Chile A LONG-TERM PARTNER JORGE PIZARRO CRISTI EXECUTIVE VICE-PRESIDENT FOREIGN INVESTMENT COMMITTEE

A long term partner Mature business environment FDI in Chile: A solid track record A land of opportunities A new FDI attraction policy TOPICS

1. A LONG-TERM PARTNER

Chile is the best evaluated economy in Latin America and, indeed, one of the best evaluated among emerging economies worldwide. Its sustained economic growth and social progress have been highlighted by different international organizations and, in 2010, it became the first South American country to join the Organisation for Economic Co-operation and Development (OECD). BEST EVALUATED ECONOMY IN LATAM

Economy GDP 2014 (PPP) US$264 billion (IMF) GDP per capita (PPP, 2014) US$23,165 (IMF) 1 st place in Latin America Interest rate (monetary policy) 3.0% (Feb 2014) Unemployment rate 6.1% (Dec 2014-Feb 2015) Public foreign debt (2013) US$24.4 billion Exports (2014) US$76.6 billion Imports (2014) US$72.3 billion SNAPSHOT OF THE CHILEAN ECONOMY

Source: Economist Intelligence Unit. Chile’s Sovereign Ratings Fitch Ratings A+ Standard & Poor’s AA- Moody’s Aa3 DBRS AA- Overall Risk Ranking 2014 (Selected economies) A LOW-RISK COUNTRY

*Selected economies. Global Competitiveness Index (33 rd out of 144 economies)* CHILE LEADS LATIN AMERICA

Over the past 30 years, Chile’s financial system has undergone significant development, with an increase in the number of participants, the variety of products and market depth. Chile’s banking system is largely privately-owned (except for BancoEstado), with a significant presence of foreign-owned subsidiaries. Currently, there are 23 banks in Chile: 18 are considered “established in Chile", 4 are subsidiaries of foreign banks and one is state-owned. All banks are subject to supervision by the Superintendency of Banks and Financial Institutions (SBIF) and are governed by the General Banking Act and by regulations issued by the SBIF. According to the OECD (in its latest economic review of Chile - October 2013), the financial system remains healthy and reflects strong financial supervision. HEALTHY FINANCIAL SYSTEM

*Selected economies. Source: Transparency International. A TRANSPARENT COUNTRY Corruption Perceptions Index 2014 (21 st out of 174 economies)*

1Norway 2Australia 3Switzerland 4Netherlands 5United States 6Germany 14United Kingdom 15Korea (Republic of) 17Japan 20France 26Italy 27Spain 40United Arab Emirates 41Chile 41Portugal 49Argentina 50Uruguay 71Mexico 79Brazil 82Peru 98Colombia 98Ecuador Source: UNDP. HUMAN DEVELOPMENT INDEX ST OUT OF 187 ECONOMIES

Source: The Institute for Economics and Peace (IEP) GLOBAL PEACE INDEX 30 TH OUT OF 162 COUNTRIES

WHAT THEY SAY ABOUT CHILE “Chile has been a model of democracy in Latin America. It's been able to consistently transition from center-left governments to center-right governments, but always respectful of democratic traditions.” President of the USA, Barack Obama June 30, 2014

2. MATURE BUSINESS ENVIRONMENT

Thanks to its political and economic stability, openness to trade, legal security and excellent growth prospects, Chile has maintained an attractive and dynamic business climate for investors. THE BEST BUSINESS ENVIRONMENT IN LATAM

BUSINESS ENVIRONMENT RANKING GLOBAL RANKING, (13 th out of 82 economies) Source: Economist Intelligence Unit. Selected economies.

63% of world population 85% of global GDP 93.8% of Chile’s export markets 14 Free Trade Agreements 3 Economic Partnership Agreements 6 Economic Complementation Agreements 2 Agreements under negotiation Agreements in force Agreements signed but not yet in force 24 FREE TRADE AGREEMENTS WITH 62 COUNTRIES

INVESTMENT PROTECTION Chile has investment protection agreements and clauses with countries that represent 76.4% of global GDP.

