Nestle=
d between
the Andes mountain range and the Pacific Ocean,
·
The U.S. Chile Free Trade
Agreement (FTA) came into force January 1, 2004. Since then, 97 percent of
·
Bilateral trade between t=
he
·
·
·
The
·
·
Sustained GDP growth, low
inflation, macroeconomic stability and growing integration with internation=
al
capital markets mean
Perhaps the greatest challenge to a
·
·
A
key to competing is finding the right Chilean partner. A good Chilean agent or distributo=
r can
use their business or social connections to open doors. They can also help overcome regula=
tory,
as well as cultural and language barriers.
For businesses in certain sectors,
intellectual property rights protection (IPR) can also be a challenge in
and Chapter 6: Investment Climate for more information.
The fast growing Chilean economy is generating investment
and new opportunities for foreign investors and
suppliers. The U.S.-Chile FTA
coupled with a more competitive U.S. dollar offers further advantages for <=
st1:country-region
w:st=3D"on">
·
The
Chilean peso has appreciated by as much as 15 percent against the U.S. doll=
ar
since 2004 and has proven a challenge for some Chilean exporters. Conversely, the strong peso has ma=
de
·
Establishing a local subsidiary or =
branch
office in
Another practical and more common= market entry strategy, especially for new-to-market exporters, is to appoint an ag= ent or representative with good access to relevant buyers and solid technical expertise. See Chapter 3: Sellin= g U.S. Products and Services for more details on mar= ket entry strategies.
For bac=
kground
information on the economic and political environment of the country, please
click on the link below to the U.S. Department of State Background Notes.
http://www.state.gov/r/p=
a/ei/bgn/1981.htm
In general, foreign suppliers enter= the Chilean market by appointing an agent, distributor or wholesaler. Most are small-to-medium size firms. Several large firms ha= ndle different product lines and operate as wholesalers. Almost all the firms have their ma= in offices in Santiago. The larg= er ones have branch offices throughout the country, including the free-trade z= ones of Iquique and Punta Arenas. Agent/representative commissions normally range from 5 to 10 percent, depending on the product. For contract requirements, see Local Professional Services in this chapter.
Chile is a relatively small market = where relationships in the business community are a key to success. The selection of a Chilean agent or representation is an extremely important decision for U.S. exporters, and merits a thorough review of possible candidates, their qualifications and capabilities. U.S. companies = are invited to make full use of the wide range of market entry and partner sear= ch services offered by the Commerce Department’s U.S. Commercial Service= (www.buyusa.gov/chile/en) and for agricultural exports, the Department of Agriculture’s Foreign Agricultural Service (www.fas.usda.gov). Please see Chapter 10: Guide to Our Services.
Incorporating in Chile is not exp= ensive (approximately US$1,000) and takes about two months. Chile has no minimum local partici= pation requirement, and the inclusion of local partners is guided only by commerci= al considerations.
The first step for a U.S. citizen, corporation or entity wishing to establish a business in Chile is to presen= t a declaration of intent to invest in Chile to a Chilean Consulate, stating the nature of the business and the capital to be invested, simultaneously requesting a Permanent Residence Visa.&nbs= p; This confers official residence status on the company, without which= it will be barred from conducting commercial activities in Chile.
Wit=
hin the
framework of Chilean law, business entities can choose to set up in a varie=
ty
of different corporate forms, each with different legal and tax
implications. Since Chilean t=
ax
treatment of the various forms of businesses is similar, the choice of enti=
ty
type is often guided by U.S. tax considerations. See Chapter 6: Investment Climate=
.
In 2006,
franchising sector sales is expected to reach some $240 million, providing
35,000 local employments, and creating a nationwide presence. There are some 113 franchises oper=
ating
in Chile, mainly in the fast-food and service sector (University of Chile
Economics Department).
Franchi=
se
companies operating in Chile are subject to regular trade laws and have
benefited greatly from the Chile-US FTA.&n=
bsp;
Royalties and fees have a withholding tax that ranges from 15 percen=
t to
35 percent. Chile’s Fra=
nchise
Chamber, www.camaradefranquic=
ias.cl
, was founded in 2005. It is =
the
second attempt of local companies to establish a franchise entity after the=
first
association – AFICH – was dissolved in 2000. Chile’s Franchise Chamber is
negotiating its participation in ExpoRetail 2007, to be held in Santiago on
October 2, 2007.
Since
trademark/brand stockpiling is rather common in Chile, U.S. companies are e=
ncouraged
to register their trademarks as soon as possible if they are considering Ch=
ile
as a potential market. U.S.
franchises operating in Chile include:&nbs=
p;
Applebee’s, Blockbuster, McDonald's, Domino's Pizza, Pizza Hut,
KFC, Burger King, Curves, Powerhouse Gym, Ruby Tuesday, H2O, Holiday Inn
Express, Manpower, Remax, Berlitz, Taco Bell, Fridays, Subway, Coverall,
Gymboree, Hampton Inns, and Hooters.
For more
information, contact Veronica Pinto of the U.S. Commercial Service Santiago=
at Veronica.Pinto@mail.doc.gov..
Direct marketing is well establishe= d in the services sector, especially in banking/finance and telecommunications servi= ces, etc. Catalog and online sales= are not commonplace with the average Chilean consumer, but are growing rapidly among the middle to upper classes, young teens and Internet savvy professionals. The more tradi= tional Chilean consumer generally prefers to browse in shops rather than to purcha= se through catalogs. This consum= er type will diminish over time. Customers do want to know there is a store that can provide after sa= les service or address any problem that might arise. Exchange of products in Chile is m= ade more complicated due to value added tax (VAT) considerations. Most store policies will provide s= tore credit, rather than cash refunds with exchanges. The larger department and grocery store chains do provide cash refunds. Credit card penetration is lower in Chile than in the United States, but growing.
In Chile, joint ventures and licens= ing arrangements require the participation of a legally established local partn= er who can be responsible for Chilean legal and tax obligations. The various administrative, commer= cial, profit distribution and other issues involved in the association are established in contracts drawn up between the partners in accordance with Chilean law and tax regulations.
The U.S.-Chile FTA calls for open t=
endering
in public procurement. Tender=
s must
be in writing and winning bids published, including the name of the supplier
and the value of the contract. The
FTA provisions cover procurements by twenty Chilean central government enti=
ties
for non-construction purchases over $56,000. It also covers local government
non-construction procurements over $460,000. In both cases, higher limits apply=
for construction
work. The agreement also call=
s for
non-discriminatory “national treatment” for either country̵=
7;s
suppliers. Tender opportuniti=
es
should be published at least thirty days in advance and technical
specifications or requirements should be performance-based. The agreement further establishes =
an
impartial authority to review any challenges lodged against specific
procurement awards.
A government of Chile procurement w=
ebsite (www.chilecompra.=
cl)
was established in March 2000 to increase transparency, enhance opportuniti=
es
and reduce government procurement costs.&n=
bsp;
The site serves as a central source for all Chilean government
procurement. Foreign and local
bidders on government tenders must register with the Chilean
“Dirección de Provisionamiento del Estado” (Bureau of
Government Procurement Supplies).
They must also post a bank and/or guarantee bond, usually equivalent=
to
ten percent of the total bid, to ensure compliance with specifications and
delivery dates. Bidding is be=
st
done through a local agent who is registered, well connected, and familiar =
with
Chilean government bidding procedures. Estab=
lishing a
local subsidiary or branch office in Chile offers would-be exporters the be=
st
guarantee of efficient service and appropriate product promotion. Any corporation legally constituted
abroad may form, under its own name, an authorized branch (agencia) in
Chile. This method of market =
penetration
involves a considerable investment, but is justified if sales are large in
volume or when local service support and/or inventory are key
to success. Another practical and more common=
market
entry strategy, especially for new-to-market exporters, is appointing an ag=
ent
or representative with good access to relevant buyers and with solid techni=
cal
expertise. Most manufacturing,
trade and service activities in Chile are managed from Santiago, the capita=
l. However, Chile’s distances a=
re
great, so larger representatives often have bran=
ch
offices in different regions as well. Seaports are the most important points of entry for merchandise
entering Chile. Approximately=
97
percent of exports and 59 percent of imports go though seaports, of which t=
he
most important are San Antonio and Valparaíso. Remaining trade exits/enters the c=
ountry
via airports and by surface transportation (mainly to/from Argentina, Brazi=
l,
and Bolivia). From point of e=
ntry,
merchandise is distributed to final destinations mostly by surface
transportation. Chile’s=
train
network is limited, although there are plans to modernize and expand it.Distribution
and Sales Channels &=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; Return to top
Depending on the product or service= , price can be the key sales factor in Chile. Price-competitive products from places such as Taiwan or South Korea often outsell more expensive European or North American products, especiall= y in consumer product categories such as electronics, appliances and automobiles= .
Where dependability becomes more im= portant, products such as advanced electronics or heavy machinery, Chilean customers often prefer more expensive U.S. or European products. While price remains a factor in pu= rchasing decisions, considerations of quality, durability, technology, customer supp= ort and availability of service will also influence the purchasing decision, wi= th the order of importance depending on the industry, the customer and the application.
All sales materials should be in Sp= anish.
In Febr=
uary 2000,
Chile became the first country in Latin America to sign a joint statement on
electronic commerce with the United States, highlighting the countries̵=
7;
agreement that the private sector should take the lead on the establishment=
of
business practices related to electronic commerce. In addition, on January 15, 2002, =
the
Chilean Congress passed a law authorizing the use of digital signatures,
another important step in developing e-commerce. The U.S.-Chile FTA also
affirms that both governments will refrain from applying duties to digital
products and will continue to cooperate with each other on ways to improve =
and
facilitate e-commerce.
The 200=
6 Digital
Economy study of the Santiago Chamber of Commerce (CCS), reported that reta=
il
“digital economy” transactions reached $250 billion in Chile, a=
44
percent increase compared to 2005, and represented 8 percent of Chile’=
;s
GDP. Among businesses, overall
connectivity reached 70 percent while, in the case of medium and large
enterprises, connectivity is close to 100 percent. The digital gap separati=
ng
Chile from the developed countries remains but is narrowing, according to t=
he
CCS. Chile’s strong
telecommunications network, high level of mobile telephony penetration, and
rollout of broadband and WiFi services is helping Chile grow its e-commerce
sector at a fairly substantial rate.
Chile&#=
8217;s
Digital Agenda continues to be a priority with clear goals and objectives t=
hat
include the following:
Some pr=
incipal
e-commerce sites in Chile are listed below:
B2B:=
Santiag=
o Chamber
of Commerce: www.ccs.cl
Sonda s=
ystems
integrator: www.sonda.cl
B2G:=
Chile&#=
8217;s
export promotion agency ProChile: www.prochile.cl/
Chile&#=
8217;s government
procurement site: www.chilecompra.cl/
Chile&#=
8217;s
internal revenew service: www.sii.cl
B2C =
–
Retailers:
· TV
Television, radio, newspaper and magazine advertising are used heavily to reinforce in-store-merchandising methods. Private agencies handle most advertising. Most of these ag= encies belong to the Chilean Association of Advertising Agencies (ACHAP). ACHAP estimated about $735 million= was spent on advertising in Chile in 2005.&nbs= p; Non-cable television accounted for 47.4 percent = of all spending on advertising, followed by newspapers (29.4 percent), radio (8.2 = percent), billboards/posters (8.4 percent), magazines (3.2 percent), cable TV (1.7 percent), the Internet (1.4 percent) and films (0.3 percent). See www.achap.cl.
Chile has five national broadcast television networks. All of them are self-supporting th= rough advertising. TV broadcasting stations in Santiago are: Telecanal (Channel 2); Red TV (Channel 4); Universidad Católica Valparaíso (UCV – Channel 5); Tele= visión Nacional (TVN – Channel 7); Mega TV (Channel 9); Chilevisión (Channel 11); and Corporación de Televisión de la Universidad Católica (UCTV – Channel 13).
Cable/satellite television reaches = an estimated 900,000 households in Chile, 51% of them in Santiago. The largest cable system company VTR TV, covers 80% of Chile. It rebroadcast all l= ocal stations, as well as major international channels from the United States, Italy, France, Germany, Argentina, Brazil and Mexico. U.S. offerings include CNN International, HBO, MTV, TNT, ESPN and Cartoon Network.
Reaching into the most remote areas, radio is Chile's most ext= ensive mass medium. Nearly all Chile= an stations operate commercially, and six have network affiliates. Chile’= ;s Undersecretariat for Telecommunications lists 170 AM and 1,229 FM stations = in the country, with 24 AM and 55 FM stations in Santiago alone. An estimated 93 percent of Chile's population listens to radio. However, market share for radio advertising has decreased by 9 perce= nt over the last three years since television, cabl= e and Internet are perceived to be more effective.
The principal national networks are= Radio Cooperativa (76 AM and 93.3 FM), number one in the metropolitan area, Radio Agricultura (57 AM and 92.1 FM), and Bio Bio (99.7 FM). Other major musical and commercial= FM radios are Rock & Pop, Duna, Pudahuel, Corazón, Romántica, Activa, and Digital FM that operates outside of the capital city.
Chile = has approximately 40 newspapers ranging from nationally distributed dailies to small-town tabloids. Distribu= tion ranges from as many as 301,606 copies (Sunday edition of Santiago's El Mercurio) to regional papers with 3,000 copies. Santiago has 10 major newspapers w= ith a combined weekday circulation of approximately 700,000. The circulation of local dailies i= n the regions is approximately 220,000.
Two major established newspaper ent=
erprises
operate in Chile: the El Mercurio chain, owned by the Edwards family,
with 3 national newspapers and 20 regional dailies affiliated throughout Ch=
ile,
and Consorcio Periodístico de Chile (COPESA), owned by the Alvaro Sa=
ieh
group, which distributes nationally La Tercera, popular La Cuarta=
,
daily free tabloid La Hora and
the newsweekly Qué Pasa.&nbs=
p;
Copesa also owns three radio stations. El
Mercurio of Santiago is Chile's most influential paper, followed by La Tercera.
Also
published in Santiago are economic and financial newspapers El Diario and Estrategia, government-owned La
Nación, mass-oriented and popular tabloids Las Ultimas Noticias (El Mercurio-owned), La
Cuarta, and afternoon La Segund=
a
(El Mercurio-owned), and free tabloids Publimetro and La Hora.
Approximate
circulation for Santiago's major newspapers:
|
Dailies: |
|
|
|
|
128,789 |
173,049 |
260,108 |
|
|
La
Tercera |
100,955 |
195,626 |
222,084 |
|
Las
Últimas Noticias |
140,118 |
146,400 |
169,461 |
|
La
Cuarta |
141,689 |
136,655 |
181,950 |
|
Publimetro |
95,056 |
---- |
---- |
|
La Hora |
100,473 |
---- |
---- |
|
La Segunda |
33,266 |
---- |
---- |
|
Total: |
740,346 |
651,730 |
833,603 |
*Circulation figures are from the s= tudy for the Circulation and Readership Verification System for the January-June 2006 period, carried out by KPMG. =
The
major Santiago news magazines published for nationwide readership are the
weeklies Qué Pasa (approximate 195,000 circulate with t=
he
Saturday edition of La Terce=
ra), and independent leftist El
Periodista (8,000); these two cover curr=
ent
events and political analysis. The
conservative biweekly Ercilla h=
as an
approximate circulation of 10,000.
Three business-oriented publications – the monthlies Capita=
l,
AméricaEconomía a=
nd Gestión – focus on bu=
siness
and professional audiences. Two biweeklies with Life-magazine style formats -- Cosas
and Caras – feature photos and illustrations accompanying th=
eir
“beautiful people” interviews and articles on national and
international topics. Other
publications include El Siglo, =
the
weekly Communist Party publication; Punto
Final, a biweekly publication of the extreme-left group Movimiento de
Izquierda Revolucionario (MIR); Mensaje,
an intellectual monthly published by the Jesuits; and several sports and
TV/motion picture magazines.
Useful
web links for mayor Chilean publications
El Mercurio chain website
Consorcio Periodistico de Chile (COPESA) =
www.copesa.cl
Economic
and financial daily Estrategia =
www.estrategia.cl
Economic
and financial daily El Diario: =
; &n=
bsp; www.eldiario.cl
Useful
web links for mayor Television stations
National
Televisión (TVN): &=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; www.tvn.cl
Catholic
University of Chile TV (TVUC): &=
nbsp; &nbs=
p; www.canal13.cl
Mega TV:
&=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; &=
nbsp; www.megavision.cl
Chilevisión
TV (CHV): &nbs=
p; &=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; www.chilevision.cl
Useful
web links for mayor Chilean radio networks
Radio Cooperativa: &n=
bsp; =
; &n=
bsp; =
; <=
/span>www.cooperativa.cl
Radio Agricultura: =
&nb=
sp; =
&nb=
sp; www.radioagricultura.cl
Our Services &=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; Return to top
Pricing in Chile starts with a fair= ly straightforward formula based on CIF value: costs plus generally constant ship-to-warehouse expenses. G= ross margins for consumer goods are generally 30 to 50 percent or more for direct sales to consumers, or 20 to 30 percent each for the importer/distributor a= nd the retailer when a distribution chain is in place. The final price for mass-market it= ems should be competitive with imports from Asia and/or Brazil. Higher-priced items must identify = niche market segments to prosper. M= ore specialized products are sold by stocking distributors or by commissioned agents who generally earn margins of 5 to 10 percent on their sales.=
Under the U.S.-Chile FTA, tariffs w= ere eliminated on most goods imported from the United States. However, Chile’s value added= tax (called ”IVA” in Spanish) was raised to 19 percent as of October 1, 2003. Any tariff and value added tax is usually paid by the importer and not by the supplier. There are some exceptions: government entiti= es do not pay these taxes, and some luxury goods have higher tariffs.
Customer service and support are fundamental to successfully penetrating and retaining market segments for m= ost products and services. Any pr= oduct that requires operator training or needs after sales technical service must have, in effect, a qualified local company ready and able to assist the customer. Due to Chile’s relatively close-knit society, company reputations can be made or lost in a fairly short period of time.
Legislation, regulations and
institutional capacity to protect intellectual property in Chile are growing
more sophisticated, but overall enforcement still falls far short of U.S. standards. In fact, Chile’s inadequate
intellectual property rights protection and failure to comply with the
obligations agreed upon in Chapter 17 of the U.S.-Chile FTA led to a U.S. T=
rade
Representative Out of Cycle Review in the second
semester of 2006 and, as a result, Chile was placed in the U.S. Trade
Representative’s Priority Watch List, in January 2007.
Chile
belongs to the World Intellectual Property Organization (WIPO); therefore,
patents, trademarks, industrial designs, models, and copyrights are protect=
ed
in Chile by the provisions of the International Convention for the Protecti=
on
of Industrial Property (the Paris Convention). In December 2004, Chile agreed to =
comply
with WTO/TRIPs, resulting in expedited civil court proceedings and creation=
of
the authority of the government to seize illegal copies of patented
products.
The
U.S.-Chile FTA stimulated further improvements in intellectual property
protection:
·
Chile is required to accede in full to several international IPR
agreements, e.g., the Patent Cooperation Treaty (1984) and the Trademark Law
Treaty (1994).
·
It established procedures in Chile to prevent or cancel the registra=
tion
of marks that are similar or identical to a well-known trademark used
internationally.
·
Authors, performers and producers have exclusive rights to authorize=
or
prohibit reproductions of their work.
The term of protection is not less than the life of the author and 70
years after the authors death, or not less than =
70
years from the end of the year of the first publication of the work, if the
term is not based on the life of a person.
·
The Government of Chile confirmed its commitment to use only legitim=
ate
computer software.
