Chile: business environment
and investment opportunities
InvestChile
Foreign Investment Committee
Chile, Business Environment and
Investment Opportunities
Snapshot of the Chilean Economy
Economy
GDP 2011
US$ 243 billion
GDP per capita (PPP, 2011)
US$ 16.171 (IMF)
Actual interest rate (Monetary
Policy) /
5,0%
Unemployment rate 2012 Jan
6,6%
External Public Debt (2010)
US$ 3.5 billion
Exports (2011)
US$ 80.5 billion
Imports (2011)
US$ 69.9 billion
Chile’s Sovereign
Ratings
Social
Fitch Ratings
A+
Standard & Poors
A+
Moody’s
Aa3
Government of Chile| Foreign Investment Committee
Population
16.9 million
Official Language
Spanish
Currency
Peso (484 =
USD 1.0)
Literacy rate
97%
Life expectancy
78 years
Source: Central Bank of Chile (www.bcentral.cl)
2
Why
Invest in
Chile?
High potential for
economic growth
Strong
Institutional
Framework
Political
Stability
Chile, Hub to Latin America
Why Invest in Chile?
10 Reasons to Invest in Chile
Dynamic Economy
Highly
Competitive
High Transparency
Institutional &
Financial Strength &
Low Country Risk
Globally Integrated
Highly Skilled &
Competitive
Human Resources
Great Business
Environment &
Economic Freedom
Tax Friendly
Economy
Outstanding Quality of
Life
Transport Infrastructure
& Modern Connectivity
Integrated to the World
Growth OECD countries 2011-2012*
GDP PPPA
per capita 2010*
US$15,040
Chile
Chile
US$29,996
Korea
US$18,527
Estonia
US$38,203
Sweden
US$27,129
New Zealand
US$14,405
Mexico
US$29,601
Israel
US$39,764
Australia
US$22,194
Slovakia
US$18,981
Poland
US$39,171
Canada
US$46,860
United States
US$35,059
United Kingdom
US$33,909
France
US$36,081
Germany
4,7 (2012)
6,5 (2011)
4,4
3,9
4,0
6,5
3,8
4,4
3,8
2,0
3,6
3,8
3,6
4,8
3,3
1,8
2012
3,3
3,3
3,0
3,8
1,9
2,1
2011
Chile leads the
projected growth for
2012, according to
the IMF.
1,8
1,5
1,6
1,1
1,4
1,7
1,3
2,7
*IMF
Government of Chile| Foreign Investment Committee
Source:
6
Economic growth projection 2011-2012
 2011
 2012
9.5
9.0
8.0
7.8
7.5
6.5
4.6
3.3
4.4
3.9
3.8 3.6
4.7
4.3
4.0
3.83.6
2.7
2.11.9
1.8
1.8
1.5
1.3
Germany
Alemania Argentina Australia
Brazil
Canada
Government of Chile| Foreign Investment Committee
China
Korea
United
States
1.1
0.8
Spain
1.7
1.4
France
1.6
1.1
India
Mexico
Source:
United
Kingdom
1.5
1.2
Russia European
Union
7
Chile
FDI Attraction Record
FDI Stock in Chile
(63.8% as % GDP 2000-2010)
74.3
73.1
60.8
63.4
63.3
62.9
67.6
62.7
60.5
54.7
2000
• Brazil:
2001
2002
2003
21.7%
• Mexico: 25.7%
• Peru:
2004
2005
2006
2007
58.2
2008
2009
2010
• Hong Kong:
345.7%
• Singapore:
165.6%
22.8%
Government of Chile| Foreign Investment Committee
Source:
5
Global FDI Inflows 2010
Top 20 Host Economies
United States
China
2
Hong Kong
5
15
Germany
6
6
7
United Kingdom
3
Russia
7
Singapore
2009
8
In 2010 Chile ranked for
the first time among the
world’s top 20 FDI host
economies. Our country
advanced from 26 in
2009 to 19 in 2010.
9
22
10
France
10
15
30
18
Mexico
21
19 (2010)
Chile
Chile
Indonesia
2010
4
17
Brazil
2
3
4
Belgium
Spain
1
1
26 (2009)
43
20
Government of Chile| Foreign Investment Committee
(19 out of 20 economies)
Selected economies.
