicit Traffic Control Plan (PCTI), the National Customs Service seized more than 8.7 million illegal merchandise items in 2017, 96.7 percent higher than the previous year. According to the National Customs Service, the value of these seizures totals nearly USD 96 million, which represents an increase of 142 percent compared to 2016. Toys, shoes, cellphones, clothes and cigarettes are the most prominent products seized during the year.
Chile’s IPR enforcement remains, according to the WIPO report mentioned above, 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. Rights holders indicate a need for greater resources devoted to customs operations and a better-defined 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 Special 301 Priority Watch List (PWL) since January 8, 2007, and remains on the 2018 Priority Watch List. The main challenges are related to longstanding IPR issues under the U.S.-Chile FTA: the implementation of measures against circumvention of technological protection; remedies for rights holders and satellite and cable service providers, including measures related to decoder boxes; pending implementation of UPOV 91; the implementation of an effective system for addressing patent issues expeditiously 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. On a positive note, a draft bill aimed to criminalize satellite piracy passed the Chilean Senate in September 2017, and now awaits passage in the Lower Chamber of the Congress, representing a possible first sign of progress on IP issues for Chile.
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. U.S.-based 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 does not rank high in terms of 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-dependent economy.
Chile has accepted the obligations of Article VIII (sections 2, 3 and 4) and maintains a free floating exchange rate system, free of restrictions on the making of payments and transfers for current international transactions.
Credit is allocated on market terms and is available to foreigners, although the Central Bank does reserve 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 third of Chileans have a credit card from a bank, but a lower proportion (15 percent) has 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 sound and competitive, and many Chilean banks already meet Basel III standards. Capital adequacy ratios remain stable (around 14 percent as of February 2018). Stress tests conclude that the banking system has an adequate financial position to face the materialization of severe stress scenarios. Capital adequacy ratios are robust even when including discounts due to market and/or operational risks.
Non-performing loans have shown a steadily decreasing trend during the last five years, across all three major portfolios (mortgage lending below 3 percent, commercial loans slightly above 2 percent, and consumer loans around 1.5 percent), when measured by the standard 90 days past due criterion.
The Chilean banking system’s total assets, as of February 2018, amounted to USD 378.5 billion, according to the Superintendence of Banks and Financial Institutions. The largest 4 banks account for approximately 63 percent of banking assets (Banco Santander-Chile, Banco Estado, Banco de Credito e Inversiones, and Banco de Chile).
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. Private banks manage most corporate business.
There are currently 21 banks in Chile, including 6 banks that are foreign-owned but legally established banks in Chile and 6 branches of foreign banks (one of them has been authorized but has not yet started its operations). There is one state-owned bank, Banco Estado. There are also approximately 20 representative offices of foreign banks in Chile. Both the foreign-owned but legally established banks in Chile and the branches of foreign banks are subject to the requirements set out under the Chilean banking law. As of August 2003, Chile’s Central Bank had 12 correspondent banking relationships (CBR). There are no reports of CBR 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.
A number of Chilean banks have announced they are exploring blockchain technologies and their potential for banking applications. Additionally, the Superintendence of Banks and Financial Institutions (SBIF) in September 2017 joined, as a regulatory member, an international consortium of 70 financial institutions for the research and development of distributed ledger in the financial system, led by U.S. firm R3, a software developer of blockchain technology. The Santiago Stock Exchange, in partnership with IBM, is in the process of implementing a blockchain-based solution to accelerate back-office processing of securities lending.
Financial services supervised by the SBIF include mainly traditional banking products, credit card operations, and prepaid cards. A new law (Ley 20.950) authorizes the emission of prepaid cards by non-banking entities.
Foreign Exchange and Remittances
Foreign Exchange Policies
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 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 Central Bank reserves the right to intervene under exceptional circumstances to correct significant deviations of the currency from its fundamentals. In practice, however, this right to intervene is used sparingly (if at all).
