Foreign Direct Investment
In 2021, Chile saw FDI flows rise, mainly driven by investments made into mining and hydrocarbons. According to the World Investment Report 2022 published by UNCTAD, FDI flows to Chile rose by 32% to USD 13 billion (compared to USD 8.4 billion in 2020), sustained by several large acquisitions and renewed interest in the mining industry, with the number of international project finance deals increasing 80% to 88 projects.Out of these projects, one of the largest ones is the construction of a USD 3 billion ammonia production plant with onshore wind farm, electrolysers, and port facility. In fact, from a sector-specific perspective, Chile's commitment to a green transition has created the basis for attracting additional foreign capital into green energy industries. Moreover, 2021 also saw an increase in Greenfield investments, reaching 82. However, FDI stocks decreased from USD 188 billion in 2020 to USD 180 billion in 2021. The USA, Spain, Canada, the Netherlands, and the United Kingdom represent more than the half of the FDI stock. Investment are mainly oriented towards mining, financial services, energy, commerce, and manufacturing.
Chilean economic policies, which are founded on the principle of capital transparency and non-discrimination against foreign investors, comprise one of the country's strengths. Investors are also attracted by the richness of Chile's natural resources, the stability of its macro-economic system, its growth potential, its juridical security, its low level of risk and the high quality of its infrastructure. Chile is highly regarded as one of the strongest investment destinations in Latin America and the country has made progress in facilitating starting a business procedures over the last few years by enabling online registration of closed corporations. However, the country's reliance on copper prices may negatively affect its economy and drive away some potential investors. In 2020, the Chinese tech company announced that it would invest on a second data centre in the country, boosting its cloud and AI platform in South America, and in 2021 a Chinese firm Sinovac invested USD 60 million on a vaccine manufacturing plant in Santiago. Additionally, according to the Economist Business Environment, Chile ranks 20 out of the 82 countries reviewed for their investment climate.
| Foreign Direct Investment | 2019 | 2020 | 2021 |
| FDI Inward Flow (million USD) | 15,231 | 9,637 | 12,719 |
| FDI Stock (million USD) | 187,572 | 188,227 | 180,489 |
| Number of Greenfield Investments* | 140 | 80 | 82 |
| Value of Greenfield Investments (million USD) | 8,703 | 5,435 | 5,278 |
Source: UNCTAD - Latest available data.
Note: * Greenfield Investments are a form of Foreign Direct Investment where a parent company starts a new venture in a foreign country by constructing new operational facilities from the ground up.
| Country Comparison For the Protection of Investors | Chile | Latin America & Caribbean | United States | Germany |
| Index of Transaction Transparency* | 8.0 | 4.1 | 7.0 | 5.0 |
| Index of Manager’s Responsibility** | 6.0 | 5.2 | 9.0 | 5.0 |
| Index of Shareholders’ Power*** | 7.0 | 6.7 | 9.0 | 5.0 |
Source: Doing Business - Latest available data.
Note: *The Greater the Index, the More Transparent the Conditions of Transactions. **The Greater the Index, the More the Manager is Personally Responsible. *** The Greater the Index, the Easier it Will Be For Shareholders to Take Legal Action.