Source:
9
Doing Business 2012
(39 out of 183 economies)
Singapore
Hong Kong
New Zealand
United States
Denmark
Norway
United Kingdom
Korea
Iceland
Ireland
Chile
Chile
Peru
Colombia
Mexico
Uruguay
Paraguay
Argentina
Brazil
Ecuador
Bolivia
Venezuela
1
Category
Pos.
Starting a business
27
Protecting investors
29
6
Getting electriciy
41
7
Paying taxes
45
Getting credit
48
Registering a property
53
Enforcing contracts
67
Trading across borders
62
Dealing with construction permits
90
Resolving insolvency
110
2
3
4
5
8
9
10
39
41
42
53
90
102
113
126
130
153
177
Government of Chile| Foreign Investment Committee
*Selected economies.
Source:
10
Corruption perception index 2011
(22 out of 182 economies)
GDP PPP
per capita 2010*
US$36,442
US$27,129
US$56,694
US$34,918
US$38,203
US$39,171
US$39,491
US$15,040
US$46,860
US$14,338
US$29,830
US$11,043
US$11,272
US$9,357
US$14,405
US$15,901
New Zealand
Denmark
Finland
Sweden
Singapore
Norway
Ireland
Chile
Chile
United States
Uruguay
Spain
Costa Rica
Brazil
Peru
Argentina
Mexico
1
2
2
4
5
6
16
22
24
25
31
50
73
80
Chile leads Latin
America.
100
105
*IMF
Government of Chile| Foreign Investment Committee
*Selected economies
Source:
11
Economic Freedom Index 2011
(11 out of 179 economies)
GDP PPP
per capita 2010*
US$45,943
Hong Kong
US$39,764
Australia
US$46,860
United States
9
Chile
Chile
11
US$15,040
US$35,059
United Kingdom
US$33,884
Japan
US$29,830
Spain
US$9,357
Peru
US$9,592
Colombia
US$33,909
France
US$29,479
Italy
US$11,272
Brazil
US$7,544
China
US$15,901
Argentina
1
3
16
20
31
41
45
64
87
113
135
Chile leads Latin America.
138
*IMF
Government of Chile| Foreign Investment Committee
*Selected economies.
Source:
12
A safe and reliable country to invest
In 2010 Chile became a full member
of the OECD.
North America : Canada (1961); United States (1961); Mexico (1994)
South America Chile (2010)
Europe : Germany (1961); Austria (1961); Belgium (1961); Denmark (1961);
Slovenia (2010); Spain (1961); Estonia (2010); Finland (1969); France (1961);
Greece (1961) ; Hungary (1996); Ireland (1961); Iceland (1961); Italy (1961);
Luxemburg (1961); Norway (1961); Netherlands (1961); Poland (1996) ;
Portugal (1961); United Kingdom (1961); Czech Republic (1995); Slovak
Republic (2000); Sweden (1961); Switzerland (1961); Turkey (1961)
Pacific : Australia (1971); Japan (1964); New Zealand (1973); Republic of
Korea (1996)
Middle East : Israel (2010)
Government of Chile| Foreign Investment Committee
13
Foreign Investment in Chile
Chapter XIV
Decree Law 600
Applies to any operation in excess of
US$10.000
Voluntary for operations in excess of
US$5 million (first investments in cash)
and US$2,5 million (fixed assets).
No contract executed with the state.
Contract executed with the State
represented by the Foreign Investment
Committee.
Subject to standard tax regime.
Optional tax stabilization regime.
Government of Chile| Foreign Investment Committee
14
FDI in Chile - Countries D.L. 600
1974-2011 (US$80.333 Million)
France
Switzerland
2%
Belgium
2%
1%
Italy
2%
Netherlands
2%
Others
9%
United States
25%
Mexico
2%
Australia
5%
Japan
6%
United Kingdom
8%
Spain
18%
Canada
18%
Government of Chile| Foreign Investment Committee
Source: Foreign Investment Committee (www.foreigninvestment.cl).