·
It required Chilean authorities to adjust patent terms to allow for
unreasonable delays encountered in granting the patent. Under the FTA, data exclusivity is=
to be
guaranteed for 5 years for pharmaceuticals and 10 years for agricultural
chemicals.
·
In civil proceedings, the rights holder can request destruction of g=
oods
that have been found to be pirated or to bear counterfeit marks. Rights violators can be held liabl=
e for
actual damages or statutory damages where actual damages are unknown. Law enforcement is given the autho=
rity
to seize suspected counterfeit or pirated goods, as well as the equipment u=
sed
to produce such goods.
Ongoing
challenges:
·
Pirated computer software and video recordings in Chile (roughly 50
percent of the market)
·
Continued significant IPR violations with pharmaceutical products and
the exclusivity of private research data.&=
nbsp;
This includes outright patent violation through the Ministry of
Health’s granting of sanitary approval (in essence marketing approval)
for generic drugs and sanitary approval for generics based on test data (da=
ta
exclusivity) provided by foreign pharmaceutical companies.
·
Inadequate legal recourses available to companies with considerable
delays in courts (up to 2-4 years), expensive proceedings ($5,000 - $10,000=
+),
minor fines, and weak sentences. To
date, legal action has failed to protect IPR in Chile.
·
Inadequate protection of data exclusivity.
U.S. firms should still register their trademark as =
soon
as they have any intention of doing business in Chile. Ownership of the trademark is not
prejudiced by lack of use in cases where the registered party makes use of =
the
mark in other countries, and trademarks may be perpetually registered in
periods of ten years at a time.
Firms wishing to register their trademarks should do so with the Min=
istry
of Economy, “Departamento de Propiedad Industrial,” Tel: (56-2)=
687
– 4605, or on the web at www.dpi.cl=
.
For more information on IPR issues in Chile, see the section on P= rotection of Property Rights in Chapter 6: Investment Climate<= /a>.
Due diligence is an important part = of any decision to enter into business with a foreign company. U.S. exporters who would like to r= equest background on a prospective business partner should consider the Internatio= nal Company Profile service offered by the U.S. Commercial Service. For more information on this and o= ther U.S. Commercial Service assistance to identify and qualify your business partner, please see www.= buyusa.gov/chile/en/76.html.
Chile's=
business
environment and infrastructure are well-developed. There are many local
companies that can provide professional services to U.S. firms.
The U.S. Commercial Service maintains a list of service providers that offer
legal, financial, administrative/HR, transportat=
ion,
hotel, consulting and market research services. These firms provide support to com=
panies
initiating or expanding business in Chile.=
See www=
.buyusa.gov/chile/en/business_service_providers.html.
U.S. Commercial Service Santiago: www.buyusa.gov/chile/en<= /p>
And for a list of local service providers/hotels/transport: <= /span>
www= .buyusa.gov/chile/en/business_service_providers.html.
USDA Foreign Agricultural Service: = www.fas.= usda.gov
U.S. Embassy Santiago: www.usembassy.cl
Chilean-American Chamber of Commerce (Amcham): www.amchamchile.cl
Chilean Embassy in Washington: www.chile-usa.org
Santiago Chamber of Commerce: www.ccs.cl
Chile’s Industrial Property D= epartment: www.dpi.cl
Chilean Government Procurement webs= ite: www.chilecompra.cl
Com=
mercial
Sectors
The C=
hilean
farm sector produces a wide variety of crops, but Chile is still a net impo=
rter
of most bulk and intermediate commodities.=
Chile also has its own competitive food processing sector, as well a=
s an
extended growing/harvest season due to its extreme north-south geography.
Competition from Mercosur suppliers remains fierce for
grains, soybean products and pet food, while domestic and European imports
present the greatest challenge to U.S. processed foods.
· =
Bulk Commodities
· =
Intermediate Products
· =
Food Ingredients for Food Processing Sector
· =
Consumer-Oriented Products for the Retail Sector
· =
High-Value Food Products for Institutional Food Servi=
ce
U.S. =
exports of
bulk commodities to Chile should increase even though the United States will
likely remain a residual supplier due to higher prices relative to Argentin=
a,
Brazil and other suppliers. An
important U.S. advantage is our reliable menu of grains and feed ingredients
available throughout the year, which creates good opportunities for sales
whenever other suppliers are short.
Mixed cargoes of commodities also are sometimes an attractive option
that helps U.S. exporters to be competitive in this market.
We se=
e steady
growth potential for feeds, fodders and genetics as Chile expands its
production of pork, beef and poultry.
Chile will also continue to be a strong market for planting seeds.
Chile has a very competitive food
manufacturing/processing sector that supplies a wide range of products,
including: poultry and pork products, dairy products, seafood, processed fr=
uits
and vegetables, cookies, chocolates, candies, pasta, powdered beverages, so=
ft
drinks, bakery products, canned peaches, marmalades, tomato sauces and
wine. Chile has worked steadi=
ly to
improve food safety standards, and has become a leader in this area in the
South American region. The Ch=
ilean
food processing industry is growing and Chile’s Free Trade Agreements
with the European Union and the United States are expected to provide furth=
er
impetus to this sector.
The principal constraint in the market is that currently most low cost impo=
rts
for this sector come from other Mercosur countries (Argentina, Uruguay,
Paraguay and Brazil). However, we believe there is a need for US high tech =
food
ingredients. The U.S.-Chile F=
TA
also opened up new market access for previously restricted inputs of meat,
fresh fruits and dairy. In ge=
neral,
opportunities exist for food ingredients for the following processed food
categories: dairy, bakery pro=
ducts,
snacks, processed meats, etc. In
addition to the domestic food processors that dominate the market, there are
several foreign food processors that have invested in Chile to make products
specifically for sale in Chile and in the region.
The
retail food market (supermarkets, department stores and others) accounted f=
or
21.2 percent of Chile’s GDP in 2006 with sales of almost $28 billion,
according to a report by Colliers International. Chile's
supermarket industry reported sales of $7.8 billion in 2006. The sales forecast for 2007 is $8.=
2 (5%
sales growth).
Chile has a modern, highly competitive supermarket sector. The number of retail food stores grows
approximately one percent per year. &=
nbsp;
The market for consumer-ready food products and imports is concentra=
ted
in Santiago, where higher incomes and the city’s population density
command almost half of the country’s consumer demand. Superm=
arkets,
i.e., stores with 3 or more checkouts, serve about 58% of the grocery market
and number about 688. Traditi=
onal
neighborhood mini-markets, beverage stores, vegetable stands, etc. serve ab=
out
23% of the market and number about 90,000.=
Convenience stores, gas marts and kiosks sell limited quantities of
imported candy and snack foods. In
general, they do not import, but purchase from local wholesalers/distributo=
rs.
<=
span
lang=3DEN-US>There are important differences between the products carried b=
y both
hypermarkets and supermarkets in the low versus mid to high socio-economic
segments. The stores located in low-income areas normally carry a limited
number of specialty items (usually higher-priced imported goods), apart from
the items destined for massive consumption. Hypermarkets and supermarkets in
the mid to high-income areas carry a varied assortment of specialty items w=
ith
a relatively high degree of imported products. A rise in consumer sophistication =
in the
mid to high socio-economic areas, in terms of products, brands and price, h=
as
resulted in increased demand for imported food products. =
These
stores now account for 20% of total sales, offering customers fresh bakery
goods, delicatessen items, fresh seafood, coffee bars, prepared salads, piz=
zas
and meat dishes, in addition to fresh, frozen and dry grocery products. Warehouse outlets and wholesale cl=
ubs
have not yet made an appearance.
<=
span
lang=3DEN-US style=3D'color:black'>
<=
span
lang=3DEN-US>Nevertheless, despite the increasing selection of products and
advances made in the super and hypermarket sector as a whole, compared to t=
he
United States, the selection of imported specialty products is still
limited. About
10-15% of products sold in supermarkets are imported, but this segment has
grown by 85% over the last six years.
The U.S. – Chile FTA has prompted new interest in U.S. products
and opened new opportunities for previously prohibited products, such as red
meat, certain fresh fruits, and dairy products. The following foreign food imports=
are
in the highest demand: snack foods, including high energy nutritional snacks
for sports; frozen prepared dinner entrees and frozen bread products; dairy
products, fresh and frozen, such as yogurt and specialty drinks; processed
meats, sardines and tuna; dietetic snacks and candies; baked goods and mixe=
s;
sweets, gum and chocolates; specialty pet foods (other than dry dog food) a=
nd
alcoholic beverages (rum & vodka in particular).
The institutional food service m=
arket
reported sales of US$600 million for 2005, and the top three companies (Sod=
exho
Chile S.A., Central de Restaurantes, Compass Catering S.A.) control 64 perc=
ent
of the market. Mines and
educational institutions dominate demand for institutional food services.
<= span lang=3DEN-US>The leading local products sold to the Hotel, Restaurant, Inst= itute (HRI) sector are produce, poultry and pork, seafood/fish, fruits and wine. Imported food accounts for about 10 percent of the demand. Imported products are mainly beef = from Argentina, Brazil and Uruguay, legumes and cereals such as corn and wheat f= rom Argentina and Canada. Chileans still value freshness as much as possible, but do consume large amounts of frozen food, mostly from domestic suppliers.
2006 - Agricultural, Forestry & Fish Imports by Chile (mil=
lions
of dollars)
|
Total (from wor=
ld) |
3,388 |
|
From the United States |
313 |
|
U.S. Share |
9.2 per= cent |
|
Chilean Surplus with U.S. |
3,451 |
<=
b>2006 - Principal U.S. Agricultural Exports to Chile (millions =
of
dollars)
Soyb=
ean
Meal
|
<= span lang=3DEN-US>48.0 |
Anim=
al Feed
|
<= span lang=3DEN-US>41.4 |
Whea=
t
|
<= span lang=3DEN-US>37.9 |
|
Other Intermediate Products |
<= span lang=3DEN-US>19.3 |
|
Planting Seeds |
<= span lang=3DEN-US>16.0 |
|
Treenuts |
<= span lang=3DEN-US>13.0 |
|
Forest Products |
<= span lang=3DEN-US>11.4 |
|
Cotton |
<= span lang=3DEN-US>10.4 |
|
Dairy |
<= span lang=3DEN-US>8.1 |
|
Snack Foods |
<= span lang=3DEN-US> 6.5 |
|
Processed Fruits and Vegetables |
<= span lang=3DEN-US>3.8 |
|
Live Animals |
<= span lang=3DEN-US>2.6 |
|
Pet food |
<= span lang=3DEN-US>2.5 |
Source: U.S. Bureau of the Census Trade Data
<=
b>2006 - Principal U.S. Agricultural Imports from Chile (million=
s of
dollars)
<=
b>
|
Fresh Fruit |
<= span lang=3DEN-US>1,140.3 |
|
Forest Products |
<= span lang=3DEN-US>1,038.6 |
|
Fish Products |
<= span lang=3DEN-US>951.9 |
|
Wine & Beer |
<= span lang=3DEN-US>167.2 |
|
Processed Fruits & Vegetables |
<= span lang=3DEN-US>149.8 |
|
Planting Seeds |
<= span lang=3DEN-US>130.5 |
|
Fruit & Vegetables Juices |
<= span lang=3DEN-US>89.3 |
|
Spices |
<= span lang=3DEN-US>11.4 |
|
Snack Foods |
<= span lang=3DEN-US>9.9 |
|
Fresh Vegetables |
<= span lang=3DEN-US> 9.3 |
<= span lang=3DEN-US>Source: U.S. Bureau of the Census Trade Data
For m= ore detailed trade statistics and reports on U.S. food and agricultural export opportunities, visit ww= w.fas.usda.gov/commodities.asp.
Return to table of contents<= /a>
Construction Sector
|
|
|
|
|
Total Market Size*
|
563 |
497 |
508 |
|
Total Local Production* |
260 |
290 |
300 |
|
Total Exports |
12 |
10 |
12 |
|
Total Imports |
315 |
217 |
220 |
|
Imports from the U.S. |
149 |
106 |
108 |
(In millions of U.S. Dollars.= Source: Chilean Customs. *Unofficial estimates)
Chile= 217;s Construction Chamber is forecasting 15 percent growth in the sector for 200= 7, after a decline in previous years. The decline in 2005 was due to the ending of large construction proj= ects that were part of the most ambitious private concession program, ever launc= hed in Chile. However, industry analysts forecast strong growth for 2007 in construction thanks to the sustained economy growth, strong demand for new housing, on-going public infrastructure projects, and expansion and construction of new shopping mal= ls, hospitals and several specialized industrial parks. These projects will require import= ed specialty-building materials.
The publ= ic infrastructure construction program alone had estimated a total investment = for about US$2.3 billion for 2006. Public Works in Chile rely on a very successful long-term private concessions program (based upon 15 to 30 year contracts) dedicated to const= ructing airports, highways, jails, schools and eventually hospitals. Most of the largest and emblematic projects have been already built and, currently, the Ministry of Public Wor= ks is working on the second phase of the public concession program. This second phase involves develop= ing a series of less privately profitable initiatives and its success will be bas= ed upon the economic incentives the government could offer to private investors. Private inve= stors (both Chilean and foreign) have invested over $6 billion in approximately 40 such concessions. For the per= iod 2006-2010, there are several private construction projects that will entail over $31 billion in new investments, largely concentrated in industrial pro= jects.
Chile manufactures only limited types of construction equipment and the most sophisticated machinery and equipment is imported. Chile’s production concentra= tes on small construction equipment, and simple parts and pieces for imported construction machinery. Even = where domestic producers exist, imported construction machinery and supplies are often preferred for their high quality and advanced technology. U.S.-made products, with roughly a= 50 percent market share, are highly regarded by Chilean users. U.S. exporters have good prospects offering specialized cement trucks, cranes, concrete plants, large concrete booms and pumps, assorted earth-moving equipment, construction forms and scaffolding, innovative building materials, professional services, construc= tion and project management systems.
Upcoming
(within next 2-5 years) and on-going major investment productive projects
include:
o CMPC (pulp & paper plants): $900 million
o El Chamisero (housing development): $700 million
o Agrosuper (agri-business): $500 million
o
o Endesa (hydropower generation): $2 billion
o Falconbridge (hydropower generation): $2.4 billion
Source: Chilean press and company press
releases
=
Public works investment program includ=
es a
series of projects in areas such as:
o&nb=
sp;
Second Generation of Highways Projects US$
860 million
o&nb=
sp;
New Hospitals Program &nb=
sp; =
&nb=
sp; US$
250 million
o&nb=
sp;
Mass Transportation Program &nb=
sp; =
US$
175 million
o&nb=
sp;
Dams Program =
&nb=
sp; =
&nb=
sp; US$
400 million
o&nb=
sp;
Airports Program &n=
bsp; =
; &n=
bsp; US$
100 million
o&nb=
sp;
Rain-water Program =
&nb=
sp; =
US$
400 million
o&nb=
sp;
Other Public Infrastructure Projects=
<=
u>US$
170 million
Source: Chilean Ministry of Public Wor=
ks
Chile’s
Association of Professional Engineers: www.ingenieros.cl
Chile
Construction Chamber: www.cchc.cl/
For more
information, contact Carlos Capurro of the U.S. Commercial Service Santiago=
at Carlos.Capurro@mail.doc.gov=
.
|
|
2004 |
2005 |
2006 (estimated) |
|
Total Market Size |
521 |
542 |
622 |
|
Total Local Production |
223 |
250 |
290 |
|
Total Exports |
Negligible |
Negligible |
Negligible |
|
Total Imports |
440 |
462 |
536 |
|
Imports from the U.S. |
275 |
289 |
335 |
(In millions of U.S. Dollars. Source: Santiago Cham=
ber of
Commerce)
Chile’s
market for computers and peripherals has been showing positive growth over =
the
last three years due to better overall economic conditions, 0 percent import
tariffs and a 15 percent drop in prices.&n=
bsp;
Computer hardware sales in Chile has approximately reached $622 million in=
2006,
representing a 16% increase over 2005.&nbs=
p;
Market penetration of laptop computers in Chile, in 2006, represented
24% of PC purchases exceeding laptop sales in other Latin American countries
where laptops are, on average, 10% of PC sales. The first choice in the hardware m=
arket
among Chilean companies is Lenovo, a Chinese manufacturer that bought
IBM’s division of personal PCs at the end of 2004, followed by Hewlett
Packard, and Dell. The princi=
pal
suppliers of hardware in Chile are the United States with 33% of the market
share, China with 32%, and Mexico with 7%.=
It is important to note that a significante amount of these
type of manufactured products, previously coming from the United States, are
now coming from US IT companies based in China.
The
purchase of computer software by companies is also rising along with the
overall growth in the economy.
Small enterprises are important potential customers since they accou=
nt
for some 40 percent of software purchases done in the country.
Hardware: hard drives, laptops, cards, wirel=
ess
products, and gatedefender.
Software: antivirus and antimalware.
There
are good opportunities for software products aimed at small and medium-sized
companies. The most common pr=
ograms
purchased by such companies are data processing programs, navigators, and e=
mail
systems.
IT and software application services, especially development and
implementation of solutions for industrial production processes.
The IT
services market should be boosted by the U.S.-Chile Free Trade
Agreement’s guarantee of non-discriminatory access for U.S. service
providers.
Chilean
Association of Information Technology Companies: www.acti.cl
Chilean
Software Distribution Association: www.ads.cl=
Santiago
Chamber of Commerce: www.ccs.cl
For more information, contact Veron=
ica
Pinto of the U.S. Commercial Service Santiago at Veronica.Pinto@mail.doc.gov=
.
Electric Power Equipment
|
|
|
|
|
Total Market =
Size
|
398 |
563 |
558 |
|
Total
Local Production |
110 |
120 |
150 |
|
Total
Exports |
12 |
27 |
44 |
|
Total
Imports |
300 |
470 |
452 |
|
Imports
from the U.S. |
82 |
97 |
95 |
(In millions of U.S. Dollars.=
Source: Chilean Customs. *Unofficial estimates)
Chilean
demand for electric power has been rising steadily for the last ten years a=
t a
rate about 8 percent per year and is expected to accelerate as power demand=
builds
up in response to economic growth.
Electricity in Chile comes mainly via two separate grids, the SING a=
nd SIC, which all together supply the largest share of all
power generated.
The Northern Interconnected System (SI=
NG)
– 100 percent derived from thermal generation – supplies
Chile’s mining companies and consumer demand from sparsely populated
cities spread throughout Northern Chile.&n=
bsp;
In 2001, the SING received a huge increase in available electric pow=
er
supply, traditionally based on coal-fired power plants. The major transformation of SING w=
as
brought about by the introduction of natural gas imported from Argentina via
two large gas pipes to several gas-fired combined-cycle power plants. These technological changes introd=
uced a
new generation of power plants to Chile – units larger than 300MW -- =
and
have, altogether, more than doubled the electric generation capacity that
existed just five years ago.
However, the increased electric power generation also brought new
vulnerabilities since Chile’s electric power system is now reliant up=
on
only a handful of power plants as well as one foreign source for nearly all=
of
its natural gas. In fact, Arg=
entine
suppliers, faced with a domestic energy shortage, have cut back on their
exports of natural gas to Chile.
The SING has been particularly hard hi=
t by
these gas shortages and Chile has been forced to actively look for alternat=
ive
sources of power generation, i.e., pet coke, coal and diesel oil. Currently, there are several on go=
ing
international Requests For Proposal to attract
international electric power generators to become new suppliers, particular=
ly
to the copper mining industry.
The Central Interconnected System (SIC)
largely relies on hydroelectric power generation. The introduction of natural gas im=
ported
from Argentina brought major changes to this system as well. However, SIC still relies largely =
on
hydroelectric power generation. As
natural gas reaches larger areas of the central southern part of Chile, new
generations of combined-cycle gas-fired plants gradually replaced the older=
and
more expensive-to-operate units.
