Highlights of Chile 2015 - 2016 Political environment This is the of President of the third year government 2013’s election withMichelle Bachelet, who won will be in charge The President 62.16% of the votes. Marchfrom until March 2014 The actual 2018. the ruling coalition, Mayoría”, the of “Nueva approval is of 13%. tank According to the opinion poll of a local think the actual (the Centro de Estudios Públicos or CEP) approval of the “Alianza por Chile”, the opposition opposition party, is of 10%. As a renewal of image, the in coalition changed its name to “Chile Vamos” the Unión October 2015. This new coalition includes Demócrata Independiente, Renovación Nacional, Evolución Política (Evopoli) and the Partido Regionalista Independiente (PRI).
The economy had a positive growth of 2.1% had a positive The economy theAt 2015, the end of copper price reached an of US$249.23 cents per pound, lower average of US$311.25 cents than the 2014 average per pound materialized investment foreign direct The total (FDI) channeled through DL 600 reached as US$ 2,718 million in 2015. Chile consolidates the risk credit best country rated of Latin America rate unemployment annual average The estimated inflation reached 6.2% and the annual average
Synopsis • • • • during 4.3% was 2015
2015-2016 Highlights of Chile of Highlights
Highlights of Chile In October 23, 2016, the Municipal elections will be Social Demócrata, and 16 to Partido Socialista. Of the held, where the Mayor and all the Municipal Council representatives of Chile Vamos, 15 belong to Renovación will be renewed for all the 346 communes in Chile. Nacional, 1 to Evopoli and 29 to Unión Demócrata This will be the second election under the automatic Independiente. inscription and voluntary vote method. The Senate is made up of 18 senators of the centre left Since March 2014, representatives and senators coalition, 14 of the centre right coalition, 5 independent elected in the October 2013 election will be in charge. and 1 of MAS. Of the senators of Nueva Mayoría, Next election will take place in December 2017, with 6 belong to Partido Socialista, 6 to Partido por la the renewal of all the Lower Chamber and half of Democracia and 6 to Partido Democráta Cristiano. Of the the Senate. representatives of Chile Vamos, 6 belong to Renovación Nacional, and 8 to Unión Demócrata Independiente. The Lower Chamber will have 64 representatives of the governing centre left coalition (Nueva Mayoría), 45 of Thus, the Government does have a clear majority in the the centre right coalition (Chile Vamos), 1 of the Liberal Lower Chamber, and a slight majority in the Senate. Party (Partido Liberal de Chile) and 10 independent. Of these representatives of Nueva Mayoría, 21 belong to Partido Demócrata Cristiano, 6 to Partido Comunista, 15 to Partido por la Democracia, 6 to Partido Radical Economic performance, performance, Economic tax and labor legislation tax and Tocoihue Waterfall, Dalcahue - X region, Los Lagos - Chile Lagos Los Dalcahue - X region, Waterfall, Tocoihue
Highlights of Chile lower 2014;FOB). surplus Theprevious year than this 2014;FOB) of US$58,738million(14.35% andimports than ofUS$ 62,232million(16.93%lower exports million, with balanceforThe trade 2015showed ofUS$3,494 asurplus BalanceandofPayments 2. Trade 2016. inMarch Bank information according Central to the incomeisapproximately percapita Chile’s US$13,362, before, mainly lower dueto the investment. year the of2.1pointsincomparison with an expansion demandincreased uptoThe internal 1.8%in2015,showing to lessconsumption andinvestment. lowerdue to economy, the onthe global expectations leading ChileanPeso andalso relatedthe USdollarstrengthen to the expected inDecemberof2015,mainly dueto depreciation of numberislower to this growth 2.5%,even though, than Chileaneconomy 2015,the hadanincrease inits During Domestic (GDP) 1. Gross Product US$ 25,371millionin2009. 2012, US$41,979in2011, 27,864millionin2010and 2014, US$41,094millionin2013, US$41.650millionin endof 2015, compared US$40,447millionatthe to the Foreign exchange were reserves US$ 38,643millionfor US$ 2,492perpound. per pound.Theannualaverage for year price 2015was annualaverage the ofcopperwillbeUS$2.15 that price by COCHILCOThe projection showed for 2016,performed supply (5,700kMTCopper). in the increase year to maincontributor before. this the Chileisthe in201518.7millionMT,reached growing 1.08% regarding (USGS),global supply ofminecopper Geological Survey According United to published by information the States consecutive eighteenth yearFOB). Thisisthe ofsurplus. (both US$ 75,675millionand67,908ofimports approximately of reached exports US$7,767million,with
