Geography
Chile is located in the Westerly part of the Southern cone of South America, stretching to the continent of Antarctica and reaching Easter Island and Polynesia to the West. Also incorporated in its territory are: the Archipelago of Juan Fernández, The Juan Félix Islands, San Ambrosia, Sala and Gómez-the exclusive economic area of 200 miles serving as a platform to the continent. From north to south the visitor can discover the desert all the way to the eternal ices, passing along the way: valleys, pastures, lakes, forests, islands, glaciers, rivers and canals.
The surface area of Chilean Antarctica and other Chilean territories off the mainland is 2,006,000 km2. The length of the country is over 8000 km, the maximum width 445km whilst the average width is 180km.
The country is divided into 15 regions: Tarapacá, Antofogasta, Atacama, Coquimbo, Valparaíso, Metropolitan, General Libertador Bernardo O´Higgins, Maule, Bío Bío, La Araucanía, Los Lagos, Aysén del General Carlos Ibáñez del Campo, Magallanes, Antártica Chilena, Los Ríos, Arica and Parinacota. These regions, in turn, are divided into 51 provinces and 342 communes. Santiago is the capital city located in the Metropolitan region. Other major cities are: Iquique, Antofogasta, Copiapó, La Serena, Valparaíso, Rancagua, Talca, Concepción, Temuco, Valdivia, Puerto Montt and Punta Arenas.
In the north the climate is mostly temperate. The average temperature on the coast is 23°C and inland this rises to 30°C. In the central area, the four seasons are very much evident, with pleasant temperatures found in every season. Towards the south, temperatures fall around 1°C for each 150m altitude in The Andes. These conditions create a Mediterranean climate. The average temperature reaches 20°C in summer whilst it drops to 8°C in winter. Precipitations tend to be concentrated in the winter months (May to August) reaching an average of 375mm. Winters are generally calm and summers are relatively hot.
The Domestic Market
Population
One of the great characteristics of the Chilean people is their strength of character inherited from the indigenous cultures. Furthermore, the condition of being a descendant of the Spanish conquistadors and the later arrival of European immigrants has brought together a unique population, which nowadays has a relatively homogenous profile, where diversity continues to keep its place
The last census, carried out in 2002, showed that Chile has a population of 15 million inhabitants, 40% of whom live in the Metropolitan region where the city of Santiago is located. According to estimated made by the National Institute of Statistics, life expectancy has significantly increased in Chile: from aged 30 at the beginning of the 20th century to an average of 73 nowadays
Language
The official language of Chile is Spanish. Alongside this a variety of indigenous languages exist
In the north of Chile, approximately 20,000 inhabitants speak Aymará, although the majority of those are bilingual and regularly use Spanish
In the central area, specifically in the territory of Easter Island, the original inhabitants speak Rapa Nui, a language of Polynesian origin.
In the south, ½ million people speak Mapudgun of Mapuche ethnic origin, though the majority employ Spanish as a second language. In these areas education is provided in both languages to prevent indigenous languages from dying out
In terms of foreign languages, the Ministry of Education caters for various languages in schools around the country. The most important of these is English, although French and German are also taught in some schools. As a result of commercial agreements, some schools and universities are teaching Mandarin Chinese.
National elections
Presidential elections were last held in December 2005, the next will be in 2010. The last elections for senators and deputies were held in December 2005 the next will be in 2012
Currency
The Chilean currency is peso.
Units of Weight and Measure
The measurement unit in Chile is the metric system. For weighing we use the kilogram.
Economy
Economically, Chile is an exemplary country in Latin America. Political stability, strong macroeconomic indexes and the quality of human resources are all factors which have allowed Chile to reach such a leadership in the continent. If one compares Chile to other emerging countries, its privileged position in terms of country risk, economic and political freedom and quality of life can be highlighted. Alongside this, there is a vast mining potential, low corporate taxes, modern transport and telecommunications infrastructure. Chile also stands out for its solid and efficient financial industry as well as high levels of market penetration in Information Technology and the use of Internet.