Nevertheless, given the crisis caused by current energy shortage in
neighboring Argentina, thermal generation based on coal and diesel, despite
greater cost and pollution, is being considered in terms of new investments=
.
The Chilean government is actively ind=
ucing
the private sector to seriously consider adding renewable-nontraditional
sources of energy in to the existing grids. The Chilean Congress is discussing
legislation to make economically feasible to add at least 5% of all new ene=
rgy
generation to come from sources based upon renewable-nontraditional resourc=
es,
i.e., mini-hydro, wind, solar and geothermal.
Given Chile’s short to medium te=
rm
energy shortages, the Chilean government has committed – through ENAP
– to develop a 5-7 million cubic meter/day (liquid natural gas) LNG
re-gasification plant worth some $400 million. The plant should be ready and
functioning by the end of 2007 and will partly ease Chile’s dependenc=
e on
natural gas from Argentina by facilitating imports from Asia and
elsewhere.
To make
up for the current energy crunch brought about by reduced imports of gas fr=
om
Argentina, local generators are exploring new alternatives to develop mini,
medium and large hydropower projects.
In addition to this, there is a portfolio of over 100 small
Non-traditional Renewable Energy projects looking for funding. Most of these are hydro and wind p=
ower
based.
Existing
power transmission and distribution companies, under the supervision of CNE,
the local regulatory agency, have developed a long-term program to purchase
energy from private generation companies.&=
nbsp;
To fulfill the growing demand foreseen by these companies, the CNE
visited New York and London to reach out to potential investors in September
2006. Hopefully, this road sh=
ow
will attract foreign investors willing develop power generation infrastruct=
ure
in Chile. These investments w=
ill be
secured by a long-term contract (to supply 300,000 GWh through the years
2010-2024), based upon prices known to all participants and a periodic
adjustments clause. Next RFP =
will
take place sometime during 2007.
There
are several hundred million dollars worth of power electric equipment and
supplies derived from the multi-billion dollar business opportunities resul=
ting
from ever-rising power demand in SIC.
The Chilean Energy Commission (or CNE), publishes recommendations f=
or
future investments based upon their current and projected energy demand.
CNE
publishes in their website the existing policies and plans regarding the
development of geothermal and other renewable sources of energy in Chile.
| Company |
Project Name |
Investment (In millions/USD)&n=
bsp;
|
| Transelec<= o:p> | Transmission Line |
1,500 |
| Hidroel&ea=
cute;ctrica
de Aysén |
Pascua II =
Power
Generator |
940 |
| Endesa |
Puelco
Hydroelectric Generator |
830 |
| Ingenier&i=
acute;a
Austral Ltda (Falconbridge)
|
Río
Cuervo Hydroelectric Generator |
700 |
| Hidroel&ea=
cute;ctrica
de Aysén |
Río=
Baker
I Hydroelectric Generator |
680 |
| Colb&uacut=
e;n |
Coronel I =
Coal
Generator |
500 |
| Colb&uacut=
e;n |
Coronel II=
Coal
Generator |
500 |
| Endesa |
Bocamina
Generator Expansion |
460 |
| Electroand=
ina |
Combined C=
ycle
Generators |
450 |
| Hidroel&ea=
cute;ctrica
de Aysén |
Río
Pascua I Hydroelectric Generator |
450 |
| Enap and o=
ther
private investors |
GNL Plant<= o:p> | 400 |
| Endesa |
Neltume
Hydroelectric Generator |
385 |
| Hidroel&ea=
cute;ctrica
de Aysén |
Río=
Baker
II Generator |
360 |
| SN Power C=
hile
Limitada |
Maqueo
Hydroelectric Generator |
350 |
| Suez y Gas
Atacama |
GNL Plant<= o:p> | 350 |
Source:
CNE, Chile
Electricity
and Combustible Superintendence: www.sec.cl
National
Energy Commission: www.cne.cl
SING
Energy Distribution Center: www.cdec-si=
ng.cl
SIC
Energy Distribution Center: www.cdec-sic=
.cl
For more information, contact Carlos
Capurro of the U.S. Commercial Service Santiago at Carlos.Capurro@mail.doc.gov=
.
Financial Services Sector
|
|
=
2004 |
=
2005 |
=
2006 (estimated) * |
|
Total Capital Market Size Assets =
|
106,000 |
120,000 |
135,000 |
|
Private Pension Funds Assets (1) =
|
50,000 |
70,000 |
87,000 |
|
Mutual Funds Assets (2) |
5,000 |
14,000 |
20,000 |
|
Factoring (Volume of Docs. Acquir=
ed)
(3) |
3,500 |
9,800 |
16,000 |
|
Insurance Premiums (4) |
3,500 |
3,800 |
4,300 |
(In millions of U.S. Dollars=
. * Unofficial
estimates)
(1)
Source: Chilean Pension Fund Superintendency, AUM
(2) Source: Chilean Mutual Fund Association
(3) Source: Chilean Factoring Association
(4) Source: Chilean Insurers Association
Note: Total Capital Market Size includes other sectors financi=
al
assets such as banking, investment funds, private funds, and insurance total
assets. The number is given a=
s a
reference point for the other data.
Other referential data is Chile’s 2006 GDP, approximately $106
billion, and the total local stock market capitalization, close to $88 bill=
ion.
In 1974
and 1975, the first generation of capital market reforms in Chile freed up int=
erest
rates and credit controls. From 1974 though 1981, the Chilean
financial system grew significantly thanks t=
o a
liberalization process that ended 30 years of financial
restrictions. In the early 19=
80s
Chile embarked on a second generation of capital market reforms, significantly
increasing the powers of supervision and control of the Superintendence of
Banks and Financial Institutions (SBFI) and introducing an improved regulat=
ory
platform. These reforms have allowed the Chilean capital market to grow
remarkably in size, depth, and liquidity, transforming it into t=
he
most developed in Latin America.
Chile’s
total domestic capital market includes over $120 billion in assets.
Chile’s privatized social security system represents the largest
institutional investor, with over $85 billion in assets. The mutual funds
industry, with assets of $ 20 billion, is growing more than 15 percent
annually, while the factoring industry is also experiencing double–di=
git
growth on an annual basis.
Mutual
Funds Sector
In
Chile, 21 mutual fund administrators invest in approximately 900 internatio=
nal
mutual funds. These are funds formed abroad and managed by a foreign
administrator. More than 50 investment companies from around the world,
primarily the United States, followed by Europe and Japan, manage these fun=
ds.
The primary users of international funds are the Insurance Companies and the
Social Security or Pension Fund Administrators (Administradoras de Fondos de
Pensiones – AFP), which hold almost 100 percent of international fund=
s.
Factoring
Sector
The
factoring industry in Chile began operating in the early 1990s. It was designed as a tool to provi=
de
funding to small and medium-sized enterprises (SME), by swapping their acco=
unts
receivable for cash. No new special regulation was enacted; factoring
transactions must comply with credit assignment and transfer regulations
included in Chilean law. This new industry fulfilled the demands of SMEs th=
at
did not have a specialized department for collecting overdue payments from
their clients and needed cash in advance from their sales.
Mutual
Funds
The
multiple fund system for AFP raised the number of available social security
pension investment funds from two to five.=
This has increased the percentage of investment in variable income
securities. With the mu=
ltiple
funds, the funds managed by the AFP are distributed into five funds. It is therefore estimated that
investment in variable income instruments, and specifically mutual funds, w=
ill
increase by at least 24 percent, which makes AFPs a very attractive client.=
AFPs
may invest 30 percent of their AUMs in international instruments. Industry specialists expect that t=
his
limit will be raised to 40 percent in 2007.
In the
next two years, the Chilean factoring sector will grow 20 to 25 percent.
The
stock of accounts receivable acquired by the factoring industry represents =
less
than 3 percent of outstanding loans in the financial system. Currently fewer
than 10,000 Chilean SME’s use factoring, which is 11 percent of the
approximately 90,000 potential companies.
Another
important factor for the development of this industry is the government pro=
ject
that gave legally binding status to the invoice. This way invoices have the same le=
gal
validity or liability as a check, thus facilitating domestic factoring
transactions as well as making their operation safer and more formal.
The
growing needs of Chilean SMEs for liquidity, outsourcing of collection, cre=
dit
risk information and credit risk reduction, should motivate the development=
of
factoring in Chile.
Chilean Central Bank: www.bcentral.cl
Chilean Securities and Exchange Commission: www.svs.cl
Chilean Pension Fund Superintendency: www.safp.cl
Banks and Financial Institutions Superintendenc=
y: www.sbif.cl
Chilean Insurers Association: www.aach.cl
Chilean Mutual Funds Association: www.aafm.cl
Chilean Association of Pension Fund Administrat=
ors:
www.afp-ag.cl
For more information, contact Marce=
lo
Orellana of the U.S. Commercial Service Santiago at Marcelo.Orellana@mail.doc.gov=
.
Food Processing/Packaging Equipment
|
|
|
|
|
Total Market =
Size
|
119 |
185 |
249 |
|
Total
Local Production |
8 |
7 |
7 |
|
Total
Exports |
Negligible |
Negligible |
Negligible |
|
Total
Imports* |
111 |
178 |
242 |
|
Imports
from the U.S. |
18 |
17 |
24 |
(In millions of U.S. Dollars.=
*Source: Chilean Customs. **Unofficial figures)
Chile’s
food industry continues to grow and aims to become more efficient,
cost-effective and competitive in order to fully take advantage of Free Tra=
de
Agreements signed with trade partners such as Mexico, Mercosur, Canada, Sou=
th
Korea, the European Union, the United States, and China. Chile’s agro-industry has be=
en
growing at important annual rates, accounting for 10 percent of the
country’s GDP. During 2=
005,
Chile exported $8.2 billion worth agro-industrial products, being ranked as
number 17th among the world’s food suppliers. Chile projects=
being
top ten in food exports by 2010, with projections ranging between $14 and $=
17
billion.
Chile
has excellent natural conditions to continue developing its agro-industry a=
nd
food industry sectors. Its
Mediterranean climate and favorable geography make it viable to produce a w=
ide
range of food products. In
addition, the country is a phyto-sanitary island (desert in the north, the
Andes mountain range to the east, the Pacific Ocean to the west and south.<=
span
style=3D'mso-spacerun:yes'> Being a sanitary island, and the s=
trict
government sanitary policy, make it difficult for diseases and pests to ent=
er
Chile. One of the countryR=
17;s
major advantage is also its location in the southern hemisphere, which is v=
ery
convenient for counter season exports, especially considering that the major
purchasing markets are located in the northern hemisphere.
Chilean
wine, salmon & trout, and fresh fruit are well recognized international=
ly,
and even though still growing, are reaching maturity as sub-sectors. New and promising products include=
meats
(beef, poultry, pork and exotic meats), olive oil, other aquaculture produc=
ts
(mussels, abalone, scallops, tilapia, oysters, catfish, etc.), dairy produc=
ts,
etc. As a result, there are g=
reat
opportunities for new technologies, food processing and packaging machinery=
and
equipment that allow for improved quality, efficiency and greater productio=
n of
processed food items.
In
recent years Chile’s agriculture, fishing & aquaculture, and food
processing sub-sectors have become more concentrated, with a focus on produ=
cing
and exporting value-added products and a growing concern for clean
production. Product tracking,=
food
safety, best practices programs and certification have become important iss=
ues
for Chilean exporters. Moreov=
er, in
order to reach its goal of becoming a top-ten world food supplier, the indu=
stry
needs to invest heavily on R&D, technology, and ensure access to adequa=
te
energy supply. Most of the
machinery and equipment required in this industry is imported since local p=
roduction
is very basic and small.
Italy, Germany and other =
European
countries are the traditional suppliers of food processing machinery in
Chile. However, given the
reputation of U.S. equipment, the more competitive U.S. dollar (vis-à=
;-vis
the Euro), and the elimination of duties on most U.S. imports through the
U.S.-Chile FTA, Chilean companies are actively seeking new sources of U.S.-=
made
food processing equipment, mainly freezing & refrigeration equipment,
skinning machines, meat and bone separators, filleting equipment, meat
grinders, dehydrating equipment, industrial microwave ovens, automatic
stuffing, portioning, waste recycling systems, vacuum packaging machinery.<=
span
style=3D'mso-spacerun:yes'>
The
Chilean Economic Development Agency, CORFO, is organizing a series trade
missions to Chile, to attract foreign investors. The first one will take place in M=
ay of
2007, and aims to attract investors in the wine industry. CORFO will fund lodging and
transportation, and participation in the week-long program, including site
visits.
Another
good opportunity to enter the Chilean market is to participate in local tra=
de
fairs such as:
- PescaSur 2007 (Fishing Show)
March
21-24, 2007 – Talcahuano, Chile (www.pesca-sur.cl)
- Vinitech Latin America (wine industry
related trade show)
July
12-14, 2007 – Santiago,Chile (www.vinitch.cl)
- ExpoRetail 200=
7 (Food processing and related
industries trade show)
October
16-19, 2007 – Santiago, Chile (www.expotrade.cl)
- AquaSur 2008 (Aquaculture Show)
March, 2008 – Puerto Montt, Chile.
(http://www.aqua-sur.cl/)
If
interested in obtaining additional information, or in participating, please
contact: Mary Lou Lathrop, Mary.Lou.Lathrop@mail.doc.gov=
Association
of Chilean Food Producers: www.c=
hilealimentos.cl
Salmon
Industry Association: www.salmonchile=
.cl
Chilean
Winery Association: www.vinasdechile=
.cl
Chilean
Olive Oil Producers Association: www.c=
hileoliva.cl
For more information, contact Mary =
Lou
Lathrop of the U.S. Commercial Service Santiago at Mary.Lou.Lathrop@mail.doc.g=
ov.
Franchising
|
|
|
|
|
|
Total
Market Size |
63 |
154 |
240 |
|
Total
Local Production |
21 |
36 |
55 |
|
Total
Exports |
Negligible |
Negligible |
Negligible |
|
Total
Imports |
42 |
118 |
185 |
|
Imports
from the U.S. |
&nbs=
p; 35 |
74 |
115 |
(In millions of U.S. Dollars.= Source: University of Chile Econom= ics Department)<= o:p>
In 2006, franchising sector sales is expected to reach some $240 millio=
n,
providing 35,000 local employments, and creating a nationwide presence. There are some 113 franchises oper=
ating
in Chile, mainly in the fast-food and service sector (University of Chile
Economics Department).
Franchise companies operating in Chile are subject to regular trade laws
and have benefited greatly from the Chile-US FTA. Royalties and fees have a withhold=
ing
tax that ranges from 15 percent to 35 percent. Chile’s Franchise Chamber, www.camaradefranquicias.cl ,=
was
founded in 2005. It is the se=
cond
attempt of local companies to establish a franchise entity after the first
association – AFICH – was dissolved in 2000. Chile’s Franchise Chamber is
negotiating its participation in ExpoRetail 2007, to be held in Santiago in
October 2, 2007.
Since trademark/brand stockpiling is rather common in Chile, U.S. compa=
nies
are encouraged to register their trademarks as soon as possible if they are
considering Chile as a potential market.&n=
bsp;
U.S. franchises operating in Chile include: Applebee’s, Blockbuster,
McDonald's, Domino's Pizza, Pizza Hut, KFC, Burger King, Curves, Powerhouse
Gym, Ruby Tuesday, H2O, Holiday Inn Express, Manpower, Remax, Berlitz, Taco
Bell, Fridays, Subway, Coverall, Gymboree, Hampton Inns, and Hooters.
Some successful Chilean companies also franchise their businesses,
however, the trend to franchise local businesses has yielded mixed results.
Local franchises currently account for 23 percent of the total market. Franchise operations of U.S. origin
account for 48 percent of the total Chilean market. Even though Chile has an ideal
geography for sub-franchising, the basic benefits of franchising is not well
understood outside Santiago, so companies that offer a master franchise with
the prospects of sub-franchising most or all of their units must be aware t=
hat
sub-franchising outside Santiago remains a challenge.
Since there are already many fast-food outlets in Chile, most of the
untapped franchising opportunities are in full-service restaurants, nightcl=
ubs,
amusement parks, automotive services, IT, cosmetics, repair and rental
services, cleaning (home and industrial), clothes, fitness centers, real es=
tate
business, education, childcare, training services, hotels/motels, supermark=
ets
and others. In early education, for example, you many find Gymboree Pre-sch=
ools
operating in Chile.
For more information, contact Veronica Pinto of the U.S. Commercial Ser=
vice
Santiago at Veronica.Pinto@m=
ail.doc.gov..
Medical Equipment
|
|
|
|
|
|
Total Market Size |
172.2 |
226.2 |
265.2 |
|
Total Local Production |
20 |
22 |
24 |
|
Total Exports |
4.2 |
5.3 |
6.2 |
|
Total Imports |
156.7 |
209.5 |
247.2 |
|
Imports from the U.S. |
56.5 |
68.2 |
80.4 |
(In millions of U.S. Dollars.=
Source: Chilean Customs)
=
Chile currently spends approximately 7 percent of its GDP on
healthcare.
Chile’s medical sector is small but extre=
mely
competitive. Chile produces a=
nd
exports a limited amount of medical products exporting approximately $5.3
million worth of medical equipment, disposables, and instruments in 2006.
Yearly increases in government spending since 1990 have raised=
the
Chilean public healthcare budget to a record $4.1billion for 2007, represen=
ting
a 13 percent increase over 2006 budget.&nb=
sp;
According to the Chilean Health
Superintendence, public health insurance (Fonasa) and private health insura=
nce
companies (ISAPRES) cover $2 billion and $1.8 billion, respectively, of med=
ical
expenses per year.
In July 2005, the Chilean government implemented a healthcare
reform package aimed at reducing the inequities of the Chilean healthcare
system. Chile’s
“Universal Access with Explicit Guarantees” or “Plan
AUGE” ensures government-funded healthcare coverage for individuals
regardless of age, class, and most importantly, their ability to pay.
By July 2007, “Plan AUGE” will expand to include a=
ll
56 major illnesses and by 2009 there will be 80 diseases listed by the Mini=
stry
of Health. These illnesses ra=
nge
from cancer to respiratory disease to mental illness.
The Chilean M=
inistry
of Health is also undergoing major improvements of most of its public hospi=
tal
infrastructure and their improvement will require an investment of over $600
million in equipment and infrastructure for the next several years. Investm=
ent
includes the construction of new hospitals and new medical attention
units. The government will fi=
nance
new or refurbished hospitals, two of which will be opened to concession in
April 2007.
Concessions w=
ill only
be applied to the construction and repairing of the hospitals and to the
non-clinical areas of the hospitals such as parking, security, and catering=
.
Thanks to this
concession approach, the government believes it will have additional resour=
ces
of about $5.3 million to purchase needed equipment: imaging equipment,
anesthetic instruments and appliances, cardiac monitors, medical, surgical =
and
laboratory sterilizers, mobile dental clinics and ambulances.
Many private
hospitals are expanding existing facilities or planning the construction of=
new
ones. Some of these projects =
are:
Holding Banmedica ($60 million); Clinica Alemana ($45 million); Clinica Ind=
isa
($15 million); Isapre Masvida ($50 million).
After
the signing of the Free Trade Agreement between the United States and Chile,
most U.S.-made medical equipment enters Chile duty-free. Medical imports, like all products
foreign and domestic, are subject to Chile’s 19 percent VAT (Value Ad=
ded
Tax).
The
United States has long been Chile’s most important supplier of medical
equipment by supplying around 30% of all imports. Many medical professionals study or
receive training in the United States and prefer U.S.-made equipment. Other competitors are Germany (15
percent share) and Japan (7 percent share).