Australia Belgium Brazil Canada Colombia Korea Croatia Denmark Ecuador Spain France Ireland Malaysia Mexico Norway New Zealand Paraguay Peru Poland Portugal United Kingdom Russia Sweden Switzerland Thailand Chile has DTAAs with 25 countries. DOUBLE TAXATION AVOIDANCE AGREEMENTS

“Foreign investment plays a key role in boosting and diversifying our economy and creating value.” President Michelle Bachelet July 30, 2014 WHAT THEY SAY ABOUT CHILE

3. FDI IN CHILE: A SOLID TRACK RECORD

Source: World Investment Report, UNCTAD, Developed economies Developing and transition economies TOP 20 FDI HOST ECONOMIES, 2013 US$ billion

Source: Central Bank of Chile. FDI IN CHILE, US$ billion

Source: Central Bank of Chile By countryBy sector FDI INFLOWS IN CHILE , US$100.8 billion

WHAT THEY SAY ABOUT CHILE “(I’m expecting) a brilliant future for the Chilean economy.” Prime Minister of Japan, Shenzo Abe August 1, 2014

4. A LAND OF OPPORTUNITIES Investment opportunities

ENERGY

ENERGY: CHALLENGE AND OPPORTUNITIES

5. A NEW FDI ATTRACTION POLICY

 That adds value to our exports.  That energizes highly concentrated markets.  That generates quality jobs and permits development of our human capital.  That points to long-term sustainable growth.  With high quality standards and best practices.  That permits good productive linkage with local suppliers.  Seeking innovative and technological development.  In different regions and key economic sectors. WE ARE LOOKING FOR MORE AND BETTER FDI

This year, the government presented to Congress a bill to create a new institutional framework for the promotion and attraction of foreign direct investment (FDI) in Chile. The new framework will comprise a Committee of Ministers to advise the President of the Republic on policy design and a Foreign Investment Promotion Agency in line with OECD standards charged with policy implementation. It includes the creation of a new agency that will focus on promoting foreign investment in those sectors that are strategic or need to attract investment of this type. Its powers will allow it to serve as the body that coordinates efforts to attract investment in Chile and will include establishing a foreign investment promotion and attraction strategy, tying in investment attraction with country’s productive development strategy. The bill recognizes foreign investors’ guarantee of access to the formal foreign exchange market and of the right to repatriate capital and earnings whilst safeguarding the Central Bank’s powers in this field. It also guarantees foreign investors freedom from arbitrary discrimination. A NEW INSTITUTIONAL FRAMEWORK

In addition, the bill modernizes and updates the procedure for obtaining exemption from sales tax (VAT) on capital goods imported by foreign investors for projects under DL 600. This modification seeks to promote the development of large investment projects in Chile which, because of their nature, take a long time and to prevent them from incurring high financial costs in their prior and initial stages. In order to permit the players’ adaptation to the change of foreign investment regime and in line with the Advisory Commission’s proposals, the bill stipulates that, for a maximum period of four years, foreign investors will be able to request authorization for their planned investments under the terms of Article N° 3 of DL 600, with the rights and obligations envisaged in this law but with a total locked-in tax rate of 44.45%. In addition, the bill regulates the effects of contracts signed under DL 600 so as to ensure the full application of the rights and obligations acquired by foreign investors under this legal regime. A NEW INSTITUTIONAL FRAMEWORK

Information services Information about Chile’s business climate. Portfolio of public and private investment projects. Reports and other publications. FDI statistics. Material in Spanish, English and Chinese. Participation in forums. Investment facilitation services Legal advice for the signing of a foreign investment contract. Assistance in preparing schedule of meetings. Processing of investors’ queries and applications. Assistance to contact public and private sectorial institutions. SERVICES, ACTIVITIES AND TOOLS

Head of the FDI Attraction Unit Vicente Mira| Energy Jorge Yáñez | Mining and Infrastructure Nicolás Muñoz | Tourism and TI Martin Pathan | Food Industry and Biotechnology Vanessa Séverin | Small and medium enterprises Salvatore Di Giovanni | CONTACTS

Chile will move from a passive policy of RECEIVING FDI… to an active policy of ATTRACTING FDI.

“Trust, believe and invest in Chile.” President Michelle Bachelet