A fast-growing and stable economy, top-tier talent pool, and favorable legislation for doing business makes Chile an attractive destination for foreign investment.
The Andean country ranks high across many categories. The World Bank listed Chile as the best place to do business and start a company in Latin America, while the IMD ranking placed the country as the most competitive in the region in terms of economic performance, infrastructure, and government and business efficiency.
According to preliminary figures published by the country’s Central Bank, in the first eight months of 2020, Chile received $10.16B in foreign direct investment (FDI) which represented an increase of 11% compared to the same period in 2019. InvestChile – the Chilean investment promotion agency – sustains that the country’s FDI continues to grow despite the repercussions of the COVID-19 pandemic on the local economy.
In the first eight months of 2020, Chile received $10.16B in foreign direct investment (FDI) which represented an increase of 11% compared to the same period in 2019.
The South American country boasts a GDP of $282.3B with a population of 18.9M people, and is a global leader in the mining industry, holding 28% and 54% of the world’s total copper and lithium reserves, respectively. With a wealth of natural resources, Chile also depends heavily on other traditional industries such as logging, fishing, and agriculture.
Additionally, with 44.2% mobile penetration and 82.3% of its population using the Internet, Chile has one of the fastest-growing e-commerce markets in the region, a tendency that has been accelerated as a result of the pandemic. Solutions in e-commerce, m-commerce, clean energy, agtech, logistics, and fintech are increasingly becoming important sources of innovation and are modernizing the country’s more traditional sectors.
Innovation is one of Chile’s pillars of growth. For over ten years, the Chilean legislation has encouraged companies to integrate research and development into their standard practices through a tax credit. Local and overseas companies can reduce the cost of investment in R&D by up to 50% and increase their competitiveness. Over 900 projects have been implemented through a government contribution in the form of tax credits of over $350M.
Local and overseas companies can reduce the cost of investment in R&D by up to 50% and increase their competitiveness.
With this advancement, it comes as no surprise that Chile was considered Latin America’s most innovative country in 2019 or that it houses one of the region’s strongest entrepreneurial ecosystems.
There is a wide range of government programs and incentives that promote venture capital and entrepreneurship in the country.
The Chilean government’s economic development agency CORFO is constantly working towards positioning the country as a tech hub in the region. The capital city, Santiago, is where most of Chile’s startups, investors, and accelerators are concentrated.
Some of the country’s top investors include Nazca Mountain, Magma Partners, Manutara Ventures, Alaya Capital Partners, Austral Capital, FounderList, NXTP Labs, Chile Global Ventures, Fen Ventures, and WeBoost.
The government created Startup Chile in 2010 to encourage foreign entrepreneurs to use Chile as a launchpad into other markets. Since its inception, the early-stage accelerator has helped kick-off over 1,600 startups and, with InvestChile, launched a program called Visa Tech, an initiative to help tech companies obtain a work visa in fewer than 15 working days.
With this advancement, it comes as no surprise that Chile was considered Latin America’s most innovative country in 2019 or that it houses one of the region’s strongest entrepreneurial ecosystems.
The country’s export promotion bureau, ProChile, facilitates contact between importers and Chile’s exportable goods and services from different industries with offices in 45 countries around the world and 16 offices in Chile. The department provides an intensive training plan to ensure that Chilean companies seeking to enter international markets have the qualities and knowledge they need to be able to meet the demands of international clients.
ProChile also organizes events like Chile Connected USA 2020 which seeks to consolidate the US as a destination market for innovative and high value-added Chilean products and services, in industries such as edtech, healthtech, fintech & retailtech.
Tu Empresa en un Día is another initiative by the Ministry of Economy that serves as a portal for entrepreneurs to create a company in one day through a simple online process that is free for small businesses.
Considering that Chile is a member of the Organization for Economic Co-operation and Development (OECD) and has 26 international trade agreements signed with 64 countries, companies can also benefit from privileged access to the world’s largest markets.
Foreign investors like Bezos Expeditions and Uber have identified Chile as a fertile ecosystem and have made major investments in local startups. NotCo became Jeff Bezos’ first investment in a Latin American startup, while Uber acquired the last-mile grocery delivery platform Cornershop.
Investment in Latin America has steadily grown over the past years as more foreign investors discover the untapped potential of the region. Chile has become a promising investment destination due to the high performing economy and the government initiatives that create a nurturing environment for startups with innovative solutions to succeed.
Chile Connected USA 2020 is an opportunity to match with Chilean FinTech, HealthTech, and Edtech companies, access expert panels & more. The event will run from October 19th to November 18th, with the Tech & Innovation related activities taking place from October 27th to 29th.
Brought to you by ProChile, Chile’s export promotion bureau.
