Doing Business in Chile
Chile is the best evaluated economy in Latin America and, indeed, one of the best evaluated among emerging economies worldwide. Its sustained economic growth and social progress have been highlighted by different international organizations and, in 2010, it became the first South American country to join the Organisation for Economic Co-operation and Development (OECD).
Chile is a safe and reliable place to do business. This is borne out by risk ratings agencies which have maintained their high ratings for Chile, highlighting its low level of public debt, the health of its financial system and its solid institutions.
Chile has consolidated its position as Latin America’s most competitive economy. This is mainly due to its sustained economic growth and openness to trade which have set it apart internationally as a free and dynamic market. Its performance is reflected in the rankings of institutions that monitor countries’ competitiveness. Chile obtained its best scores for government efficiency and economic performance, putting it in top position within Latin America and a high 18th position among economies with less than 20 million inhabitants.
In view of its political and economic stability, openness to trade, legal security and excellent growth prospects, Chile has maintained an attractive and dynamic business climate for investors. According to the Business Environment Rankings of the Economist Intelligence Unit (EIU), Chile is one of the 20 most attractive economies in which to do business between 2010 and 2014 and leads Latin America in this field.
Chile’s advantages as a place to do business were also highlighted by Doing Business 2012, a report published by the World Bank. In this report’s overall ranking, Chile took 39th place out of 183 countries. Chile is also an attractive country in which to do business because of its high level of free trade.
Chile is known for its transparency and this is reflected in international rankings that highlight the low level of corruption in the country and, particularly, its finances, due to government efforts to raise standards in administration of the state. In Transparency International’s 2011 Corruption Perceptions Index, Chile obtained a score of 7.2 points, ranking among the 25 best-placed economies out of the 183 countries included in the Index. Chile has maintained a stable rating in recent years, leading Latin America and enjoying the transparency standards of a developed country.
Chile’s open economy, combined with an active policy of bilateral, regional and multilateral trade agreements, has underpinned a sustained increase in foreign trade in goods and services and in the country’s international competitiveness, consolidating its position as an active international partner.
Chile’s 22 trade agreements, covering a total of 59 countries, have expanded its domestic market of 16.8 million inhabitants to one of over 4,302 million potential consumers around the world (representing 85.7% of global GDP and 62% of the world’s population). Chile has Free Trade Agreements with Australia, Canada, Central America, China, Colombia, EFTA (Norway, Switzerland, Iceland and Liechtenstein), Malaysia, Mexico, Panama, Peru, South Korea, Turkey and the United States.
Foreign direct investment (FDI) inflows to Latin America totalled US$ 232.6 billion in 2012, an increase of 7.2%, according to the latest report on global investment trends by the United Nations Conference on Trade and Development (UNCTAD), in stark contrast to the downward trend in global FDI, which dropped by 18%. FDI inflows into Chile in 2012 was US$ 28.1 billion against US$ 15.6 million in 2011 (62% increase).
GDP: The total GDP is US $ 248.6 billion in 2012, while the GDP per capita is US $ 17,355. The GDP real growth rate is estimated at 5% in 2012, compared to 5.9% in 2011 and 6.1% in 2010.
Chile was the first Latin American country to seek trading arrangements with Asia. The India-Chile Preferential Trade Agreement (PTA), which was signed in December 2006 and came into force in August/September 2007, was a result of lot of effort and hard work between the two countries. India's interests in advancing trade relations were apparent given its broader industrial base and ability to meet Chilean import needs. Chile considers India as a huge potential market that would help the country to diversify its manufacturing base and the possibility to raise its attraction as a destination for FDI on the basis of preferential access to the Indian market.
The mining sector holds great promise as Chile is the world leader in copper mining and production and is also a leading producer of many other minerals including molybdenum, lithium, gold and silver. India is the third largest importer of copper from Chile after Japan and China. There are vast opportunities for private and foreign investors to set up production facilities and tap large domestic market and export potential in India. India could also use Chile as a platform for its exports to Latin American countries.