HomeReportsBureau of Economic and Business Affairs2018 Investment Climate Statements…Chile

# 					2018 Investment Climate Statements: Chile			

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													Executive Summary											

                -  Executive Summary 
                -  1. Openness To, and Restrictions Upon, Foreign Investment   
                -  2. Bilateral Investment Agreements and Taxation Treaties   
                -  3. Legal Regime   
                -  4. Industrial Policies   
                -  5. Protection of Property Rights   
                -  6. Financial Sector   
                -  7. State-Owned Enterprises   
                -  8. Responsible Business Conduct   
                -  9. Corruption   
                -  10. Political and Security Environment   
                -  11. Labor Policies and Practices   
                -  12. OPIC and Other Investment Insurance Programs   
                -  13. Foreign Direct Investment and Foreign Portfolio Investment Statistics   
                -  14. Contact for More Information   

## Executive Summary

Representing the seventh largest economy in the Western Hemisphere, the Chilean economy is considered by many economists to be the most stable and prosperous in Latin America and the Caribbean. The Organization of Economic Cooperation and Development (OECD) contends that Chile’s solid macroeconomic policy framework has smoothed adjustment to the end of the commodity boom, contributing to low unemployment, resilient household consumption, and a stable financial sector. Due to its attractive investment climate, participation in over 60 free trade agreements, and reputation for strong financial institutions and sound policies, Chile also boasts the strongest sovereign bond rating in South America. The country’s economy grew 1.4 percent in 2017, and following the election of President Sebastian Pinera, the International Monetary Fund (IMF) increased the forecast for Chile’s economic growth in 2018 from 2.5 percent to 3.0 percent.

Chile has a successful track record of attracting Foreign Direct Investment (FDI), despite the relatively small size of its domestic market. The country’s market-oriented policies have generated and supported significant opportunities for foreign investors to participate in the country’s economic growth. Chile has a sound legal framework, and private property rights, including foreign ownership and establishment, are generally respected. Sectors that tend to attract significant investment include mining, financial services, chemical manufacturing, and wholesale trade. Mineral, hydrocarbon, and fossil fuel deposits within Chilean territory are restricted from foreign ownership, but companies may enter into contracts with the government to extract these resources. While corruption exists, Chile consistently rates among the least corrupt countries in Latin America and ranked 24 out of 176 countries globally on Transparency International’s 2016 Corruption Perceptions Index.

Although Chile is an attractive destination for foreign investment, challenges remain. Intellectual property (IP) rights are generally respected, but Chile has not fully complied with its IP obligations set forth in the U.S.-Chile FTA. Reforms launched by the previous center-left administration have also increased the complexity of and costs to comply with corporate tax and labor regimes. Environmental permitting processes, indigenous consultation requirements, and court proceedings are increasingly unpredictable, especially in cases with political sensitivities. Communities can be hostile to large investment projects and are adept at using the court system and mandatory indigenous consultation requirements to obstruct them. The current administration has prioritized attracting foreign investment and is implementing measures to streamline the permitting process, including through the creation of the office of large investment projects.

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