Chilean Foreign Direct Investment
E.I van den Heuvel
Royal Dutch Embassy
Santiago de Chile
October - January 2005
Chilean Foreign Direct Investment
Page
Introduction
3
Summary
5
Chapter 1:
Development and actual situation of Chilean International Trade and Foreign
Direct Investments
1.1: Chilean International Trade
Exports
Imports
7
9
1.2: Foreign Direct Investment
What is Foreign Direct Investment? A Definition
Direct Investment vs. Portfolio Investment
Data on Investments might be Biased
FDI from Emerging Markets
Chilean FDI from a Regional Perspective
Development of Chilean FDI
Chilean FDI from a World-Wide Perspective
Distribution of Chilean FDI per Sector
Geographic Distribution of Total Chilean FDI
Chilean FDI in 2005
10
10
10
11
11
12
14
15
17
17
20
1.3 Analysis of Relationship between Trade and FDI from Chile
22
Chapter 2:
Chile: Investing Abroad
2.1 General Motives to Invest Abroad
Chile as a Platform for Investments
International Conventions with a positive influence on foreign investment: FTAs, BITs
and DTAs
23
24
25
2.2 The Process of Investing Abroad
How to Invest Abroad
FDI: Regulations of the Banco Central
Transnationalization Policy?
27
27
27
28
1
2.3 Analysis of Important Chilean FDI-Destinations, by Region and Country
Central America
Latin America
Argentina
Uruguay
Peru
Brazil
Venezuela
North America
New Zealand
28
28
29
29
31
31
32
32
33
33
Chapter 3:
Europe and The Netherlands as Chilean FDI-Destinations
3.1 Europe: Advantages and Disadvantages
Country Risk
Large but Highly Developed Markets
Geographical Distance
Cultural Distance
International Relations
Promoting Investment: Article 21 of the Association Agreement between the EU and
Chile
Bilateral Agreements with Member States of the European Union
(Investment-) Climate? An Example
35
35
35
36
36
36
37
37
39
3.2 Analysis of Important Chilean FDI- Destinations Within Europe
Spain
England and The Canal Islands
39
39
40
3.3 The Netherlands as a Destination for Chilean Investments
Large Amounts of Trade and Small Amounts of Investments
Country Risk
International Relations
Disadvantages
Opportunities
Chilean Companies Investing in The Netherlands
40
40
40
41
41
41
41
Appendices
43
Sources
59
2
Introduction
Chile’s economy is rapidly evolving, internally as well as externally. On the Latin-American
continent, Chile has a prominent position, concerning economical growth, stability and
welfare. Chile is an export-oriented country, but it appears that since around 1990, residents in
the country not only export products, but also capital, to expand their own active participation
in the world market.
The starting and ongoing globalization of the Chilean economy is also visible in the number
of Free Trade Agreements, Bilateral Investment Treaties and Double Taxation Agreements,
which has been growing since 1990 and continues to grow every year. It is interesting to
investigate the reasons, tendencies and patterns of these phenomena of globalization in the
context of Foreign direct Investments, because, by knowing them, it will be possible to predict
future investment flows and to develop strategies to attract Chilean capital.
In the first chapter, the focus will be on both Chilean trade and investments, primarily to get
an impression of the Chilean external sector and, secondarily, to find an answer on the
question whether there might be a relation between international trade and Chilean Foreign
Direct Investment (FDI). Although it is almost impossible to find a clear definition of and
exact data on Chilean FDI, a few statements can be made about important destinations and
trends.
A further analysis of motives for Chilean investors to invest abroad is being given in Chapter
two, which amongst others discusses the destinations of Chilean FDI. There are several
determinants with an influence on flows of foreign direct investment, which cause a different
sectoral distribution of Chilean FDI per country. Country risk is a very important factor. In
addition, we stress the fact that Chile also is being used by foreign multinationals as a
platform for their investments.
In the final chapter, we take a look at the investments in Europe and possible opportunities for
investments. The total amount of investments in Europe is relatively low, but seems to be
increasing in the past years. For this reason, it will be interesting to investigate why Chileans
do, but also why Chileans don’t invest in Europe by looking at advantages and disadvantages
3
for Chilean investors in Europe. In this context we focus on an analysis of the most important
destinations for Chilean FDI in Europe, namely Spain, England, the Canal Islands and the
Netherlands.
This study has been carried out with the assistance of the Royal Dutch Embassy. The views
expressed herein are those of the author and do not represent any official view of the
Embassy.
4
Summary
•
Amounts of Chilean international trade increase every year.
•
Most important destinations for Chilean exports are the United States, China and
Japan; Most important countries concerning imports are the United States and Brazil.
•
Most important trade partner for Chile are the United States.
•
Statistics on FDI often are biased because of different definitions and methods of
registration.
•
Most Chilean FDI is invested in Financial Services, Insurance, Real Estate and
Services.
•
Chile has a prominent position in Latin America concerning inward as well as outward
FDI.
•
Chilean outward FDI increased substantially since the end of the Pinochet-era.
•
Total amount of outward Chilean FDI is small, if compared to the world.
•
Between 1974 and 2005, the largest amount of Chilean FDI is invested in Central
America (Cayman Islands) and South America (Argentina). In Europe, Spain is the
most important destination.
•
Since 2004, the Cayman Islands lost their importance and in 2005 North America is
the most important destination for Chilean FDI.
•
Country Risk influences Yield, which is the main reason to invest.
•
Not all registered Chilean FDI comes from purely Chilean investors.
5
•
International Conventions can facilitate flows of FDI.
•
There are no significant internal barriers for Chileans to invest abroad.
•
Central America is being used as platform for investments.
•
For Chilean companies, Argentina has many advantages to invest in, but also
important disadvantages.
•
Country risks in Latin America generally are high; corruption often is a problem.
•
The United States offer many advantages to invest in; especially the country risk is
very low.
•
Europe as a destination to invest has advantages (e.g. country risk) and disadvantages
(e.g. geographical and cultural distance).
•
The Association Agreement between Chile and the European Union facilitates trade
and investments.
•
Although The Netherlands is characterized by a lot of advantages as a destination for
FDI, low amounts of Chilean investments in The Netherlands might be caused by a
lack of information of the country and the opportunities and by geographical and
cultural distance.
6
Chapter 1: Development and actual situation of Chilean International Trade and
Foreign Direct Investments
1.1 Chilean International Trade
During the past years, Chilean trade with the world has been increasing. Chile is an exportoriented economy with an every-year increasing surplus on the balance of trade ($ 9.019
million in 2004).
Chile'sTrade balance 2000-2004
Millions of Dollars
35000
30000
25000
20000
Exports fob
Imports fob
Trade Surplus
15000
10000
5000
0
2000
2001
2002
2003
2004
Exports fob
19210
18272
18180
21524
32025
Imports fob
17091
16428
15794
18002
23006
Trade Surplus
2119
1844
2386
3522
9019
Source: Banco Central de Chile 2005
Exports
As can be seen in the table, the three principal export destinations for Chilean products are
Asia, Europe and the United States and Canada as a block. The three most important countries
are China, Japan and the United States. Main export sectors are mining, (with copper as
primary product), industry (with food and chemicals as primary products) and agriculture,
forestry and fishery (with fruits as main products). For an overview of these sectors, please
refer to the appendix.
7
However, exports are concentrated among a small number of products and a small number of
exporters. For example, in 2002, more than 50% of exports were accounted for by the 10 main
export products alone and only 25 companies generated almost half of all Chilean exports.1 In
2005, more than 50% of exports were accounted for by only 2 export products alone: copper
and molybdenum.2
It is most likely that trade with Asia as a block (and China in particular) will show a strong
growth in the future because of the economic developments in the area and ratification of
several Free Trade Agreements (FTA Chile-China signed in November 2005). The Economic
Association Agreement with Europe and the FTA with the United States also will continue to
facilitate trade with Chile. Chilean companies themselves share this expectation: a survey by
the Chilean Export Barometer shows that 76% of the companies predicts an increase of
exports, while 24% expects no change. Not a single company thought their exports sales
would fall.3
Block
Most important
Countries
within block
Country’s
Total Value of
Exports JanOct 2005
Principal
Sectors4
Millions of Dollars
1
Asia
China
3668 Mining
Japan
3604 Mining
2
Europe
The Netherlands
Italy
1967 Mining
1323 Mining
3
United States
and Canada
United States
4846 Industry
Canada
Brazil
Mexico
Australia
Others
South Africa
Others
827
1403
1342
82
30
45
61
4
Latin America
5
Oceania
6
Africa
Mining
Mining
Industry
Industry
Industry
Industry
Industry
Based on data of the Banco Central de Chile, November 2005
1
Roberto Alvarez E., ‘The export performance of Chilean Firms: Some stylized Facts,’ Cepal Review 83, August
2004 118
2
Sofofa, ‘Comercio Exterior. Informe Mensual Agosto 2005’ 5
3
‘Business news: January-october exports top whole of 2004’, La Tercera 9-11-2005
8
Imports
Chile imports its products mainly from Latin America, Asia and Europe. If we take a look at
countries instead of blocks, then Argentina, Brazil and the United States are the most
important partners. Important products are durable consumer goods, and semi-manufactured
products like (products of) oil.
