The flows of foreign direct investments (FDI) in Chile experienced a strong growth until 2008 (flows had multiplied by four in five years), but they slowed down in 2009 due to the effect of the global recession. They have sharply recovered since 2010, reaching a record level for the country. Chile is the second most attractive country in South America in terms of FDI, after Brazil. According to the UNCTAD, Chile ranks 11 in relation to FDI attractiveness. The origin of this good performance is due to the Chilean economic policies founded with a spirit of capital transparency and non-discriminatory against foreign investors. These investors are also attracted by the richness of Chile's natural resources, the stability of its macro-economic system and its growth potential, its juridical security, the country's low level of risk and the high quality of its infrastructures. The mining sector, driver of the Chilean growth, has been receiving significant and steady flows of FDI. The country ranks 34 out of 189 countries in the classification of Doing Business 2014 issued by the World Bank.
Chili ranks fifth among the countries that are the most open to imports and foreign investments in the world. The United States is the largest investor in this country.
|Chile||Latin America & Caribbean||United States||Germany|
|Index of Transaction Transparency*||8.0||4.0||7.0||5.0|
|Index of Manager’s Responsibility**||6.0||5.0||9.0||5.0|
|Index of Shareholders’ Power***||6.0||9.0||5.0|
|Index of Investor Protection****||6.3||5.0||8.3||5.0|
Source: Doing Business - Last Available Data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action. **** The Greater the Index, the Higher the Level of Investor Protection.
|Foreign Direct Investment||2011||2012||2013|
|FDI Inward Flow (million USD)||23,444||28,542||20,258|
|FDI Stock (million USD)||172,699||206,021||215,452|
|Performance Index*, Ranking on 181 Economies||6||-||-|
|Potential Index**, Ranking on 177 Economies||29||-||-|
|Number of Greenfield Investments***||72||84||96|
|FDI Inwards (in % of GFCF****)||41.6||44.1||30.3|
|FDI Stock (in % of GDP)||68.8||76.8||77.8|
Source: UNCTAD - Last Available Data.
Note: * The UNCTAD Inward FDI Performance Index is Based on a Ratio of the Country's Share in Global FDI Inflows and its Share in Global GDP. ** The UNCTAD Inward FDI Potential Index is Based on 12 Economic and Structural Variables Such as GDP, Foreign Trade, FDI, Infrastructures, Energy Use, R&D, Education, Country Risk. *** Green Field Investments Are a Form of Foreign Direct Investment Where a Parent Company Starts a New Venture in a Foreign Country By Constructing New Operational Facilities From the Ground Up. **** Gross Fixed Capital Formation (GFCF) Measures the Value of Additions to Fixed Assets Purchased By Business, Government and Households Less Disposals of Fixed Assets Sold Off or Scrapped.
Labor laws are favorable to business, mainly due to the flexibility of working hours and uncomplicated procedures for the dismissal of employees.
The restricted size of the Chilean market has become less of a handicap due to the country's increase in economic weight at a regional level and its open trade. Foreign companies established in Chile can benefit from privileged access to regional markets through different free trade agreements.
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Last Updates: January 2015