Chile 2017 Country Commercial Guide
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Chile Table of Contents Doing Business in Chile ________________________________ 6 Market Overview ___________________________________ 6 Market Challenges __________________________________ 8 Market Opportunities ________________________________ 8 Market Entry Strategy ________________________________ 9 Political and Economic Environment _________________________ 10 Political Environment ________________________________ 10 Selling U.S. Products & Services ____________________________ 11 Using an Agent to Sell U.S. Products and Services ________________ 11 Establishing an Office ________________________________ 11 Franchising ______________________________________ 12 Direct Marketing ___________________________________ 13 Joint Ventures/Licensing ______________________________ 13 Selling to the Government ______________________________ 14 Distribution & Sales Channels____________________________ 14 Express Delivery ___________________________________ 15 Selling Factors and Techniques ___________________________ 15 eCommerce ______________________________________ 16 Trade Promotion and Advertising _________________________ 17 Pricing _________________________________________ 20 Sales Service/Customer Support __________________________ 20 Protecting Intellectual Property __________________________ 20 Due Diligence _____________________________________ 21 Local Professional Services _____________________________ 21 Principle Business Associations __________________________ 21 Limitations on Selling U.S. Products and Services ________________ 22 Web Resources ____________________________________ 22 Leading Sectors for US Exports & Investments ___________________ 23 Agricultural Equipment and Technology _____________________ 23 2 Agricultural Sector __________________________________ 26 Automotive Parts ___________________________________ 38 Construction ______________________________________ 40 Energy _________________________________________44 Energy Efficiency ___________________________________ 48 Environmental Technologies ____________________________ 50 Healthcare _______________________________________ 53 Mining _________________________________________ 55 Telecommunications Sector _____________________________ 59 Travel and Tourism __________________________________ 62 Customs, Regulations & Standards __________________________64 Trade Barriers _____________________________________64 Import Tariffs _____________________________________64 Import Requirements and Documentation ____________________ 65 U.S. Export Controls _________________________________ 65 Temporary Entry __________________________________ 66 Labeling/Marking Requirements _________________________ 66 Prohibited & Restricted Imports __________________________69 Customs Regulations _________________________________69 Standards for Trade _________________________________69 Trade Agreements __________________________________ 72 Licensing Requirements for Professional Services ________________ 73 Web Resources ____________________________________ 74 Investment Climate Statement ____________________________ 75 Executive Summary __________________________________ 75 Openness To, and Restrictions Upon, Foreign Investment ___________ 76 Policies Towards Foreign Direct Investment ___________________ 76 Limits on Foreign Control and Right to Private Ownership and Establishment 77 Other Investment Policy Reviews ___________________________ 77 Business Facilitation _________________________________ 78 Outward Investment _________________________________ 78 Bilateral Investment Agreements and Taxation Treaties ____________ 79 3 Legal Regime _____________________________________ 80 Transparency of the Regulatory System ______________________ 80 International Regulatory Considerations ______________________ 81 Legal System and Judicial Independence ______________________ 81 Laws and Regulations on Foreign Direct Investment ______________ 82 Competition and Anti-Trust Laws _________________________ 82 Expropriation and Compensation __________________________ 82 Dispute Settlement __________________________________ 83 Bankruptcy Regulations _______________________________ 84 Industrial Policies___________________________________ 85 Investment Incentives ________________________________ 85 Foreign Trade Zones/Free Ports/Trade Facilitation _______________ 85 Performance and Data Localization Requirements ________________ 85 Protection of Property Rights ____________________________ 86 Real Property _____________________________________ 86 Intellectual Property Rights _____________________________ 86 Financial Sector ____________________________________ 88 Capital Markets and Portfolio Investment _____________________ 88 Money and Banking System _____________________________ 88 Foreign Exchange and Remittances ________________________ 89 Sovereign Wealth Funds _______________________________ 90 State-Owned Enterprises ______________________________ 90 Privatization Program _________________________________ 91 Responsible Business Conduct ___________________________ 92 Corruption _______________________________________ 93 Political and Security Environment ________________________ 95 Labor Policies and Practices _____________________________96 OPIC and Other Investment Insurance Programs ________________ 99 Foreign Direct Investment and Foreign Portfolio Investment Statistics ___ 99 Contact for More Information on the Investment Climate Statement ____ 101 Trade and Project Financing _____________________________ 103 Methods of Payment ________________________________ 103 Banking Systems __________________________________ 103 Foreign Exchange Controls ____________________________ 104 U.S. Banks & Local Correspondent Banks ____________________ 104 Project Financing __________________________________ 105 4 Financing Web Resources _____________________________ 105 Business Travel ____________________________________ 106 Business Customs __________________________________ 106 Travel Advisory ___________________________________ 106 Visa Requirements _________________________________ 106 Currency _______________________________________ 107 Telecommunications/Electric ___________________________ 108 Transportation ___________________________________ 109 Language _______________________________________ 109 Health ________________________________________ 109 Local Time, Business Hours, & Holidays ____________________ 109 Temporary Entry of Materials and Personal Belongings ___________ 111 Travel Related Web Resources __________________________ 112 INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2017. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES. 5 Doing Business in Chile Market Overview Chile continues to be a strong trading partner and export market for U.S. companies, largely due to its open market policies, zero tariffs, stable democratic government, solid business practices, and low corruption. While GDP growth over the last 30 years has averaged approximately 5% per year, the Chilean economy has slowed in recent years, with just 1.9% growth in 2014, 2.1% in 2015, and 1.6% in 2016. Forecasted 2017 GDP growth is still weak, at 1-2%. As the United States - Chile Free Trade Agreement (FTA) concludes its thirteenth year, trade of products and services continues to be a resounding success. As of January 1, 2004, duties were reduced to zero on 90% of U.S. exports to Chile, and in January 2015, all remaining tariffs were phased out, such that all U.S.-origin products now enter Chile tariff free. U.S. exports reached $17.5 billion at their highest post-FTA year in 2013, representing a 545% increase in exports when compared to pre-FTA figures. While bilateral trade has decreased in recent years, bilateral trade is still 2-3 times 2004 levels. In 2015, bilateral trade in goods between the United States and Chile totaled US$24.0 billion, down slightly from previous years. The decline is largely attributable to a slowing Chilean economy and the sharp decline in global copper prices. Overall, the U.S. enjoys a US$6.7 billion trade surplus with Chile, exporting US$12.9 billion in goods to Chile, while imports to the U.S. from Chile totaled US$8.7 billion in 2016. In addition to the US$12.9 billion in goods, the U.S. exports US$4 billion in services to Chile. Overall, the U.S. is Chile’s #2 trading partner after China, which overtook the U.S. at the #1 trading partner three years ago. Chinese-Chilean bilateral trade has increased significantly in recent years; however, the United States maintains a broader, more dynamic and diverse trading relationship with Chile. Per the United Nations Conference on Trade and Development (UNCTAD), global foreign direct investment (FDI) inflows to Chile in 2015 (most recent year with data available) reached US$20.2 billion – a slight decline from US$21.2 billion in 2014. FDI stock inflows to Chile from the U.S. amounted to US$730 million in 2014. Total FDI stock from the U.S. in Chile stood at US$27.6 billion at the end of 2014 (last year of information available), representing the largest source of FDI in Chile. Both macroeconomic stability and growing integration with international capital markets have earned Chile an A+ credit rating from Fitch. Although Fitch modified Chile’s outlook from stable to negative in December 2016, Chile continues to have the highest credit rating in Latin America. 6 Chile is stable, prosperous, and consistently ranks high on international indices relating to economic freedom, transparency,