The Global Summit of Women 2009 Santiago, Chile May 14-16 Presentation on Doing Business in Chile By Bruno Philippi, President, SOFOFA (Federacion Gremial de la Industria), Chile
Global Summit of Women Doing Business in Chile Sociedad de Fomento Fabril May 13, 2009
125 years of history SOFOFA - Chilean Federation of Industry SOFOFA was founded on October 7th, 1883. Ever since, it has steadfastly championed free enterprise, private property, market freedom, freedom of pricing and contracting, and foreign trade. Commemorative Medal of SOFOFA s centenary SOFOFA encourages both internationalization and modernization of the national industry, increases foreign businesses and represents the interests of the industrial sector. The representative nature of SOFOFA, its political independence, solid principles, businesslike approach and the prestige of its leaders have earned it a place among the country's most outstanding institutions. Government, political, social and economic leaders listen carefully to SOFOFA s views.
SOFOFA - Chilean Federation of Industry 100% of Chilean industrial output 30% of GDP SOFOFA 40% of total Chilean exports
SOFOFA - Chilean Federation of Industry Wine and salmon Timber, cellulose, print, wooden and forestry products Metal, chemical products and plastics SOFOFA Agroindustrial products, fishery and poultry Energy, water and sewage Telecommunications and information technology Port services and air and maritime transport
GDP By Economic Sector (% of Share, Constant Prices 2003)
Why Invest in Chile?
Why Chile? Solid Macroeconomic Fundamentals Sustained Growth Inflation Control Highly Competitive Model Fiscal Equilibrium Autonomous Central Bank Public-Private Cooperation International Integration Pro Market Environment Consolidated Social Market Economy
Why Chile? Globally connected Efficient services in transport, logistics and communications World-class seaport, airport and logistical infrastructure Source: Cinver Solid connection network with the rest of the world
Why Chile? Regulation of Investment in Chile I. Constitutional Framework, 1980-2005 Right to private property: Under the Constitution, all persons, including foreigners, are guaranteed the freedom to acquire ownership of all types of goods, both tangible and intangible. Economic freedom: Within the bounds of the legal norms regulating different economic activities, the Constitution guarantees the right to undertake any economic activity that does not contravene moral standards, public order or national security (Art. 19 N 21). National treatment: The Constitution also guarantees that, on economic matters, foreign investors will receive the same, or not less favorable, treatment as local investors from the State and its agencies, and will not be subject to discrimination of any type (Arts. 19 N 2 CPE, 57 Civil, 9 and 10 DL 600). Source: Cinver
Why Chile? Regulation of Investment in Chile II. Legal Framework Decree Law N 600 (DL 600) Originally introduced in August 1974 Include the principles of non-discrimination, nondiscretionary treatment and economic freedom, and provides legal certainty and stability. Foreign investors can request to sign a Foreign Investment Contract with the state of Chile An investor is guaranteed access to the formal foreign exchange market Stability in Tax Regime. Source: Cinver
Why Chile? Foreign Investment Statute Decree Law N 600 Since DL 600 came into force in 1974, most foreign investors have used this mechanism. By 2008, foreign direct investment worth US$ 69 billion had been materialized through DL 600, representing 71% of total FDI in Chile during that period. Source: Cinver
Why Chile? Exports (Exports of good and services as % of GDP, current prices)
Why Chile? A Global Trader (Trade Balance, Mill. Of US$, moving average 12 M)
Why Chile? Trade Openness 20 Agreement 57 countries +90% trade Aprox. POTENTIAL MARKET: 4,040 MILL. INHABITANTS
Why Chile? Market diversification (Exports by market, 2008) Product Diversification (Exports by Economic Sector, 2008) LEGAL STABILITY CONSOLIDATION OF THE LARGE COMPANIES ELIMINATION OF TARIFF ESCALATION GOOD COMMERCIAL DEFENSE MECHANISMS AUTHORIZATION OF SANITARY PROTOCOLS *Taking the long term price of copper, its share is reduced to less than 40%
Why Chile? Exports of Manufactured Products (millions of current US$, FOB)
COMPANY IN ASIA CHILE : STRATEGIC ALLIANCE Mining Forest Fishing Agribusiness Energy Capital Goods Services Transport Telecommunications ASIAN COMPANY IN CHILE Resources: Human, Natural and Financial P-4 E.U. USA MERCOSUR Mexico Korea Colombia Canada Peru Venezuela Ecuador Central America EFTA Bolivia Panama India Japan Cuba China Australia
SHOES RULE OF ORIGIN FOR USA: Change of Item meeting regional value content not below: 45% in case of Build down method 6402.99.40 Tariff Code for USA USA General Tariff Tariff for Chile 37.5% 0%
PLASTIC BAGS RULE OF ORIGIN TO EXPORT TO MERCOSUR: Original from Chile, meeting 60% Added Value (Inputs from Chile, Argentina, Paraguay, Uruguay and Brazil plus Chilean work force). PLASTIC BAGS 3923.21 Export Product MERCOSUR General Tariff Tariff for Japan Tariff for Chile 18% 18% 0%
NOTEBOOKS RULE OF ORIGIN TO EXPORT TO COLOMBIA: Original from Chile, complying with Change of Item (Paper can be even imported from any country). NOTEBOOKS 4820.20 Export Product COLOMBIA General Tariff Tariff for Japan Tariff for Chile 20% 20% 0%
Heritage Foundation WE Forum World Bank IMD Economic Freedom Global Competitiveness Ease of Doing Business World COMPETITIVENESS 2009 2008-2009 2009 2008 1 Hong Kong 1 United States 1 Singapore 1 USA 2 Singapore 2 Switzerland 2 New Zealand 2 Singapore 3 Australia 3 Denmark 3 United States 3 Hong Kong 4 Ireland 4 Sweden 4 Hong Kong, China 4 Switzerland 5 New Zealand 5 Singapore 5 Denmark 5 Luxembourg 6 United States 6 Finland 6 United Kingdom 6 Denmark 7 Canada 7 Germany 7 Canada 7 Australia 8 Denmark 8 Netherlands 8 Ireland 8 Canada 9 Switzerland 9 Japan 9 Australia 9 Sweden 10 United Kingdom 10 Canada 10 Iceland 10 Netherlands 11 Chile 11 Hong Kong SAR 28 Puerto Rico 11 Norway 12 Netherlands 12 United Kingdom 33 Chile 12 Ireland 19 Japan 13 Korea, Rep. 44 Mexico 22 Japan 25 Germany 17 Taiwan 58 Peru 26 Chile 26 Sweden 28 Chile 65 Panama 28 Czech Republic 35 Taiwan 29 Spain 66 Colombia 31 Korea 38 Uruguay 30 China 69 El Salvador 33 Spain 40 South Korea 58 Panama 98 Uruguay 35 Peru 49 Mexico 59 Costa Rica 109 Argentina 41 Colombia 57 Peru 60 Mexico 115 Costa Rica 43 Brazil 58 Malaysia 64 Brazil 121 Honduras 44 Poland 64 France 74 Colombia 122 Brazil 50 Mexico 76 Italy 75 Uruguay 128 Ecuador 52 Argentina
Global Summit of Women Doing Business in Chile Sociedad de Fomento Fabril May 13, 2009