Transcript Foreign Investment Committee

Foreign Investment in Chile
Liliana Macchiavello, Executive Vicepresident
Foreign Investment Committee
www.foreigninvestment.cl
June, 2010
Snapshot of the Chilean Economy
Social
Population
:
16.9 millon
Oficial Language
:
Spanish
Currency
:
Peso
Literacy rate
:
97%
Life expectancy
:
78 years
GDP 2009
:
US$ 164 billion
GDP per capita (PPP , 2009)
:
US$ 14,341
Economy
(*estimated by IMF)
Interest rate (Monetary Policy)
:
0.50%
Unemployment rate
:
9,7%
Public debt (2009)
:
US$ 2.563 millones
Exports (2009)
:
US$ 53,7 billion
Imports (2009)
:
US$ 39,7 billion
2009
Source: Central Bank of Chile (www.bcentral.cl)
Chilean investment attraction track record
Foreign Direct Investment in Chile (6.8% average)
(% of GDP)
12.0
8.7
7.6
7.5
6.4
6.4
5.8
6.5
6.1
5.8
7.7
5.9
5.0
3.8
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Central Bank of Chile (www.bcentral.cl)
Chilean investment attraction track record
FDI in Latin America and the Caribbean:
top 10 recipient countries, 2009 (in million dollars)
Source: FDI in Latin America and the Caribbean 2009, May 2010, ECLAC (www.eclac.org)
Chilean investment attraction track record
16000
14000
Reinvestment of profits (% of FDI)
D.L 600 yand
Chapter
D.L.
Capítulo
XIVXIV
Reinvestment
Profits
Reinversión
de of
utilidades
12000
10000
8000
6000
4000
2000
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
Source: Foreign Investment Committee (www.foreigninvestment.cl).
Solid fundamentals
Among the advantages:
• Country’s political and economic stability
• An efficient level of connectivity
• The Free Trade Agreements network
• The legal certainty and stability for foreign investment.
Dynamic business environment
GDP growth in Chile (real annual variation, %)
7,4
6,7
6,0
5,6
4,6
4,6
3,8
3,5
3,2
5,5
4,6
4,5
3,7
2,2
-0,8
-1,5
*Estimated as of April 2010
Source: Central Bank of Chile (www.bcentral.cl)
Competitive economy
Business Environment Ranking 2010 – 2014 (82 economies)
Singapur
1
Switzerland
2
Finland
3
Canada
5
New Zealand
8
United States
13
Germany
14
15
Chile
17
Ireland
19
France
35
Mexico
40
Brazil
45
Peru
Colombia
51
Source: Economist Intelligent Unit, April 2010 (www.eiu.com)
Competitive economy
Index of Economic Freedom (179 economies)
Hong Kong
1
Singapore
2
Australia
3
6
Switzerland
United States
8
Chile
10
11
United Kingdom
19
Japan
23
Germany
33
Uruguay
36
Spain
41
Mexico
62
Portugal
Brazil
113
Source: Heritage Foundation, March 2010 (www.heritage.org)
High levels of transparency
Corruption Perception Index (180 economies)
New Zealand
1
Denmark
2
Singapore
3
Switzerland
5
Australia
8
17
United Kingdom
19
United States
Chile
25
Uruguay
25
35
Portugal
43
Costa Rica
75
Brazil
89
Mexico
106
Argentina
Ecuador
146
Source: Transparency International (www.transparency.org), November 2009
Safe and reliable country to invest in
In 2010 Chile formally became member of the
Organisation for Economic Co-operation and
Development (OECD).
North America: Canada (1961); United States (1961); Mexico (1994)
South America: Chile (2010)
Europe: Germany (1961); Austria (1961); Belgium (1961); Denmark (1961);
Slovenia (2010); Spain (1961); Estonia (2010); Finland (1969); France (1961);
Greece (1961) ; Hungary (1996); Ireland (1961); Iceland (1961); Italy (1961);
Luxemburg (1961); Norway (1961); Netherlands (1961); Poland (1996) ;
Portugal (1961); United Kingdom (1961); Czech Republic (1995); Slovak
Republic (2000); Sweden (1961); Switzerland (1961); Turkey (1961)
Pacific: Australia (1971); Japan (1964); New Zeland (1973); Republic of Korea
(1996)
Middle East: Israel (2010)
Globally connected
18 international airlines operate
in Chile, offering 80 thousand
flights a year.
Chilean ports include:
10 state-owned port companies
37 airports and aerodromes.
23 private ports
Handle almost 90% of Chile’s
international trade.
Investors committed more than
US$10 billion to concession
projects that include highways,
prisons, hospitals, ports and
others.
