1. Foreign Investment in Chile Liliana Macchiavello, Executive Vicepresident Foreign Investment Committee www.foreigninvestment.cl June, 2010

2. Snapshot of the Chilean Economy Social Population:16.9 millon Oficial Language:Spanish Currency:Peso Literacy rate:97% Life expectancy:78 years Economy GDP 2009: US$ 164 billion GDP per capita (PPP, 2009):US$ 14,341 (*estimated by IMF) Interest rate (Monetary Policy):0.50% Unemployment rate2009:9,7% Public debt (2009) :US$ 2.563 millones Exports (2009):US$ 53,7 billion Imports (2009):US$ 39,7 billion Source: Central Bank of Chile (www.bcentral.cl)

3. Chilean investment attraction track record Foreign Direct Investment in Chile (6.8% average) (% of GDP) Source: Central Bank of Chile (www.bcentral.cl)

4. FDI in Latin America and the Caribbean: top 10 recipient countries, 2009 (in million dollars) Chilean investment attraction track record Source: FDI in Latin America and the Caribbean 2009, May 2010, ECLAC (www.eclac.org)

5. Reinvestment of profits (% of FDI) Source: Foreign Investment Committee (www.foreigninvestment.cl). Chilean investment attraction track record

6. Solid fundamentals Among the advantages: Country’s political and economic stability An efficient level of connectivity The Free Trade Agreements network The legal certainty and stability for foreign investment.

7. GDP growth in Chile (real annual variation, %) Dynamic business environment *Estimated as of April 2010 Source: Central Bank of Chile (www.bcentral.cl)

8. Business Environment Ranking 2010 – 2014 (82 economies) Source: Economist Intelligent Unit, April 2010 (www.eiu.com) Competitive economy

9. Index of Economic Freedom (179 economies) Competitive economy Source: Heritage Foundation, March 2010 (www.heritage.org)

10. Corruption Perception Index (180 economies) High levels of transparency Source: Transparency International (www.transparency.org), November 2009

11. In 2010 Chile formally became member of the Organisation for Economic Co-operation and Development (OECD). North America: Canada (1961); United States (1961); Mexico (1994) South America: Chile (2010) Europe: Germany (1961); Austria (1961); Belgium (1961); Denmark (1961); Slovenia (2010); Spain (1961); Estonia (2010); Finland (1969); France (1961); Greece (1961) ; Hungary (1996); Ireland (1961); Iceland (1961); Italy (1961); Luxemburg (1961); Norway (1961); Netherlands (1961); Poland (1996) ; Portugal (1961); United Kingdom (1961); Czech Republic (1995); Slovak Republic (2000); Sweden (1961); Switzerland (1961); Turkey (1961) Pacific: Australia (1971); Japan (1964); New Zeland (1973); Republic of Korea (1996) Middle East: Israel (2010) Safe and reliable country to invest in

12. Globally connected Chilean ports include: 10 state-owned port companies 23 private ports Handle almost 90% of Chile’s international trade. 18 international airlines operate in Chile, offering 80 thousand flights a year. 37 airports and aerodromes. Investors committed more than US$10 billion to concession projects that include highways, prisons, hospitals, ports and others.

13. Internationally integrated economy Chile has in force 20 agreements with 56 countries Canada (1997) United States (2004) Mexico (1999) Central America (2002) Panama (2008) Free Trade Agreements EFTA (2004) Korea (2004) Japan (2007) China (2006) Australia (2009) European Union (2003) P4 (2006) Association Agreements Colombia (2009) Ecuador (1995) Peru (2009) Bolivia (1993) Mercosur (1996) Venezuela (1993) Bilateral Trade Agreements India (2007) Partial Trade Agreement Malaysia Turkey In negotiation,concluded but not signed Vietnam Thailand

