Business Opportunities in High Value Added Sectors www.investchile.gob.cl
at a glance Population 18 Million 2018 GDP US$ 298 Bill US$ 67 Bill Exports 2018 GDP US$ 25.978 Imports US$ 65 Bill per capita 2018 # 1 ST LatAm Inflation 2,6% Interest Rate 2,5% 12 months Last decade 3.2% average Small Country, Great Economy
This is Chile! #1 GL # GLOBAL C COMPETIT ITIV IVENESS IN INDE DEX ( X (WEF) Nº1 in L n Latin n # #1 B BUS USIN INESS E ENVIR IRONMENT R RANKIN ING G Ame merica # #1 B BEST C COUN UNTRIE IES F FOR B BUS USIN INESS & Global Player #1 E # ECONOMIC IC F FREEDO DOM # #1 GDP GDP P PER C CAPIT ITA ( (PPP) WEF’s most Competitive Nation in Latin America since 1998! 1 ST SOUTH AMERICAN ECONOMY IN THE: & One of the most attractive market for FDI
Robust Foreign Investment Regime • Equal t l treatme ment nt: : Foreign companies based in Chile enjoy the same rights and responsibilities as Chilean companies in the country. • Free f flo low o of c capital a l and nd p profits: : National legislation allows the entry and repatriation of capital without cost. • Pro-b -busine ness e environme nment nt: : Simple tax structure / Ease to set up companies. • Commi mmited t to b boost i investme ment nt: : Pro-Investment agenda of President Piñera government
Why Chile? Reasons ns & & At Attributes tha hat ma make Chi hile le a a ON-GOING HIGH-LEVEL LATIN AMERICAN TRENDSETTER ENTREPRENEURIAL ENVIRONMENT hi highly a hly attractive F FDI DI LEADERSHIP TALENT HUB ma market i in n Lati Latin Ame merica #Chile #BuildingyourFuture
à GREAT RANKINGS come with ON-GOING Long-term commitment building key pillars LEADERSHIP Laws p protect b basic r right hts ; e ; enf nforceme ment nt p processes; d ; dispute r resolu lution Rule of Law +25 y years o openi ning ng e econo nomy; F y; FTA’S ’S w with 8 h 86% o of g glo lobal GDP l GDP; D ; DTA’S ’S Open Economy Export oriented Eng ngine ne f for g growth, c h, competitivene ness o of i ind ndustries, # , #1 i in 1 n 10 e export p products -Econo -E nomi mic: C : Competitivene ness, Inf , Infla lation, f n, foreign e n excha hang nge r rate & & ma market Long Term public policies -Soli -S lid Ins Institutions ns, Go , Governa nanc nce, he , healt lthy f y fiscal r l rule les, c , cent ntral b l bank nk Solid financial system Competitive, i , int nterna nationa nal , w l , world ld c cla lass r regula lation n
à Highly-qualified workers, at competitive costs: SOPHISTICATED Chile records the highest productivity per capita in LatAm TALENT (ILO, 2017) +1,262,000 Chile University students Top 1 in LatAm +202,000 on the 2018 Tale lent nt At Attraction Global Talent annual graduates 26 OF THE REGION’S Pr Progr gram am. . Competitiveness More than 1 million 101+ best universities Du During ng 2 2018, , high- skilled Index (Times Higher Education 2018) appli lications ns we were employees inc ncreased i in 1 n 164%
à Globally recognised for our pioneering ecosystem ENTREPRENEURIAL ENVIRONMENT Chile 1º LATAM Global Entrepreneurship Index 2018/19 Nº 17 in the World (137 economies) +286,000 Most innovative early stage Companies created with entrepreneurs the newly implemented Leads LatAm & outstands amongst the most innovative company-in-a-day-system Source: 2018-2019 WEF – Global companies worldwide, alongside Entrepreneurship Monitor giants like Amazon, Airbnb, (2013- 2018) Apple, Buzz Feed & Facebook . Source: MINISTRY OF ECONOMY, ECONOMIC DEVELOPMENT AND TOURISM (Fast Company, 2017)
à Regional platform with GLOBAL ACCESS: LATIN AMERICAN More free trade / double taxation agreements than any other Country HUB on the planet • FTAs allow zero-tariff market access to 86.3% of the World’s GDP. • Preferential access to 4.3 billion consumers across all continents. • International agreements to avoid double taxation with 32 economies. • Logistics Performance Index 2018: • 1º in Latin America • 34º worldwide • Airports: 17 • International: 7 From Chile, Think LatAm, Think Global • National: 10 • Ports: 17 Source: World Bank
à Natural Laboratory & Early Adopter TRENDSETTER For green energy & For new-tech business sustainable business 1 º CHILE Nº33 2018 country with the greatest attractiveness Connectivity Public E-Mobility for investment in NCRE Leade Le ader r in L LATAM AM Source: Climatescope Ranking 2018 60% Digital Commerce Top 20 of solar energy Global Retail generated in Latin E-Commerce Index America is produced (Source: AT Kearney) Source: Cepal in Chile
Chile as a destination of FDI Third in capital US$6,082 million investments and +4% than 2017 +4% job creation in 88 88 greenf nfield ld proje jects started LatAm 2018 +62.9 .96% than 2017 (Source: FDI Intelligence) Capital l investme ment nt InvestChile Portfolio: increased by 80% US US$14,108 mi milli llion Job creati Job creation on +82% than 2017 +82% rose +116%
Global Services and Digital Economy Hub for Global Services Companies benefit from: ▪ Technological entrepreneurship Ecosystem. ▪ Technological & Telecom Infrastructure. ▪ Wide network of FTA’s and DTA’s agreements. ▪ Access to Talent for the industry (number of graduates and quality of the universities). ▪ Government Incentives. ▪ Time Zone Advantages. ▪ VISATECH program.