The
Ministry of Health is undergoing a major improvement of its hospital
infrastructure that will require an investment of about $600 million in
equipment and infrastructure for the next five years. Investment includes the constructi=
on and
remodeling of 35 hospitals, 11 of them will be new. Two of these hospitals
projects will be opened to concession in 2007. Concessions will only be applied t=
o the
construction and repair of the hospitals and to the non-clinical areas of t=
he
hospitals, such as parking, security and catering. There will be good opportunities f=
or
U.S. companies to supply the necessary equipment for these projects.
The Ministry of Health: www.minsal.cl
ISAPRE Association: www.isapre.cl
Medical Professional Association: www.colegiomedico.cl
For more information, contact Patri=
cia
Jaramillo of the U.S. Commercial Service Santiago at patricia.jaramillo@mail.doc.gov=
.
Mining Equipment and Supplies
|
|
2004 |
|
|
|
Total
Market Size* |
1,388 |
1,612 |
1,700 |
|
Total
Local Production* |
348 |
&nb=
sp;
400 |
&nb=
sp;
440 |
|
Total
Exports |
28 |
28 |
30 |
|
Total
Imports |
1,068 |
1,240 |
1,290 |
|
Imports
from the U.S. |
587 |
&nb=
sp;
682 |
710 |
(In millions of U.S. Dollars.=
Source: Chilean Customs. *Unofficial estimates)
Chile’s
mining exports account for 60 percent of all Chile’s exports and abou=
t 9
percent of total GDP. In 2006,
there was a 80% percent increase in mining expor=
ts
(including non-monetary gold) reaching $33 billion. Thanks to record high mineral pric=
es
– especially copper – Chile’s mining sector is expected to
grow 7 percent annually through 2010.
Projected investments made by private sources – mostly in copp=
er
and gold mining – are likely to exceed $18 billion during the same
period, while government sources forecast a level of investment slightly ov=
er
$13 billion for the same period.
|
Projected investment =
in
copper, gold and silver mining (2006-2010) (In millions U.S. dol=
lars) |
|
|||||||
|
|
2006 |
2007 |
2008 |
2009 |
2010 |
Total 06 - 10 =
|
Post 2010 |
|
|
Total Mining Investment |
2,073 |
2,461 |
2,356 |
2,948 |
3,253 |
13,091 |
2,610 |
|
|
1) Copper mining |
2,014 |
2,250 |
1,946 |
2,373 |
2,543 |
11,126 |
2,285 |
|
|
CODELCO |
810 |
1,753 |
970 |
1,318 |
1,813 |
6,664 |
2,135 |
|
|
Private investors |
1,204 |
497 |
976 |
1,055 |
730 |
4,462 |
150 |
|
|
2) Gold & Silver mining |
59 |
211 |
410 |
575 |
710 |
1,965 |
325 |
|
|
Source: COCHILCO |
CODELCO,
the state-owned mining company, is the world’s largest copper produce=
r,
but privately owned mines (including those with international ownership)
account for about half of Chile’s copper production and look to incre=
ase
their share of the market steadily.
CODELCO has announced yearly investments of around $2 billion for the
next six years.
Regardless,
some mining experts foresaw a slowdown in mining investment due to the
introduction of a mining royalty. The current record high prices have offset
any negative impact on investment.
The most significant variable affecting long-term investment decisio=
ns
will continue to be the copper price in international markets.
Exports
are supported by the output of a well-developed industry, which uses
state-of-the-art production technology, particularly in copper mining. Mining production will continue to=
lead
Chile’s economy with significant foreign and domestic investment in
developing new mines and/or modernizing and expanding existing ones.
Within the mining industry, U.S.-made
equipment enjoys great approval.
Over half of all the equipment installed in new and expanding mining
projects comes from U.S. makers because of the equipment’s reputation=
for
excellent quality and the suppliers’ reputation for good after-sale
service, and timely delivery.
Brazilian, Canadian, German, Korean and Japanese manufacturers are
aggressive competitors.
§ Equipment that require re=
gular
replacement:
§ Crushers
§ Grinders
§ Off-road trucks (240-440 =
tons)
§ Cabbed truck chassis (+ 5=
0 tons)
§ Part for rock cutters
§ 360 degree revolving exca=
vators
§ Cranes and screening mach=
ines
§ Environmental system solu=
tions
(water treatment, air pollution abatement, mine closures)
§Underground mining technology services
§Wear-resistant materials
=
Ten
largest mining projects:
=
=
Aldebaran
(copper): US$1,650 million
=
Andina
(copper): US$1,600 (CODELCO)
=
Pascua-Lama
(copper): US$1,400 million
=
Spence
(copper): US$990 million
=
Expansion
Division Norte (copper): US$900 million (CODELCO)
=
El
Teniente-mine: US$800 million (CODELCO)
=
Gaby
(copper): US$600 million (CODELCO)
=
Mansa
Mina (copper): US$430 million (CODELCO)
=
Los
Pelambres (copper): US$400 million
=
El
Teniente-processing (copper): US$340 million
=
=
Source:
Companies’ press reports
For more
information, contact Carlos Capurro of the U.S. Commercial Service
Santiago at Carlos.Capurro@mail.doc.gov=
or visit www.exponor.cl=
.
Chilean
Mining Ministry: www.minmineria.cl=
Chilean
Copper Commission (COCHILCO): www.cochil=
co.cl
National
Society of Mining: www.sonami.cl
CODELCO
(Chile’s state-owned copper company): www.codelco.cl;
and for supplying to CODELCO: www.codelco.com/english/areas_negocio/fr_abaste=
cimiento.html
=
Association
of Big Mining Suppliers: =
www.aprimin.cl
=
Quadrem
(mining B2B portal): w=
ww.quadrem.com
<= o:p>
=
For
more information, contact Carlos Capurro of the U.S. Commercial Service
Santiago at Carlos.Capurro@mail.doc.gov=
.
<= o:p>
Plastics Machinery
|
|
|
|
|
|
Total
Market Size |
44.0 |
75.2 |
86.8 |
|
Total
Local Production |
&nb=
sp;
2.2 |
&nb=
sp;
2.4 |
&nb=
sp;
2.5 |
|
Total
Exports |
&nb=
sp;
0.7 |
0.3 |
&nb=
sp;
0.5 |
|
Total
Imports |
42.5 |
73.7 |
84.8 |
|
Imports
from the U.S. |
&nb=
sp;
4.6 |
&nb=
sp;
5.8 |
&nb=
sp;
6.7 |
(In millions of U.S. Dollars.=
Source: Chilean Customs. *Unoffici=
al
estimates)
Plastics/Resins
|
|
|
|
|
|
Total
Market Size |
590 |
640 |
690 |
|
Total
Local Production |
450 |
416 |
450 |
|
Total
Exports |
144 |
176 |
190 |
|
Total
Imports |
284 |
398 |
430 |
|
Imports
from the U.S. |
47 |
64 |
70 |
(In millions of U.S. Dollars.=
Source: Chilean Customs. *Unoffici=
al
estimates)
The
Chilean plastics industry has grown steadily for the last fifteen years.
The Chilean market – made up of some 500 mostly sma=
ller
plastics transforming companies, of which 80 percent are concentrated in the
capital, Santiago – is competitive and price sensitive. Customer service and after-sales s=
upport
are also critical factors in local buyers’ purchasing decisions. A long-term presence in the =
market
and frequent contact with local clients, distributors and/or representatives
are critical to carving out market share.&=
nbsp;
In
spite of inroads made by Asian and Latin American suppliers, the United Sta=
tes
remains one of Chile’s main suppliers of plastics materials and resin=
s,
with a growing 16-18 percent share.
On the equipment side, European suppliers dominate the plastics
machinery market with almost a third of the market. U.S. exports of plastics processing
machinery and equipment accounted for a market share of 8 percent in 2005.<=
span
style=3D'mso-spacerun:yes'> The U.S. share of the market shoul=
d grow
thanks to a more competitive U.S. dollar and the elimination of duties on
U.S.-made equipment under the U.S.-Chile Free Trade Agreement.
ENAP,
the Chilean oil and gas state owned company, has recently announced investm=
ents
close to US$1 billion to erect two new petrochemical plants to produce
ethylene, polyethylene and polypropylene, mostly to cope with increasing
domestic demand for resins. M=
ost of
projected growth would be based upon the expansion of the plastics products
demand derived from the packaging industry growth.
Chilean
Plastics Industrial Association (ASIPLA): =
www.asipla.cl
For more information, contact Carlos
Capurro of the U.S. Commercial Service Santiago at C=
arlos.Capurro@mail.doc.gov.
Po=
llution
Control/Water Treatment/Environmental Services (POL/WRE)
The
U.S.-Chile FTA contains important provisions for U.S.-Chile environmental
cooperation. The National
Environmental Commission has completed most of the 8 environmental agreemen=
t points
of the FTA. There are two pro=
jects
that will be completed during the first semester of 2007, a project on
remediation of mining pollution and closing of mining sites and a pilot pro=
ject
to retrofit a fleet of diesel trucks to demonstrate technologies and strate=
gies
to achieve significant emissions reductions.
Addressing
the enforcement of its domestic environmental regulations will be an ongoing
process for Chile.
Implementing its regulations will generate demand not only for pollu=
tion
control equipment, but also for technical environmental engineering and
consulting services. This is =
the
situation in the water treatment sector.
Water Treatment Equipment
|
|
|
|
|
|
Total
Market Size |
297 |
280 |
296 |
|
Total
Local Production |
Negligible |
Negligible |
Negligible |
|
Total
Exports |
Negligible |
Negligible |
Negligible |
|
Total
Imports |
42 |
39 |
45 |
|
Imports
from the U.S. |
17 |
16 |
18 |
(In millions = of U.S. Dollars.&= nbsp; *Unofficial estimates based on data from Chile&#= 8217;s Sanitary Services Superintendency and the Environmental Association, AEPA.)=
According
to Chilean regulation, all wastewater must be treated, either in house or
through a water treatment company.
This and other norms regulating discharge of industrial wastewater i=
nto
the sewage system were published in the Official Gazette in September
2004. According to the
Superintendency of Sanitary Services (SISS), the Chilean government office
responsible for enforcement of this mandate, this overall effort will requi=
re
an investment of $1.4 billion before 2015. Industry sources estimate th=
at
imported equipment accounts for approximately 20 percent of the total cost =
of
new water treatment plants and 80 percent accounts for local engineering
supplies and civil works, this is reflected in t=
he
difference between total market and total imports.
The
solid waste management equipment and service sector is still a new market in
Chile. There are a fairly lim=
ited
number of companies that can handle solid waste and necessary capital resou=
rces
remain scarce.
The Metropolitan Environmental and Hea=
lth
Service estimates the Santiago Metropolitan Regi=
on
alone generates approximately seven million tons of waste per year, 50 perc=
ent
of which is residential waste. The
municipalities are responsible for waste management.
Even
though production of specialty equipment and technologies used in the treat=
ment
of solid waste is limited, the market will grow. U.S. companies may wish to develop
long-range plans (5 to 10 years) for promoting their equipment and service =
in
this sector.
Chile’s
regulations for handling hazardous waste, approved in 2004, establish the
procedure for identification and classification of hazardous waste and the
standards for collection, transport, recycling, incineration and final
disposal.
The
approval and implementation of these regulations should lead to investment =
in
the market for hazardous waste handling.&n=
bsp;
It is estimated that 5 percent of Chile’s annual 2.5 million t=
ons
of industrial waste is hazardous waste.
Chilean
production of specialty equipment and technologies used in water and solid
waste treatment is practically nonexistent. Local environmental engineering and
consulting companies are keen to partner with foreign companies that possess
the necessary know-how and technical expertise, mainly in the following are=
as:
·
Environmental impact assessment
·
Project design and construction of water treatment plants
·
Reclamation and remediation services
·
Solid and hazardous waste management and disposal.
Clear
environmental laws and a stable economy have allowed Chile to have a leading
role in the region. Many of t=
he
Latin American countries follow the model that Chile is using or has alread=
y tested. As a result, Chile has become a pl=
atform
country for the transfer of environmental technology and expertise to other
Latin American countries.
Chilean
Environmental Commission (CONAMA): www.con=
ama.cl
Chilean
Environmental Association (AEPA): www.aepa.c=
l
For
more information, contact Isabel Valenzuela of the U.S. Commercial Service
Santiago at Isabel.Valenz=
uela@mail.doc.gov
Safety and Security Equipment
|
|
|
|
|
|
Total
Market Size |
52.6 |
54.8 |
75.1 |
|
Total
Local Production |
3.8 |
4.1 |
6.6 |
|
Total
Exports |
2.8 |
3.1 |
5.9 |
|
Total
Imports |
51.6 |
53.8 |
74.1 |
|
Imports
from the U.S. |
&nbs=
p; 9.9 |
13.3 |
21.6 |
(In millions of U.S. Dollars.=
Source: Incomex/Chilean Customs)
In 2006, the safety and security industry expects a 27% growth on its t=
otal
imports. The U.S. market share
growth is expected to be at the 38% level.=
These import growth levels are the result of Chile’s Free Trade
Agreements with the U.S., Canada, Mexico, South Korea, and the E.U. that ha=
ve
opened the Chilean market for these industry products. According to local contacts, imports for this industry in 2007 is expected at 15%.<=
span
style=3D'mso-spacerun:yes'> Chile continues to offer a wide ra=
nge of
opportunities for U.S. suppliers of residential, commercial and industrial
security equipment and services. Local companies are open to incorporate new
technologies to guarantee a better quality service for residences, companie=
s,
institutions, and industries. The
United States had the highest market share for this industry in 2005 (29%),
followed by China (15%), and France (9.8%).
Personal safety products, access control, fire detection, home automati=
on,
CCTV, outdoors photoelectric beam detectors for perimeter protection,
integrated systems, sprinkler systems, and signage and lighting, continue t=
o be
in demand in this market, as well as guard services for residences and
institutions.
There
are numerous construction projects starting in 2007 in the health, industri=
al,
banking, and education sectors, which will call for security-related
supplies. In addition, there =
is an
ongoing concession project to double Chile’s prison capacity creating
demand for imported security technology and equipment.
Ministry of Interior: www.interior.c=
l
Chilean Police: www.carabineros.c=
l
Chilean Security Association: www.achs.c=
l
For more information, contact Veronica Pinto of the U.S. Commercial Ser=
vice
Santiago at Veronica.Pinto@m=
ail.doc.gov.
Telecommunications Equipment/Services (TEL/TES)
Telecommunications Equipment
|
|
|
|
|
|
Total Market Size |
763 |
916 |
1,072 |
|
Total Local Production |
Negligible |
Negligible |
Negligible |
|
Total Exports |
Negligible |
Negligible |
Negligible |
|
Total Imports |
763 |
916 |
1,072 |
|
Imports from the U.S. |
103 |
137 |
160 |
(In millions of U.S. Dollars.=
Source: Incomex/Chilean Customs)
Chile's telecommunications sector is completely privatized and one of the most advanced and competitive in Latin America. With sizeable invest= ment, Chile’s telecom industry grew an average of 20 percent annually over = the last decade. Chile’s fixed-line network has been fully digital since 1993. But while Chile’s mobile market continues to flourish, the fixed-line sector remains flat.
Chile’s Undersecretariat of Telecommunications (SUBTEL) regulates the sector, sets standards and issues licenses and concessions. At present, the two main regulatory issues before SUBTEL are regulations for V= oice over Internet Protocol (VoIP) and High Definition Television (HDTV). During 2006, the U.S. Commercial S= ervice in Santiago has organized numerous meetings and activities to promote the A= TSC standard (North American HDTV standard).
The telecommunications market in Ch= ile is highly competitive. Several k= ey mergers and acquisitions have occurred in the last few years. The main players in this sector are Claro (Mexico), Entel (Chile), Telefónica (Spain), and Telmex (Mexico). In cable= TV, the major players are VTR (U.S.) and Telefónica (Spain).
Chile does not manufacture telecommunications equipment. U.S. products are regarded for their high quality. The United States has a 10 percent market share, being the 4th most important supplier. Telecom products imported by Chile originate mostly from Asia and Latin America; however, many of its componen= ts are from the United States.
The largest market potential is in = mobile telephony and broadband access. WiFi is spreading rapidly and the government of Chile is also looking for new technology to improve rural telephony and broadband access to remote areas.
Competition among telecom operators= means they are looking for a competitive edge to attract more customers. This is creating more opportunitie= s for value-added services such as 800 numbers, cellular messaging, hot lines, automatic collect-calls, home security services and others. In corporate communications servic= es, telecom operators offer services such as videoconferencing, teleconferencing and business TV.
Chilean Undersecretariat of Telecommunications: www.subtel.cl
Chilean Association of Information Technology Companies: www.acti.cl=
For more information, contact Isabel
Valenzuela of the U.S. Commercial Service Santiago at Isabel.Valenzuela@mail.doc.g=
ov
Chile’s Outbound Travel
|
|
|
|
|
|
|
Total Chilean Outbound Travele=
rs |
1,801,000 |
1,997,557 |
1,888,918 |
2,068,000 |
|
Chilean Travelers to the U.S.<= o:p> |
263,000 |
270,085 |
266,715 |
299,000 |
(Source: Junta de Aeronáutica Civil =
and
Sernatur)
The United States remains as one of= the most attractive destination for Chilean travelers, only surpassed by Argent= ina and Brazil due to their proximity. The United States attracts Chileans because of its excellent tourism infrastructure, amusement parks and entertainment for the entire family, shopping and recreational activities.<= span style=3D'mso-spacerun:yes'>
Most competition with U.S. for vaca= tion destinations comes from Latin American countries. The Pacific Islands were the destinations with the highest growth during 2006 because it has become the preferred destination for Chilean honeymooners.
Although visa requirements and secu= rity measures may affect Chilean travel to the United States, a strong Chilean p= eso vis-à-vis the U.S. dollar should attract more Chilean leisure travel= ers to the United States.
I=
n Chile,
wholesale operators generally provide services to travel agents who, in tur=
n,
provide services to consumers. Chileans
generally prefer to make their travelling arrangements through a travel age=
nt;
however, use of the Internet to make travel reservations is on the rise.
T=
he top
travel destinations in the United States are Miami and Orlando, due to their
reputation for recreational activities.&nb=
sp;
Chileans travel to the U.S. for four primary purposes: business, vacation, visiting
relatives/friends, and study/training.&nbs=
p;
Increasing numbers of Chilean students and professionals travel to t=
he
U.S. to learn English or obtain post-graduate degrees.
<= o:p>
T=
he peak
travel season for Chileans, representing 30 percent of travel, are the mont=
hs
of January and February (Chile’s summer season). July and September (winter and spr=
ing
school break, respectively) are also busy travel times.
The best promotional opportunities = for U.S. tourism industry are the following:
For participating in any of these s= hows, interested companies may contact Isabel.Valenzuela@mail.doc.gov
Tourism Service of Chile: www.sernatur.cl
Visit USA Committee Chile: www.visitusa.cl
For more information, contact Isabel
Valenzuela of the U.S. Commercial Service Santiago at Isabel.Valenzuela@mail.doc.g=
ov.
The U.S.-Chile Free Trade
Agreement (FTA) came into force on January 1, 2004. Tariffs on 90 percent of U.S. expo=
rts to
Chile were eliminated immediately.
As of January 2007, 97 percent of all U.S. exports to Chile are duty
free. The remaining 3 percent=
included
duties primarily on agricultural products. Key U.S. exports such as aut=
os and
auto parts, computers and IT equipment, medical devices and construction and
agricultural equipment all won instant duty-free access. In addition, Chilean tariffs on mo=
re
than three quarters of U.S. farm products will be eliminated by 2008. By 2015, all trade between the two
countries will be duty-free. =
For
those products still subject to duty and products not of U.S. (or other FTA
country) origin, Chile generally applies a uniform 6 percent duty.
