Foreign Direct Investment
According to the World Investment Report 2023 published by UNCTAD, FDI flows to Chile rose by 50% in 2022, totalling USD 19.8 billion, above the levels recorded before the pandemic and at the 19th spot worldwide. In the same year, the total stock of FDI stood at USD 256 billion, around 85.1% of the country’s GDP. According to figures from the Chilean Central Bank, the main investing countries are Canada (13.2%), the U.S. (10.9%), the Netherlands (9%), the UK (7%), Spain (6.7%), and Italy (5.5%). Investment are mainly oriented towards the mining sector (36.9%), followed by electricity, gas and water (20.8%), financial services (19.3%), trade (5.6%), and manufacturing (5.1%). Preliminary figures for 2023 show that FDI inflows totalled USD 19.2 billion in the first eleven months of the year (-4.7% y-o-y – data Chilean Central Bank).
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 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. With few exceptions, foreign investors can fully own enterprises in Chile, as the country only imposes restrictions on private ownership or establishment in what it deems as specific "strategic" sectors like nuclear energy and mining. The existing Constitution asserts the "absolute, exclusive, inalienable, and permanent domain" of the Chilean state over all mineral, hydrocarbon, and fossil fuel deposits within its territory. However, Chilean legislation permits the government to award concession rights and engage in lease agreements with individuals and corporations for exploration and exploitation activities, as well as to assign contracts to private investors, without discriminating against foreign investors. Chile has not implemented an investment screening mechanism for national security purposes and FDI is only subject to pro forma screening by InvestChile, the national investment agency. Chile has a good business environment: it ranks 22th out of 184 countries on the 2023 Index of Economic Freedom and 52nd among the 132 economies on the Global Innovation Index 2023.
Foreign Direct Investment | 2020 | 2021 | 2022 |
FDI Inward Flow (million USD) | 10,833 | 13,194 | 19,786 |
FDI Stock (million USD) | 248,849 | 242,201 | 256,064 |
Number of Greenfield Investments* | 80 | 82 | 98 |
Value of Greenfield Investments (million USD) | 5,411 | 5,353 | 5,616 |
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.