14. Investment Platform General Electric (Industry)Finning (Industry) Equifax (Services)Grupo Nueva (Forestry) AP Moller-Maersk (Services) Phelps Dodge Mining Services (Mining) Packard Bell (Information & Technology) Beirsdorf (Industry) TNT Express (Services) Wachovia Corporation (Financial Services) Some of the companies that use Chile as a platform to reach other countries are:

15. 197520032009 Exported products 2003,8544,981 Exporting companies 2006,4357,517 Countries 50165191 Total (US$ billion) 1.632.053.0 Source: Central Bank of Chile, Direcon Diversification of exports

16. Regulation of investment in Chile I. Constitutional Framework Right to private property: Under the Constitution, all persons, including foreigners, are guaranteed freedom to acquire ownership of all types of goods, both tangible and intangible. Economic freedom: Within the bounds of the legal norms regulating different economic activities, the Constitution guarantees the right to undertake any economic activity that does not infringe moral standards, public order or national security (Art. 19 N° 21). National treatment: The Constitution also guarantees that, on economic matters, foreign investors will receive the same, or not less favorable, treatment as local investors from the State and its agencies, and will not be subject to discrimination of any type (Arts. 19 N° 2 CPE, 57 Civil, 9 and 10 DL 600).

17. II. Legal Framework Decree Law N° 600 (DL 600) Foreign Investment Committee Originally introduced in August 1974. In March 2003 it was ratified by Congress with minor modifications. Chilean Central Bank's Compendium of Foreign Exchange Regulations (Chapter XIV) It establishes the general rules for foreign capital transfers. All capital entered via Chapter XIV remains under the general applicable regulation in all matters, including for the access to the foreign exchange market, the possibility to transfer capitals to the exterior, and for any other right or obligation established in that regulation. Regulation of investment in Chile

18. Foreign Investment Statute Decree Law N° 600 Since DL 600 came into force, most foreign investors have used this mechanism. By 2009, foreign direct investment worth US$ 74,9 billion had been materialized through DL 600, representing 67.3% of total FDI in Chile during that period.

19. Main characteristics of DL 600 Non-discrimination Non-discretionary procedures Free access to economic sectors Contract with State of Chile Access to Formal Exchange Market Capital and profit remittances Choice of tax system Six forms of investment

20. Foreign investment under DL 600 Source: Foreign Investment Committee (www.foreigninvestment.cl), 1974 – 2009 FDI under DL 600 by country of origin, 1974 - 2009 (US$ 74,901 million)

21. FDI under DL 600 by economic sector, 1974 - 2009 (US$ 74,901 million) Source: Foreign Investment Committee (www.foreigninvestment.cl), 1974 – 2009 Foreign investment under DL 600

22. Chile exports more than US$ 12,000 millon in food. It aims to become a “Food Power” and position between the ten largest world food producers (currently 17th). If offers natural advantages such as: Mediterranean climate Opposite seasons with respect to the world’s main markets Phytosanitary assets. Agribusiness Investment opportunities

23. Foreign investment in agribusiness Share of the food industry in Chile’s industrial sector

24. Foreign investment in agribusiness Source: Foreign Investment Committee (www.foreigninvestment.cl), 1974 – 2009 Between 1974 and 2009, materialized FDI in agribusiness sector through DL600 worth US$3, 015 million, representing 4% of total net FDI.

25. Foreign investment in agribusiness Some of the companies with materialized investments in agribusiness in the 2008-2009 period CompanyCountrySectorRegion OceaNorway Fish Farming Los Lagos DanoneFranceFood industryBiobio CamilBrazilFood industryMetropolitana SograpePortugalWine y licorsO’Higgins DaminvestSpainWine & licorsO’Higgins Source: Foreign Investment Committee (www.foreigninvestment.cl), 1974 – 2009

26. In Chile, you will always be welcome. Thank you

27. Chile’s Investment Climate Liliana Macchiavello, Executive Vicepresident Foreign Investment Committee www.foreigninvestment.cl June, 2010