Global Services and Digital Economy 1. Infrastructure projects - Three main macro projects in digital infrastructure 2018 - 2021 National D National Digital Highw hway 5G De 5G Deployme ployment nt Enha hanced I International conne connect ctiv ivit ity 3 new submarine cables: 40-fold increment in Intl’ capacity to Doubles current backbone capacity of data Proliferation of connected devices and significant Chile (6 to 260 Tbps). transmission. quality of service improvement. Intl’ Terrestrial Links: 7 new border crossings (plus 11 Fiber Length: 18,000 to 36,000 (Km) From 17 to 100+ MM Devices existing). (Other 13 crossings remain to be implemented; 2020 Budget) Speed (peak): 0,1 to 10 Gbps
Global Services and Digital Economy 2. Data Center Hub • Public Cloud Market USD $ $ 1 1,620 m mill Private Cloud Market USD $ $ 1 1,350 m mill • • CAGR 20% to 2021 (IDC 2018). Chile CAGR 2 23% (Gartner 2019). • • High potential in renewable energies, 46% o of t the he n national m matrix. Cloud F First P Policy. • • Incentives for the investment of capital g goods. • Incentives to export s services. • Network of commercial agreements (FT FTA) and double taxation (DT DTA).
Global Services and Digital Economy 3. IT and business services for LATAM and the world • TLC and DTA ne networ ork • Ince Incent ntiv ives to export services. • More than 45,000 g graduates in administration and commerce every year. • First l level e engineering in LATAM. • Access to high-level IT t talent (+15,000 graduates per year at ICT) and openness to talent (Visa T Tech). • Track R Record • Digital c convergence • Ar Arbitration of talent versus cost. • Security, stability and scale for Sha hared S Services C Center.
Incentives for Investment
Global Services and Digital Economy Sector Incentives Value Ad Va Added Ta Tax on on Ex Expor ports • VAT exemption for service exports. VAT refund for the export of services (some requirements apply). • Va Value Ad Added Ta Tax Ex Exempt ption ion on on Im Impor ported C Capital Good Goods • Project > USD 5 MM Conventions f for t the he A Avoidance o of D Double T Taxation w with 3 h 32 E Economies LATAM (in force): Mexico, Brazil, Argentina, Colombia, Peru, Ecuador , Paraguay. •
Global Services and Digital Economy Sector Incentives Country S Strategy: P Public - - P Private C Committee f for E Export o of S Services • Human Capital Scholarships (1000 junior programmers per year; 1000 English scholarships for the service industry per year among others) • Export facilitation initiatives • Visa Tech Digit Digital al Ta Talent Init Initiat iativ ive – – P PPP R&D L Law • 35% Tax Credit which is directly credited against the corporate tax. Ta Tax De Deduct duction ion fo for T Training ( (National National Se Service ice for or training training and and employment – – S SENCE) • Allows to deduct from tax payments the expenses related to training and/or evaluation and certification of labor competencies, in a amount of up to 1% of the annual payroll.
Global Services and Digital Economy Relevant Industry Associations • As Asociación d de e empresas C Chi hilenas d de T Tecnología – – C Chi hiletec – – • As Asociación C Chi hilena d de E Empresas d de T Tecnología d de I Información A A.G – – A ACTI – – • As Asociación L Latinoamericana d de I Internet – – AL ALAI AI – – • As Asociación I Interamericana d de E Empresas d de T Telecomunicaciones – – AS ASIET - -
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