13
FDI in Chile - Industries D.L. 600
1974- 2011 (US$80.333 Million)
Transport &
Communications
11%
Construction
2%
Agriculture,
Forestry & Fishing
1%
Mining
34%
Manufacturing
11%
Electricity, gas &
water
19%
Services
22%
Government of Chile| Foreign Investment Committee
Source: Foreign Investment Committee (www.foreigninvestment.cl).
14
FDI in Chile - Political Subdivisions D.L. 600
1974-2011 (US$80.333 Million)
Valparaíso
Region
2%
Magallanes
Bío-Bío Region
& Chilean Antartic
2%
Region
Others
2%
3%
Coquimbo Region
2%
Multi Region
38%
Tarapacá Region
4%
Atacama Region
8%
Antofagasta Region
14%
Metropolitan Region
25%
Government of Chile| Foreign Investment Committee
Source: Foreign Investment Committee (www.foreigninvestment.cl).
15
Investment Opportunities
•
•
•
•
•
•
•
Food Industry
Infrastructure
Renewable Energy
Offshoring
Biotechnology
Logistics Program
Mining Suppliers
Investment Opportunities
Chile: Food Industry
17% of employment, 23% exports
Chile is one of the most competitive Mediterranean food ecosystems in the world
(sanitary barriers, off season, cost).
The objective of InvestChile´s Investment Attraction Program is to improve the
Competitiveness of the Food Industry, adding value and consolidating Chile as one of
the main countries that produce quality food products.
The Program intends to attract investors that are interested in bringing capital and
transferring technology to improve the performance of the above mentioned sector,
resulting in high quality cost effective products.
Challenge
We are ranked in the 17th place of the industry with US$12,5 billion.
Our goal for 2020 is to be ranked as top 10 with US$22 billions in exports
Investment Opportunities
Chile: Infrastructure
The investment in infrastructure that has taken place in Chile over the past twenty years
has had a very tangible impact in the form of higher-standard roads, world-class ports
and airports. In operation since 1993, Chile’s concessions system has become a model
internationally.
The portfolio of projects for the period 2010-2014 envisages tenders for contracts worth
a total of US$8 billion while possible projects for a further US$3,73 billion are being
evaluated in different regions and sectors.
Investment Opportunities
Chile: Renewable energy
Electricity consumption has been increasing at an average annual rate of around 4%, with
demand for energy closely mirroring GDP growth. Through to 2020, consumption is
expected to increase at an annual rate of 3%. At present, Chile has an installed generating
capacity of some 15,000 MW and a gross electricity output of more than 55,000 GWh.
Forecasts for demand by 2020 indicate that it will be necessary to develop 66 new power
plants (3,695 MW) and 14 transmission projects (7,040 MW) by this date. Chile’s aim is to
diversify its sources of energy supply in the medium to long term.
In order to eliminate barriers to the entry of new investment in this sector, a number of
attractive financial incentives are being introduced for geothermal, Eolic and solar projects.
Investment Opportunities
Chile: Offshoring
Chile is one of the most competitive locations, as for stability, infrastructure and Human
Capital (A.T. Kearney 2010, World Economic Forum, Economist Intelligence Unit).
Chile has endorsed the development of this emerging industry for two main reasons: job
creation & technology transfer and good practices.
Global trend for companies that search to open centres in the most effective locations,
worldwide. This industry is growing over 30% a year.
Recently, LATAM has been getting attraction from the markets, as a new emerging player.
Investment Opportunities
Chile: Biotech
One of the fastest growing sectors in Chile with a 20% growth over the last three years.
Over 200 institutions dedicated to biotech sector.
Favorable natural conditions and world-class industries based on natural resources
(agriculture, mining, etc.).
Investment Opportunities
 AgBio
 Industrial Biotechnology
 Life Science
Industrial Logistics Program
Chile: Logistics
Allows foreign companies to take advantage of Chile’s Free Trade Agreements.
Chile as a platform for exporting goods that undergo a certain process in the country,
allowing it to be considered a Chilean product, and therefore accessing the world market
with preferential tariffs.
