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Advertisers Ski Portillo Chile
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Investing in Chile
Chileans, who are competition-oriented business people, welcome foreign investment. According to Nicolas Wsevolojskoy, president of General Motors Chile, “Chile is a perfect test market; there are no barriers and the market controls prices. The market is extremely competitive. For example, it is impressive to see that in a small market like Chile, there are 78 car brands and 1,000 models.”
As part of an ad-hoc approach to economic development, the Chileans have instituted a law that provides stable, clear and simple rules for investing, known as the Foreign Investment Statute or Decree of Law (DL) 600 of 1974. It falls under the direction of the Foreign Investment Committee, with whom investors sign a legally binding contract that sets the terms of the agreement. The fundamental principles of DL 600 are:
This statute offers investors a well-structured investment platform that is constantly being revised to keep up with the global trends and to enhance commercial relations. Another important initiative, complementing DL 600, is that through the Washington Accord of 1990, Chile has agreed to let international arbitration resolve investment disputes.
Many U.S. global enterprises with materialized business in Chile believe that it is an important Latin American model for doing business. “In the 1990s, when I was honorary consul of Chile in Atlanta, Ga., I always tried to orient my actions toward business development. As a result of this, I was able to inform President Patricio Aylwin, that Atlanta (alone) during 1994 invested in Chile more than all of Germany,” stated Pedro Pablo Diaz. “We are very proud in Chile to have great American businesses, whose home base is Atlanta. Among these are Coca Cola, Bell South, Home Depot and Delta within the next couple of months.” He is also Coca Cola’s Latin American group vice president. Coca Cola arrived in Chile in 1941 and leads the non-alcoholic ready-to-drink beverages sector with 58 percent market share.
An array of investment opportunities is available in Chile in almost every sector. According to the U.S. Department of Commerce, the leading sectors for U.S. exports and investments are medical equipment, tourism, computer equipment, telecommunications equipment, port equipment, pollution control, construction and building materials, electrical power equipment, plastics, air conditioning and refrigeration, and food processing. Through the U.S. Embassy in Chile, the Department of Commerce helps primarily small and medium-sized U.S. companies explore beneficial commercial relations with Chilean companies. They are placing significant emphasis on promoting electronic commerce between both countries as well as providing the necessary orientation to develop this market.
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Table of Contents New president focuses on future while reconciling the past |
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Chile has one of the most flexible and modern investment platforms of those throughout the world. Doing business is straightforward, predictable and based on a non-discriminatory trade policy. Recent Standard & Poor’s and Duff & Phelps risk reports gave Chile ratings, the highest score that both agencies encountered in Latin America.
As mentioned by the Foreign Investment Committee, materialized investment during 1999 amounted to $8.9 billion, increasing 48.5 percent from the previous year’s $5.9 billion. Out of the 1999 figures, $1.7 billion was from the United States, the second largest amount after Spain, which leads the way with $4.5 billion. Between 1974 and 1999, United States’ investment in Chile was $12.6 billion, which translates into 31 percent of Chile’s total materialized foreign investment. It is also important to note that investment is reciprocal between the United States and Chile; the latter’s investment in the United States for 1999 was $3.047 billion, representing 38 percent of its entire investment abroad (source: Foreign Investment Committee).