Block
Most important
Countries
within Block
Country’s
Total Value of
Imports JanOct 2005
Principal Sectors
Millions of Dollars
1
Latin America
2
Asia
3
Europe
Argentina
3672 Semi-manufactured
Products
Brazil
2866 Semi-manufactured
Products
China
Japan
Germany
1890 Consumer goods
787 Capital goods
910 Semi-manufactured
Products
545 Semi-manufactured
products
France
4
5
United States
and Canada
Africa
United States
3783 Semi-manufactured
Products
Canada
315 Semi-manufactured
Products
55 Semi-manufactured
Products
1154 Semi-manufactured
Products
110 Semi-manufactured
Products
29 Semi-manufactured
Products
South Africa
Others
6
Oceania
Australia
Others
Based on data of the Banco Central de Chile, November 2005
To conclude, looking at both imports and exports, we can see that Asia and Europe as blocks
of countries are the most important trading partners for Chile. Because of the value of both
4
For a more detailed description of these sectors, please refer to the appendix
9
imports and exports, The United States as a single country are by far the main trading partner
of Chile.5
1.2 Foreign Direct Investment
What is Foreign Direct Investment? A Definition
There seem to be a lot of different definitions of Foreign Direct Investment, which causes
considerable differences in the statistics on investments. For this paper, data on net
investments of the Banco Central de Chile are being used, because this institution uses (in
comparison with other institutions within Chile) the most sophisticated definition of Foreign
Direct Investments, based on the Balance of Payments Manual of the International Monetary
Fund (Fifth Ed.):
‘Direct investment is the category of international investment that reflects the objective of a
resident entity in one economy obtaining a lasting interest in an enterprise resident in another
economy. (The resident entity is the direct investor and the enterprise is the direct investment
enterprise.) The lasting interest implies the existence of a long-term relationship between the
direct investor and the enterprise and a significant degree of influence by the investor on the
management of the enterprise. Direct investment comprises not only the initial transaction
establishing the relationship between the investor and the enterprise but also all subsequent
transactions between them and among affiliated enterprises, both incorporated and
unincorporated.’6
Direct Investment vs. Portfolio Investment
Direct investment is different from portfolio investment, which doesn’t imply a significant
degree of influence. Portfolio investment is much more reactive to short term developments in
financial markets, which makes it more volatile and complex than direct investment.
Therefore, and in spite of the fact that portfolio investment forms the largest part of total
foreign investment of Chile, this paper only concentrates on direct investment, as defined by
the International Monetary Fund and as specified by the Banco Central: the data include only
operations reported to the Banco Central, specified in Chapters XII and XIII of the Compendio
5
6
Banco Central: ‘Boletín Mensual’ (November 2005) 151
IMF: ‘Balance of Payments Manual 5th edition’
10
de Normas de Cambios Internacionales (CNCI). For a more specific understanding of the
definition of direct investment, please refer to the appendix.
Data on Investments might be Biased
Despite the fact that the Banco Central uses an internationally recommended definition of
FDI, it is likely that amounts of registered FDI are biased. For example, for fiscal and other
reasons companies can decide not to report the investments abroad, or report less. In addition,
if investments are being reported, it will often be with a delay because it is of no primary
concern of companies.
Concerning the destination of FDI, it is possible that data are biased because of a lack of
knowledge of the final destination of the capital. The final destination isn’t being reported by
companies and the Banco Central doesn’t register it either. Nevertheless, data of the Banco
Central are considered to be the least biased, because of the institution’s autonomy and formal
task of registering economic data as Chile’s FDI.
Eight years ago, the Banco Central implemented a new system to register Chilean FDI. The
validity of the data registered by the old system could be biased and will, as far as possible,
not be used for this investigation.
Another source for data on Chilean FDI is the Camara de Comercio de Santiago, but there are
remarkable differences between data of the Banco Central and the Camara de Comercio;
concerning amounts of FDI as well as trends. These differences can, among others, be caused
by the use of a different definition. Apart from this, The Camara de Comercio registers
intentions to invest, while the Banco Central registers materialized investments.
Finally, it is important to note that registered Chilean FDI is a registration of a flow of capital
from Chile to another country, but this capital (and the decision to invest) can have its origin
in another country.
FDI from Emerging Markets
According to UNCTAD in 2003, FDI from emerging markets to the world is growing at a
much faster rate than outward investment from developed countries. The number of emerging
11
markets investing abroad has increased between 1985 and 2003 from 70 to 122. In addition,
more emerging markets are encouraging their firms to transnationalize. The policy
environment for FDI is improving and more emerging-market firms have the potential to go
abroad. Emerging investors from a country like Chile have the potential to be significant
investors in their regions and elsewhere.7
Chile’s FDI from a Regional Perspective
Up to 2001, Chile had a leading role on its continent, concerning outflows of Foreign Direct
Investment.8 Nowadays, Chile still has a rather prominent position with respect to foreign
direct investment from Latin America. In 2004, the country holds after Brazil and Mexico the
third place in the ranking list of FDI inflows within Latin America and the Caribbean and after
Brazil, Mexico and Panama the fourth place in the ranking list of FDI outflows within Latin
America and the Caribbean.
7
www.unctad.org, ‘Press Release: Firms in developing countries rapidly expanding foreign investment,
transnational activities’ 30-05-05
8
Unctad, ‘World Investment Report 2001’ 30
12
To further investigate this quite prominent position within the Latin American continent, the
next paragraphs concentrate on describing the FDI outflows from Chile, by amount,
destination and sector.
13
Development of Chilean FDI
Development of Chilean FDI: 1975-2005
Millions of Dollars
7000
6120
6000
5000
3602
4000
2649
3000
2000
1421
1280
849
1000
380
140
0
19751998
1999
2000
2001
2002
2003
2004
2005
Source: Banco Central de Chile
The phenomenon of investments from Chile is relatively new. Between 1975 and 1989, the
Central Bank registered a total of net investments of $166 million, an average of only $11
million a year. However, since the end of the Pinochet-era and the creation of a democratic
system in Chile in 1990, investments increased substantially. Between 1990 and 1996, net
investments increased from $15 million to $973 million a year.9
During the period between 1999 and 2005, Chilean FDI shows a rather unstable and volatile
development. As becomes clear in the graph, FDI in 2002 reached an all-time low of $ 140
million. The main reason for this was the macroeconomic crisis in Latin America.
One of the causes of the peak in 2000 was the steady progress of FDI-liberalization on the
continent and in the world. Interesting fact is that a large part of Chilean FDI was realized by
foreign companies residing in Chile, for example the Spanish Enersis and the Italian Entel
(which nowadays is a Chilean company).10
Expectations concerning the amounts of FDI are positive: it is likely that, because of
economic growth of Chile and the ongoing globalization, investments will increase strongly.
9
Banco central de Chile ‘Boletin Mensual 04-2001’ 987
Due to a change in methods of registering, registered amounts of investments before and after 1997 are not
comparable with each other.
10
Unctad, ‘World Investment Report 2001’ 32
14
Chilean FDI from a World-Wide Perspective
Right now, and in spite of the relatively prominent position of Chile on the Latin American
continent concerning amounts of FDI, the total amount of Chilean FDI in absolute terms is
small. But if we look at other countries with a like economic situation, Chilean performance is
not that bad. For example, if we compare it to the amount of Chilean exports, we can see that
exports in 2004 amounted to $32,024.9 million, while FDI in 2004 amounted to $380 million;
around 1% of total exports. In average, between 2000 and 2004 the total amount of FDI in
relation to total exports was only 7%. But if we look at other countries, for example at Poland,
we see that the FDI/export ratio is smaller: 0,01% in 2004.11
Chilean FDI in relation to Chile’s GDP (in 2004 $94 billion) is 0.4%.
Because of different systems of registration of FDI and a lack of available information, it is
hard to compare countries in Latin America with each other, concerning their amounts of
investments abroad. However, it looks like Chile’s low FDI-performance is not exceptional:
for example, Uruguay invested in 2004 only $122.8 million abroad12 and Brazil in 2003 only
$249 million13.
From a world-wide point of view, Chile held in 2003 the 25th and in 2004 the 27th place in the
Outward FDI Performance Index (in this index, Belgium and Luxemburg are in leading
position and Kuwait has the lowest score, that is, 132)14,15 For a country in Latin America this
is a rather high position.
If we compare the Chilean investment performance in absolute terms with, for example, The
Netherlands and the United States, the relatively low performance of Chile becomes clear:
Total stock of Chilean FDI until November 2005 was $16,441 million, while in 2004, total
11
Based on data of the National Bank of Poland, www.nbp.pl. Exports 2004: Euro 76,668 million, FDI 2004:
Euro 657 million
12
www.bcu.gub.uy
13
www.bcb.gov.br
14
Unctad, ‘World Investment Report 2005’ 276
15
The Unctad Outward FDI Performance index is based on the ratio of a country’s share in global FDI outflows
to its share in world GDP
15
stock of FDI from The Netherlands added up to € 437,090 million16 and from the United
States $ 229,294 million.17 On the other hand, however, Chilean FDI performance is even
better than the performance of the United States if the country’s amounts of FDI are being
related to the population: the Chilean population at the moment accounts for 15,981
inhabitants and the population of the United States accounts for 295,734 inhabitants.18
In general terms, FDI from Latin American countries is low, compared to other countries in
the world.
A possible reason for the low amount of FDI from and between Latin American countries is
that there still is a lot of mistrust between countries in the region. Latin American countries
always preferred a high level of autarky, which still can be felt nowadays.19 Another reason
for Chile is that companies in Chile are relatively small, compared to for example companies
in Europe: a company is called ‘big’ in Europe, when its sales exceed $50 million, while a
company in Chile is called ‘big’ when its sales exceed $6,5 million. A lot of companies in
Chile don’t have the size and maturity to invest large amounts of capital abroad.20
Nevertheless, Chilean multinationals are prominent in Latin America. Well-known companies
are for example CSAV, LanChile, David del Curto, CMPC, Codelco, Falabella, Banco Chile,
Soquimich and Cencosud.