Remittances of profits generated by investments can be made any time after tax obligations are fulfilled; remittances of capital can be made after one year since the date of entry into the country. In practice, this one-year permanency requirement for capital has not constituted a restriction for productive investment, because normally projects need more than one year to mature. Under the investment chapter of the U.S.–Chile FTA, the parties must allow transfers of covered investments to be made freely and without delay 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
Chile has two sovereign wealth funds (SWFs) built from annual contributions made by the government when there is an effective fiscal surplus. The Economic and Social Stabilization Fund (FEES) was established in 2007 and was valued at USD 15 billion as of January 2017. The FEES seeks to fund public debt payments and temporary deficit spending, in order to keep a countercyclical fiscal policy. The Pensions Reserve Fund (FRP) was established in 2006 and was valued at USD 10.2 billion as of January 2017. The purpose of the FRP is to anticipate future needs of payments from the government to those eligible to receive pensions, but whose contributions to the private pension system fall behind a minimum guaranteed by the State.
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 abroad into instruments denominated in foreign currencies. As of January 2017, FEES’ portfolio consisted of 88.1 percent of sovereign bonds and monetary market instruments, 3.4 percent of inflation-indexed sovereign bonds and 8.5 percent of stocks. At the same date, FRP’s portfolio consisted in 46.8 percent of sovereign bonds and related instruments, 17.1 percent of inflation-indexed bonds, 19.6 percent of corporate bonds and 16.5 percent of stocks.
7. State-Owned Enterprises
Chile has 33 state-owned enterprises (SOEs). They are all commercial companies. Thirty of 33 Chilean SOEs are not listed on the stock exchange and are fully owned by the government. The remaining three are majority government owned. Ten Chilean SOEs operate in the port management sector; eight in the services sector, three in the defense sector, three in media, two in the water sector, two in transportation, four in the mining sector and one is a state-owned bank (Banco Estado). The state also holds a minority stake in four water companies as a result of a privatization process. Total assets of SOEs amounted to USD 64.4 billion in 2016. Total net income of SOEs in 2016 was USD 61 million. SOEs employed 51,656 people in 2016.
Twenty-two SOEs in Chile fall under the supervision of the Public Enterprises System, a government entity in charge of overseeing SOE governance, as well as exercising minority rights in four water companies. The rest — including Chile’s most important SOEs: CODELCO, the world’s largest copper producer; ENAP, an oil exploration company; and Banco Estado — have their own supervisory structures outside of SEP jurisdiction, but report to government ministries. All 34 SOEs are accountable to Congress, the President and the General Comptroller Office. 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.
In general, private and public firms compete under the same terms and conditions (e.g., there are many private copper mines and private banks). However, there are specific areas where SOEs enjoy special advantages. For example, ENAP is the only company allowed to refine oil in Chile. SOEs are subject to the same taxes and the same value added tax rebate policies as their private sector competitors. They are not afforded material advantages and are subject to hard budget constraints. As an OECD member, Chile adheres to the OECD Guidelines on Corporate Governance for SOEs.
8. Responsible Business Conduct
Awareness of the need to ensure corporate social responsibility grew over the last two decades in Chile. However, NGOs and academics who monitor this issue believe that its importance is still not sufficiently incorporated into business practices, in particular their risk mapping and management.
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, and 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 for OECD MNE guidelines, who is currently the Bilateral Affairs Director at the General Directorate for International Economic Relations.
On August 21, Chile released its National Action Plan on Business and Human Rights based on the UN Guiding Principles. The document is available here: . Separately, the Council on Social Responsibility for Sustainable Development, coordinated by Chile’s Ministry of Economy, developed an action plan for 2015-2018 with 17 measures to help bolster RBC, and is currently developing a National Policy on Social Responsibility.
Regarding procurement decisions, in 2014, the Ministry of Environment published a Handbook for Sustainable Public Procurement. 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, controversial instances of corporate impact on human rights have occurred in Chile in recent years.
The Chilean government 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.
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: , the Catholic University of Valparaiso’s Center for Social Responsibility and Sustainable Development VINCULAR: , 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).
Corruption in Chile is relatively limited: Chile ranked 26th out of 180 countries in Transparency International’s 2017 Corruption Perceptions Index.
Chile implemented, in a non-discriminatory manner, various laws to combat corruption of public officials, including a 2003 law establishing a professional civil service, a 2005 law to regulate political party and candidate financing, and the 2009 Transparency Law, regarding disclosure of public information related to all areas of government, which also created an autonomous Transparency Council in charge of overseeing its application. On January 5, a new provision of law expanded the number of public trust positions required to release financial disclosure, mandated disclosure in greater detail, and allowed for stronger penalties for noncompliance.
