Chile at a Glance Andres Lamoliatte Embassy of Chile

1. CHILE: Economic Indicators and Index

CHILE: KEY INDICATORS & INDEX Sustained economic growth, income gap has been reduced by more than 40%

36th place (Forbes) CHILE: KEY INDICATORS & INDEX 10th in the world, 2017 Index of Economic Freedom: 10th in the world, 2nd in the Western Hemisphere (after Canada) Best Countries for Business 36th place (Forbes) 2017 (est) GDP per-capita PPP US$24,710

We base our leadership in strong institutional pillars CHILE: KEY INDICATORS & INDEX We base our leadership in strong institutional pillars 1. High Stability and Respect for Government Institutions Governance Index

11% CHILE: KEY INDICATORS & INDEX 20th 8.3% 19,500 Foreign Direct Investment, A dynamic growth source for Chile 20th among 202 world’s economies as FDI recipient 8.3% of GDP 19,500 MMM USD Annual average FDI income 2007 - 2016 11% Annual average FDI 2007–2016 growth

CHILE: KEY INDICATORS & INDEX Challenge: Export Basket Diversification

Strong commitment to mantain healthy inflation levels CHILE: KEY INDICATORS & INDEX Strong commitment to mantain healthy inflation levels 12 10 -2 8 Apr.99 Okt.00 Apr.02 Okt.03 Apr.05 Okt.06 Apr.08 Okt.09 Apr.11 Okt.12 Apr.14 Okt.15 Apr.17 Inflation Inflación Subyacente Average 2000 - 2017; 3.3% Inflation (Var.% a/a) 6 4 2 Source: Central Bank of Chile

CHILE: KEY INDICATORS & INDEX A connected and integrated country: Regional platform with global access Airports: 17 International: 7 National: 10 Country’s ports: 17 Logistic Performance Index 2016 2º in Latin America Source: InvestChile based in the Logistic Performance Index 2016 "Connecting to Compete 2016: Trade Logistics in the Global Economy“, World Bank.

2. TRADE POLICY

CHILE´S TRADE POLICY Chile is relative small and open economy, open to free trade through the implementation of a trade policy based on the negotiations of trade agreements. For the past 35 to 40 years, this strategy has allowed Chile to position it´s products in important and highly competitive markets around the world. Thee fundamental pillars: Unilateral reduction of tariffs Bilateral negotiations of Trade Agreements Multilateral integration through WTO, OCDE and APEC

CHILE´S TRADE POLICY We have signed more Free Trade Agreements than any other country on the planet 26 free trade agreements and with 64 countries.

7,7% OF THE WORLD POPULATION 21,3% OF CHILEAN EXPORTS COVERED CHILE`S FTA NETWORK BACK IN THE 90’s 8 TRADE AGREEMENTS WITH 11 COUNTRIES 7,7% OF THE WORLD POPULATION 21,3% OF CHILEAN EXPORTS COVERED 24,6% GDP

26 TRADE AGREEMENTS WITH 64 COUNTRIES CHILE`S FTA NETWORK TODAY 26 TRADE AGREEMENTS WITH 64 COUNTRIES 94% OF CHILEAN EXPORTS COVERED 86,3% GDP 64% OF THE WORLD POPULATION

EFFECTIVE TARIFF VS AND EXPORTS (MM US$ and PERCENTAGE,%) FTA THAILAND FTA MALASIA 32.6% (MFN 220%) FTA AUSTRALIA FTA VIETNAM y HONG KONG FTA KOREA FTA USA FTA JAPÓN UNILATERAL TARIFF REDUCTION FTA CHINA AAE EU ACE MERCOSUR 15.5% (MFN 35%) 12.3% (MFN 20%) 9.5% (MFN 15%) 9.2% (MFN 11%) 6.2% (MFN 10%) 1.0% (MFN 6%) (*) Exports 2003-2015 calculated with the average copper price 1987 – 2003 = 0,965 US$/Lb (**) Weighted average imports tariff Source: Studies Department DIRECON-PROCHILE, based on data from Central Bank of Chile, UNCTAD and Santiago Chamber of Commerce.