This program includes in-depth information and local logistic services for multi-sector
companies that manufacture and/or assemble products and/or components, including
the renewable energy ancillary industry.
Investment Opportunities Mining Suppliers
The Chilean Mining Industry offers huge opportunities for Mining suppliers
 Projected Investment in mining projects planned in Latin America = US$ 235 billion
(2010 – 2020), of which US$ 67 billion are expected to be materialized in Chile.
 More than US$ 13 billion are spent every year in supplies for the operation of the
mining industry in Chile, out of US$ 36 billion for Latin America (Chile, Argentina, Brazil,
Mexico and Peru).
Chile is experiencing an investment record of US$ 67 billion by 2020.
84% will be materialized by 2015.
Investment Opportunities for Mining Supplier
Mining is the main economic sector in Chile and is now
experiencing a major growth …
Copper production represents more than 1/3
of the world total production, exceeding 5
billion tons of Fine Copper
PIB Minero (US$ Corrientes)
Participación en el PIB Total
6.000
4.000
3.000
2.000
Producción Sector Público
Producción Sector Privado
2009
2007
2005
2003
2001
1999
1997
1995
-
1993
1.000
1991
Ton
Participación en PIB
5.000
1989
2009
2008
0%
2007
2006
4%
2005
5.000
2004
8%
2003
10.000
2002
12%
2001
15.000
2000
16%
1999
20.000
1998
20%
1997
25.000
1996
24%
1995
30.000
1994
28%
1993
35.000
1992
32%
1991
40.000
1990
US$ mn (PIB)
For the period 2006-2009, Mining
represented 19.7% of total GDP (average)
Investment Opportunities for Mining Supplier
Suppliers make a major contribution to the mining industry, that
increasingly require technology
140.000
1,2
120.000
1
100.000
0,8
80.000
0,6
60.000
0,4
40.000
0,2
20.000
0
benefits
400
Net benefits (USD MM)
Util i da d Neta (US$ mn)
Tax payment (USD MM)
Pa go Impues tos (US$ mn)
Copper
price
(cent/lb)
Preci
o Cobre
(cent/l
b)
13.100
14.075
350
11.006 300
0
8.454
6.114
Leyes Sulfuros
Productividad A
4.505
3
250
7.818
200
6.207
4.575
150
4.344
4.024
100
1.429
596
50
2010e
2009
2008
2007
2006
2005
0
2004
2003
300
2002
100)
2000
Precio
del Cobre
Costos
de Producción
(año
2000=
base=100)
Copper
priceyand
Production
costs
(year
2000
base
1.252
983
213 374138 434 49
110
2001
Costs
1.719
250
200
Apart from the high price of the copper, the technology added
to the industry by suppliers also explains the fact that despite
decreasing metal rates and increasing production costs,
profits keep being huge.
150
100
Copper
pricereal)
Precio
Cobre (base
Total
Unit
Cost
index- Chile
- Chile
Indice
Costos
Totales
Unitarios
2008
2007
2006
2005
2004
2003
2002
2001
2000
50
Precio del Cobre (cent/lb)
1,4
Productividad
Productivity
Suphides
Sulfuros
Ley deRate
Grades
Investment Opportunities for Mining Supplier
Those facts explain why, in recent years, mining job creation benefited
to the contractors
140.000
120.000
80.000
60.000
40.000
20.000
Propios
Direct
Contratistas
Contractors
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
Nº Empleos
of Jobs
Number
100.000
Investment Opportunities for Mining Supplier
¡ The technological needs of the Mining Industry
are already identified !
Mining
Equipment
• trucks (off road, light,
low profile)
• Loaders
• Jumbos, shakers
Mining Supplies
•
•
•
•
Explosives
Grinding Balls
Geo textiles
Reactive chemicals, coatings
Applied Robotics
• Surface Characterization
Tele-guided Mini-robots
• Equipment Maintenance
and Operational Task
Execution Robots
Automation and
Control
• Remote systems.
• Softwares (location,
precision, monitoring
etc).