Economic Growth
According to figures given by the Central Bank of Chile, in the 1990s the economy grew on average 8%. In the 1st years of the new century growth has slowed down and in the context of an international crisis growth expectations are not as high. Growth between 2000 and 2008 was 4%. The growth rate in 2005 reached an extraordinary rate of 6% due to an increase in production oriented towards the service sector, low inflation and the increased level of international reserves
Credibility
The macroeconomic management based on pre-established policy and the independent and autonomous Central Bank guarantee fiscal and monetary discipline. The existence of stable and transparent policies, an efficient and independent judiciary and the presence of a dynamic and innovative private sector situates Chile as the most competitive country in the area and provides an offer of stability very much appreciated by foreign investors
Exports
Currently, in a large number of companies, there are almost 4,000 different products exported to 176 countries. Amongst those products are: copper, saltpetre fertilizer and lithium. In agriculture there are: wines, a wide variety of fruits, the seafood industry-which is particularly dedicated to salmon, tinned fish and seafood and fishmeal. Another range, by no means minor in terms of export includes: frozen foods, pre-prepared foods, ceramic designs and forestry amongst others. Added to this is a wide variety of manufactured products because Chile is blessed with a highly qualified workforce renowned in the international market. Last but not least, there is the large quantity of telecommunications and financial consulting that the country offers the world.
Foreign Investment
For a long time Chile has been attractive to first-time investors in Latin America as they value the economic and political stability and the clarity in business and taxation matters. But increasingly investors are going a step further, having gained confidence in the country, and are not only gaining experience trading with Chile but are also using Chile as a base to provide to other markets, i.e. a business platform to other countries of the region. Examples of this abound from mining companies such as: BHP Billiton, Placer Dome and Anglo American in the north that export Copper to the world markets and the Canadian company Methanex in the extreme south which produces methanol and sells it around the world. Agricultural and manufacturing companies in sectors from the food industry, producers of the best wines in the world to salmon farming, ship building and computer assembly now supply to markets outside Chile and use Chile as a base, taking advantage of the growing network of trade agreements
Tax Reform
In the year 2002, Chile updated its tax legislation to facilitate the process of using Chile as a platform from which businesses can invest in trading with other foreign markets and to strengthen alliances between foreign investors and local businesses. In line with Chile´s policy to minimise tax barriers to foreign investors, the reform means that foreign investors do not have to pay Chilean taxes on earnings which are obtained from investments in other countries. It means that its current legislation allows national and international companies have their business platforms in Chile by applying paid taxes in such countries under the credit mechanism.
The Consequences of Credibility in Chile >
The use of Chile as a platform for trading with neighbouring countries has created a significant number of new jobs, as well as increasing technological exports and services within the country. However, there are also benefits which are less visible: in the form of know-how and technology. Consequently, all these positive aspects are combining and providing the impetous for Chilean development, which in turn is beneficial for foreign associates.
The Financial System
Currently there are 26 establishes banks operating in Chile,19 of which consider themselves banks established in Chile. They are the following Banco de Chile, Banco Internacional, Scotiabank Sud Americano, Banco de Crédito e Inversiones, Corpbanca, Banco Bice, HSBC Bank, Banco Santander-Chile, ABN AMRO Bank, Banco Security, Banco Falabella, Deutsche Bank, Banco Ripley, HNS Banco, Banco Monex, Banco Penta, Banco París, Banco Bilbao Vizcaya Argentinaria, Chile (BBVA) and Banco Desarrollo. As well as the aforementioned, there are 6 branches of foreign banks which include:
Banco do Brasil S.A., Citibank N.A., BankBoston, N.a., JPMorogan Chase Bank, N.A., Banco de la Nación Argentina and The Bank of Tokyo-Mitsubishi, LTD.
Finally, there is the Central Bank of Chile1 which is not audited by the Superintendence of Banks and Financial Institutions.
All the banks mentioned, (with the exception of the Central Bank) are subject to inspections from the Superintendence and are regulated by legal decree No. 3 26th November 1997 which is outlined in The General Law of Banks as well as the norms which the Superintendence oulined in the Updated Version of Norms.
The General Banks Law define what a bank is in article no. 40. This definition states that the basic operation is: to obtain money from the public with the objective of offering it in loans, adding interest, investing, acting as a financial intermediary and making profits from these and any other operations that the law allows.
State Guarantee and Preference for deposits and attracting Savings
The norms of the General Law of Banks (article 65,123, section 5, 132 and articles 144-153) assure the deposits in national or foreign currency from a bank or financial institution the following transactions:
In 100% of their balance
Deposits via a savings book with an unconditional deadline draft
In 90% of their total balance with a maximum payment limit of 108 index¬linked units2 in the whole financial system each calendar year for on-time deposits which fulfil the following requirements
· The account holder is a person, not a business
· Deposits are made within the deadline via nominative documents on demand or with savings books via instalments
· Deposits with the deadline of which the expiry date does not exceed 10 days following the presentation of an agreement or the declaration of forced liquidation Current account deposits
· Deposits via a savings book, payable on demand
· Other deposits at call
Doing Business 2009