The U.S.-Chile FTA further addresses o=
ther
import taxes Chile applies. F=
or
example, under the FTA, Chile eliminated the 50 percent duty surcharge appl=
ied
to used goods originating from the United States=
. In addition, Chile agreed to phase=
out
its luxury tax on U.S.-made automobiles.&n=
bsp;
Starting January 2007,
the tax has been eliminated completely. Certain other imported “luxu=
ry
goods” incur a 15 percent tax upon entry into Chile. These include: beer, chicha, cider, wine and cham=
pagne;
gold, platinum, and white ivory articles; jewelry and natural or synthetic
precious stones; fine furs; mobile home trailers; caviar conserves and their
derivatives; pyrotechnic articles, such as fireworks, petards, and similar
items (except for industrial, mining or agricultural use); air or gas arms =
and
their accessories (except for underwater hunting); and fine carpets and sim=
ilar
articles. Other liquors, such=
as
grape pisco, whisky, aguardiente and liquorice wines face a 27 percent
tax. Tobacco products, such as
cigarettes, cigars and processed tobacco, are subject to additional 61 perc=
ent,
51 percent and 57.9 percent taxes, respectively. Additionally, all imports are subj=
ect to
the same 19 percent Value Added Tax (IVA) imposed on domestic goods.
Chile
generally has few barriers to imports or investment allowing, in most cases,
foreign firms to enjoy the same protections and operate under the same
conditions as local firms. In
agriculture, some exceptions apply.
For example, while dairy and beef establishmen=
ts no
longer have to be individually inspected by the Chilean Ministry of
Agriculture, processed poultry and pet food establishments still do. Imports of fresh/chilled poultry a=
re still
prohibited. Many import
restrictions on fresh fruits have been resolved, as a result of technical t=
alks
held in tandem with the FTA negotiations.&=
nbsp;
Consequently, new market access is available for a wider range of fr=
uits
and vegetables, although exporters should still check with the Department of
Agriculture/APHIS to check on any restrictions before shipping to Chile.
Chile only approves the import of proc=
essed
food products on a case-by-case basis.&nbs=
p;
There is no blanket approval process for permitting identical produc=
ts
from different companies to enter Chile after they have been tested and fou=
nd
in compliance with local health regulations. To bring in a product, the importe=
r must
obtain the permission of the Health Service Officer at the port of entry, w=
ho
will take samples and perform the necessary tests. This process raises the overhead c=
ost of
introducing new products into the market.&=
nbsp;
Labeling and fortification standards are also unique to Chile’s
Health Ministry and sufficiently distinct from U.S. standards that most U.S.
processed food products must be labeled and/or formulated especially for
Chile. For more information
regarding Chile’s labeling requirements see the Foreign Agricultural =
Service’s
Food and Agricultural Import Regulations report at
Commercial forms used by both local importers and exporters are
commercial invoices, certificates of origin, bills of lading, freight insur=
ance
and packing lists. Special
permission, certificates, and approval documents, such as sanitary and
phytosanitary certificates, are required in for most agricultural products =
and
in special cases for industrial products. Depending on the nature of the
product, these certificates can be obtained from National Health Service
(Servicio Nacional de Salud, SNS), the Agricultural and Livestock Service
(Servicio Agrícola y Ganadero, SAG), and the National Fishing Service
(Servicio Nacional de Pesca, SERNAP). For documentation requiremen=
ts
specific to agricultural imports, see the SAG web site www.sag.cl.
The U.S. does not maintain an embargo
against or any export controls specific to shipments to Chile. However, U.S. exporters should ver=
ify
applicable export controls by reviewing information from the U.S. Departmen=
t of
Commerce and U.S. Department of State.&nbs=
p;
See www.expo=
rt.gov/exportcontrols.html.
Under the terms of the U.S.-Chile FTA,=
Chile
will permit duty-free temporary admission of professional equipment necessa=
ry
for carrying out the business activity of a businessperson who qualifies for
temporary entry under Chilean law.
Temporary duty-free admission of goods intended for display or demon=
stration
and commercial samples is allowed.
For temporary entry of food samples, see www.aduana.cl, Acuerdos
Internacionales, Tratados de Libre Comercio, Chile – Estados Unidos,
Oficios Circulares, Oficio Circular Nº 333.=
Contact the Commercial Service to =
add
certainty to this process.
Chile has fairly common l=
abeling
requirements for imported products. Among the most important requirements f=
or
U.S. exporters is that labeling must be in Spanish and measurements must be
metric. In addition, consumer
products must display the country of origin before being sold in Chile. Packaged goods must be marked to s=
how
the quality, purity, ingredients or mixtures, and the net weight or measure=
of
the contents. <=
span
style=3D'mso-bookmark:OLE_LINK6'>There are also specific requirements for canned
food, shoes, foods, electric machinery, liquid and compressed natural gas
equipment (LNG and CNG), plastics, wines and alcoholic beverages, textiles =
and
apparel, wheat flour, detergents and insecticides for agricultural use.
Canned or packaged foodstuffs imported=
into
Chile must bear labels in Spanish for all ingredients, including additives,
manufacturing and expiration dates of the products, and the name of the
producer or importer. All siz=
es and
weights of the net contents also must be converted to the metric system.
The importation of used passenger and cargo transportation vehicles =
is
prohibited. Exceptions includ=
e the
importation of used ambulances, armored cars, mobile homes, prison vans, st=
reet
and highway cleaning vehicles, cement-making vehicles, hearses, and
fire-fighting vehicles.
Firearms can be imported, but they require a special permit from a
military authority in Chile.
Controls for importing firearms are becoming more stringent.
The import of pharmaceuticals, cosmetics and most biological and
bio-chemical preparations requires prior registration with the Institute of
Public Health (Instituto de Salud Pública; (see web site at <=
/span>www.ispch.cl) and may be subject to s=
pecial
labeling and other requirements, depending on the nature of the product.
Imported goods that are considered inconsistent with Chilean
"morals, public health, national security, or environment" require
special authorization to enter into Chile.=
These include certain chemicals/processes and some media products th=
at
face review and possible censorship.
All films, videos and TV programs, imported or locally produced, are
currently reviewed for suitability.
Chile continues to have animal health, phytosanitary and sanitary
requirements that impede imports, although great progress has been made on a
number of fresh fruits, dairy and red meat. All food products entering Chile a=
re
subject to sampling and analysis by health authorities. For specific inform=
ation
see www.sag.cl<=
span
style=3D'mso-bookmark:OLE_LINK6'> or contact the U.S. Fore=
ign
Agricultural Service in Chile +56-2-330-3704, e-mail: =
AgSantiago@usda.gov.
For more information regarding restrictions on agricultural product
imports see the Foreign Agricultural Services Food and Agricultural Import
Regulations at www.usembassy.cl, Food & Agriculture, Food Regulation.
Chilean customs valuation uses the normal value =
of
merchandise, without special discounts, plus freight and insurance (CIF).
=
Chile is both a standards maker and a
standards taker. The country =
has
recently started a concerted effort to develop technical regulations useful=
to
its growing export industrial base.
The overall policy is to use and comply with international standards
under the guidelines of the World Trade Organization (WTO) Committee on
Technical Barriers to Trade. =
In the
event that a required standard does not exist, then the general policy is to
look into norms that are generally accepted by Chile’s largest trading
partners, including the European Union and the United States.
Chile’s “Instituto Naciona=
l de
Normalización” or National Standards Institute (INN) is the
institution that oversees, fosters and develops the use of technical
regulations in three areas: S=
tandardization,
Accreditation and Metrology.
Certification is done through accredited institutions. These include institutions of priv=
ate,
public, national and international origin.=
For example, the INN has accredited U.S.-based Underwriters Laborato=
ries
(UL) to issue product certification.
Certain standards are set by Chile’s central government. Such will be the case for the High
Definition TV standard (HDTV), currently under study by the Office of the
Undersecretary of Telecommunications.
A decision will be made on this standard early 2007.
Chapter seven of the U.S.-Chile FTA addresses technical barriers to
trade and calls on the two parties to intensify their joint work in the fie=
ld
of standards, technical regulations, and conformity assessment procedures w=
ith
a view to facilitating access to each other’s markets. The countries agreed to identify
bilateral initiatives that are appropriate for particular issues or sectors=
. Such initiatives may include coope=
ration
on regulatory issues, such as convergence or equivalence of technical
regulations and standards, alignment with international standards, reliance=
on
a supplier’s declaration of conformity, and use of accreditation to
qualify conformity assessment bodies, as well as cooperation through mutual
recognition. Each party is al=
so
required to allow persons of the other party – on terms no less favor=
able
that those accorded to its own people -- to participate in the development =
of
standards, technical regulations, and conformity assessment procedures.
Chile’s INN already interacts wi=
th
several standards institutions from around the world, including the U.S.
Department of Commerce’s National Institute of Standards and Technolo=
gy
(NIST), the American National Standards Institute (ANSI) and the American S=
ociety
for Testing and Materials (ASTM International).
For questions related to standards, pl=
ease
contact Mr. Marcelo Orellana at Marcelo.Orellana@mail.doc=
.gov
In Chile, there are no standards associations like those found in the
United States. The only
organization charged with developing standards in Chile is the INN. A loose translation of the INNR=
17;s
name would be National Standards Institute. Its web site is www.inn.cl. Its long-term plan for the develop=
ment
of standards is aligned to Chile’s chief export sectors. These are
copper, salmon, forestry, agro-products and wine. Chile is also keen to develop its
biotechnology and information technology sectors. See www.inn.=
cl/pags/normalizacion/index.html for INN’s current
standards development plan.
Member countries of the World Trade
Organization (WTO) are required, under the Agreement on Technical Barriers =
to
Trade (TBT Agreement), to report to the WTO all proposed technical regulati=
ons
that could affect trade with other Member countries. “Notify U.S.R=
21; is a free, web-based e-mail subscription service that
offers an opportunity to review and comment on proposed foreign technical
regulations that can affect your access to international markets. Register
online at Internet URL: www.nist.gov/notifyus/
The main national testing organizations are grouped under
the following categories. The
number in parenthesis indicates the approximate number of institutions acti=
vely
working in an area:
a) &nbs=
p; &=
nbsp; &nbs=
p;
Quality Management Systems (QMS) (8)
b) &nbs=
p; &=
nbsp; &nbs=
p;
Environmental Management Systems (EMS) (2)
c) &nbs=
p; &=
nbsp; &nbs=
p;
Product certification&n=
bsp;
(40)
d) &nbs=
p; &=
nbsp; &nbs=
p;
Testing laboratories (200)
e) &nbs=
p; &=
nbsp; &nbs=
p;
Calibration laborato=
ries
(40)
f) &nbs=
p; &=
nbsp; &nbs=
p;
System Quality Auditors (80)
g) &nbs=
p; &=
nbsp; &nbs=
p;
Inspection organizat=
ions
(55)
A few of the locally accredited organizations are:
Name
|
Address in Chile |
Telephone |
|
SGS ICS (C=
hile)
/ ISO9000 |
Ignacio Valdivieso 2409, San
Joaquín, Santiago |
(56 2) 555-8478 |
|
Underwrite=
rs
Laboratories UL (U.S.) |
Don Carlos 293=
9 Office 605, La=
s Condes
- Santiago - Chile |
(56 2) 378-099=
0 |
|
ICONTEC
(Colombia) / ISO9000 |
Av. Apoquindo 4499 Piso 11, Las Condes,
Santiago |
(56 2) 228-2400 |
|
IRAM (Argentina), Certificación de Sistemas /
ISO9000 |
Av. 11 de Septiembre 1881, Of. 1213,
Santiago |
(56 2) 233-5409 |
|
AENOR
(España) División de Certificación de Sistemas / ISO=
9000 |
Andrés Bello 2711, Of. 2402, Las
Condes, Santiago |
(56 2) 499-9200 |
|
CESMEC Ltd=
a.
(Chile), División Certificación / ISO9000 |
Av. Marathon 2595, Macul, Santiago |
(56 2) 350-2100 |
|
DICTUC
S.A.,(Chile) |
Av. Vicuña Mackenna 4860,
Santiago |
(56 2) 354-4886 |
|
Fundaci&oa=
cute;n
Chile (Chile) |
Av. Parque Antonio Rabat Sur 6165,
Vitacura, Santiago |
(56 2) 240-0300 |
|
Bureau Ver=
itas
S. A.(France) |
Av. Isidora Goyenechea 3250, Piso 7,
Santiago |
(56 2) 485-9000 |
|
ISP (Insti=
tuto
de Salud Pública de Chile) |
Av. Marathon 1000, Nuñoa, Santi=
ago |
(56 2) 350-7477 |
|
IDIC (Inst=
ituto
de Investigaciones y Control) (Chile) |
Avda. Pedro Montt 2050, Santiago |
(56 2) 520-7700 |
|
SAG (Servi=
cio
Agrícola y Ganadero) (Chile) |
Av. Bulnes 140, Piso 8 Santiago |
(56 2) 345-1104 |
|
Salimax (C=
hile) |
Av. Providencia 2601, Of. 20 Santiago |
(56 2) 335-6488 |
|
Corthorn Q=
uality
(Chile) |
Palacio Riesco 4549, Huechuraba, Santi=
ago |
(56 2) 243-9292 |
In most sectors, standards are not mandatory in Chile, but companies=
can
voluntarily comply with them, especially in industries where such compliance
constitutes a kind of “seal of approval.” However, certain imported products=
, such
as those related to industrial safety, building and construction materials,=
and
the gas and electricity industries, must comply with the specific requireme=
nts
of the supervising entity. For
example, there are specific regulations pertaining to the seismic resistanc=
e of
new construction. The INN is =
also
promoting ISO 9000 standards among local manufacturers. The chemical industry is an exampl=
e of
one industry that has incorporated the ISO 9000 standards in its industrial
processes.
For agricultural products, the FTA inc=
luded
an agreement on red meat grading standards, which now allows U.S. boneless =
red
meat products to be sold in the Chilean market according to U.S. standards.=
A complete list of accredited testing =
organizations
under each category can be found at www3.inn.cl/acreditacion/portada/index.php under the heading DIRECT=
ORIO DE
ACREDITADOS.
The name of Chile’s national gazette is the Diario Oficial<=
/i>. Once regulations are approved by t=
he INN
and officially accepted by Chile’s central government, they are publi=
shed
in the Diario Oficial. Only
approved and officially accepted regulations are published. Proposed
regulations are not published in the Diario Oficial.
Regulations currently under discussion, a schedule of upcoming stand=
ards
development committee meetings and a forum for public comment are available=
on
the INN web page at www.inn.=
cl/pags/normalizacion/index.html. Any institution, private or public=
, may
request the services of the INN for the development of a standard, in
accordance with open and transparent procedures. Institutions and company represent=
atives
can be active participants or observers in the committee that is created wh=
en
defining a standard. U.S. com=
pany
representatives have, in fact, participated in such study discussions. The application request is done vi=
a the
Internet.
As described previously in this section, Chile has fairly common
labeling requirements for imported products. Among the most important
requirements for U.S. exporters is that labeling must be in Spanish and
measurements must be metric. =
In
addition, consumer products must display the country of origin before being
sold in Chile. Packaged goods=
must
be marked to show the quality, purity, ingredients or mixtures, and the net
weight or measure of the contents. <=
/span>There are also specific requirements for canned
food, shoes, foods, electric machinery, liquid and compressed natural gas
equipment (LNG and CNG), plastics, wines and alcoholic beverages, textiles =
and
apparel, wheat flour, detergents and insecticides for agricultural use.
Canned or packaged foodstuffs imported=
into
Chile must bear labels in Spanish for all ingredients, including additives,
manufacturing and expiration dates of the products, and the name of the
producer or importer. All siz=
es and
weights of the net contents also must be converted to the metric system.
The Standards Liaison at the U.S. Embassy in Santiago is Mr. Marcelo
Orellana, Phone: +56-2-330-34=
55;
Fax: +56-2-330-3172; E-Mail:<=
span
style=3D'mso-spacerun:yes'> Marcelo.Orellana@mail.doc=
.gov; web site: www.buyusa.gov/chile/en.
INN, Head of Standards Division Contact Point is Ms. Leonor Ceruti.
Phone: +56-2-445-8870; E-Mail: leonor.ceruti@inn.cl; website www.inn.cl.
The Government of Chile’s Contact
Point for WTO Technical Barriers to Trade is Ms. Ana María Vallina,
Jefe, Departamento de Comercio Exterior, Ministerio de
Economía. Phone: +56-2-473-3400; Email: amvallina@economia.cl; web site=
www.economia.cl.
Chile has 14 Free Trade Agreements, wi=
th
China, EFTA, Panama, Central America which counts as 5 FTAs (Honduras, El
Salvador, Costa Rica, Guatemala, and Nicaragua), Canada, United States, Mex=
ico,
South Korea, P4 which counts as one FTA (encompasses New Zealand, Australia,
Brunei, and Singapore), and the European Union FTA.
Chile has numerous other trade agreeme=
nts,
known as “acuerdos de complementación económica”
(ACE) or Complementary Economic Agreements. Chile has signed ACE with Bolivia,
Mercosur, Venezuela, Cuba, Colombia, Ecuador, and Peru.
In addition, Chile has concluded FTA
negotiations with Colombia even though the agreement has not been ratified =
at
the writing of this report. C=
hile
will be signing its FTA with Japan in March 2007. India’s agreement is not
considered a “Free Trade Agreement” but a “partial”=
one
is expected to be ratified by Congress sometime in 2007.
This network of trade agreements has
significantly improved market access for Chilean products and exports. Chile sends roughly 30 percent of =
its
exports to Asia, 25 percent to the European Union, 20 percent to NAFTA
countries, and the rest to Latin American and other smaller markets. For more information on Chile̵=
7;s
trade agreements, see www.direcon.cl<=
/span>.
U.S. Government: www.export.gov
U.S. Commercial Service Santiago: www.buyusa.gov/chile/en
USDA Foreign Agricultural Service:
U.S. Embassy Santiago:
U.S. Government information on export
controls: www.export.gov/exportcontrols.html
Government of Chile: www.gobiernodechile.cl
Ministry of the Economy:
Industrial Property Department: www.inn.cl
Ministry of Foreign Affairs (Economic
Directorate): www.direcon.cl<=
/span>
Customs Service: www.aduana.cl
Institute of Public Health: www.ispch.cl
Agriculture and Livestock Service: www.sag.cl
Standards Issues:
The Standards Liaison at the U.S. Embassy in Santiago is Mr. Marcelo
Orellana, Commercial Specialist. Phone: +56-2-330-3455; Fax: +56-2-330-3172: E-Mail: Marcelo.Orellana@mail.doc=
.gov; web site: www.buyusa.gov/chile/en.
INN, Head of Standards Division Contact Point is Ms. Leonor Ceruti.<=
span
style=3D'mso-spacerun:yes'> E-Mail: leonor.ceruti@inn.cl and website www.inn.cl.
The Government of Chile’s Contact Point for WTO Technical Barr=
iers
to Trade is Ms. Ana María Vallina, Jefe, Departamento de Comercio
Exterior, Ministerio de Economía. Phone: +56-2-473-3400 and web site www.economia.cl.
For the last three decade=
s, Chile
has made foreign direct investment (FDI) an essential part of its national
development strategy. Chile's
sound, market-oriented policies have created significant opportunities for
foreign capital to participate in the country's impressive economic
growth. Chile's business clim=
ate is
generally straightforward and transparent; corruption is rare. Foreign investors receive national
treatment in nearly all sectors.
There are generally no special exemptions or incentives for FDI, as
matter of policy. A broad pol=
itical
consensus on the advantages of foreign investment means that Chile's polici=
es
towards FDI are unlikely to change in the foreseeable future.