Highlights of Chile Switzerland), the United States of America, Kong, Hong States theSwitzerland), United Central Thailand, Turkey, Mexico, Panama, Malaysia, Honduras and Guatemala, America (Costa Rica, El Salvador, agreement, with The latest Nicaragua) and Vietnam. Hong 2014. since November is in force Kong, Agreementsof Economic Association with Japan, members of the EU and of the Zealand, Singapore, New P4 (formed by withBrunei Darussalam, FTAs and Chile) and limited On the also in force. India are other hand, Economic AgreementsComplementation exist with Cuba, Bolivia, Venezuela, Paraguay, Peru, (Argentina, Mercosur Ecuador, and Venezuela. Brazil and Uruguay) been concluded has of India’s a deepening FTA present, At the to Pacific signed; Protocol an Additional yet but not Chile, has been signedAlliance (Alianza del Pacífico) between Association Peru, Colombia and Mexico. Also, a Strategic Agreement with Indonesia is currently being negotiated. PartnershipFebruary was signed (TPP) on 4, The Transpacific the by pending the2016, still Congress. approval 4. Trade agreements and Agreements Treaties Trade there present, At 25 Free are with South Canada, China, Colombia, in force Australia, and Norway (Iceland, Liechtenstein, E.F.T.A. Korea, Chile is conducting negotiation with variousChile is conducting negotiation other countries. Agreements with Argentina, China, Italy, Japan, Czech Agreementswith China, Italy, Argentina, South of AmericaRepublic, have Africa States and the United signedbeen already currently and are pending ratification Congress.by 3. Double Taxation Agreements Taxation 3. Double of double taxationChile has 26 agreements the for avoidance countriesTreaty force. fiscal evasion in and the of prevention Austria, Brazil, Belgium, Colombia, Canada, Australia, are: Malaysia, Ireland, Spain, France, Ecuador, Denmark, Croatia, Peru, Poland, Zealand, Paraguay, New Mexico, Norway, Switzerland, South Sweden, Portugal, Russia, Korea, Kingdom. Thailand and the United
Highlights of Chile Grey Lake, TorresGrey delPaine National Park -XII region, Magallanes -Chile
Highlights of Chile
7. Outbound investment 7. Outbound investment Affairs theof MinistryEconomic Direction The Foreign Chilean outbound information updated regarding released has not during the 2014, outbound 2015. As for year investment 2,862 million, which US$ a 15.4% was represents investment on theof the same period investment during 2013. mainly went share theOf these largest outbound investments, Latin Americanto Countries. The countries that received Peru (48.4%), Brazil (24%), were in 2014 shares the largest (7.5%). Colombia (15.3%) and Egypt the years, preferred sectors theThroughout twenty-four last been services have Chilean outbound investments for (45.6 %); industry (18.6%). Mining (26.3%) and energy a small portion only represents (6.7%) and so do agriculture (2.6%). and livestock (US$ 382 million). Foreign investors came mainly from Spain from mainly came investors million). Foreign (US$ 382 of AmericaMexico (16.1%), States (20.9%), the United (10.8%). (11.1%) and Colombia 6. Foreign investment 6. Foreign During materialized investment foreign direct total 2015, (FDI) channeled through DL 600 reached US$ 2,718 million, this amount for of investment kind which is a much lower than 2014, which reached The main US$ 11,910 million. gas electricity, DL 600 FDI in 2015 were receiving sectors million), (US$ 866 million), mining (US$ 553 and water chemical industries million), and commerce (US$ 452 5. Foreign debt 5. Foreign the to the information issued by According Chilean Central Bank, in 4.01% reaching in 2015, foreign debt increased in debt increased The public sector US$155,656 million. theUS$482 million, while in debt increased private sector the foreign investment direct US$5,523 million. Particularly, led the withcompanies debt increase Other US$9,310 million. their decreased externalcompanies debt in US $247 million and banks their decreased external in US $550 million. debt debt balance in its increased On the other hand, government US$1,029 million.