2nd 1st world supplier of grapes 1st world supplier of frozen salmon 4th world supplier of wines 1st world supplier of blueberries 2nd world supplier of trouts 2nd world supplier of fish meal

3. INVESTMENT REGIME & OPORTUNITIES: A GENERAL OUTLOOK

INVESTMENT REGIME & OPORTUNITIES Foreign Direct Investment Inflows

Robust Foreign Investment Regime INVESTMENT REGIME & OPORTUNITIES Robust Foreign Investment Regime Equal treatment before the law: all of enterprises established in Chile declare its taxes according to the Chilean rules. Moderate income tax on companies. Creation of InvestChile, new foreign investment promotion and attraction agency. Priority in 5 economic sectors mining industry services, sophisticated food industry, exportable technological services, sustainable tourism and energy/logistics infrastructure for development.

MINING INVESTMENT REGIME & OPORTUNITIES According to the USGS, Chile concentrated a 28% of the worlds copper reserves. 4.600 companies. Taking the latter into consideration, Chile has become the world`s largest copper producer (30%). Furthermore, other metals are produced: Iodine 58% world market production Lithium 45% world market production Between 2017 – 2023, current mining companies present in the Chilean market are expected to invest up to US$ 50 billion. These mean that annually, the mining industry will require approximately US$ 15 billion in auxiliary services. MINING The mining industry contributes approximately 9% to Chile`s GDP. A 33% of all major mining project worldwide, will be operated in Chile.

Service Providers for a more comprehensive Mining Industry INVESTMENT REGIME & OPORTUNITIES Service Providers for a more comprehensive Mining Industry Promote Chile as a healthy and sound market for large foreign companies to settle in Chile. Promote large clusters of companies to reallocate and use Chile as a hub in the region. Allocate in Chile large production proccesses of foreign service providors. Identify local service providers which lack research & development + investigation & innovation, investment and/or technology in order to increase their operations in the industry and associate them with foreign companies which may serve as partners. The latter will facilitate the entry of foreign companies into the Chilean mining industry. Promote small and medium service providers to associate with foreign companies.

INVESTMENT REGIME & OPORTUNITIES Currently Chile has an installed production capacity of 20,6 GW. Annual demand will rise by 3,5% During the first semester of 2017, solar energy output will amount to 2.169MW (June 2016 – 872MW) Major challenge is to further diversify the grid, amount of companies and consolidate efficiency and sustainability of the Chilean energy system. ENERGY 41% of the energy produced by the Chilean National Grid System came from renowables energies.

INVESTMENT REGIME & OPORTUNITIES Objective is to have more than 70% of Chile`s energy consumption, come from renewables energy sources, by no later than 2050. Public tenders for more than 11.000 GW in the next two years. Generation / Production Atract foreign investment with the objective to further roubust transmision lines. In this context, during 2017 the government has concluded a public tender worth more than US$288 MM. Transmission Development of technologies, products and related services. Solar Energy District (1 GW in northern Chile). Solar Energy

Public tender until 2025 will amount to US$150.000 billion. INVESTMENT REGIME & OPORTUNITIES In the last 20 years, public tenders by the Government have contructed project worth more than US$16 billion. Necesities Focus INFRAESTRUCTURE Infraestructure project and public biddings represent a top priority for the country and is viewed as the cornerstone for Chile`s economic and trade integration with the region. Public tender until 2025 will amount to US$150.000 billion. Will be focused in increasing infraestructure, transport and water management.

A NEW STRATYEGY… …A NEW OFFICE

A NEW STRATYEGY… …A NEW OFFICE Services at InvestChile

Chile at a Glance Andres Lamoliatte Embassy of Chile