Anti-corruption laws do extend to family members of officials, in particular mandatory asset disclosure, and a draft bill incorporating restrictions on appointments and incompatibilities for family members of public officials has been submitted to Congress. 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, a system established in 2015 in the website of Chilecompra (central public procurement agency) available for vendors, buyers and the general public, allows for anonymously reporting irregularities in government procurement. Also, a new decree defined sanctions for public officials who do not adequately justify direct contracts. The constitution also provides for public access to government information, and the law was effectively implemented during the reporting period.
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.
NGO’s 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
Contact at government agency or agencies are responsible for combating corruption:
Consejo para la Transparencia
Morande 360 piso 7
Contact at “watchdog” organization:
Chile Transparente (Chile branch of Transparency International)
Perez Valenzuela 1687, piso 1, Providencia, Santiago de Chile
Ciudadano Inteligente (Founder NGO of the Anticorruption Observatory)
Holanda 895, Providencia, Santiago, Chile
10. Political and Security Environment
Since its return to democracy in 1990, the incidence of political violence and civil disturbance in Chile has been generally low, and has had little impact on the Chilean economy. During the last 10 years, there were relatively few incidents of politically motivated attacks on investment projects or installations outside of the Araucania region. Between 2011 and 2013, there were occasional incidents of vandalism of storefronts and public transport during student protests, some of which included violent incidents. 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. 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 CODELCO. The investigation is ongoing at the time of this report.
On occasions, illegal activity by striking workers resulted in damage to corporate property or a disruption of operations. Some firms have publically expressed concern that during a contentious strike, law enforcement has appeared to be reluctant to protect private property.
Over the last 20 years, there were a growing trend of violence related to land claims and other grievances of indigenous communities in southern Chile who belong to the Mapuche people, located in the Araucania region and one province in the southwest of Bio-Bio region. These incidents included arson attacks on churches, farms, facilities at forestry plantations, and forestry contractors’ machinery and vehicles, resulting in over a half-dozen deaths (including some attributed to police forces), injuries, and damage to property.
Violence in southern Chile is so far concentrated geographically and limited to roads and rural areas outside of larger towns and cities.
Civil disturbance is not present at levels that could put investments at risk or destabilize the government. Chilean civil society is active and demonstrations occur frequently. Although the vast majority of demonstrations are peaceful, on occasion protestors have veered off of 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 on 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 in the past resulted in damage to property.
11. Labor Policies and Practices
Unemployment in Chile averaged 6 percent of the labor force during 2017. The labor participation rate was 62.7 percent of the working age population in 2017. Immigrants account for nearly four percent of the labor force. 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. Data on informality are not available for Chile in the ILO databases, but different estimations made by academics situate informal employment in Chile, depending on the specific data and methodology utilized, between 10 percent and 20 percent of the non-agricultural workforce.
Article 19 of the Labor Code stipulates that at least 85 percent of the staff hired by one and the same employer must be Chilean, 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, independently of the size of the company. The percentage of foreign employees is calculated as a fraction of an employer’s total staff throughout Chile, rather than in each branch separately. Technical staff who cannot be replaced locally are not included when calculating the percentage of foreign employees. In addition, a foreigner whose spouse or children are Chilean, or who is the widower or widow of a Chilean, is counted as Chilean.
A voluntary mechanism created by the Labor Inspection Service and the Executive Vice-Presidency of the Foreign Investment Promotion Agency (APIE) allows foreign investors to certify the need to hire a larger number of foreign employees. This can be done by entering a national register and presenting a letter explaining the company’s situation as regards the hiring of foreign employees. This letter should be accompanied by a sworn statement containing detailed information, as indicated in the following link: .
In general, upon dismissal without cause, workers who have been working for at least one year are entitled by Chilean Labor Code to a statutory severance pay equivalent to 30 days of the last monthly remuneration earned, for each year of service worked and fraction greater than six months. 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 on the basis of business requirements (economic reasons). Upon termination of employment, regardless of the reason for termination, 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.
According to the Labor Directorate, 1,139,955 workers (13.9 percent of Chilean workers) belonged to a trade union in the last quarter of 2016 (latest data available), when 11,653 unions were active. In the same period, 347,142 workers (4.2 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 are not granted 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 conflict solving model aimed at facilitating peacefully communication and agreement between both parties.