Engineering
Services
• Geomatic services
• Slopes Monitoring
• Logistic and Environmental
Monitoring
• Tribology
Investment Opportunities for Mining Supplier
As a result, the Chilean Mining Industry offers huge opportunities
for Mining suppliers
The investment in mining projects planned in Latin America represent more than
US$ 235 billion for the period 2010 - 2020,
Planned Investment
period 2010 – 2020
in US$ MM
Operating costs by
country (2009)
In US$ MM
CHILE
13.000
CHILE
67.000
ARGENTINA
10.000
ARGENTINA
4.500
BRASIL
64.000
BRAZIL
15.000
COLOMBIA
22.000
MEXICO
1.500
MEXICO
13.000
PERU
2.800
PERU
48.000
PANAMÁ
4.000
ECUADOR
7.000
Source: CESCO, SONAMI
Investment Support Instruments
PRE-INVESTMENT STAGE
Pre-Feasibility
Studies
INVESTMENT STAGE
Technological
Investment
Investment in
Opportunity Zones
Working Capital &
Investment
Guarantees
Gobierno de Chile | InvestChile
OPERATION STAGE
• R&D Law
(20.241)
•Entreprenurial
Innovation
Entrepeneurial
Development
Foreign Trade
Guarantees
31
What can we do for you





Reduce the costs of investing
in Chile;
Offer appropriate and relevant
information;
Coordinate our efforts with
other public organizations;
Offer specific investment
opportunities in public and
private projects;
Become our partners.
Government of Chile| Foreign Investment Committee
32
Companies Supported by InvestChile
Gobierno de Chile | InvestChile
33
Success Stories
InvestChile: Support for innovative initiatives
Avomex Ltda.: Company originated in North America (U.S.A.)
located in Chile in the Valparaiso region to
produce avocado pulp.
Project:
Processing Plant of avocado pulp.
Investment Amount: US$ 19 million
New Employments (project): 353
Place:
Quillota, Valparaiso Region.
“ A significant contribution to the avocado industry in the transformation of
the part in excess of avocados in a high price product applying an innovative
pressure technology that transforms the useless part of the avocado in a natural
product without additives “.
Avomex Incorporated
is a company originated in Texas,
U.S.A., with 20 of participation in
the market. It has facilities in
Mexico, Peru and USA.
It is the biggest company in
the world in processing and
supplying of avocado derivatives
and has 90% on the retail
market of the United States
and 60% of the foodservice
market.
Employments around the
world: 1.680
World Sales 2008:
US$ 105 million
Success Stories
InvestChile: Support for innovative initiatives
PureFruit is a company created on 2010 with Chilean and French
capital through a joint venture between PURFRUIT SAS (French
partner), and SURFRUT S.A. (Chilean partner), who jointly
accumulate 30 years of experience in fruit processing.
Project: Construction of a plant for the development of fruit
processing –organic and conventional- using high technology.
Investment:
US$ 5 million
N° of Employees: 50
PURFRUIT SAS,
France:
20 years of
experience.
150 employees
€ 30 million.
SURFRUT S.A. Chile:
62 years of experience
in processed food
from the agriculture
USD 11.9 million
The partners combine
a large experience in
their markets, in the
industrial
transformation for
fruits.
Success Stories
HT
InvestChile: Support for innovative initiatives
Ancilliary Industry
Ritrama (V Region, US$ 21 million)
Multinational Self Adhesive Paper Company
•
•
•
•
•
Location: Curauma V Región de Valparaíso
Investment : USD 21,9 million
Employment: 63
Sales in Chile USD 70 million
Markets: North America, South America & Caribbean
•
•
•
•
•
Grants:
TODOCHILE : USD 58.000
High Tech: USD 1,06 million
HT3: USD$136.395
(4.8% of total investment)
Success Stories
InvestChile: Support for innovative initiatives
Semillas Pioneer Chile Ltda.
Investigation Seed Processing Plant
The project involves the development of
an experimental station in the area of
Arica, including investment in equipment,
laboratories and human resources at the
highest level.
With these features, the center increases
the amount of services offered by the
company to satisfy the requirements of
researchers from Pioneer in genetic
research around the world, allowing a
crucial and substantial development of
new varieties to the benefit of farmers
Company
: Semillas Pioneer Chile Ltda.