Highlights of Chile to television and internet. related cellphonemarket,7.8%, dueto the services andother 1.9% respectively, whiletelecommunication increased in sector increased in2.8%and Personal andbusinessservices presented in2014. decrease, scenario just like the due to retail increase andwholesaleautomotive sales barely reached 0.9%in2015,mainlyCommerce growth gas and water sectorthe didnot numbers. general influence generation ofthe industry,electricity performance andthe sector isrelated Thedynamismofthis totrimesters. the two first of1.4%,evenadecrease inthe agrowth after with Regarding sector of electricity, the gas andwater, 2015closed because oflower production rates. production. Thenon-coppermining alsodecreased the reduced maintenance procedurescopper minesstarted that also,several copperprices, international reduction inthe decreased 0.2%in2015,becauseofthe Mining performance sector by performance 8. GDPanalysis general numbers. year,salmon production was alsodecreased this the affecting The extractive fishingandmolluscharvesting. rates inthe Fishing by 2015in3.2%,explained lower decreased during andshoesector hadnegativeleather results. textile, clothing, side,the other products. Onthe chemistry higher production inbeverages andtobacco, andalsoin production increased in2.0%,mainlyIndustrial dueto a 2015by edifications. during was leaded 2.3%, activity which reached growth Construction 2015 mainly dueto asmallerproduction ofsawable pine. livestock alsogrew, sector contracted forestry in butthe industry, mainly5.6%, driven fruit by vegetables the and of activityhadabiggrowth and forestry The agriculture
Highlights of Chile 10. Labor rate unemployment In 2015, the annual average estimated thereached to 6,2%, according data of the Institute National (INE). of Statistics 9. Country risk 2015, Chile’s risk credit August As from rating in long term & Poor’s. Standard to according foreign currency is “AA”, riskThe credit rating in local currency and its transfer This evaluation maintains in “AA+”. and convertibility Chile’sconsolidates Latin America leading position in as the country with the risk credit best rating, which has also been Emerging Morgan in Chile’sreflected position in the J.P. EMBI Bond IndexThe JP Morgan (EMBI Global). Markets 250 base at December 2015 was Spread Global Chile Stripped of 185.6 in 2015. points, with an annual average Copihue, Chiloe National Park - X region, Los Lagos - Chile Los Lagos - X region, Park Copihue, Chiloe National
Highlights of Chile CLP $597.10.CLP in November $715.66and itslowest atCLP valueinMay at The exchange year itshighest rate valuefor 2015 reached the calendaryear.of the beginning $606.75 perUSdollaratthe compared CLP with Market, year $707.24 perUSdollar, 2015atCLP closedthe Formalbuying andsellingrates for inthe transactions average exchange isthe rate,The “observed” which of 12. Exchange rates and 7.1%in2008. 3.0% in2012,3.3%2011,2.7%2010,-1.4%2009, Inflation annual average was 4.4%in2014,1.8%2013, atDecember2015was 4.4%. variation Annual average 2015 was 4.4%, annual inflationduring 11. Inflation transactions that require approval Bank. Central that transactions prior by the are no Thus,there Bank. Central need only to bereported the exchange formal market; the through that or(iii)operations must only beperformed that Bank;(ii)operations Central the exchange market to (i.e.acommercial bank)andreported formal the through must beperformed that (i) operations exchangeSince 2002,foreign fallinto operations 3categories: 14. Foreign regulations exchange rate to this Bank raised 3.5%. 2016,Central lending interest rate February to 3.1%.During Banklowered Central 2015,the benchmark During the 13. Interest rates
Highlights of Chile Petrohue River - X region, Los Lagos - Chile Los Lagos - X region, River Petrohue
Highlights of Chile of 44.45%. rate aninvariabletax 1,2020, butwith January longer than investment Decree Law underthe No. contracts 600for no possibilityto Italsogives contract. celebrate the foreign the andobligations stated on same rights 1, 2016willkeep the underdelatercontract Decree Law No. 600before January investors investor foreign a foreign signed the that that Foreigncurrent Investment Committee. This law provides Foreign Promotionfor ofthe Investment the replacing the direct investment foreign Agency inChileanditcreates the new framework the establishes June 25,2015,which for Law No. OfficialGazette 20,848was publishedinthe on 1,2017. January into forceIntegrated System). on Thesesystems willentry regimesIncomeSystem (i.e.Attributed andPartially tax discussed modification relatesthe