16
www.dnb.nl
www.bea.gov/bea/di/usdcap/cap_04.htm
18
www.cia.gov/cia/publications/factbook/index.html
19
Interview with Señor Profesor D. Hachette de la F., Pontificia Universidad Católica, 16-11-2005
20
Interview with Sra. Rosella Cominetti, Eurochile 17-11-2005
17
16
Distribution of Chilean FDI per sector
Chilean FDI has the FIRS-sector as principal destination, followed by the Ce- and MI-sectors.
Distribution of Total Chilean FDI per sector, up to November 2005
Millions of Dollars
ASFF;
CS 102; 1% 628; 4%
Abbreviation:
M; 92; 1%
MI; 1395; 8%
Agriculture, Stock breeding, Forestry, Fishery
ASFF
Minery
M
Manufacturing Industry
MI
Electricity, Gas and Water
EGW
EGW; 1016; 6%
Cn 159; 1%
Construction
Cn
Commerce
Ce
Transports, Supply and Communications
TSC
Financial Services, Insurance, Real Estate and
FIRS
Ce; 1622; 10%
TSC; 1100; 7%
FIRS; 10327; 62%
Services
Community Services
CS
Source: Banco Central de Chile
Geographic Distribution of Total Chilean FDI
When we take a look at the distribution of total outward Chilean FDI, the first thing we notice
is that the largest part of Chilean FDI (83%) has been invested in the Americas, with Central
America (40%) on the first place, followed by South America (36%) and North America(7%).
Europe accounts for 10%.
17
Distribution of Total Chilean Foreign Direct Investment from 1974 up to November 2005
Millions of Dollars
TOTAL: $16.441 MILLION
Africa and oceania 1099
North America 1161
Asia 44 (7%)
(7%)
(0%)
Europe 1726
(10%)
Central America 6456
(40%)
Source: Banco Central de Chile
South America 5955
(36%)
Within Central America, the Cayman Islands and Panama are the most important destinations
of Chilean FDI:
Distribution of Total Chilean FDI in Central America from 1974 up to November 2005
Millions of Dollars
Bermuda; 67; 1%
Dominican
Republic
3% Other; 117; 2%
Virgin Islands; 526; 8%
Bahamas; 173; 3%
Panama; 1592; 25%
Cayman Islands; 3806;
58%
Source: Banco Central de Chile
18
Within South America, the most important countries are Argentina, Uruguay, Peru and Brazil:
Distribution of Total Chilean FDI in South America from 1974 up to November 2005
Millions of Dollars
Ecuador
0%
Venezuela
Paraguay
Bolivia
5%
0%
2%
Other
1%
Colombia
3%
Uruguay
16%
Argentina
51%
Brazil
11%
Peru
11%
Source: Banco Central de Chile
Within North America, the United States account for 77% of total Chilean FDI.
Finally, we take a closer look at Europe, where Spain, England and the Canal Islands are the
principal destination.
Distribution of Total Chilean FDI in Europe from 1974 up to November 2005
Millions of Dollars
Other; 96; 6%
Switzerland; 72; 4%
England; 331; 19%
Germany; 121; 7%
Netherlands; 141; 8%
France; 0; 0%
Canal islands; 151; 9%
Belgium; 9; 1%
Liechtenstein; 126; 7%
Ireland; 26; 2%
Spain; 653; 37%
19
If we look solely at countries, then The Cayman Islands,
Source: Banco Central de Chile
Argentina and Panama are Chile’s main destinations for its FDI.
Total Chilean FDI per Country from 1974 up to November 2005
Millions of Dollars
3806
3017
1592
1061
945
887
668
653
634
526
141
C
ay
m
an
Is
la
nd
s
Ar
(1
ge
)
nt
in
a
(2
Pa
)
na
N
m
ew
a
(3
Ze
)
al
an
d
(4
U
ru
)
gu
U
ni
ay
te
(5
d
)
St
at
es
(6
)
Pe
ru
(7
)
Sp
ai
n
(8
)
Br
Vi
az
rg
…
i
i
n
l(
Th
Is
9)
e
la
N
nd
et
s
he
(1
rla
0)
nd
s
(..
18
)
4000
3500
3000
2500
2000
1500
1000
500
0
Source: Banco Central de Chile
A further analysis of development and distribution of Chilean FDI is being given in chapter
two.
Chilean FDI in 2005
When we take a look at FDI-flows in the period from January to October 2005, the
distribution of FDI is completely different. Central America was by far the least important
destination; the Cayman Islands and Panama even experienced outflows of Chilean FDI,
respectively by $-119 million and $-12 million.
It is possible that because of an increase in the number of Bilateral Investment Treaties and
treaties to avoid double taxation, these fiscal paradises lost their importance. The decrease of
investment in The Cayman Islands seems to be a recent phenomenon; in 2004, for the first
time net investments in the Cayman islands were negative (-2). Stricter regulations concerning
FDI after accusations of being non-transparent in 2000 is one of the reasons that causes this
trend.21
21
http://news.bbc.co.uk/1/hi/world/americas/country_profiles/370918.stm
‘Regions and territories: Cayman Islands’ 17-11-2005
20
On the other hand, The British Virgin Islands accounted for a relatively high inflow of FDI:
$124 million. North America was the most important destination ($325 million) with the
United States covering the main part, with an amount of $300 million. South America
experienced a slight decrease (8%) in the incoming flow of Chilean investments.
Nevertheless, in this region, Brazil, Argentina, Uruguay and Peru continued to be the main
recipients. In 2004, Argentina experienced a period of disinvestment, mainly caused by the
election of president Kirchner in 2003, but in 2005 net investment was above zero again.
Distribition of Total Chilean FDI, January-October 2005
Millions of Dollars
Asia; 18; 2%
Africa and oceania; 6; 1%
Europe; 258; 30%
North America; 325; 39%
Central America; 2; 0%
South America; 240; 28%
Source: Banco Central de Chile
As we can see, Europe has become the second most important destination of Chilean FDI
(30%), with England and Spain as main recipients, receiving respectively $202 million and
$36 million. Although they were with England and Spain one of the three most important
destinations in the decades before 2005, the Canal Islands received no investments from
Chile. Right now, Switzerland holds the third place in the ranking. The Netherlands received
in the first three trimesters of 2005 $ 3 million, 1.2% of total investments in Europe in 2005.
If we look at countries instead of regions with the most Chilean FDI in January to October
2005, then the United States come first, followed by the United Kingdom ($202 million), the
British Virgin Islands ($124 million) and Brazil ($104 million). These four countries received
21
together 86% of Chilean FDI, which means that there is not a lot of diversification with
respect to Chilean FDI.
1.3 Analysis of Relationship between Chilean International Trade and FDI from Chile
Some important trading partners (like Argentina, Brazil and the United States) are important
destinations for Chilean FDI as well, which could imply that trade is a necessary preceding
condition for investment. On the other hand, there are also regions that have a very good trade
relationship with Chile, but where Chilean investments don’t come off, like Asia: This block
is the most important destination for Chilean exports and the second most important origin of
Chilean exports of 2005, but received only 2% of Chilean FDI in 2005.
In addition, there are also countries with a large amount of Chilean investment, but with a low
amount of international trade, like countries in Central America (e.g. Cayman Islands).
Therefore, it still is logical that already existing trade relations facilitate future investment
flows, but other factors with an influence on investments shouldn’t be neglected either. For
example, investments in the Cayman Islands are not a direct consequence of trade with the
Cayman Islands, but are caused by the attractive tributary system and have another final
destination.
Moreover, Chilean FDI is far from homogeneous, which makes it hard to make statements
about general relationships or facilitating factors. To find the factors with major influence on
Chilean FDI, we focus on the main destinations of Chilean FDI in the next chapter.
22
Chapter 2: Chile: Investing Abroad
2.1: General Motives to Invest Abroad
Chileans invest generally to expand their markets, which is quite logical. Chile does not have
a very large market itself; with a total amount of only 15.981 million, Chileans feel the need
to look beyond their own borders.22 Other reasons to invest are to increase the scale of the
business and to get the possibility to control a larger part of the business someone is in.
Generally, Chilean business is characterized by efficiency and good management; especially
in comparison with other countries in the region, which forms an extra incentive to buy some
control over parts of the business abroad.23 At this moment, Chilean companies possess a lot
of liquid assets, which makes it plausible that companies will invest in Chile itself and abroad.
The choice to invest in a certain country depends roughly on one factor: yield. Yield is a
complex term: it consists of factors that minimize costs as well as of factors that maximize
benefits. For every sector in an economy, there are other factors influencing yield, which
makes it difficult to investigate general patterns of investment. Nevertheless, there are some
general factors that influence investment. One of the most obvious of these factors, both
influencing costs and benefits, is country risk.
Country risk itself depends on three factors:
1) Economic stability (e.g. macroeconomics, exchange rates, currency stability)
2) Financial stability (e.g. inflation)
3) Political stability (internal: e.g. corruption and policies concerning foreign participation in
the market, as well as external: e.g. international relations in general or the presence of
conventions like Free Trade Agreements, agreements to avoid double taxation and
Bilateral Investment Treaties).
Although somewhat vague, country risk determines the degree of trust that potential investors
have in a certain country. The perception of country risk may vary per country, but also per
sector.
22
23
www.gesource.ac.uk/worldguide/html/851_people.html
Based on: Interview with Señor Profesor D. Hachette de la F., Pontificia Universidad Católica, 16-11-2005
23
Other factors are, for example, the presence of markets, already existing trade relationships or
competition, history, geographical and/or cultural proximity and the policy of the country of
origin concerning outward FDI. This list of factors enumerates the most important ones, but of
course, for each sector (and even for each company) in the Chilean economy, the factors
constituting a decision to invest in a certain country are different.
