Chile, thanks to its pro-business environment and supportive government schemes, has become one of the leading FDI destinations in Latin America, a development that has seen it established as home to an increasingly vibrant start‑up scene. To better understand its investment environment and start‑up landscape, HKTDC Research undertook a consultative visit and engaged with a variety of local businesses and trade associations.

A business haven

Chile has a reliable institutional system governed by the rule of law, as well as a longstanding commitment to free‑market policies. This has resulted in a favourable business environment for both local and foreign investors, while also seeing the country highly ranked across a range of international economic indicators.

In the World Competitiveness Yearbook 2024, as issued by the International Institute for Management Development (IMD), Chile was ranked third in the Americas, behind only the US and Canada. [1] The country has consistently ranked highly for FDI in Latin America over the past decade. In 2022, it boasted a significant inward FDI stock of US$256.5 billion, accounting for approximately one‑tenth of the region’s total, as well as an inward FDI flow of US$19.8 billion.

Chile’s conducive business and investment environment has attracted investors from all over the world.

More specifically, statistics from theBanco Central de Chileshow that, in 2022, Canada was Chile’s largest investor, contributing US$35.5 billion (13.9% of the national total), followed by the US (8.9%), the Netherlands (8.3%), the UK (7.7%) and Spain (7.1%).

For the same period, investments from Asia also played a notable role, cumulatively totalling some US$9.3 billion.

Japan, the country’s largest Asian investor, accounted for 44% of total Asian FDI.

Growing prominence of Chinese investment

Although China has yet to become a major FDI source for Chile, the presence of mainland investment in the Andean country has

been increasing rapidly in recent years.

Chile’s foreign investment promotion agency, InvestChile, has taken proactive measures to promote investment opportunities

to prospective Chinese investors. In partnership with ProChile, Chile’s trade promotion agency, InvestChile runs an annual

promotional campaign in mainland China – Chile Week China – in order to strengthen exchanges and intera

ctions between the two nations. As an indicator of its success, mainland China’s FDI stock in Chile has grown dramatically,

rising from US$3 million in 2013 to US$700 million in 2022, representing compound annual growth of 83%.

Mainland China’s investment momentum not only marks the growing interest among the country’s investors in the Chilean market, 

but also underscores the strengthening bilateral economic ties. In addition to the increasing penetration of Chinese car brands into

Chile, for example, mainland China has also made significant investments in a wide range of the Latin American nation’s mining operations.

[2]

Shaping the future

Chile has already attracted foreign capital and technology into a number of strategic sectors, including mining, energy, venture capital, food, services, tourism and infrastructure. Looking to the future, sustainability and digitalisation are seen as bright new investment prospects.

Reflecting the strength of its global mineral reserves, more than a quarter of all Chile‑bound FDI is focused on the mining sector. A major commodity exporter, Chile’s mining industry extends beyond such traditional metals as copper, silver and gold to include many important rare metals. Indeed, the Andean nation was estimated to possess 41% of the world’s lithium reserves in 2023, while also being the world’s second‑largest lithium producer, accounting for approximately one‑third of global lithium production in 2022. [3]

A French mining company has recently pledged initial investment of nearly US$100 million (in partnership with Chile’s state mining company) in a major lithium extraction project, one aimed at helping meet the rising demand for electric vehicle batteries. A further US$1 billion from the same company is said to be on the table for a variety of other lithium‑related projects. [4]

Beyond this, Chile has also set itself the ambitious goal of being carbon neutral by 2050. In order to accomplish this, the country has been accelerating its adoption of renewable energy and sustainable waste management. Looking to capitalise on its geographic and climate characteristics, Chile has already established photovoltaic solar farms in the Atacama Desert in the north of the country, as well as a wind farm in Patagonia.

Alongside these initiatives, the Chilean government has shown growing interest in utilising hydrogen as a clean fuel. To this end, in 2020, Chile unveiled a National Green Hydrogen Strategy with the goal of becoming a leading hydrogen exporter by 2030, a move seen as aligning with the nation’s sustainable, low‑carbon energy transition.

Accelerating economic development

CORFO, a Chilean economic development agency with a production promotion remit, has played a decisive role in enhancing the competitiveness and productivity of businesses operating in the country. It offers numerous supportive schemes for a range of sectors designated as priorities, including innovation, entrepreneurship, finance and sustainability.