Chile: Business Environment and Investment Opportunities Guest Speaker 14:00 15:00 GUEST SPEAKER Martin Pathan Investment Officer Foreign Investment Committee
Chile: business environment and investment opportunities Martin Pathan Foreign Investment Committee
Snapshot of the chilean economy Economy GDP 2012 GDP per capita (PPP, 2012) Actual interest rate (Monetary Policy February 2013) US$ 268 billion (IMF) US$ 18.354 (IMF) 1 place in South America 5.0% Unemployment rate (2012) 6.4% External Public Debt (2012) Exports (2012) Imports (2012) US$ 23,5 billion US$ 78,8 billion US$ 70,6 billion Chile s Sovereign Ratings Fitch Ratings A+ Standard & Poors AA- Moody s Aa3 DBRS AA- Social Population 16.5 million Official Language Spanish Currency Peso Literacy rate 97% Life expectancy 78 years Government of Chile Foreign Investment Committee Source: Central Bank of Chile (www.bcentral.cl) / IMF (www.imf.org) / ProChile 4
The best place to invest
Economic Growth Projections 8 Growth comparison: World, Latin America and OECD 2000-2013 *Projected growth 6 4 4,4* 3,9* 3,6* 2 1,4* 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013-2 -4-6 Mundo World Latinoamérica America and y el the Caribe Caribbean Chile OECD Government of Chile Foreign Investment Committee Source: 6
FDI in Latin America and Caribbean, 2012 Latin America and Caribbean: Largest FDI recipients, 2011-2012 (US$ billion) Global FDI fell by 18% in 2012 to US$1.3 trillion, down from US$1.6 trillion in 2011. Brazil Chile 17.3 28.1 65.3 66.7 By contrast, FDI in Latin America and the Caribbean rose by 7.2% to US$232 billion. Mexico Colombia 17.4 20.8 15.8 13.6 2012 2011 Variation in FDI flows, 2012 (%) 62.7% Peru 11 8.2 Argentina 11 8.7 Sources: Global Investment Trends Monitor, UNCTAD 2013 / Central Bank of Chile 7.2% According to UNCTAD s estimates for 2012, Chile was for the first time Latin America s second largest recipient of FDI; the inflow reached US$28,152 million, the highest ever in the country s history. World Latin America Chile -18.3% Gobierno de Chile Comité de Inversiones Extranjeras Source: 7
Total FDI in Chile, 2002-2012 FDI in Chile, 2002-2012 (US$ million) 28,152 15,518 15,373 17,299 According to UNCTAD, Chile was one of the seven economies in which the inflow of FDI showed the highest growth in the last year. 4,334 7,241 7,097 7,426 12,572 12,887 In 2012, Chile received FDI worth US$28,152 million; this represented an increase of 62.7% on 2011 and was a new historical record. 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 In 2012, Chile achieved a new record as a recipient of FDI. Gobierno de Chile Comité de Inversiones Extranjeras Source: Central Bank of Chile 8
Foreign Direct Investment in Chile / Global Player Top 10 host economies (FDI inflows, average 2009-2011, US$ Billions) Government of Chile Foreign Investment Committee Source: 9
Outstanding Business Environment Doing Business 2013 Corruption Perception Index 2012 Economic Freedom Index 2013 (37 out of 185 economies)* (20 out of 176 economies)* (7 out of 177 economies)* Singapore Hong Kong New Zealand United States Denmark Norway United Kingdom Korea Georgia Australia Chile Peru Colombia Mexico Uruguay Paraguay Argentina Brazil Ecuador Bolivia Venezuela 89 103 124 130 139 155 180 37 43 45 48 1 2 3 4 5 6 7 8 9 10 Denmark Finland New Zealand Sweden Singapore United Kingdom United States Chile Uruguay Spain Costa Rica Brazil Peru Colombia Argentina Mexico Venezuela 165 1 1 1 4 5 17 19 20 20 30 54 69 83 94 102 105 Hong Kong Australia Chile United States U. Kingdom Japan Uruguay Colombia Peru France Italy Brazil China Argentina 1 3 7 10 14 24 36 37 44 62 83 100 136 160 Category Pos. Protecting investors 32 Chile leads Latin America. Government of Chile Foreign Investment Committee *Selected economies. 10
Chile, Globally un integrated país abierto economy al mundo A country with an open economy: 22 Free Trade Agreements with 60 countries. Turkey Ecuador Colombia Australia Peru Cuba Panama Japan India P-4 China EFTA Korea United States European Union Central America Mexico Canada MERCOSUR Venezuela Bolivia Malaysia Nicaragua Agreements In force Agreements signed but not yet in force Agreements under negotiation Thailand Hong Kong Vietnam 63% of world population 86% of the global GDP 90.5% of Chile s export markets Government of Chile Foreign Investment Committee 11
Avoidance of Double Taxation agreements Chile has entered into 25 ADTA with 25 countries. Agreements in force Agreements signed but not yet in force Agreements under negotiation Belgium Denmark Spain France Ireland Poland Portugal United Kingdom Sweden Switzerland Norway Croatia Canada Colombia Ecuador Mexico Peru Argentina Brazil Paraguay South Korea Thailand Malaysia New Zealand United States Russia Australia Government of Chile Foreign Investment Committee 12
Investment opportunities
Investment Opportunities Food Industry Mining Chile is a world class player. Mining companies plan to invest US$104 billion during the next eight years. Investment Opportunities: Produce Industry; Wine Industry and grape sub-products; Olive Industry; Meat and Dairy subproducts; Salmon Industry; Food Ancillary Industries; Elaborated Foods; Biotechnology applied to the Food Industry. Energy High growth potential. Investment Opportunities: Natural conditions for Non- Conventional Renewable Energy; Need for matrix diversification; Energy independence. Infrastructure Chile has an investment portfolio of an aggregate amount of US$7,7 billion in public tenders. Government of Chile Foreign Investment Committee 14
Foreign Investment Mechanisms in Chile Chapter XIV Decree Law 600 Applies to any operation in excess of US$10,000. No contract executed with the state. Voluntary for operations in excess of US$5 million (first investments in cash) and US$2.5 million (fixed assets). 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 15
FDI inflows under D.L. 600 1974-2012 (Jan-Sep) (US$85,962 million) Breakdown by countries Breakdown by industries Netherlands 2,0% France 2,0% Others 11,5% United States 24,2% Manufacturing 11,1% Construction 1,6% Agriculture, Forestry & Fishing 1,4% Mexico 2,1% Mining 34,9% Italy 2,3% Transport & Communications 11,4% Australia 4,6% Japan 7,2% United Kingdom 7,7% Canada 18,2% Spain 18,2% Electricity, gas & water 17,9% Services 21,7% Government of Chile Foreign Investment Committee Source: Foreign Investment Committee (www.foreigninvestment.cl). 16
Our activities and tools Information services Information about Chile s business climate. Portfolio of public and private investment projects. Reports and other publications. Information about DL 600. FDI statistics. Material in Spanish, English and Chinese. Participation in forums. Investment facilitation services Legal advice for the signing of a foreign investment contract. Assistance in preparing schedule of meetings. Processing of investors queries and applications. Tools Foreign investment contract. Government of Chile Foreign Investment Committee 17
Foreign Investment Committee www.foreigninvestment.cl cie@foreigninvestment.cl 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.