There doesn’t exist a ‘perfect’ destination for Chilean investments. Every possible destination
has advantages and disadvantages, depending on numerous factors, situations and preferences
of the investing entity. A certain country which seems to be ideal for investments in a certain
sector from a certain company, might be the worst option for another investor.
Chile as a Platform for Investments
We should be aware of the fact that not all registered Chilean FDI comes from purely Chilean
investors. For example, subsidiary companies (in Chile) of foreign multinationals can invest
their capital outside Chile, and can therefore be registered as Chilean foreign direct investors.
Although complex and hard to trace, this theory could especially be applied to the two main
investors in Chile: the United States and Spain, with respectively $15.9 billion and $13.7
billion of total materialized investments between 1974 and 2004.24 Their investments in Chile
can be a new source of Chilean FDI, by using Chile as a platform for their own investments.
This seems to be complex, but there are other more complex possibilities of using Chile as a
platform for investments. A foreign company could form a strategic alliance with a Chilean
company, to develop commerce in, for example Latin America. In this way, ‘Chilean’
investments abroad can partly be from other foreign companies as well as Chilean companies.
It depends on the way of registration and technical aspects of the investment whether this
investment will be registered as a Chilean investment abroad or a foreign investment in or via
Chile (or in Latin America). An example for this is the case of Mitsubishi forming a strategic
alliance with the Chilean company Teknos, to introduce a so-called Wireless Local Loop
technology, developed by Mitsubishi, in other Latin American countries.25
24
25
www.cinver.cl Authorized and Materialized FDI by Country of Origin (D.L.600)
www.cinver.cl ‘Mitsubishi is Extremely Interested in using Chile as an Investment platform’, 27-12-2005
24
In this context, it is an interesting observation to see that Chile has an exceptionally high
Inward FDI/GDP ratio: 65% in 2003, while other countries didn’t even come close to this
percentage (for example, Brazil (25.8%), the United States (14.1%) or the average of the
developing countries (31.4)).26 Principal sectors for foreign investment in Chile are
M(32.6%), EGW and FIRS (both 19.6%).27
International Conventions with a positive influence on foreign investment: FTAs, BITs
and DTAs
The existence of international conventions like Free Trade Agreements (FTAs), Bilateral
Investment Treaties (BITs) and Double Taxation Agreements (DTAs) can increase foreign
investment between countries. Free Trade Agreements often include chapters with regulations
concerning foreign investment, by, for example, reciprocally assuring a secure and predictable
legal framework, protection of intellectual property and an effective and impartial procedure
for dispute settlement with respect to foreign investment. Such regulations can be found in,
amongst others, the FTA between Chile and the United States.28,29 Moreover, such
agreements create a positive trade- (and investments-) minded atmosphere.
In 1991, Chile became a signatory of the Washington Convention of 1965 that created the
International Centre for Settlement of Investment Disputes (ICSID). Since then, the country
began to negotiate BITs, a mechanism through which Chile provides additional protection
both to inward and outward foreign investment flows. As of November 2005, Chile has signed
52 BITs.30
Finally, Double Taxation Agreements guarantee more financial security for investors, by
establishing more cooperation amongst tax authorities. Exchange of information and the
formulation of reciprocally recognized regulations are key instruments. A complete list of
countries which are party to Chile’s FTAs, BITs and DTAs as well as more legal information
about BITs can be found in the appendix.
26
Unctad ‘World Investment Report 2004
www.cinver.cl
28
www.ustr.gov, summary of the U.S.-Chile Free Trade Agreement
29
For a more detailed description of the FTA between Chile and the European Union, please refer to chapter 3 of
this report.
30
www.cinver.cl
27
25
Treaties like FTAs, BITs and DTAs can facilitate a high level of investments, but it is also
possible that a high level of investments is a reason to start negotiations about these kinds of
agreements.
There is no clear evidence that an agreement necessarily and directly influences the level of
investments; for example in the case of New Zealand, which is the fourth destination of
foreign investment from Chile, but with which are no FTA, BIT or DTA in force. In the case
of the United States, the most important destination for Chilean FDI in 2005, there ‘only’ is a
FTA in force.
26
2.2 The process of investing abroad
How to invest abroad
In general, it’s quite easy for Chileans to invest outside Chile. The most important things to
do, is to get informed about the situation in the country of destination, ‘send the money’,
inform the Central Bank of Chile and the Servicio de Impuestos Internos, the Chilean Tax
Authority. Unlike about five years ago, it is not necessary to ask any authority for permission
to complete the transactions, which is in accordance with The Ley Orgánica Constitucional
del Banco Central de Chile, Artículo 39.
This Article states that ‘Any person may freely engage in foreign exchange transactions.’31
Articles 40 and 42 describe limitations: ‘The Bank may require that the transaction of
specified foreign exchange operations be reported in writing using the prescribed forms’32
and ‘The Bank may decide, through a justified resolution adopted by the majority of all Board
Members, that (certain) transactions are to be conducted exclusively within the Formal
Exchange Market’.33 Article 41 describes this Formal exchange Market as follows: ‘The
Formal Exchange Market shall be deemed to consist of the banking entities. The Bank may
authorize other entities or persons to be part of the Formal Exchange Market, that shall be
entitled to conduct only such transactions as The Bank may have determined.’34
FDI: Regulations of the Banco Central
In Chile, the Central Bank formulated rules for Chilean foreign Direct Investment. There are
two chapters about Foreign Direct Investment. These are Capítulo XII and Capítulo XIII. The
first one contains rules for persons, established in or residing in Chile, not being banking
companies. The second one contains rules for banking companies, established in Chile. These
rules constitute a certain environment of security and for example the prevention of fraud, but
will not be a barrier to invest abroad. Please refer to the appendix for an example.
31
Ley Orgánica Constitucional del Banco Central de Chile, Título III: Facultades y Operaciones del Banco,
Párrafo Octavo (1), De las Facultades en materia de operaciones de cambios internacionales, art. 39
32
Ley Orgánica Constitucional del Banco Central de Chile, Título III, art. 40
33
Ibidem, art. 42
27
Transnationalization policy?
Some governments of emerging markets try to support foreign direct investment, to improve
competitiveness.35 Also in Chile, the government tries to support FDI, but only in a nonsubsidizing way and mainly to support investment in Chile. For example, foreigners can count
on tax advantages if they want to invest in Chile.36
Concluding, Chile has an open economy, also concerning FDI. Therefore, if we look at the
policy concerning FDI in the country of origin and in the country of destination, the
destination and amounts of flows of investments are mostly determined by the latter.
2.3 Analysis of Important Chilean FDI- Destinations, by Region and Country
General remarks: For reasons of lack of information of Chilean FDI divided by sector, in this
chapter the focus will be on direct investment and portfolio investment together. Analyses are
based on data of the Boletín Mensual from December 2003 of the Banco Central de Chile.
For an impression of which companies from which sector are investing in which country,
please refer to the appendix. In spite of the fact that the data on this list are somewhat
outdated, it might help to get a better understanding of Chilean investments and investors.
Chapter three is dedicated to Europe and The Netherlands, for a more detailed description of
these destinations.
Central America:
Because of the fact that the largest part of Chilean FDI in Central America was destined to the
FIRS-sector until December 2003, it is likely that the Cayman Islands, Panama and the Virgin
Islands are not a final destination for Chilean FDI, but a platform from which Chilean
companies invest in other countries in the world, like the United States.
Reasons for this are an attractive tributary system, proximity to highly developed countries
and perhaps also the possibility to keep the final destination and amounts of capital secret. It is
imaginable that this especially was attractive under the Pinochet regime, which also might
explain that at this moment the region is much less attractive than before. Another reason for
34
Ibidem, art. 41.
Unctad, ‘Press Release: Firms in developing countries rapidly expanding foreign investment, transnational
activities’, 30-05-05
36
www.cinver.cl: Decree Law 600, ‘Fdi in Chile: regulations and procedures’
35
28
companies to keep information about their investments secret, is possible competition from
other companies.
The Cayman Islands as a platform for investments are attractive because of a very low country
risk, but this does not count for the whole region. For example, investing in Panama is not
considered to be without risk.
Investments in Panama until December 2003 not only included investments in the FIRSsector, but a considerable part is also directed to the TSC- and ASFF-sector (respectively 22%
and 12%).
Since October 18th 1999, a FTA between Chile and Central America (that is, Costa Rica,
Honduras, Nicaragua, Guatemala, El Salvador and Panama) is in force.37 There are also
several BITs with countries in Central America (amongst others with Costa Rica, Panama,
Nicaragua, Honduras, Cuba and Guatemala).38 Until now, there are no DTAs with countries in
Central America.39
Latin America
In general, countries in Latin America have advantages with respect to FDI, because of their
cultural and geographical proximity. Because of this, costs of maintaining commercial
relations and investment will be lower, in terms of time as well as of money.
In this region, the largest part of investments until December 2003 was directed at the FIRS- ,
MI-, and Ce-sectors. Contrary to Central America, this region is for the largest part of the
investment a final destination and not a intermediate stage for Chilean capital. Taking this into
account, Latin America is the most important final destination for total Chilean foreign
investment.
From a historical perspective, Argentina (which received more than 50% of total direct
investments in Latin America between 1974 and 2005) became an attractive country to invest
in because of economic reforms starting around 1988. These economic reforms included
privatization and decentralization; a process comparable to the one in Chile, started in 1979
37
38
www.direcon.cl
www.cinver.cl
29
under Pinochet. Because of this, Chileans had an advantage by already having experience in
managing privatizing companies, which made Argentina an interesting country to invest in.