Chile's
openness and transparency for foreign direct investment is embodied in the
country's 1974 foreign investment statute, known as DL (Decree Law) 600.
The
contract may not be modified unilaterally by the Chilean State or by the
enactment of any legal regulations after it has been signed. Any foreign individual or foreign =
legal
entity, as well as Chilean individuals with residence abroad, can invest in
Chile through DL 600.
The
contract acknowledges as foreign investment:
-- freely convertible currency;
-- capital goods;
-- technology.
The
general regulations, terms, interest and other modalities of foreign credit
contracts, as well as surcharges related to total costs to be paid by the
debtor, including commissions, taxes and expenses, must also be authorized =
by
the Central Bank of Chile. The
investor can, under DL 600, increase the capital of his/her investment thro=
ugh
both the capitalization of credits made under Chapter XIV of Central Bank
regulations and the obligations derived from current imports and pending
payments. DL 600 allows capit=
al
increases through the capitalization of transferable profits.
Foreign
investors may request a maximum of three years to implement their investmen=
t.
Investments of more than US$50 million for industrial or non-mining extract=
ive
projects can request a time limit of up to eight years. In the case of mining projects, th=
e time
limit is eight years, but if previous exploration is required, the FIC is
empowered to extend it to up to twelve years. In the event that more favorable
regulations than those in the contract are subsequently enacted, the invest=
or
would have the right to request an amendment.
The
contracts give investors the following rights:
-- to receive non-discriminatory treatment;
-- to participate in any form of investment;
-- to hold assets indefinitely;
-- to remit or reinvest earnings immediately and to remit
capital after
one
year (or immediately with authorization from the FIC);
-- to acquire foreign currency at the inter-bank rate of
exchange; and
-- to
opt for either national tax treatment, under which local firms are currently
taxed at a rate of 35 percent on fully distributed earnings, or for a
guaranteed tax rate currently set at 42 percent.
On June
6, 2003, the FIC raised the minimum investment under DL 600 to $5 million p=
er
investor, and increased it to $250,000 in the case of fixed assets, technol=
ogy,
debt capitalization, and profit reinvestments. Capital investments below the new
minimum level can be channeled through Chapter XIV of the Central Bank's
Compendium of Foreign Exchange Regulations. Title I, Chapter XIV of the Chilean
Central Bank's Compendium of Foreign Exchange Regulations is another mechan=
ism
provided for transferring foreign capital into Chile. Chapter XIV establishes regulations
applicable to investors that govern foreign exchange operations related to
credits, deposits, investments and capital contributions originating
abroad. The procedure is appl=
ied to
operations whenever the amount involved is greater than $10,000 or its
equivalent in other foreign currencies.
In
November 2002, the Chilean Government launched an Investment Platform
initiative aimed at attracting international operations headquarters for the
Latin American region to Chile. As
part of this initiative:
-- A
company that is set up exclusively as a platform for investments abroad and=
in
Chile is exempt from Chilean earnings tax on the profits that overseas
shareholders derive from its investments outside Chile. These platform companies can be ei=
ther publicly
or privately-held, but in the latter case must submit to the same regulatio=
n as
public companies;
-- Up to
15 percent of the platform company's shareholders may be resident in Chile;
non-resident shareholders may not reside in tax havens;
-- Shareholders
in the platform company can contribute capital either in the form of shares=
or
equity in other companies, as well as in foreign currency;
-- If a
platform company invests in Chilean assets, it must pay tax on profits deri=
ved
from these investments. Simil=
arly,
the earnings of the platform company paid to Chilean shareholders are liable
for the same tax (and have the same right to tax credits) as an investment
abroad that repatriates profits to Chile;
--
Platform companies that invest in Chile must distribute earnings in the ord=
er
in which they were obtained, starting with the oldest. As a result, separate accounting is
required for earnings from investments abroad and on assets in Chile;
-- There
are no restrictions on domestic borrowing by a platform company, but its
overseas debt cannot exceed the value of the capital contributed by overseas
shareholders;
-- The
platform company may not invest in tax havens;
--
Platform companies are not entitled to bank secrecy (as defined under Chile=
an
law).
By
exempting platform companies from Chilean tax on overseas earnings, the
initiative addresses the problem of three-way taxation and provides foreign
investors with additional incentive to invest in Chile. This initiative is meant to foster
regional joint ventures between foreign investors and Chilean partners. Also, in order to facilitate the e=
ntry
of foreign capital into Chile, the initiative allows companies that are alr=
eady
established in the region to move their operation centers to Chile without
incurring the transaction costs involved in selling and re-buying assets.
For most
of the 1990s, the Chilean economy attracted large inflows of foreign capita=
l,
particularly direct investment, especially in the mining sector. According to Chile’s Foreign
Investment Committee, Chile's total stock of foreign direct investment betw=
een
1974 and 2004 reached $74.6 billion.
Since 1990, multinational companies have committed more than $55 bil=
lion
to Chile, an extremely significant amount for an economy in which GDP reach=
ed $115 billion in
2005. Today more than 3,000
companies from 60 countries have operations in Chile. These figures represent the largest
stock of FDI per capita and the highest FDI to GDP ratio of the major econo=
mies
in Latin America.
According
to a report by the GOC's Foreign Investment Committee, FDI in Chile totaled
$3.89 billion in the first nine months (January – September) of 2006,=
a
62.8% increase over the same period of 2005. This amount exceeds total FDI of $=
3.7769
billion for all of 2005. Duri=
ng the
first nine months of 2006, 56.6% of the total investment – $2.202 bil=
lion
– entered via the DL 600 regulatory norm. Investment in the gas, electricity=
and
water sectors accounted for 54.2% of DL 600 investment, almost all of which=
is accounted
for by Canadian firm Brookfield’s purchase of Chilean company Transel=
ec
for $1.122 billion. Mining
accounted for 19.1% of DL 600 investment.&=
nbsp;
The two largest transactions in this sector were the $150 million
expansion of Escondida and German firm K+S’s purchase of Sal Lobos for
$118 million. As of the third
quarter of 2006, Canada was the main source for FDI in 2006 at 54.4%.
Although
Chile encourages foreign investment, some barriers do exist. Foreigners may not invest in Chile=
an
fishing companies or media unless their country has a reciprocity arrangeme=
nt
with Chile. The European Union
signed such an agreement in 2002 with regard to commercial fishing companie=
s.
There
are no restrictions on foreign investment in telecommunications, but invest=
ors
must acquire a license, and the number of licenses available is limited in =
some
new sectors of the industry.
Certain types of investment projects require additional authorization
beyond that of the FIC. For example, projects in the mining sector require =
the
Chilean Copper Commission's authorization; for investments in the fishing
sector, projects require the approval of the Undersecretariat of Fishing;
authorization from the Bank and Financial Institutions Regulatory Agency is
required to operate in the banking sector, and the Securities and Exchange
Commission for activities in insurance and investment funds. Other authorizations are required =
from
the Pension Funds and Private Health Insurance regulatory agencies to
participate in those sectors. For
projects with a potential environmental impact, authorization is required f=
rom
the National Environmental Commission (CONAMA) or the Regional Environmental
Commission (COREMA), depending on the case.
As
mentioned earlier, the U.S.-Chile FTA entered into force on January l,
2004. The chapter on investme=
nt is
modeled on the standards found in agreements throughout the world: the DIAFTA investment chapter, the
investment chapters in Chile's FTAs with Mexico and Canada, U.S. bilateral
investment treaties, and customary international law. It incorporates innovations and
improvements based on the experiences of both countries in implementing
investment agreements, and responds to new U.S. objectives set forth in the
Trade Promotion Act (TPA) of 2002.
The main objective of this chapter is to provide stability and secur=
ity
to investors. The chapter provides six basic forms of protection:
--
Non-discriminatory treatment, based on national treatment and
most-favored-nation treatment, relative party investors;
--
Freedom from performance requirements;
-- Free
transfer of investment funds;
--
Expropriation only when effected consistent international law;
-- A
minimum standard of treatment in customary international law;
-- The
ability to hire key managerial and technical personnel without regard to
nationality.
·
In the late 1980s and early 1990s, the Government of Chile imposed
strict controls on short-term capital inflows. In May 2000, the one-year withhold=
ing
period requirement for foreign capital entering Chile under Chapter XIV was
eliminated. This type of inve=
stment
capital may now be repatriated immediately without penalty.
A second
major move in 2000 was the virtual elimination of the "encaje" or
lock-in, which required foreign investors to deposit 30% of foreign-sourced
loan funds and portfolio investment with the Central Bank in a
non-interest-bearing account for up two years. In response to pressures on current
account and international financial crises since 1997, the Central Bank red=
uced
this percentage by late 1998 to zero.
The Central Bank reserves the right to re-impose the "encaje&qu=
ot;
mechanism in the future, if circumstances warrant.
Additional
reforms in 2001 and 2002 eliminated controls on flows of foreign capital in=
to
Chilean debt and equity markets and freed outflows associated with capital
returns, dividends, and other investments from the need for Central Bank
approval. In June 2003, the G=
OC
sent to Congress a package of incentives for the development of local ventu=
re
capital. This measure has not=
yet
received Congressional approval.
Pursuant
to recent changes in regulations governing foreign exchange, investors,
importers, and others are guaranteed access to foreign exchange in the offi=
cial
inter-bank currency market without restriction.
The
Central Bank reserves the right to deny access to the inter-bank currency
market for royalty payments in excess of five percent of sales. The same restriction applies to pa=
yments
for the use of patents that exceed five percent of sales. In such cases, firms would have ac=
cess
to the informal market. The C=
hilean
tax service reserves the right to prevent royalties of over five percent of
sales from being counted as expenses for domestic tax purpose.
Under
the Investment Chapter of the FTA, each government must allow transfers of
covered investment to be made freely and without delay into and out of its
territory. These include tran=
sfers
of profits, royalties, sales proceeds, and other remittances related to the
investment. However, for cert=
ain types of short-term capital flows, the chapter allows =
Chile
to impose transfer restrictions for 12 months, as long as those restriction=
s do
not substantially impede transfers.
If restrictions are found to substantially impede transfers, damages
accrue from the date of the initiation of the measure.
Chilean law grants the government authority to expropriate property,
including property of foreign investors, only for public or national intere=
sts,
on a non-discriminatory basis and accordance with the due process of law.
The law
requires the payment of compensation without delay at fair market value, in
addition to any applicable interest.
The 1973-1990 military regime and the four subsequent democratically
elected governments have not nationalized any private firm, and nothing
suggests that any expropriation is likely in the foreseeable future.
Except for U.S. investment
covered by Overseas Private Investment Corporation (OPIC) Insurance, disput=
es
involving U.S. investors have been typically settled in negotiations between
the investor and the concerned government entity. Disputes have been referred to the=
local
judiciary system, although the time requ=
ired
for resolution may make this an unattractive option for foreign investors.<=
span
style=3D'mso-spacerun:yes'> Accordingly, litigants often chose=
to
settle of court. Suit may als=
o be brought
under expedited procedures involving the abrogation of constitutional right=
s.
Chile
has signed several bilateral investment protection agreements with other
countries allowing for binding international arbitration. The different agreements contain v=
arying
procedures; some allow the investor to choose either the host country's leg=
al
system or international arbitration but not both, while others specify that
disputes must pass through the host country's legal system before recourse =
to
international arbitration. Ch=
ile
joined the International Center for Settlement of Investment Disputes (ICSI=
D)
in 1991.
Although the U.S. and Chile do not have a bilateral
investment treaty (BIT), many issues normally covered in a BIT are addresse=
d in
the FTA. Section C of the
Investment Chapter provides a mechanism for investors to pursue a claim aga=
inst
a host government that is in breach of the FTA's investment obligations, an
investment agreement, or an investment authorization. Investment authorizations under D.=
L. 600
are not subject to this mechanism, and only agreements signed beginning 2 y=
ears
from the date on which the treaty enters into force may make use of this
dispute settlement mechanism. Under
this section, the investor pursuing a claim may choose an arbitral forum -
including the International Center for Settlement of Investment Disputes
(ICSID), the Additional Facility of the Center - under the UNCITRAL arbitra=
tion
rules, or any other mutually agreed upon arbitral institution. The rules chosen will govern the
proceedings except to the extent modified by the FTA. An investor may initiate a proceed=
ing up
to 6 months after the event which gave rise to the claim, and all claims mu=
st
be brought within 3 years of the date the claimant acquired knowledge of the
breach and/or injury.
The chapter on investments encourages consultations or
negotiations before recourse to dispute settlement mechanisms. If the parties fail to resolve the
matter, a claim for arbitration can be submitted by the investor. Arbitration must be by mutual
consent. Provisions in Sectio=
n C
ensure that the proceedings are transparent by requiring that all documents
submitted to or issued by the tribunal be available to the public, and by s=
tipulating
that proceedings be public. T=
he
tribunal must also accept amicus curiae submissions. The section establishes clear and
specific terms for making proceedings more efficient and avoiding frivolous
claims. Domestic law is to be
applied to all contracts. How=
ever,
arbitral tribunals decide disputes in accordance with FTA obligations and
applicable international law.
The judicial system in Chile is generally transparent and
independent. The likelihood of
government intervention in court cases is low, although in Chile’s
highly-centralized presidential system the courts often look to the Preside=
ncy
for policy direction. If a
state-dependent firm is involved in the dispute, the Government of Chile may
become involved through the State Defense Council (Consejo de Defensa del Estado). In
cases where courts determine a firm is bankrupt, a receiver is named to
distribute the debtor's assets to the creditors.
The Foreign Investment Co=
mmittee
does not apply performance requirements in its review of projects. The investment Chapter in the FTA
establishes the rules prohibiting performance requirements that apply to all
investments, whether by third party or domestic investors.
The
chapter also regulates the use of mandatory performance requirements as a
condition for receiving incentives and explicitly states relevant
exceptions. These include:
government procurement, qualifications for export and foreign aid programs,=
and
non-discriminatory health, safety and environmental requirements.
Chile
does not subsidize foreign investment nor does it offer any special tax
exemptions. There are, howeve=
r,
some regional incentives linked to isolated geographical zones and to the
information technology sector.
These benefits relate to co-financing of feasibility studies as well=
as
to incentives for the purchase of land in industrial zones, the hiring of l=
ocal
labor and facilitation of project financing. Other important incentives include=
accelerated
depreciation accounting for tax purposes, special tax treatment for retained
earnings, and legal guarantees for remitting profits and capital.
On January 8, 2007, the U.S. placed Chile on the Special 301 Priority
Watch List (PWL) over concerns about its commitment to the protection of
intellectual property rights. Chile
had been on the Special 301 Watch List since 1989 and was subject to an
Out-of-Cycle Review during much of 2006, which ultimately resulted in the P=
WL
designation. Protection of
intellectual property rights in Chile is inadequate in several important
respects.
Chile,
as a member of the WTO, chose to qualify as a developing country for meeting
its obligations as a TRIPS signatory.
As a result, the final deadline for harmonizing national legislation=
to
the multilateral organization's norms was January l, 2000. Chile's Congress finally approved =
the
Miscellaneous Law in November 2003 to bring the country into compliance with
TRIPS copyright obligations and address some concerns about copyrights and =
authors
rights. U.S. industry representatives have stated that the law continues to
fall short of those obligations. Chile signed the World Intellectual Proper=
ty
Organization (WIPO) Treaties on Copyright and Performances and Phonograms in
April 2001. Chile did not app=
rove
legislation to bring the country into compliance with TRIPS obligations rel=
ated
to industrial property until December 2004. The new law provides for, among
other things, expedited court proceedings and the authority to seize illegal
copies of patented products. =
To
implement this new law, the GOC published regulations in November 2005.
Despite
increasingly active enforcement efforts by the police, piracy of computer
software and video recordings in Chile remains significant. However, evidence suggests that ef=
forts
by law enforcement to identify and curb the problem have been undermined by
weak penalties issued by Chilean courts and by the overall lack of a clear
Chilean government policy on IPR protection. U.S. industry now estimates that h=
alf of
all pre-recorded music sold in Chile in 2006 was pirated.
The U.S. industry estimates losses related to video piracy alone at =
over
$2 million annually. This tre=
nd is
leading to a significant drop in the value of the Chilean market for sound
recordings – during the last five years, industry estimates that the
market has shrunk by 62 percent.
The
Chilean National Commission Against Piracy (CONA=
PI in
Spanish) estimated piracy losses close to $250 million annually in books,
movies, music and software.
Chile’s Congress is considering an anti-piracy bill designed to
address weaknesses in copyright enforcement, but U.S. industry representati=
ves
have stated that the bill does not do enough to deter piracy effectively.
The FTA
seeks to strengthen Chile's legal framework for protection of copyrights. F=
or
example, the agreement increases the period of protection for copyrights and
related rights to 70 years. The FTA also criminalizes end-user piracy and
mandates both statutory and actual damages for IPR violations. Provisions of
the agreement provide state- of-the-art protection for digital products and
penalize tampering with anti-piracy technology. Chile enacted legislation to
implement its FTA commitments on copyright protection in November 2003.
In relation
to internet domain names, the U.S. and Chile committed to making a system
available for the resolution of disputes, following international standards
with respect to problems such as the cyber piracy of brands and trademarks =
for
higher level country domain names. Furthermore, both countries committed to
creating a database containing information on individuals who have register=
ed
higher-level domain names. This database will protect the personal data of
those who have registered.
However,
the most notable area of IPR violations in Chile involved pharmaceutical
products and/or related data. Chile
lacks a clear and transparent system for protecting pharmaceutical patents =
and
the proprietary clinical data related to innovative products.
The
U.S.-Chile FTA seeks to strengthen significantly patent protection under
pre-existing Chilean law. For
example, the FTA provides for the extension of the protection period for
patents when there are unjustified delays in the patenting process. The Agreement also requires partie=
s to
protect confidential information provided to authorities in order to obtain
marketing or health permits for pharmaceutical products and agricultural
chemicals. In addition, the F=
TA
establishes the obligation to undertake reasonable efforts to extend patent
rights to qualifying plants.
The Institute of Public Health (ISP in Spanish), Chile's
general equivalent to the U.S. FDA, is the agency charged with granting
marketing approval (sanitary approval under the Chilean system) to new drug=
s. The ISP has issued sanitary approv=
als
for unauthorized copies of patented products as well as of products whose
patent application is in process or whose period of data exclusivity has not
yet expired.
U.S.
firms have been obligated to defend their patent rights in costly court
proceedings that take several years and have produced unproductive
results. Chilean authorities =
have
not established an effective link between actions of the ISP and the Minist=
ry
of Economy's Industrial Property Department, Chile’s patent and trade=
mark
office, to prevent this undermining of effective patent protection. This issue whi=
ch
remains a major area of concern for the U.S. Government.
On
November 2005 the Ministry of Public Health published the regulation that
establishes a mechanism to protect data related to pharmaceutical products =
and
grant protection to pre-clinical pharmacological and toxicological
studies. As of the end of 200=
6, the
results of the new regulations have been mixed.
Chile's
trademark law is generally consistent with international standards, but
contains some deficiencies addressed by the FTA. Some U.S. trademark holders have
complained of inadequate enforcement of trademark rights in Chile. The FTA requires government involv=
ement
in dispute resolution between trademarks and Internet domain names in order=
to
prevent "cyber-squatting" of trademarked domain names. The FTA also applies the principle=
of
"first in-time, first-in-right" to trademarks and geographical
indicators (place-names).
Several
U.S. nurseries have complained of violations of patented plant varieties in=
the
fruit sector. They claim that=
in
some cases, Chilean fruit produced from patented U.S. genetic stock has ent=
ered
the U.S. market without paying the appropriate royalties.