Internationally integrated economy
Chile has in force 20 agreements with 56 countries
Canada (1997) •
•Free Trade Agreements
•Association Agreements
•Bilateral Trade Agreements
•Partial Trade Agreement
•In negotiation,concluded
but not signed
•
EFTA (2004)
• European Union (2003)
•Turkey
• United States (2004)
Mexico (1999)
Central America (2002) •
Panama (2008)
•
• Venezuela (1993)
Colombia (2009) •
Ecuador (1995) •
Peru (2009) •
• Bolivia (1993)
• Mercosur (1996)
• Japan (2007)
• China (2006)
India (2007) •
•
• Korea (2004)
• Vietnam
• Thailand
• Malaysia
• Australia (2009)
P4 (2006)
•
Investment Platform
Some of the companies that use Chile as a platform to
reach other countries are:
General Electric (Industry)
Equifax (Services)
AP Moller-Maersk
(Services)
Packard Bell (Information &
Technology)
TNT Express
(Services)
Finning (Industry)
Grupo Nueva (Forestry)
Phelps Dodge Mining
Services (Mining)
Beirsdorf (Industry)
Wachovia Corporation
(Financial Services)
Diversification of exports
1975
2003
2009
Exported products
200
3,854
4,981
Exporting companies
200
6,435
7,517
Countries
50
165
191
Total (US$ billion)
1.6
32.0
53.0
Source: Central Bank of Chile, Direcon
Regulation of investment in Chile
I. Constitutional Framework
•
Right to private property: Under the Constitution, all persons, including
foreigners, are guaranteed 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 infringe 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).
Regulation of investment in Chile
II. Legal Framework
•
Decree Law N° 600 (DL 600) Foreign Investment Committee
Originally introduced in August 1974.
In March 2003 it was ratified by Congress with minor modifications.
•
Chilean Central Bank's Compendium of Foreign Exchange
Regulations (Chapter XIV)
It establishes the general rules for foreign capital transfers. All capital
entered via Chapter XIV remains under the general applicable
regulation in all matters, including for the access to the foreign
exchange market, the possibility to transfer capitals to the exterior,
and for any other right or obligation established in that regulation.
Foreign Investment Statute
Decree Law N° 600
Since DL 600 came into force, most foreign investors have
used this mechanism.
By 2009, foreign direct investment worth US$ 74,9 billion
had been materialized through DL 600, representing 67.3% of
total FDI in Chile during that period.
Main characteristics of DL 600
• Non-discrimination
• Non-discretionary procedures
• Free access to economic sectors
• Contract with State of Chile
• Access to Formal Exchange Market
• Capital and profit remittances
• Choice of tax system
• Six forms of investment
Foreign investment under DL 600
FDI under DL 600 by country of origin, 1974 - 2009
(US$ 74,901 million)
Mexico
Italy France 2%
3% 2%
Netherlands
Japan 3%
Others
11%
United States
26,4%
3%
Australia
4,7%
United Kingdom
8,4%
Canada
17,4%
Spain
19,4%
Source: Foreign Investment Committee (www.foreigninvestment.cl), 1974 –2009
Foreign investment under DL 600
FDI under DL 600 by economic sector, 1974 - 2009 (US$ 74,901 million)
Transport &
communications
11%
Industry
12%
Electricity, gas
& water
20%
Others
3%
Mining
33%
Services
22%
Source: Foreign Investment Committee (www.foreigninvestment.cl), 1974 –2009
Investment opportunities
Agribusiness
Chile exports more than US$ 12,000 millon in food.
It aims to become a “Food Power” and position between the ten largest world
food producers (currently 17th).
If offers natural advantages such as:
• Mediterranean climate
•Opposite seasons with respect to the world’s main markets
•Phytosanitary assets.
Foreign investment in agribusiness
Share of the food industry in Chile’s industrial sector
Wood & wood
products
4,4%
Basic metal
6,8%
Metalworking,
machinery &
equipment
4,3%
Other industries
2,8%
Chemical industry
34,8%
Non metallic mineral
mining products
8,6%
Paper, printing y
editorial industry
9,7%
Foods, beverages &
tobacco
28,6%
Source: Foreign Investment Committee (www.foreigninvestment.cl), 1974 –2009
Foreign investment in agribusiness
Between 1974 and 2009, materialized FDI in agribusiness sector through
DL600 worth US$3, 015 million, representing 4% of total net FDI.
Agriculture &
hunting
8,9%
Fishing, fish
farming & fish
processing
20,4%
Foods, beverages
& tobacco
70,7%
Source: Foreign Investment Committee (www.foreigninvestment.cl), 1974 –2009
Foreign investment in agribusiness
Some of the companies with materialized investments in
agribusiness in the 2008-2009 period
Company
Country
Sector
Region
Ocea
Norway
Fish Farming
Los Lagos
Danone
France
Food industry
Biobio
Camil
Brazil
Food industry
Metropolitana
Sogrape
Portugal
Wine y licors
O’Higgins
Daminvest
Spain
Wine & licors
O’Higgins
Source: Foreign Investment Committee (www.foreigninvestment.cl), 1974 –2009
In Chile, you will always be
welcome.
Thank you
Chile’s Investment Climate
Liliana Macchiavello, Executive Vicepresident
Foreign Investment Committee
www.foreigninvestment.cl
June, 2010