The same phenomenon could be observed in Peru since 1990 under the Fujimori-regime and
in Brazil between 1995 and 2003 under Cardoso.
However, although the advantage of Chileans in terms of experience in managing privatized
companies might explain a part of investments, it certainly does not explain all the flows of
investment to countries in Latin America. For example, efficiency and skills of Chilean
companies are also very important factors.
Right now however, because of the lack of political, financial and economical stability,
Argentina is being perceived as a rather risky country to invest in. The Kirchner regime and
political climate do not make Argentina very attractive as a destination for Chilean FDI. For
example, and though it is not the only factor, on the Transparency International’s Corruption
Perception Index, the country scores a 2.5 on a scale ranging between 1 (highly corrupt) and
10 (highly clean).40,41 In addition, there is much interference of politics in the Argentinean
economy, which is sometimes characterized by a lot of mistrust.
Nevertheless, there of course are Chilean companies that do invest in Argentina, for example
Sigdo Koppers. This Chilean company invests in Argentina and plans to invest a $50 million
more in 2006 and 2007. With this money, they will construct a plant to produce plastics that
will be used to pack food products. In this case, the reason to invest in Argentina is to increase
their participation in the countries belonging to Mercosur (Brazil, Argentina, Uruguay and
Paraguay) and Latin America, where the expectations for the food market are high.42
Others too, like the Chilean ambassador in Argentina, Luis Maira, envision interesting
opportunities, because of a large market, geographical proximity and possible strategic
alliances within the Mercosur-block. Because of this, they expect a considerable growth of
amounts of Chilean investments in Argentina.43
39
www.sii.cl
Transparency International Corruption Perceptions index 2004
41
Ranking lists of country risk are not available; because of that we are using the corruption index as an example
42
La Tercera, 20-12-2005, pag 26, Sigdo Koppers refuerza inversiones en Argentina
43
Diario Financiero ‘Buenas Perspectivas ofrecen los países de la región para el inversionista chileno’ , 20-92005 28
40
30
Chilean investments in Argentina cover a lot of different sectors: Until 2003, the largest part
of the investments was directed at the FIRS-sector (36%), but the MI- and EGW-sectors also
received a considerable part (respectively 19% and 18%). The C-sector received 12% and the
TSC-sector received 9%.
Since October 1st 1996, Chile is after signing an Economic Complementation Agreement an
Associated member of Mercosur, to which Argentina is a party.44 A BIT between Chile and
Argentina is in force since February 199545 and a DTA is in force since March 1986.46
Uruguay has, in relation to other countries in Latin America a low country risk: for example,
(and though, as already stated, not the only factor) it scores a 6.2 on the Transparency
International’s Corruption perceptions Index.
The largest part of Chilean investments until December 2003 went to the FIRS-sector (72%),
the C-sector(8%), the ASFF-sector and the MI-sector, with both 7%.
Via the Economic Complementation Agreement with Mercosur, Chile and Uruguay share an
FTA since 199647 and in 1999 a BIT between the two countries entered into force48.
Until December 2003, the largest part of Chilean investment in Peru was directed at the MIsector (36%). This is rather remarkable in comparison to other Latin-American countries,
where the FIRS-sector in this year was the most important sector (in Peru it was the second
most important, however).
Like Argentina, Peru also experienced a process of economic reforms, under the Fujimoriregime between 1990 and 2000. This offered opportunities for Chilean investors, with more
experience in managing newly privatized companies. This could have caused a surge in
investments. A FTA (1998) , a BIT (2000) as well as a DTA (2004) between Chile and Peru
are also possible stimulators for investments.49 International relations, however, might be less
stimulating. Peru and Chile historically were rivalling countries and sometimes still seem to
44
www.direcon.cl
www.cinver.cl
46
www.sii.cl
47
www.direcon.cl
48
www.cinver.cl
49
www.direcon.cl, www.cinver.cl, www.sii.cl
45
31
be: even in 2005, there were disagreements about the division of territories. This also might
influence the perception of the country risk. Corruption is rather high in the country: Peru
scores a 3.5 on the Transparency International’s Corruption perceptions Index.
Brazil is an attractive country for Chilean investments, according to the Chilean ambassador
in Brazil, Demetrio Infante. Factors that facilitate investments in this country, are
(macro)economic stability and a steady business-environment.50 Because of the size of the
country, the market is very large and the geographical and cultural proximity of the country
should make it easy for Chileans to invest.
In addition, like in Argentina, Chileans have a comparative advantage concerning experience
in managing newly privatized Brazilian companies. (From 1995, Brazil entered into economic
reforms under president Cardoso). If seen from a political perspective, the country risk is
rather low, in comparison with other Latin American countries. However, although better than
Argentina, Brazil scores with a 3.9 badly on the Transparency International Corruption
Perceptions Index.
Until 2003, 60% of Chilean investment was directed at the FIRS-sector; the second most
important sector was Cm (19%) and the third most important sector was MI, with 10%.
Via Mercosur, Chile and Brazil share an Economic Complementation Agreement since 1996.
The two countries signed a BIT in 1994, which is not in force nowadays however. A DTA
between Chile and Brazil is in force since 2003.51
For the rest, a large investment is being expected in 2006 in Venezuela: the Chilean Empresa
Nacional de Petróleo (Enap) plans to invest $ 300 million in exploration and exploitation of
an oil field in the east of the country. This investment doubles the current stock of Chilean
investments in this country, which makes Venezuela the fifth most important country for
investments on the continent.52
50
Paola Díaz S. ‘Buenas perspectivas ofrecen los países de la región para el inversionista chileno’ Diario
Financiero Economía 20-11-2005
51
www.cinver.cl, www.direcon.cl, www.sii.cl
52
Juan Metiches R., ‘Energía: Sobre US$ 300 milliones evalúa invertir Enap en Venezuela’ El Mercurio, 27-122005
32
North America
Economic relations between Chile and the United States are close, concerning trade, as well
as investments. Although not the most important country concerning total stock of Chilean
investments, at this moment, the United States as a country are not only the principal
destination of FDI, but also the principal source of FDI in Chile. Total FDI from the United
States in Chile amounts to $16 billion; 27.2% of total FDI in Chile.53 As explained in
subchapter ‘Chile as a Platform for Investments’, it is possible that because of the large
amount of trade and investments from the United States, there are automatically more
opportunities to invest in the United States.
By far, the largest part of Chilean Investments in the United States flows to the FIRS-sector
(90%). This sector is followed by the Ce- and MI-sectors, with respectively 3% and 2%.
Country Risk is low; financially, economically and politically: for example, The United States
score a 7.5 on the Transparency International Corruption Perceptions Index, and get an ‘AAA’
rating on the ‘long-term foreign currency sovereign rating’ from Fitch Ratings as well as from
Standard and Poor’s and Moody’s.54
There is a large market of consumers in the United States. This market has a rather uniform
and harmonized image, which makes it possible to create a clear and general vision of
commercial opportunities for Chilean investors.
In 2004, a FTA between the United States and Chile entered into force. Right now, a DTA is
under negotiation.55
New Zealand
All of Chilean investments in New Zealand are directed at the FIRS-sector. The country risk is
low. In combination with the proximity of Australia as well as Asia, this country, like the
countries in Central America, serves as a platform for investments in the region. However,
this is not because of the tributary system, but it is possible that there are other regulations that
53
Direcon ‘Chile, a springboard into new markets’ August 2005 83
Ibidem, 69.
55
www.cinver.cl, www.sii.cl
54
33
make this country attractive as a platform for investments. The market in New Zealand is very
open and the economies of New Zealand and Chile have various similarities.
A remarkable fact is that there are no agreements with a possible positive influence on
investments in force: Via the P4-association agreement, New Zealand signed an FTA with
Chile in 2005, which is not in force yet. In addition, the country signed a BIT with Chile in
1999 and a DTA in 2003, which also are not in force. Problems during negotiations are caused
on the side of Chile, where amongst others large-scale agricultural landowners in the south of
Chile expect to experience disadvantages of these agreements.56
56
Prue Hyman and Jane Kelsey, ‘Critique of the propsed Chile-New Zealand Closer economic Partnership (P3
with Singapore)’ 21-12-2004 www.bilaterals.org
34
Chapter 3: Europe and The Netherlands as Chilean FDI-destinations
3.1 Europe: Advantages and disadvantages
There exists a wide variety of opinions among Chileans about possibilities for investing in
Europe. For some, Europe is a very attractive destination for Chilean foreign investments, but
others don’t even think of ever investing in Europe. Low amounts of investments confirm
signs of a lack of interest in investing in Europe: only 10% of total Chilean investments up to
November 2005 has Europe as destination, in spite of large amounts of international trade. On
the other hand, it seems like Europe becomes more attractive for Chilean investors, if we look
at investments in 2005: 30% of Chilean investment had Europe as destination. In this chapter,
we take a look at the perceived advantages and disadvantages for Chileans of investing in
Europe.
Country Risk
In the first place, the country risk is low. Europe is stable; politically, as well as economically.
There is a sophisticated legal system, which safeguards investments and trade, but which on
the other hand could cause inertia because of bureaucracy. Inflation is low, and exchange rates
are stable.
Large but Highly Developed Markets
There are large markets, with a wide variety of possibilities to trade and to invest. On the
other hand, these markets are mostly highly developed and mature, with little huge ‘gaps in
the market’ to enter. To become a successful player on this market, a lot of knowledge and
skills are necessary to compete with the others. The economy of Chile is not being
characterized by a high level of innovation, while demand for innovative products is high.
