Chile - Foreign investment



Through the Decree Law 600 of 1974 (and its subsequent modifications) and the Chilean Foreign Investment Committee, Chile seeks to encourage foreign direct investment. However, broadcasting, fishing, shipping, and hydrocarbon production usually require majority national control. Foreign investors have purchased many of the assets privatized by the Chilean government over the last decade. Chile has the highest credit rating of all Latin American countries. From 1997 to 2001, $28.2 billion of foreign direct investment (FDI) went into Chile. FDI flow peaked in 1999 at $9.2 billion but dipped to $3.67 billion in 2000. In 2001, FDI inflow was at a near average level of $5.5 billion. The principal source of FDI has been the United States, but in 2002, FDI from the United States amounted to a negative flow of $1 billion. Other principal sources of FDI have been Canada, Spain, the United Kingdom, South Africa, Australia, and Japan. In 2002, the lead areas for FDI were transportation, telecommunications, and mining.

In terms of portfolio investment, by 2001 the number of companies listed on the Chile Stock Exchange and their market valuation had dropped from their peak in 1997 (before the Brazilian currency crisis) of 295 listed companies valued at $72 billion to 249 listed companies valued at $56.3 billion. As of 31 December 2001, US investors held $5.4 billion in Chilean securities, $1.92 billion in equity shares, $3.5 billion in long-term debt, and only $1 million in short-term debt.

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