creation oftwo to parallel tax legislationinChile. Themost the modifications to on September 29,2014.Thislaw introduced several Law No. OfficialGazette 20,780was publishedinthe 15. Tax legislation creditor when the creditcreditor isdully paid. whenthe and pledges guarantees, makingitanobligation for the releaseSeptember ofmortgages regulates the 25,2015,that Law No. OfficialGazette 20,855was publishedinthe on rules). capitalization (thin rules VAT regarding real estate andexcess operations ofindebtness topicsthis lawthe modified Income systems). Other areby systems new (PartiallyIntegrated tax andAttributed the companies which from willbeableto choose things, other Lawby No. the 20,780,Tax among Reform,andclarified, Thislaw wasrules. aresponse to many doubtsgenerated new tax enforcement. certain Aswell, billincorporates this adjustments shouldallow simplification that ofits the oftechnical ofamending aseries purpose the 20,780, with 8,2016.Thislaw aimstoFebruary simplify Law andclarify Law No. OfficialGazette 20,899was published inthe on
Highlights of Chile The Central Bank of Chile estimates thatThe Central Chile estimates Bank of the GDP projections and 2.25% during 1.25% from 2016. will be in a range for calendar annual inflation The expectation of the average 2017 is around for 2016 is 4.1%, and estimation year of 3.1%. 17. Prospects for 2015 was published in the Official Gazette on in the published 20,864 was Gazette Official Law No. make the to obligation legal 15, 2015, and it relieves October personshealthcare older than contributions retired 65 to old. years During 2016 an important Reform will be discussed Labor in the Congress. in considered The main aspects and voted contracting this negotiation, reform unions, collective are the a issues and end to due to possibility of replacements strike. was published in the Official Gazette on published in the 20,823 was Official Gazette Law No. April 7, 2015, it modifies the Labor Code establishing a the each hours regular for hour of a 30% over surcharge that attend directly all the for workers on a Sunday, worked also states This law establishments or similar. public in retail seven at least should have that the workers aforementioned three and they up to only could change a year, Sundays free shall be used Sunday if the Saturdays, adjacent for Sundays as well. rest for 16. Labor legislation 16. Labor published in the 20,821 was Official Gazette Law No. on April 18, 2015, it modifies regulate to the Labor Code the participation and in the of minors in public shows permission guardian requiring a legal entertaining industry, is served. alcohol to act in places where prohibits to This law in places where work to 15 and 18 years children between performedsexual acts are connotation or displayed.
Highlights of Chile 18. PwC in Chile
PricewaterhouseCoopers (http://www.pwc.cl) has been present in Chile since 1914. During these 101 years we have served the most prestigious local and foreign entities operating in Chile. We are the leading firm in the auditing business, with a staff of approximately 1,600 distributed in the cities of Antofagasta, Santiago, Viña del Mar, Concepción, and Puerto Montt.
Our services include auditing, management consulting, executive recruitment, fixed asset valuation, due diligences, technology and software selection, performance improvement, enterprise risk management, tax and legal services, foreign investment registration and structuring, bookkeeping, confidential payroll and corporate finance services. In general, we provide information and advice on how to operate in Chile.
Our main objective is to add value and help our clients be successful and we welcome any questions you may have related to either our services in general or to the information above. Palafitos, Castro - X region, Los Lagos - Chile
Renzo Corona Renzo Lead Partner Assurance PwC Chile [email protected] (56) 22940 0066 Francisco Selamé Francisco Lead Partner & Legal Tax PwC Chile [email protected] (56) 22940 0150
Colin Becker Consulting & Advisory Lead Partner PwC Chile [email protected] (56) 22940 0477 Luis EnriqueLuis Alamos Senior Partner Territory PwC Chile [email protected] (56) 22940 0065 Contactos
Highlights of Chile (56) 229400066 [email protected] PwC Chile Assurance LeadPartner Renzo Corona (56) 229400150 [email protected] PwC Chile Tax &Legal LeadPartner Francisco Selamé Calbuco Volcano -Xregion, LosLagos -Chile
Highlights of Chile Front cover image: Torres del Paine National Park - XII region, Magallanes - Chile. Images: Diego García Navarro.
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