Moreover, the European market has a lot of diversification and fragmentation in the sense of
producers, consumers and products, which makes it difficult to get a clear view of commercial
possibilities.57
57
Interview with Señor Profesor D. Hachette de la F., Pontificia Universidad Católica, 16-11-2005
35
Geographical Distance
The geographical distance of Europe offers both reasons to invest, as well as not to invest. To
manage trade and commercial processes in Europe, it’s necessary to be physically present in a
distant market. Some companies have the experience that business at the other side of the
world just is not manageable from an office in Chile, and therefore they establish an office, a
part of their production chain or they invest in a distribution channel in the market of
destination itself. On the other hand, the distance to Europe could be a reason not to trade or
to invest, because it’s simply too costly or there are too many options closer to the country of
origin.
Cultural Distance
If you look at cultural distance from Chile to Europe, a lot of different observations can be
made. In the first place, most Chilean people have their (far) roots in Europe, because of the
Spanish colonization and, since the late nineteenth century, the arrival of a large group of
European immigrants, mainly Germans, British, French and Italians.58
From a linguistic perspective, in Europe only Spain and in lesser degree Italy are close to
Chile. Difference in language is an often cited barrier for Chileans for trade and investments
in Europe. Also, a lack of knowledge of Europe in general and for example its markets,
possibilities and legal system make Europe culturally more distant. In this context, minor
factors, like a different Chilean accountancy system (which is more like the accountancy
system in the United States) and many Chilean CEO’s having their education in the United
States instead of in Europe, can also make Europe less attractive to invest in.
International Relations
Generally, international relations between Chile and the EU, as well as between Chile and the
individual member states, are good. With respect to economic ties, there is a number of
treaties, of which the Association Agreement between the EU and Chile is the most important
and well-known. However, the emphasis in this treaty is more on trade than on investments
and if there are chapters about FDI in Europe, they deal mostly with general statements on the
subject. At this moment, there is no clear, uniform, harmonized policy concerning
investments, which causes some vagueness and insecurity for foreign investors in the EU. For
36
this, to attract more investment, it is necessary (though difficult) for Europe to harmonize their
policies concerning inward foreign direct investment.
Promoting Investment: Article 21 of the Association Agreement between the EU and Chile
1. The aim of cooperation will be to help the Parties to promote, within the bounds of
their own competence, an attractive and stable reciprocal investment climate.
2. Cooperation will cover in particular the following:
(a) establishing mechanisms for providing information, identifying and
disseminating investment rules and opportunities;
(b) developing a legal framework for the Parties that favours investment, by
conclusion, where appropriate, of bilateral agreements between the Member
States and Chile to promote and protect investment and avoid dual taxation;
(c) incorporating technical assistance activities for training initiatives between the
Parties’ government agencies dealing with the matter; and
(d) developing uniform and simplified administrative procedures.59
Bilateral Agreements with Member States of the European Union
There is also, apart from the Association Agreement between Chile and the EU as a whole, a
number of Double Taxation Treaties and Bilateral Investment Treaties. These agreements
state, for example, the rules to determine the state that has the right to charge the obtained
revenues, the tax subjects, the type of tax and the tax rates that will be applied. They facilitate
the investments flow, because it is known in advance which will be the tributary costs that the
investors will have.60 In the past years, the Chilean government pursued an active policy in
expanding the number of this kind of treaties, but right now this policy is being revised. Chile
is, in cooperation with the World Bank, studying the trade off between more investment and
less tax revenues.
58
Melvin Ember and Carol R. Ember , ‘Countries and their Cultures, Volume 1
Commission of the European Communities, ‘Proposal for a Council decision on the conclusion of an
association agreement between the European Community and its Member States of the one part, and the Republic
of Chile of the other part’ 3-10-2002
60
www.eurochile.cl
59
37
BITS AND DTAS WITH MEMBER COUNTRIES OF
THE EUROPEAN UNION
Country
BIT
DTA
Austria
In force since 2000
None
Belgium
In force since 1999
In negotiation
Denmark
In force since 1995
In force since 2005
Finland
In force since 1996
In negotiation
France
In force since 1994
Signed in 2004
Germany
In force since 1999
None
Greece
In force since 2003
None
Italy
In force since 1995
In negotiation
Ireland
None
Signed in 2005
Luxembourg
None
None
The Netherlands
Not in force
In negotiation
Portugal
In force since 1995
Signed in 2005
United Kingdom
In force since 1997
In force since 2005
Spain
In force since 1994
In force since 2004
Sweden
In force since 1996
Signed in 2004
Cyprus
None
None
Slovakia
None
None
Slovenia
None
None
Estonia
None
None
Hungary
Not in force
In negotiation
Latvia
None
None
Lithuania
None
None
Malta
None
None
Poland
In force since 2000
In force since 2004
Czech Republic
In force since 1996
In negotiation
In spite of the existence of various agreements with a positive influence on Chilean foreign
investments by opening up commercial international relations, also protectionist behaviour is
being reported. Europe applies, for example, more (formal as well as informal) regulations
concerning foreign investment and is less transparent than the United States.61
38
It is possible that the recently acceded member states of the European Union will be an
attractive destination for Chilean capital, because of the state of development and the size of
the market. Right now, however, it is too early to tell anything about tendencies concerning
investments in, for example, Eastern Europe.
(Investment-) Climate? An example
There are a lot of possible reasons to invest in Europe. Sometimes it seems like even all
factors as described above are not the main reason to invest in Europe, which is also the case
with a Chilean producer of and trader in fruits. This company invests among others in Europe.
They invest in Spain and Poland, mainly by buying land to produce fruits. They also have one
commercial office in Spain. For them, the main reason to invest in Europe, is the geography,
which causes a different spread of seasons than in other parts of the world.
With their presence in many parts of the world, they can produce fruits of the season
throughout the whole year; seasonal gaps are being filled with production in another part of
the world. For example, when it’s winter in Chile, it’s summer in Spain and vice versa. The
macro-economical or political climate to invest is of minor importance, although countries
with an extremely high risk like Argentina are being avoided. This company plans to invest in
the coming three to five years $15 million in Spain and Poland.
3.2 Analysis of Important Chilean FDI- Destinations Within Europe
Spain as a country is the second most important investor in Chile with a total amount of $13.7
billion(23.4%)62 Hence, it’s very well possible that Spanish companies in Chile re-invest in
their ‘casa matriz’ in Spain.
Commercial international relations are basically good: apart from the Economic Association
Agreement between the European Union and Chile, a BIT entered into force between Spain
and Chile in 1994, and a DTA entered into force in 2004.63
61
Interview with Señor Profesor D. Hachette de la F., Pontificia Universidad Católica, 16-11-2005
Direcon, ‘Chile, a Springboard’, 85
63
www.cinver.cl, www.direcon.cl, www.sii.cl
62
39
The largest part of Chilean investments in Spain is directed at the EGW-sector (32%),
followed by TSC(23%), Cn (21%) and FIRS (18%). Together with Germany, Spain is the only
country that receives relatively more investments in another sector than the FIRS-sector.
Although from a geographic perspective very distant from Chile, from a cultural perspective
are Spain and Chile close, from which the language is an obvious demonstration. Language is
a much-reported factor that stimulates investment-opportunities.
Finally, there is a large market in Spain, which is in comparison with some other European
countries less developed and less saturated and has a stronger potency for growth.
Almost all of Chilean investments in The United Kingdom and the Canal Islands in 2003
were invested in the FIRS-sector. In the UK, this sector accounted for 92% and in the Canal
Islands it accounted for 97%. The second sector in England was the M-sector, and in the
Canal Islands the TSC-sector. Because of the large percentage FDI in the FIRS-sector, it is
plausible that these countries are being used as a platform for investments in Europe.
3.3 The Netherlands as a Destination for Chilean Investments
Large Amounts of Trade and Small Amounts of Investments
Although the Netherlands are within Europe the most important export destination (and seen
from a worldwide perspective, Chile’s fourth most important export destination, after the
United States, China and Japan), the total amount of Chilean FDI up to 2005 in this country is
very low: $141 million. Between January and October 2005, the Chileans invested only $ 3
million. As we have seen, the presence of strong trade-relations with a country doesn’t
necessarily imply a strong flow of FDI to that country, so we have to take a look at other
factors than trade.
Country Risk
Country risk in The Netherlands is low, politically as well as economically.
The presence of an excellent infrastructure, like for example the port of Rotterdam, which has
the function of being a main gate to the European market, and airport Schiphol, makes The
Netherlands an attractive platform from which to start operations in Europe.
40
International Relations
There are several commercial conventions between Chile and The Netherlands: a treaty on
economic and technological cooperation and a treaty on social security, a declaration of intent
about a Double taxation Agreement and a declaration of intent for Agricultural Cooperation.
The bilateral investment treaty hasn’t been ratified by the Chilean parliament.
Disadvantages
In spite of the signalled positive factors, described above, there are also negative factors. The
Netherlands are not well-known in Chile, which is an often-mentioned disadvantage of
investing in this country. Primarily, language is a problem and, secondarily, Chileans know
too little about opportunities (if existent). Moreover, the lack of knowledge of the sometimes
complex local and regional rules also forms a barrier to invest in this country.
Opportunities
Opportunities in The Netherlands are mainly in fields with a innovative character, while
Chilean companies investments generally are not characterized by a high standard of
innovation. However, possible sectors for investment in The Netherlands are wine and salmon
(ASFF). The FIRS-sector also offers opportunities64, as we can see in the division of
investments in 2003.
In 2003, almost 90% of total Chilean investments was being invested in the FIRS sector.