Chilean
regulatory systems tend to be transparent, and government regulators genera=
lly
have little discretion. While
rulemaking processes do not generally include formal provisions for public
hearing or comment, opening a business is easier in Chile than in many other
Latin American countries. The=
FTA
creates some additional obligations for transparency in regulatory processe=
s.
Chile's capital markets are well developed and ope=
n to
foreign portfolio investors. =
Credit
is allocated on market terms and is available to foreigners, although the
Central Bank does reserve the right to restrict foreign investors' access to
internal credit if a credit shortage exists. To date, this authority has not be=
en
exercised.
Publicly
traded Chilean companies attract substantial international investment. In late 2000, the Chilean Congress
approved legislation (known as the OPA law) on public stock tenders that
provides greater legal protection of minority shareholder rights.
In November 2001, the core measures in a far-reaching ref=
orm
of Chile's capital markets came into force. Among other things, the reform cre=
ated an
agricultural commodities exchange.
In another modification, rules governing Chile's private pension fund
industry now allow fund administrators (AFPs) to operate various funds with
different risk-return profiles instead of the single fund for all affiliated
workers. Current proposals to
reform Chile’s privatized social security system include an increase =
in
AFP funds that can be invested overseas.
Capital
market reforms have leveled the playing field for foreign investors in the
local market and those who invest through Chilean bonds abroad. This has slowly increased demand f=
or
local debt instruments among new foreign investors. The reforms also eliminated discri=
mination
that affected commercial paper issues related to stamp taxes, and created a=
new
tax exemption for cross-border bank lending that will allow foreign banks to
compete on more equal terms.
The
reforms increased incentives for personal savings through tax-deductib=
le
contributions to private pension funds administered by traditional AFPs and
other financial service companies. The package also eliminated capital gains
taxes related to short selling of shares and offered a capital gains tax
exemption on the sale widely-traded equities purchased after April 19, 2001.
The new law created an emerging markets stock grouping whereby investors can
claim exemption from capital gains taxes for the first three years after a
company's initial offering, or until 2006.
Under the U.S.-Chile FTA, U.S. insurance firms have full
rights to establish subsidiaries or joint ventures for all insurance sector=
s,
with limited exceptions. Chil=
e also
committed to phase in insurance branching rights and to modify its legislat=
ion
to open cross- border supply of key insurance sectors such as marine, aviat=
ion
and transport (MAT) insurance, and insurance brokerage of reinsurance. U.S. banks and securities firms wi=
ll be
allowed to establish branches and subsidiaries and may invest in local firms
without restriction, except under very limited circumstances. U.S. financial institutions will a=
lso be
able to offer=
financial
services to citizens participating in Chile’s privatized voluntary sa=
ving
plans and they will gain some increased market access to Chile's mandatory
social security system. Chile=
will
allow U.S. based firms to offer services to Chileans in areas such as finan=
cial
information, data processing and financial advisory services, with limited
exceptions. Chilean mutual fu=
nds
will be permitted to use foreign-based portfolio managers.
The stock of Chilean financial instruments totals $235.15
billion. Breaking this =
down
by the main sectors, stocks make up $129.4 billion, bank deposits $53.27
billion, private bonds $17.46 billion, and central bank bonds $19.12 billio=
n. These figures, from the Securities=
and
Insurance Supervisor (Superintendencia de Valores y Seguros - SVS), were
originally given in Chilean pesos.
The conversion rate here was 540 pesos to the dollar.
The main institutional investors and suppliers of capital=
to
local companies are the pension fund administrators, life insurance compani=
es,
and mutual funds. In 2004, they manage a total investment
portfolio of $63.1 billion. By
September 2005, they were managing about $71.5 billion and by October 2006,=
it
had grown to nearly $85 billion. In 2006, the pension fund administrators
diversified their total portfolio investments as follows: 25.63 percent in =
the
corporate sector, 14.62 percent in bonds with the Central Bank, 28.57 perce=
nt
in the financial and banking sector, and 31.18 percent overseas.
The
Chilean government sent a second capital market reform package to Congress =
in
June 2003. This package propo=
ses a
set of legal initiatives and norms to encourage the development of a more
robust venture capital industry, reduce transaction costs, improve corporate
administration regimes, improve supervision mechanisms, and promote alterna=
tive
voluntary pension plans (including one that mirrors the U.S. 401K option).<=
span
style=3D'mso-spacerun:yes'> As of the end of 2006, the full re=
form
package had not been approved.
The Chilean banking system is sound and competitive and m=
eets
Basel standards. There are
currently 26 banks, of which 12 are foreign owned. Foreign banks can compete on the s=
ame
terms as their domestic rivals.
There is one state-owned bank, Banco Estado, which is the nation's t=
hird
largest. Private banks manage most corporate
business. During the first 7 =
months
of 2005, the banking system registered gains of $833 million, an 8.3 percent
increase compared to the same period in the previous year. Total loans increased 11.1 percent,
driven by consumer loans that increased 20 percent and mortgage loans 16.8
percent. Only 8.5 percent of =
the
deposits and 14.5 percent of the loans are in foreign exchange.
Three
large, high-volume banks control roughly 61 percent of total loans. The
Spanish-owned banks dominate the system with a market share of 35.4 percent
(private sector). There are t=
wo
U.S. banks plus a Canadian bank with a combined market share of only 8.1
percent. The banking system has become aggressively consumer-oriented,
diversifying from basic functions such as home loans and big business credit
into fund management, leasing, factoring, insurance brokerage, credit cards,
etc. Chilean banks have also established a presence in regional markets, su=
ch
as Argentina, Costa Rica, Peru and Venezuela and some have opened offices in
the United States and some Asia Pacific destinations.
Summary of Chilean Banking System (Sep=
tember
2006)
(In USD Million)
ROE
|
19.35% |
|
Deposits |
78,068 |
|
Net
Income |
1,299 |
|
Total
Assets |
93,861 |
|
Capital
and Reserves |
8,952 |
Source: Superintendence of Banks and
Financial Institutions.
Forecast: Banco de Chile.
1 USD =3D 535.5 Ch$ September 2006
In a bid
to increase competition within the banking sector, the capital market refor=
ms
have also introduced some liberalizing changes in banking regulations regar=
ding
minimum capitalization requirements and controlling shareholders obligations
and have permitted local banks to participate in international loan syndica=
tes.
The
legislation on public stock tenders, known as the "OPA" law,
regulates public offers and acquisitions of shares, and establishes a regime
for corporate governance. Acc=
ording
to the law, any individual or group that intends to take direct or indirect
control of a corporation that has publicly listed shares must inform the
general public prior to the action.
Title XXV of the law indicates that a public offer for share acquisi=
tion
must be made when the purchase stake would allow the buyer to take control =
of a
corporation, or when the purchase target controls another corporation which
represents 75 percent or more of the target's consolidated assets. With the exception of fishing comp=
anies
or the media (as already mentioned), there are no restrictions or prohibiti=
ons
against foreign direct investment or control.
The
foreign exchange market is quite deep for spot operations and short-term
currency forwards (up to 360 days).
Daily trading on these markets is estimated at around $800 million a=
nd
$600 million, respectively.
General
Information on the Financial Market (2005)
-- Banks
and Financial Institutions: 26 participants. Total Loans: $80.6 billion, a 26 p=
ercent
increase from October 2004.
--
Pension Funds: 6 administrators. Funds under management as of September 200=
5:
approximately $70.0 billion.
--
Insurance Companies: 52 (22 general insurers, 30 life insurers). Financial investments: $508.6 mill=
ion.
Chile is
considered a low threat country.
Over the last ten years there have been relatively few incidents of
politically motivated attacks on projects or installations. Anti-American sentiment, civil dis=
order,
and terrorism are rare, and there have been no incidents involving
international terrorist groups.
However, some violent incidents have occurred in forestry plantations
and farms in the south of Chile.
These incidents are related to the land claims of indigenous people =
in
the VIII and IX Regions. Stud=
ent
protests in May and June 2006 over delayed educational reform often led to
violent confrontations with police in downtown Santiago.
Corruption in Chile is generally limited, although a numb=
er
of cases have occurred in recent years.&nb=
sp;
The GOC responded with vigor in 2003 to a succession of uncharacteri=
stic
public and financial sector scandals related to corruption and influence
peddling in the government's domestic development agency (CORFO), the Minis=
try
of Public Works (MOP) and the Central Bank. In the wake of the scandals, the G=
OC,
the courts and Congress enacted a number of legal and administrative
reforms. These include: rules=
that
clarify and modernize the way public employees are paid, new campaign finan=
ce
legislation, the establishment of a permanent budget commission to oversee
government spending, simplified administrative procedures, the establishmen=
t of
ethical guidelines for civil servants, and reforms to the manner by which t=
he
MOP awards government contracts. There is general agreement that the measur=
es,
along with the financial market reforms, have further improved Chile's
transparency.
In late 2006, a major scandal erupted over the use of sta=
te
funds by ChileDeportes, which organizes local-level sport activities, for
political campaigns. The gove=
rnment
was embarrassed by the scandal and openly expressed concern about its impac=
t on
Chile’s generally positive image.&nb=
sp;
In response to the ChileDeportes scandal and to strengthen its own
institutional framework, the government introduced 30 anti-corruption measu=
res.
Chile
has signed and ratified the Organization of American States (OAS) Convention
against Corruption. Chile is =
also a
signatory to the Organization for Economic Cooperation and Development (OEC=
D)
Convention on Combating Bribery, which was ratified in March 2001. Chilean =
law
has not yet been modified to make bribing a foreign official a criminal act,
but a wide range of bribery acts are punishable as crimes under the penal c=
ode. Investigating all forms of bribery=
is
the responsibility of the Inspector General.
There
is a chapter of Transparency International in Chile, and the country ranked
20th on the organization's corruption index in 2006, the same ranking as the
U.S.
A
Bilateral Investment Agreement with the Overseas Private investment Corpora=
tion
(OPIC) took effect in 1984.
Chile is
a party to the convention of the World Bank's Multilateral Investment Guara=
ntee
Agency (MIGA).
Chile
has enjoyed generally calm labor relations over the last decade, and strikes
have been relatively infrequent.
Strikes and public protests have been concentrated in the health,
education, transportation, communication, and civil service sectors. Union membership is voluntary, and
approximately 12 percent of the workforce is unionized. Multiple unions exi=
st
in many companies, and management can negotiate collective agreements with =
any
of the unions or with ad hoc groups of workers. Unions can form confederations or
nationwide labor centrals and can affiliate with international labor
federations. Contracts are no=
rmally
negotiated at the company level; multi-company bargaining is permitted on a
voluntary basis. Minimum wage,
working hours, overtime, paid annual vacations and holidays are established=
by
'Law. Women are entitled to
state-funded maternity leave for a period of 6 weeks before and 12 weeks af=
ter
childbirth. Layoffs are not
permitted between conception and one year after the female employee has
returned from maternity leave.
Chilean
workers have a reputation for discipline and moderately low labor costs, th=
ough
their productivity and creativity also tend to be low. Top executive salaries are on a pa=
r with
European countries, although well below those in the U.S. Chile allows companies to de=
duct
set training costs (up to 1 percent of annual payroll) from corporate tax
payments. A company can also =
use 10
percent of the rebate to finance an analysis of its training needs, and 15
percent to run a training department.
On
January 1, 2005, the maximum number of labor hours per week was reduced to =
45
from 48 without any loss of salary to the employees.
Chile
has two tax-free zones, one is in the northern port of Iquique (Region I) a=
nd
the other in the southern city of Punta Arenas (Region XII). Merchants and manufacturers in the=
se
zones are exempt from corporate tax and from VAT and customs duties. Goods can be re-exported without p=
aying
taxes, but products that are sold within Chile must pay VAT (19%) and import
duties upon leaving the zone (except to immediate geographical area in whic=
h a
lower tax rate applies). The =
same
exemptions also apply to manufacturers in the Chacalluta and Las Americas
Industrial Park in Arica (Region I).
Between
1974 and 2004, gross materialized foreign investment totaled US$74.6
billion. However, 88.5 percen=
t of
that investment entered the country after 1990. Of that, US$58.7 billion was autho=
rized
under Chile's DL 600, representing 78.6 percent of total FDI gross
inflows. During the 1990s,
investment under DL 600 expanded at an average annual rate of 19.7 percent =
in
nominal terms.
According
to the 2005 World Investment Report, published by the Uni=
ted
Nations Conference on Trade and Development (UNCTAD), the stock of FDI in C=
hile
reached 58.2% of GDP in 2004, up from just 33.2% in 1990. In 2003, the average world figure
reached 21.7% and that for developing countries was running at 29.1%.
According
to the 2006 World Investment Report, FDI in Chile reached
US$6.7 billion in 2005, down 7% from US$7.2 billion in 2004, the fourth mos=
t in
the region behind Mexico, Brazil and Colombia. Relative to population size, FDI in
Chile was the highest in the region at $450 per capita. Investment in the mining sector gr=
ew to
$US1.3 billion, part of which came from Chinese firm Minmetal’s
partnership with Chile’s state-run copper entity CODELCO. The stock of FDI in Chile reached =
64.6%
of GDP in 2005.
Foreign
direct investment flows as a percentage of GDP reached a yearly average of =
6.4
percent of GDP during the 1990s, rising to 8.3 percent between 1995 and
2000. After reaching an annual
record high of $9.9 billion in 1999, foreign investment flows began to drop,
falling by 33 percent in 2002 and by an additional 35.5 percent in 2003.
FDI in
Chile totaled $6.75 billion in 2004.
In 2005, there was a substantial drop in FDI to only $3.74 billion.<=
span
style=3D'mso-spacerun:yes'> Indications through much of 2006 w=
ere
that FDI would bounce back substantially compared to 2005 but still not rea=
ch
the 2004 level.
Much of
the FDI recorded in 2006, which appears to reflect a return to high levels =
of
FDI, was really a product of mergers and acquisitions. It would appear that very little o=
f the
FDI that flowed into Chile in 2006 went to new sectors or to industries that
will create substantial numbers of new jobs. Another caveat is that 80 percent =
of the
FDI that entered Chile in 2006 went into the gas, water, electricity and mi=
ning
sectors.
Between
1974 and 2005, the following sectors accounted for foreign investment
materialized through D.L. 600:
|
Mining
& Quarrying |
33.1 percent |
|
Electricity,
Gas & Water |
19.2 percent |
|
Communications |
10.7 percent |
|
Financial
Services |
10.4 percent |
|
Chemical,
Rubber & Plastics |
4.8 percent |
|
Food,
Beverages & Tobacco |
3.5 percent |
|
Insurance
|
3.4 percent |
|
Other
Industries |
2.4 percent |
|
Construction |
2.3 percent |
|
Wholesale
& Retail Trade |
2.2 percent |
|
Wood
& Paper Products |
2.0 percent |
|
Engineering
& Business Services |
0.9 percent |
|
Sewage,
Sanitation & Similar |
0.9 percent |
|
Transport
& Storage |
0.9 percent |
|
Fishing
& Aquaculture |
0.5 percent |
|
Agriculture
& Livestock |
0.4 percent |
|
Forestry |
0.4 percent |
|
Others
Services |
1.8 percent |
The U.S.
remains the single largest direct investor, accounting for 25.7 percent of =
inflows
from 1974 – 2006*. Since 1997, however, FDI from the European Union (=
over
40 percent) has surpassed that of the U.S., primarily due to the Spanish
acquisitions in the energy and telecommunications sectors mentioned earlier.
The following represent the inflows of FDI under DL 600 by country from 1974
– 2006 (through 10/31):
|
United
States |
25.7 percent |
|
Spain |
22.0 percent |
|
Canada |
15.6 percent |
|
United
Kingdom |
9.0 percent |
|
Australia |
4.9 percent |
|
Japan |
2.9 percent |
|
Italy
|
2.6 percent |
|
The
Netherlands |
2.5 percent |
|
France |
2.2 percent |
|
Switzerland |
2.0 percent |
|
Others |
10.5 percent |
According
to Central Bank statistics, total flows of Chilean investment abroad,
principally in Mercosur and other neighboring countries, have totaled more =
than
$18 billion since 1995. In re=
cent
year, economic and financial instability in the region has prompted Chilean
capital to seek safer havens.
By 2003,
the United States, Mexico and Canada had become the recipients of most of
Chile’s own overseas investment.&nbs=
p;
Chile's net investment abroad neared US$5.3 billion through October
2005.
Foreign Investment DL 600
(USD thousand nominal)
|
Country |
|
|
|
|
Argentina
|
504,811 |
3,805 |
18,000 |
417,223 |
|
Australia |
1,284,991 |
523,450 |
159,742 |
3,052,957 |
|
Bahamas |
100,714 |
0 |
0 |
105,381 |
|
Belgium |
360,123 |
71,242 |
42,142 |
651,561 |
|
Brazil |
248,920 |
20,332 |
25,444 |
314,493 |
|
Caiman Islands |
263,541 |
12,335 |
52,966 |
334,701 |
|
Canada |
6,721,655 |
80,886 |
1,203,997 |
9,776,393 |
|
China |
84,046 |
0 |
0 |
84,046 |
|
Colombia |
17,284 |
23,800 |
0 |
60,084 |
|
Costa Rica |
2,970 |
0 |
0 |
4,038 |
|
France |
1,226,947 |
4,735 |
21,370 |
1,373,727 |
|
Germany |
418,044 |
22,018 |
144,988 |
678,570 |
|
Holland |
1,322,359 |
6,418 |
868 |
1,555,763 |
|
International
Organizations |
204,237 |
5,000 |
3,750 |
333,518 |
|
Italy |
549,875 |
0 |
123,146 |
1,629,598 |
|
Japan |
1,486,892 |
47,200 |
35,175 |
1,822,557 |
|
Korea |
25,572 |
0 |
0 |
40,372 |
|
Liechtenstein |
132,719 |
0 |
0 |
138,500 |
|
Mexico |
131,024 |
511,537 |
46,230 |
869,984 |
|
Norway |
183,528 |
1,503 |
4,685 |
325,527 |
|
Panama |
198,081 |
6,619 |
6,402 |
266,718 |
|
Peru |
25,708 |
0 |
0 |
23,647 |
|
South
Africa |
419,125 |
466 |
2,021 |
401,308 |
|
Spain |
8,922,050 |
206,311 |
56,578 |
13,760,943 |
|
Sweden |
59,403 |
2,797 |
2,879 |
249,829 |
|
Switzerland |
1,252,326 |
10,000 |
10,000 |
1,274,086 |
|
United
Kingdom |
3,046,741 |
255,316 |
56,850 |
5,615,809 |
|
United
States |
13,114,141 |
78,126 |
215,073 |
16,041,714 |
|
Uruguay |
107,528 |
0 |
0 |
109,135 |
|
Venezuela |
124,973 |
0 |
0 |
126,563 |
Source:
Foreign Investment Committee
*2006
data corresponds to the period of January-October
Foreign Direct
Investment (DL 600) By Year: 1974-2006=
*
(in nominal=
USD
million)
|
|
|
|
|
1974-89 |
14,078 |
5,111 |
|
1990 |
1,537 |
1,280 |
|
1991 |
3,395 |
982 |
|
1992 |
2,415 |
993 |
|
1993 |
2,171 |
1,736 |
|
1994 |
5,901 |
2,522 |
|
1995 |
5,987 |
3,031 |
|
1996 |
6,943 |
4,838 |
|
1997 |
7,894 |
5,225 |
|
1998 |
6,076 |
6,039 |
|
1999 |
10,780 |
9,226 |
|
2000 |
7,194 |
3,039 |
|
2001 |
8,018 |
5,020 |
|
2002 |
3,789 |
3,381 |
|
2003 |
3,821 |
1,286 |
|
2004 |
3,835 |
4,635 |
|
2005 |
1,700 |
1,919 |
|
2006* |
|
2,231* |
Source:
Foreign Investment Committee
*2006
data corresponds to the period of January-October
(in nominal USD million)
|
Sector |
|
|
|
|
|
Agriculture |
23,303 |
1,744 |
277 |
3,000 |
|
Forestry |
4,253 |
1,012 |
150 |
16,000 |
|
Fishing |
92,470 |
0 |
2 |
0 |
|
Mining |
233,736 |
2,003,037 |
349,636 |
443,000 |
|
Food
manufacturing |
44,262 |
29,394 |
54,869 |
N/A |
|
Wood
and paper industry |
17,386 |
40,076 |
82,303 |
N/A |
|
Chemical
industry |
93,572 |
31,960 |
270,946 |
N/A |
|
Other
industries |
85,660 |
107,119 |
19,525 |
89,000 |
|
Electricity,
Water and Gas |
859,772 |
473,087 |
2,193,400 |
1,193,000 |
|
Construction |
28,578 |
138,245 |
119,109 |
9,000 |
|
Retail |
142,386 |
81,826 |
17,135 |
10,000 |
|
Transportation
and Warehousing |
15,036 |
5,079 |
24,111 |
N/A |
|
Communications |
855,121 |
330,622 |
1,772,642 |
221,000 |
|
Financial
services |
262,944 |
60,061 |
11,618 |
7,000 |
|
Insurances |
90,428 |
20,057 |
49,409 |
23,000 |
|
Company
services |
66,174 |
38,535 |
14,371 |
N/A |
|
Cleaning
and similar services |
1,595 |
959 |
134 |
N/A |
|
Other
services |
122,275 |
18,720 |
24,539 |
217,000 |
|
Total |
3,038,951 |
3,381,533 |
5,004,176 |
3,038,951 |
U.S. Embassy Santiago: www.usembassy.cl<= o:p>
U.S.