Total Investment: USD $ 19,3 million
Country of Origin: U.S.A.
around the world.
Success Stories
InvestChile: Support for innovative initiatives
Company: Oracle Financial Services
This Company has more than 11.000 employees and
9.984 clients in 145 countries around the world.
It has development centers in India/China, USA, Greece
and Chile.
Results 2009: 513,370,000 USD.
Total Investment: USD $ 2,3 million.Nº of employments generated: 291
Exportations: approx. 80%.
Project:
The Software Development Center for Financial Center
Services for LATAM provides personalized services
(language and time zone) and profits from the highly
skilled human resources existent in Chile.
¿Why Chile?
InvestChile’s commitment for bringing
this project to Chile started on 2004 and
the keys were:
• Information and Facilitation Services
to the Investor;
• Support to market studies;
• Training of the highly skilled human
resources.
 "Although we have lived through one of the worst tragedies of recent times, Chile is and continues to be one of the best places to invest in
Latin America. The rankings reflect this and the arrival of Oracle Financial Services operations proves it. We are confident that we
will keep moving forward, that more projects and investors will come to Chile, and that we will continue with the development
achieved up to this point". Chairman of CORFO, Hernán Cheyre.
20 of the top 20 Banks
in the world
use Oracle
applications
 This initiative adds to Oracle's Global Development Center, opened in the country in 2007, and reaffirms the company's
commitment to Chile and Latin America.
 Oracle Financial Services Software Ltd. is a global leader in financial sector products and services. The company is a subsidiary of
Oracle, the most complete, open, and integrated software and hardware systems company in the world.
Success Stories
InvestChile: Support for innovative initiatives
Project:
Location:
Investment:
Employees:
Exports:
Markets:
McAfee Labs.
Santiago
USD 16 million
72
USD 5.0 million
North America.
100% of the production is exported
McAfee is a multinational company based
in the U.S. which is dedicated to computing
security, founded in 1984 and with
worldwide operations (120 countries &
125 million users).
Success Stories
InvestChile: Support for innovative initiatives
Project:
Location:
Investment:
Employees:
Exports:
Markets:
Equifax R&D Center
Santiago
USD 8 million
100
USD 17.0 million
North America
100% of the production is exported
Equifax multinational
company based in North
America with over 100 years
experience in financial
services. It serves more than
250.000 clients around the
world.
Employees: 700.000
Sales: USD$ 1.9 billion
“In Chile we have found the talent necessary for the
development of R&D activities: professionals capable of
independent and creative thinking!”
Sandeep Gupta, VP R&D Equifax
Success Stories
InvestChile: Support for innovative initiatives
Project:
Competences Development Center and
Service Center
Location: Región Metropolitana
Investment: USD 127,2 million
Employees: 350
Sales in Chile 2009: USD 50 million
I&D expenses in Chile: USD 1 million
Atlas Copco is a world-class company from
Sweden, with over 135 years of experience as
a supplier for the mining, construction and
manufacturing industries.
Employees Worldwide: 30.000
Sales in 2009: USD 8.600 million
Presence: 170 markets, with 83 productive
plants in 23 countries.
This project is of great significance for the mining industry, due to the
training that the employees received in order to create a state-of-the-art
center, making the operation more efficient and safe, together with the
strong investment in equipment, that will serve the needs of the big players
in the industry.
International Food Forum
June 2012
Foreign Investment Committee
www.foreigninvestment.cl
More information
Felipe Gajardo
[email protected]
DISCLAIMER: The information contained in this document is for the purposes of information only and the
particular conditions of each specific potential project may vary from those set out here. The contents of
this document should in no way be interpreted as a legally binding obligation of the Republic of Chile or
any other state agency that participates in any way in the processes of administrative approval or of any
other nature corresponding under Chilean law. This information in no way constitutes an authorization to
start or exercise the economic activity potentially intended to be developed. The resulting agreements
will be governed and interpreted exclusively according to the laws of the Republic of Chile, their related
regulation and the national policies applicable to each particular case.