Around 7% of the total amount was invested in the MI-sector, while the rest of the
investments was divided between TSC, Ce and ASFF.
Chilean Companies Investing in The Netherlands
Chilean companies that are affiliated with The Netherlands, as far as is known by Prochile
Holanda, are: Chiquita Frupac B.V., New World Fruit Traders (Copefrut s.a.), David del
Curto, Decofrut/ Infotrade B.V., Eurofrut, Eurosouth BV, Frucentro SA, Pacific Ores and
Trading bv, Arauco Forest Products B.V.65 However, this list is not complete.
64
65
Interview with Sr. Augusto Castillo, Direcon 16-11-2005
Based on data of Prochile Holanda, 4-11-2005
41
These known Chilean investments in the Netherlands are in the ASFF-sector, which is also the
most important sector for Chilean exports to the Netherlands.
42
APPENDIX
Specification of trade-sectors
43
44
45
46
47
48
Regulations of the Banco Central: An Example
Capitulo XII
This chapter is divided in two parts: A and B. Under A, there are six subchapters. Chapter A,
number 1, starts with describing to whom this chapter is applicable. After this, a short list of
definitions of Investments, deposits, credits, ‘disposicion de fondos’ and institutional
investors is being given. Number 3 of chapter A says that the Central Bank of Chile should
directly be informed by the acting person of all sorts of investments made. Number 4 of
chapter A says that all payments, forthcoming from investments abroad, must enter Chile via
the formal exchange market. The acting person must inform the ‘Entidad del Mercado
Cambiario Formal’ about the sort of operation. The Entidad del MCF must send the received
information to the Central Bank. In the case of Valores Extranjeros o CDV, the appropriate
persons should send their information directly to the Central Bank.
49
FREE TRADE AGREEMENTS
Country or Group of
Countries
Type of Agreement
Signature Date
Effective Date
European Union (1)
Economic Association Agreement
18 November 2002
1 February 2003
P4
Economic Association Agreement
18 July 2005
Parliamentary proceeding pending
Canada
Free Trade Agreement
5 December 1996
5 July 1997
Republic of South Korea
Free Trade Agreement
15 February 2003
1 April 2004
United States
Free Trade Agreement
6 June 2003
1 January 2004
Mexico
Free Trade Agreement
17 April 1998
1 August 1999
Central America
Free Trade Agreement
18 October 1999
El Salvador
Free Trade Agreement
18 October 1999
3 June 2002 (Bilateral Protocol)
Costa Rica
Free Trade Agreement
18 October 1999
14 February 2002 (Bilateral Protocol)
Nicaragua
Free Trade Agreement
18 October 1999
Bilateral under negotiation
Honduras
Free Trade Agreement
18 October 1999
Bilateral under negotiation
Guatemala
Free Trade Agreement
18 October 1999
Bilateral under negotiation
EFTA (2)
Free Trade Agreement
26 June 2003
1 December 2004
Bolivia
Economic Complementation Agreement Nº 22 6 April 1993
7 July 1993
Colombia
Economic Complementation Agreement Nº 24 6 December 1993
1 January 1994
Ecuador
Economic Complementation Agreement Nº 32 20 December 1994
1 January 1995
Mercosur (3)
Economic Complementation Agreement Nº 35 25 June 1996
1 October 1996
Peru
Economic Complementation Agreement Nº 38 22 June 1998
1 July 1998
Venezuela
Economic Complementation Agreement Nº 23 2 April 1993
1 July 1993
Cuba
Partial Scope Agreement
Parliamentary proceeding pending
21 August 1998 (4)
(1) The countries that participate as members of the European Union are: Germany, Austria, Belgium, Denmark, Spain, Finland, France, Greece,
Italy, Ireland, Luxembourg, The Netherlands, Portugal, United Kingdom, and Sweden. As from May 1, 2004, the new member countries are:
Cyprus, Slovakia, Slovenia, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, and Czech Republic.
(2) The European Free Trade Association (EFTA) is formed by: Iceland, Liechtenstein, Norway and Switzerland.
(3) Mercosur is formed by Argentina, Brazil, Paraguay and Uruguay. Chile participates as country associated to the Agreement, as well as Bolivia.
(4) The date refers only to the end of the Negotiations.
WWW.DIRECON.CL
Bilateral Investment Treaties
In these agreements, each Contracting State commits itself to provide fair and equitable treatment to investments
legally materialized in its territory by investors of the other Contracting State. They also guarantee the principles of
National Treatment and Most Favored Nation status.
50
Moreover, BITs protect private property rights through the establishment of basic principles and minimum standards
in case of expropriations. Likewise, they guarantee that any expropriation or measure with similar effect will be
adopted in accordance with a law based on public good or national interest, in a non-discriminatory manner. They
state that expropriatory measures must be accompanied by the provisions of prompt, adequate and effective
compensation.
Through BITs, the Contracting States guarantee the free transfer of capital, of profits or interest generated by foreign
investments, and, in general any transfer of funds related to investments. Some restrictions may apply, in accordance
with national laws.
Additionally, these agreements establish a dispute settlement mechanism in case of controversies that might arise
between an investor of a Contracting State and the other Contracting State. Basically, this mechanism assures that
controversies will be settled through friendly consultations. If no agreement is reached, the investor will be entitled to
submit, at his own decision, the case before the domestic jurisdiction of the host State of the investment or to
international arbitration. In most BITs, this jurisdictional option is definitive.
The principle of subrogation is also included in BITs. This means that if one Contracting State -or an agency
authorized by it- grants any kind of insurance against non-commercial risks to an investment in the territory of the
other Contracting State, the latter shall recognize the rights of the former to subrogate for the rights of the investor in
case it has paid the insurance.
The protection provided by these agreements applies both to investments made after the agreement comes into
force as well as to those made before that date. These BITs, however, do not apply to disputes which arise prior to
their entry into force or to disputes directly related to events which occurred prior to their entry into force.
Signed treaties need to be ratified by Congress before they can be in force. Treaties are in force in Chile once they
are published in the Official Gazette (the Government's Official Registry of laws and decrees).
List of Investment Treaties
Americas
Country
Signed on
Status *
Argentina
August
2,1991
In Force
since
February
27, 1995
Bolivia
September
22, 1994
In Force
since July
21, 1999
Brazil
March 22,
Not in force
1994
Colombia
January
22, 2000
Not in force
Costa Rica
July 11,
1996
In Force
since July
8, 2000
Cuba
January
10, 1996
In force
since
September
51
Ecuador
October
23, 1993
November
El Salvador 8, 1996
In Force
since
February
21, 1996
In Force
since
November
18, 1999
Dominican
Republic
November
Not in force
28, 2000
Guatemala
November
8, 1996
Honduras
In Force
November
since
11, 1996 January 10,
2002
Nicaragua
November
8, 1996
In Force
since
December
10, 2001
Panama
November
8, 1996
In Force
since
December
21, 1999
Paraguay
August 7,
1995
In Force
since
September
16, 1997
Peru
February
2, 2000
In Force
since
August 11,
2001
Uruguay
October
26,1995
In Force
since April
22, 1999
Venezuela
April 2,
1993
In Force
since May
17, 1994
Signed on
Status
Austria
September
8, 1997
In Force
since
November
17, 2000
Belgium
July 15,
1992
In Force
since
August 5,
1999
In Force
since
December
10, 2001
Europe
Country
C:\Mis documentos\testweb\Foreign Investment
Committee_archivos\bits_archivos\austria.gif
C:\Mis documentos\testweb\Foreign Investment
Committee_archivos\bits_archivos\belgica.gif
52
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/croacia.htm
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/checa.htm
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/dinamarca.ht
m
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/finlandia.htm
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/francia.htm
http://www.direcon.cl/acuerdos/acuerdos_inversion/grecia.htm
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/hungria.htm
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/italia.htm
Croatia
November
28, 1994
In Force
since July
31, 1996
Czech
Republic
April 24,
1995
In Force
since
December
2, 1996
Denmark
May 28,
1993
In Force
since
November
30, 1995
Finland
May 27,
1993
In Force
since June
14, 1996
France
July 14,
1992
In Force
since
December
5, 1994
Germany
October
21, 1991
In Force
since June
18, 1999
Greece
July 10,
1996
In Force
since March
7, 2003
Hungary
March 10,
Not in force
1997
Iceland
June 26,
2003
Not in force
Italy
March 8,
1993
In Force
since June
23, 1995
The
November
Netherland 30, 1998 Not in force
s
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/noruega.htm
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/polonia.htm