Commercial Service Santiago: www=
.buyusa.gov/chile/en
Chilean-American
Chamber of Commerce (Amcham): www.amc=
hamchile.cl
Chile’s
Foreign Investment Committee: =
www.foreigninvestment.cl/
Chile’s
Industrial Property Department: www.dpi.cl
Transparency
International: www.transparency.org=
In Chile, payment to forei=
gn
suppliers is often made via an irrevocable letter of credit from a Chilean
commercial bank. This is rela=
tively
fast and simple, with no lengthy delays in the remittance of foreign
currency. Payments are made u=
pon
receipt of notice of shipment of goods.&nb=
sp;
Other methods of payment to suppliers include cash against documents=
and
open account. Suppliers willi=
ng to
offer an open account generally do so only after developing a long-standing
relationship with the buyer. =
An alternative, attractive and low-cost method of securing payment is through = the Export Credit Insurance Program available from the U.S. Export Import Bank (EXIM). It is becoming a popu= lar financing option for the purchase of capital U.S. goods in Chile. For more information, contact Marc= elo Orellana of the U.S. Commercial Service, Santiago at Marcelo.Orellana@mail.doc.gov= or visit the EXIM Bank web site at www.exim= .gov. For agricultural and food products= , the U.S. Department of Agriculture’s Commodity Credit Corporation offers export credit guarantees for U.S. exporters.
Chile’s banking system offers=
many of
the asset and liability products available in international markets. Foreign trade financing and money
exchange operations are particularly well developed and efficient compared =
to
the rest of Latin America.
Chile’s Superintendence of Ba=
nks and
Financial Institutions (www.sbif.cl),
an agency under the Ministry of Finance, regulates the financial sector.
Some Chilean banks with direct pres=
ence in
the United States are Banco de Chile, which has branches in New York and Mi=
ami,
and Banco Santander-Santiago, Banco de Crédito e Inversiones also kn=
own
as BCI, Banco Estado and CorpBanca, each with representative offices in New
York.
U.S. banks operating in Chile (see = list below) concentrate on corporate lending for multinationals and capital mark= et activities (wholesale), although others such as Citibank, BankBoston and HS= BC Chile are active in retail banking as well. There are a number of business development offices of U.S. commercial banks in Chile that offer U.S. Export Import Bank (EXIM) export insurance programs. Many representation offices (R.O.) are in the market as well.
Foreign exchange operations are rel=
atively
active and efficient in Chile. As a
general rule, currency may be freely traded in two markets: the informal and the interbank mar=
ket
(formal). Prior to receiving
authorization, Chile’s Central Bank requires confirmation that the tr=
ade
finance transactions, foreign loans, capital flows, and profit repatriation
will be executed through a commercial bank (formal market).
Chile has no restrictions on incomi= ng and outgoing foreign capital, reserve requirements for external capital, and the prior authorization requirement to enter funds associated with external loa= ns, investment, working capital, bonds and ADRs have been eliminated. Limitations on capital and profit repatriation were also eliminated. Foreign trade finance operations (both import and export) are allowe= d to perform their foreign exchange transactions in the open market.
|
U.S.
Banks in Chile |
Phone
(56-2) |
Fax
(56-2) |
|
|
Bank
of America N.A. (R.O.) |
751-1400 |
751-1401 |
|
|
Bank
Boston |
686-0000 |
698-2262 |
|
|
JP
Morgan Chase Bank |
425-5102 |
425-5367 |
|
|
Citibank
NA |
338-8000 |
338-8391 |
|
|
HSBC
Bank Chile |
299-7200 |
299-7393 |
|
|
Wachovia
N.A. (R.O.) |
365-9733 |
365-9709 |
|
Financial
Institutions offering EXIM Bank products in Chile |
Phone
(56-2) |
Fax
(56-2) |
Website |
|
Wachovia
N.A. (BCI) |
540-5410 |
540-4485 |
|
|
PNC
Bank N.A. |
232-5954 |
334-2150 |
|
|
Meridian
Finance Group |
232-3674 |
231-1857 |
|
|
UPS
Capital Business Credit |
247-1221 |
243-8724 |
|
|
National
City Bank |
435-0200 |
494-9362 |
|
|
BAC
Florida Bank |
248-1504 |
234-3720 |
|
|
TD
Financial Group |
416-983-1216 |
416-982-7838 |
|
Chilean
Banks |
Phone
(56-2) |
Fax
(56-2) |
Website |
|
Banco BICE |
692-2000 |
696-5324 |
|
|
Corp Banca |
687-8000 |
672-6729 |
|
|
Banco de Crédito e Inversiones (BCI) |
692-7000 |
695-3775 |
|
|
Banco de Chile |
637-1111 |
637-3434 |
|
|
Banco Santander Santiago |
320-2000 |
672-3166 |
|
|
Banco del Desarrollo |
674-5000 |
671-5547 |
|
|
Banco Internacional |
369-7000 |
369-7367 |
www.bancointernacional.cl<= o:p> |
|
Banco Security |
584-4000 |
|
|
|
Scotia Bank |
692-6000 |
698-6008 |
|
|
Banco Estado |
670-7000 |
670-5478 |
|
|
Banco Falabella |
385-9000 |
385-9050 |
|
|
Banco Ripley |
351-6000 |
351-6050 |
|
|
HNS Banco |
661-4700 |
661-4795 |
|
|
Banco Paris |
437-6605 |
437-6868 |
|
|
Banco Penta |
873-3000 |
837-3405 |
|
Other
foreign banks operating in Chile |
Phone
(56-2) |
Fax
(56-2) |
Website |
|
ABN Ambro Bank |
396-5000 |
396-5666 |
|
|
Banco de la Nación Argentina |
696-6935 |
672-9078 |
|
|
Banco Do Brasil |
336-3001 |
336-3005 |
|
|
ING
Bank N.V. |
452-2700 |
452-2745
|
|
|
The
Bank of Tokyo-Mitsubishi Ltd. |
345-1000 |
333-3032 |
------------------- |
|
BBVA |
679-1000 |
679-1350 |
|
|
Deutsche
Bank |
337-7700 |
337-7701 |
------------------- |
|
Banco
de la Provincia
de Buenos Aires (R.O) |
696-4308 |
695-3810 |
|
|
BNP
Paribas (R.O.) |
787-3333 |
787-3300 |
|
|
Calyon
America Services, Inc. (Chile) Ltda. (R.O.) |
207-3454 |
207-3898 |
-------------------- |
|
Credit
Suisse (R.O.) |
203-3130 |
203-3155 |
-------------------- |
|
San
Paolo IMI (R.O.) |
381-3434 |
381-3439 |
|
|
UBS
(R.O.) |
234-5555 |
234-5554 |
|
|
Westlb
AG (R.O.) |
334-0434 |
334-0825 |
Major project financing is available through issue of equity and bonds in the international and local capital markets and through syndicated loans.
The=
Overseas
Private Investment Corporation (OPIC) is a business development agency of t=
he
U.S. Government that helps U.S. investors overseas, fosters economic
growth in new and emerging markets, complements the private sector in manag=
ing
the risks associated with foreign direct investment, and supports U.S. fore=
ign
policy. For more information, visit www.opic.gov or contact OPIC liaison for Chile,
The
Inter-American Development Bank (IADB) and World Bank loan programs are als=
o available
for certain projects in Chile. See www.iadb.org.
Private companies can also take adv= antage of different programs like the World Bank’s International Finance Corporation (IFC), which provides financing to private sector companies involved in certain types of infrastructure projects. The IFC is particularly interested= in non-traditional industries, cross-border operations and asset securitizatio= n. See www.ifc.org.
U.S. Commercial Service Santiago: www.buyusa.gov/chile/en<= /p>
Export-Import Bank of the United St= ates: www.exim.gov
Country Limitation Schedule: www.exim.gov= /tools/country/country_limits.html
OPIC: www.opic.gov
Trade and Development Agency: www.tda.gov/
SBA's Office of International Trade= : www.sba.gov/oit/
USDA Commodity Credit Corporation: = www.fsa.usda.gov/ccc/defau= lt.htm
U.S. Agency for International Devel= opment: www.usaid.gov
InterAmerican Development Bank: www.iadb.org/
The World Bank: www.worldbank.org
International
Finance Corporation: www.ifc.org
Return
to table of contents
Return to table of contents
U.S.
business people will find that business practices in Chile and the United
States are very similar. The
business day usually begins at 9 a.m. and ends between 6 and 7 p.m. Lunch breaks usually do not begin =
before
1 p.m. If there is business t=
o be
conducted, two or even three-hour lunches are not uncommon. Although social occasions rarely b=
egin
at the indicated time, business meetings usually do.
Many Chilean business peo=
ple are
well-educated professionals who travel internationally and speak English.
Appearances are an import=
ant part
of Chilean business. Dress co=
des
are generally formal and conservative - suit and tie for men and discreet
business suit (skirt or trousers) for women. Men tend to put on their jackets w=
hen
leaving the office, even if it is just for lunch. Business attire becomes less formal
outside major cities and in certain sectors.
It is useful to have busi=
ness
cards printed with English on one side and Spanish on the other. Generally,
cards are presented to everyone in a meeting.
=
www.travel.state.gov/travel/cis_pa_tw/cis/cis_1088.htm=
l
U.S. citizens traveling to Chile for tourism or busine= ss are allowed to enter Chile without a visa for a period of 90 days renewable= in Chile. Upon arrival in Chile, U.S. visitors must pay $100.00 entry fee. This fee is based on the principle of reciprocity and must be paid in U.S. dolla= rs cash. The fee is paid once and remains valid until the expiration of the passport. For more informatio= n, see www.chile-usa.org/visas.htm<= /a>.
U.S. Companies that require travel of foreign businesspersons to the
United States should allow sufficient time for visa issuance if required.
State Department Visa Website: www.travel.state.gov/v= isa/index.html
United States Visas.gov: www.unitedstatesvisas.gov/
U.S. Embassy Santiago: www.usembassy.cl/
Chile’s capital, Santiago, =
has
a well-developed telecommunications infrastructure. Domestic and international telepho=
ny
works well and rates are generally competitive. There are also several mobile oper=
ators
present, including Claro, Entel, and Telefónica. Visitors can rent cell phones in C=
hile
or are advised to check with their own U.S.-carrier to see if their phone is
able to make international calls from Chile. Cell phones can be rented at kiosk=
s in
Santiago’s international airport.
WiFi “hot spots” are becoming fairly common in Santiago. In rural parts of Chile, the telecommunications infrastructure is le= ss developed. Most business hote= ls have internet connections available, as well as business centers. PCMCIA cards that will allow a not= ebook computer to connect to the Internet can also be rented at kiosks in Santiago’s international airport.
Chile is well connected via air service to the United States and countries throughout Latin America. American Airlines has non-stop ser= vice between Santiago and both Miami and Dallas. Delta Airlines has non-stop servic= e to Atlanta. Chile’s main airline, LAN, partners with American Airlines in the OneWorld Alliance and offers non-stop service to Miami and direct service to Los Angeles via Lima, Peru. The primary point of en= try is the Santiago International Airport (see www.aeropuertosantiago.cl= /ingles/)
Domestic air service is well developed. Flights between Santiago and most = cities in Chile are fairly frequent. The train system is less developed, but there is a good central train line that runs between Santiago and Temuco. See www.efe.cl/
Primary roads in Chile are good. The main highways are concessioned= toll roads and are in good condition. Secondary roads, especially outside of Santiago, are sometimes in le= sser repair. Gravel and dirt roads= are common in rural areas. For mo= re information on driving in Chile, see the consular information sheet:=
www= .travel.state.gov/travel/cis_pa_tw/cis/cis_1088.html
Spanish is the language of Chile. Among the business community, ther= e is a fair level of English language capability, but in order to operate in Chile, U.S. business people need to speak Spanish or identify a local partner who = can speak both English and Spanish. For more information about partner-matching assistance provided by U.S. Commercial Service, see www.buyusa.gov/chile/en/76.= html
Chile has both public and private healthcare service p= roviders. Some of the private clinics in San= tiago are well-equipped and operate at the level of service providers in the Unit= ed States and Europe. Travelers = to Chile are advised to check with their health insurance providers to ascerta= in coverage levels in Chile. For= more information on medical issues in Chile, see the consular information sheet:=
www= .travel.state.gov/travel/cis_pa_tw/cis/cis_1088.html
Because Chile is in the Southern Hemisphere, its seaso= ns are opposite those in the United States.&n= bsp; This means that when the United States enters daylight savings time, Chile falls back at about the same time and vice versa. Consequently, during the northern winter, Chile is 2 hours ahead of Eastern Standard Time. In the summer, Chile is the same t= ime as Eastern Daylight Time.
Business hours in Chile are roughly the same as the Un= ited States. Most offices open at = 8:30 or 9:00 am and continue until usually 6:00 pm or later. Lunchtime is usually later (beginn= ing at 1:00 pm or later) and longer (1-2 hours) than in the United States.<= /p>
The fol= lowing are Chile’s main holidays for 2007.&= nbsp; Dates may vary year to year.
Holiday &nbs=
p; &=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; &=
nbsp; Date
New Year’s Day&n=
bsp; =
; &n=
bsp; =
; &n=
bsp; January
1
Good Friday =
; &n=
bsp; =
; &n=
bsp; =
; =
April
6
Holy Saturday &nb=
sp; =
&nb=
sp; =
&nb=
sp; =
April
7
Easter Sunday &nb=
sp; =
&nb=
sp; =
&nb=
sp; April
8
Labor Day &=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; May
1
Commemoration of the Battle of Iquique &=
nbsp; May
21
Corpus Christi &n=
bsp; =
; &n=
bsp; =
; &n=
bsp; June
4
Saint Peter and Saint Paul &=
nbsp; &nbs=
p; &=
nbsp; July
2
Assumption Day &n=
bsp; =
; &n=
bsp; =
; &n=
bsp; August
15
Independence Day =
&nb=
sp; =
&nb=
sp; =
September
18
Day of the Army &=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; &=
nbsp; September
19
Discovery of Two Worlds &n=
bsp; =
; &n=
bsp; October
15
All Saints’ Day&=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; &=
nbsp; November
1
Immaculate Conception&=
nbsp; &nbs=
p; &=
nbsp; &nbs=
p; December
8
Christmas Day &nb= sp; = &nb= sp; = &nb= sp; December 24/25
Under t=
he
terms of the U.S.-Chile FTA, Chile will permit duty-free temporary admissio=
n of
professional equipment necessary for carrying out the business activity of a
U.S. businessperson who qualifies for temporary entry under Chilean law.
List of Service Providers/Hotels/Transport in Chile: www= .buyusa.gov/chile/en/business_service_providers.html
State Department Consular Information Sheet:
www= .travel.state.gov/travel/cis_pa_tw/cis/cis_1088.html
Tourism Service of Chile: www.sernatur.cl
U.S. Embassy Santiago (American Citizen Services): www.usembassy.cl
U.S. Commercial Service Santiago: www.buyusa.gov/chile/en<= /p>
USDA Foreign Agricultural Service: = www.fas.usda.gov
U.S. Embassy Santiago: www.usembassy.cl
U.S. Chamber of Commerce: www.uschamber.com
Chilean-American Chamber of Commerc= e (Amcham): www.amchamchile.cl
Chilean Embassy Washington: www.chile-usa.org
Government of Chile (links to Minis= tries): www.gobiernodechile.cl
Chile’s National Chamber of C= ommerce: www.cnc.cl
To view market research reports pro= duced by the U.S. Commercial Service please go to the fol= lowing website: www.export.g= ov/marketresearch.html and click on “Country & Industry Market Reports.”
Please note that these reports are = only available to U.S. citizens and U.S. companies. Registration to the site is required, but free of charge.
To view market research reports on
food, fish, forestry and agricultural products produced by the U.S. Foreign
Agricultural Service, please go to the following website:
www.usembassy.cl and click on
"Food & Agriculture,” then click on "Marketing
Reports.”
Please click on the link below for information on upcoming trade events.
www.export.gov/tradeevents.= html
For events spon= sored by the U.S. Commercial Service Santiago, click on the link below.
www.buyusa.gov/chile/en/16= 0.html
For a calendar of Chilean trade eve=
nts
relating to food, fish, forestry and agriculture, please click on the link
below www.usembassy.cl and click on
"Food & Agriculture,” then click on "Chilean trade
shows" or for information about events worldwide, click on "Food
& Agriculture,” then click on "US Exporter Assistance,”
and from there, click on "Search for Trade Shows & Other Marketing=
Opportunities.”
The U.S. Commercial Service offers customized solutions to help your business enter and succeed in markets worldwide. Our global network= of trade specialists will work one-on-one with you through every step of the exporting process, helping you to:
For more information on the service= s the U.S. Commercial Service offers U.S. businesses, please click on the link be= low.
www.buyu= sa.gov/chile/en/products_and_services.html.
The
USDA Foreign Agricultural Service (FAS) performs a similar function for U.S.
companies seeking to export food, fish, forestry and agricultural
products. FAS can help you to=
:
For more information on the services
the U.S. Foreign Agricultural Service offers U.S. businesses, please click =
on
the link below.
www.fas.usda.gov
or www.usembassy.cl and click on fo=
od
& agriculture.
For information on other U.S. Gover= nment export programs, please click on the link below: www.export.gov/
Return to table of contents<= /a>
U.S. exp=
orters
seeking general export information/assistance or country-specific commercial
information should consult with their nearest Export Assistance Center
or the U.S. Department of Commerce's Trade Information Center at =
(800)
USA-TRADE, or go to the following website: www.export.gov
To the best of our knowledge, the information contained in this report is
accurate as of the date published. However, The Department of Commerce
does not take responsibility for actions readers may take based on the
information contained herein. Readers should always conduct their own due
diligence before entering into business ventures or other commercial
arrangements. The Department of Commerce can assist companies in the=
se
endeavors.