During 2017, 174 legal strikes took place in sectors where collective bargaining is permitted (a smaller number in comparison to 2016 when there were 199 strikes), and 31,799 workers were involved in total (10.5 percent less than in 2015). As legal strikes in Chile have a restricted scope and duration, they have not, in general, presented a risk for foreign investment. The new Labor Law (described in response to question J) is believed to have reduced the incentives to strike and encouraged labor dispute settlements. However, during February and March 2017, the longest strike in the history of Chilean mining sector took place in Escondida, the world’s largest copper mine owned by British-Australian BHP Billiton. The strike lasted for 43 days and had an impact on global copper prices, as well as estimated losses amounting to USD 900 million in sales. It was also a factor for the firm in its decision to postpone new investments on plants. The strike ended with no agreement, and current contracts were extended for 18 months until a new collective negotiation is to start on June 1, 2018 under the provisions of the new Labor Law, which Escondida unions considered will grant them better terms for bargaining.
Chile has and generally enforces laws and regulations in accordance to the 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. Since January 1, 2018 the national minimum wage is CLP 276,000 -USD 463- a month for all occupations, including domestic servants, more than twice the official poverty line. There is a special minimum wage of CLP 206,000 -USD 346- a month for workers above 65 years old or below 18 years old. There are no gaps in compliance with international labor standards that may pose a reputational risk to investors.
Revised labor standards came into effect on April 1, 2017, when the Labor Reform passed in 2016 was implemented. The new legislation was designed to modernize labor relations, strengthen unions, and facilitate labor agreements. The law provides for the rights of workers, with some limitations, to form and join independent unions of their choice, bargain collectively, and conduct strikes. The law also prohibits antiunion practices and requires either back pay or reinstatement for workers fired for union activity. Unions will have the right to get from companies information necessary for the purposes of preparing the collective bargaining process.
The most significant change from the previous labor code is that employers may not dismiss or replace employees involved in a strike. However, unions must provide emergency personnel to fulfill the company’s “minimum services.” Those include the protection of tangible assets and of the company’s facilities, accident prevention, and service of the population’s basic needs.
The new labor law provides for collective bargaining rights only at the company level and extends them to apprentices and short-term employees such as in agriculture, construction, ports, or the arts and entertainment sector. Intercompany unions are permitted to bargain collectively only when the individual employers all agree to negotiate under such terms. 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. Also, 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.
12. OPIC and Other Investment Insurance Programs
Since 2013, Overseas Private Investment Corporation (OPIC) partnered with U.S. solar energy developers to finance five large-scale power facilities throughout the Atacama Desert in northern Chile. Other OPIC-financed projects in the country include the run-of-river hydropower project Alto Maipo, and the toll road Vespucio Norte Express.
An OPIC Bilateral Investment Agreement between Chile and the United States took effect in 1984. Chile is a party to the convention of the World Bank’s Multilateral Investment Guarantee Agency (MIGA).
13. Foreign Direct Investment and Foreign Portfolio Investment Statistics
Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
* Central Bank of Chile.
Table 3: Sources and Destination of FDI
According to the IMF’s Coordinated Direct Investment Survey (CDIS), total stock of FDI in Chile in 2016 amounted to USD 249 billion, compared to USD 213 billion in 2015. Stock of U.S. FDI stock in Chile amounted to USD 38 billion and was the main source of FDI to Chile, representing 15.2 percent. The remaining top five sources (Spain, the Netherlands, Brazil and Canada) accounted for 28.6 percent of Chile’s inward FDI stock. Chile’s outward direct investment stock in 2016 was concentrated in South America, where Brazil, Argentina, and Peru together represented 31.6 percent of total Chilean outward direct investment position. The United States accounted for almost 10 percent of the total. However, Panama arose in 2016 as the second largest destination of Chilean 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||248,640||100%||Total Outward||120,173||100%|
|“0” reflects amounts rounded to +/- USD 500,000.|
Table 4: Sources of Portfolio Investment
|Portfolio Investment Assets|
|Top Five Partners (Millions, US Dollars)|
|Total||Equity Securities||Total Debt Securities|
|All Countries||166,277||100%||All Countries||120,504||100%||All Countries||45,773||100%|
|United States||62,735||37.7%||United States||42,527||35.3%||United States||20,208||44.1%|
|Not Specified (including Confidential)||10,527||6.3%||Not Specified (including Confidential)||9,751||8.1%||Japan||4,532||9.9%|
14. Contact for More Information
U.S. Embassy Santiago, Avenida Andres Bello 2800, Las Condes