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/portugal.htm
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/rumania.htm
Norway
June 1,
1993
In Force
since
November
4, 1994
Poland
July 5,
1995
In Force
since
September
22, 2000
Portugal
April 28,
1995
In Force
since
February
24, 1998
Romania
July 4,
1995
In Force
since
August 27,
1997
53
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/espana.htm
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/suecia.htm
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/suiza.htm
Spain
October
10, 1991
In Force
since April
27, 1994
Sweden
May 24,
1993
In Force
since
February
13, 1996
In Force
September
since
Switzerland 24, 1999 August 22,
2002
Turkey
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/ucrania.htm
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/inglaterra.htm
August 21,
Not in force
1998
Ukraine
October
30, 1995
In Force
since
August 29,
1997
United
Kingdom
January 8
1996
In Force
since June
23, 1997
Signed on
Status
July 9,
1996
In Force
since
November
18, 1999
Asia, Pacific Islands and the Middle East
Country
http://www.sitionuevo.cl/images/flags/australia.gif
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/china.htm
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/corea.htm
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/malasia.htm
http://www.direcon.cl/acuerdos/acuerdos_inversion/textos/filipina.htm
Australia
China
In Force
March 23,
since
1994
October 14,
1995
Indonesia
April 7,
1999
Not in force
Korea
September
6, 1996
In Force
since
November
18, 1999
Lebanon
October
13, 1999
Not in force
Malaysia
November
11, 1992
In Force
since
August 4,
1995
New
Zealand
July 22,
1999
Not in force
November
Philippines 20, 1995
Vietnam
In Force
since
November
6, 1997
September
Not in force
16, 1999
54
Africa
Country
Signed on
Status
South
Africa
November
Not in force
12, 1998
Egypt
August 5,
1999
Not in force
Tunisia
October
23, 1998
Not in force
SOURCE: WWW.CINVER.CL
List of DTAs
In Force
Polonia (D.O. de 27 de Marzo de 2004)
España (D.O de 24 de Enero de 2004)
Perú (D.O. de 5 de Enero de 2004)
Perú Protocolo Modificatorio
Ecuador (D.O. de 5 de Enero de 2004)
Corea del Sur (D.O. de 20 de Octubre de 2003)
Noruega (D.O. de 20 de Octubre de 2003)
Brasil (D.O. de 24 de Octubre de 2003)
México (D.O. de 8 de Febrero de 2000)
Canadá (D.O. de 8 de Febrero de 2000)
Argentina (D.O. de 7 de Marzo de 1986)
Argentina (Protocolo Modificatorio N°1, Protocolo Modificatorio N°2)
Reino Unido (D.O 16 de febrero de 2005)
Dinamarca (D.O de 10 de febrero de 2005)
Croacia (D.O 16 de febrero de 2005)
Signed
Rusia ( 19 de noviembre de 2004)
Malasia (3 de Septiembre de 2004)
Francia (7 de junio de 2004)
Suecia (4 de junio de 2004)
Nueva Zelandia (10 de Diciembre de 2003)
Irlanda (02 de junio de 2005)
55
Portugal (7 de julio de 2005)
Paraguay (30 de agosto de 2005)
Negotiation Concluded
Sudáfrica
In Negotiation
Finlandia
Cuba
Hungría
Holanda
Suiza
Estados Unidos
Venezuela
Italia
República Checa
China
Bélgica
Kuwait
Tailandia
India
SOURCE: WWW.SII.CL
56
Focus: - (Large) Chilean Foreign Direct Investors,
World Investment Directory Volume IX Latin America and Caribbean 2004, 214
Largest home - based TNCs, 2002(Millions of dollars and number)
Company
Industry
Sales
Employees
A. Industrial
Corporacion Nacional del Cobre
Mining and quarrying
3 422
de Chile
Empresa Nacional del Petroleo
Petroleum
2 213
Empresas CMPC
Embotelladora Andina
Soc. Quimica y Minera de Chile
Madeco
Embotelladoras Chilenas Unidas
Molibdenos y Metales
CTI Tecno Industrial
Indura SA Industria y Comercio
Compania Cervecerias Unidas
Productos de Alambre Prodalam
Agricola Nacional
Coresa Contenedores, Redes y
Envases
Compania Electro Metalurgica
B. Tertiary
Compañia Sud Americana de
Vapores
Sodimac
Empresas Navieras
Farmacias Ahumada
Cencosud
David del Curto
Adexus S.A
Synapsis, Soluciones y Servicios
1 243
723
554
359
155 1
121
114
77
17
166
3
326
113
5 920
100
660
630
500
1134
491
72
56
45
4 300
500
480
37
780
20
350
Transport and storage
1 744
460
Trade
Transport and storage
Trade
Trade
Trade
Trade
IT Computer and
related activities
Trade
Telecommunications
Food
Trade
547
442
314
151
113
73
67
7 000
7
3 000
300
247
400
419
Agriculture
Beverages
Chemicals
Metals
Beverages
Mining and quarrying
Metals
Machinery and
equipment
Beverages
Metals
Machinery and
equipment
Metals
Metals
Emasa Equipos y Maquinarias
64
350
Madecotel
43
56
Empresas Iansa
22
60
Sociedad Productora y
22
80
Distribuidora
A.J. Broom y Cia
Transport and storage
5
120
Tintas Graficas Inmobiliaria y
Other business
4
4
Servicios
services
C. Finance and insurance
Assets Employees
.. .. .. ..
Sources: The Banker's Almanac, 2003 (London, Reed Information Services, 2003); Thomson
Analytics
(http://analytics.thomsonib.com/); Who Owns Whom, 2003 (London, Dun and Bradstreet, 2003).
57
Largest affiliates of home based TNCs, 2002
(Millions of dollars and number)
Company Name
Host economy
A. Industrial
Edasa
Argentina
Alto Parana
Argentina
La Papelera del Plata
Cervecería Salta
Coca Cola Polar Argentina
Sadac
Ivax Argentina
Ivax Manufacturing
Argentina
Complejo Industrial Pet
Argentina
Argentina
Argentina
Belgium
Argentina
Argentina
Me Global
Menipa
Aluflex
United States
Argentina
Argentina
Briggs Industries
United States
Gleba
Molymex
B. Tertiary
Easy Homecenter
Far Ben
Droguería Benavides
Companhia Energetica do
Ceara Coelce
Codelco Kupferhandel
Central Costanera
Argentina
Mexico
Germany
Argentina
Chile Copper
Codelco Services
Edegela
UnitedKingdom
UnitedKingdom
Peru
Benavides de Monterrey
Benavides del Pacífico
Central Termoelectrica
Buenos Aires
Easy
Generandes Peru
Mexico
Mexico
Argentina
Argentina
Peru
Hidroelectrica el Chocon
Argentina
Argentina
Argentina
Mexico
Mexico
Brazil
Industry
Sales
Employees
Beverages
Wood and wood
products
Paper and packaging
Beverages
Beverages
Chemicals
Pharmaceuticals
Pharmaceuticals
223
170
1 300
831
82
81
75
73
73
55
600
640
690
164
205
..
Rubber and plastic
products
Metals
Beverages
Rubber and plastic
products
Non metallic mineral
products
Chemicals
Chemicals
42
67
29
21
16
420
189
162
14
250
12
11
55
115
1 053
551
441
314
4 300
..
6 500
1 388
277
240
..
260
213
213
161
..
..
154
122
90
43
1 360
2 950
..
41
34
500
10
32
50
Trade
Trade
Trade
Electricity, gas and
water
Trade
Electricity, gas and
water
Trade
Trade
Electricity, gas and
water
Trade
Trade
Electricity, gas and
water
Trade
Electricity, gas and
water
Electricity, gas and
water
Assets
..
Employees
C. Finance and insurance
Mercobank Argentina
Finance
608
.. .. .. .. ..
Source: The Banker's Almanac, 2003 (London, Reed Information Services, 2003); Thomson Analytics
(http://analytics.thomsonib.com/);
Who Owns Whom, 2003 (London, Dun and Bradstreet, 2003).
58
SOURCES
Banco Central: ‘Boletín Mensual’ (2001-2005)
Banco Central: Ley Organica Constitucional del Banco Central de Chile
Diario Financiero, ‘Buenas perspectivas ofrecen los países de la región para el inversionista
chileno’, 20-9-2005
Direcon, ‘Chile, a Springboard into New Markets’ 08-2005
Commission of the European Communities, ‘Proposal for a Council decision on the
conclusion of an association agreement between the European Community and its Member
States of the one part, and the Republic of Chile of the other part’ 3-10-2002
IMF, Balance of Payments Manual 5th ed
Juan Metiches R., ‘Energía: Sobre US$ 300 milliones evalúa invertir Enap en Venezuela’ El
Mercurio, 27-12-2005
La Tercera, ‘Business news: January-October exports top whole of 2004’, 9-11-2005
Melvin Ember and Carol R. Ember , ‘Countries and their Cultures, Volume 1
Paola Díaz S. ‘Buenas perspectivas ofrecen los países de la región para el inversionista
chileno’ Diario Financiero Economía
Prue Hyman and Jane Kelsey, ‘Critique of the propsed Chile-New Zealand Closer economic
Partnership (P3 with Singapore)’ 21-12-2004 www.bilaterals.org
Roberto Alvarez E., ‘The export performance of Chilean Firms: Some stylized Facts,’ Cepal
Review 83, August 2004 118
59
Sofofa, ‘Comercio exterior. Informe Mensual’ Agosto 2005
Transparency International, ‘Transparency International Corruption Perceptions Index’ 2004
Unctad, ‘Press Release: Firms in developing countries rapidly expanding foreign investment,
transnational activities’ 30-05-05
Unctad, ‘World Investment Report 2001’ 30
Unctad, ‘World Investment Report 2003’
Unctad, ‘World Investment Report 2004
Interviews:
Angel Salinas Facco and Andrea Lynch, Banco Central de Chile
Augusto Castillo Grado, Direcon
Dominique Hachette de la F., Pontificia Universidad Católica
Fernando Irrarázaval Zegers, Decofrut
Francisco Ortúzar, Hortifrut/Euroberry
George Lever, Camara de Comercio de Santiago
Jimena Castillo
Jaime Bazán Ried and Tara Hayes, Amcham Chile
Rosella Cominetti, Eurochile
Thos Gieskes, Rabobank Chile
Websites
www.bcb.gov.br
www.bcentral.cl
www.bcu.gub.uy
www.bea.gov
www.bilaterals.org
www.ccs.cl
www.cinver.cl
60
www.direcon.cl
www.dnb.nl
www.gesource.ac.uk
www.imf.org
www.news.bbc.co.uk
www.sii.cl
www.unctad.org
www.ustr.gov
61