News

One of the best locations for the Global Services Industry
Published: November 13, 2009

Chile has positioned itself as a premier destination for those companies looking to benefit from offshoring. The country is ranked as one of the safest and most attractive global services locations in the world.

It is one of the world's most dynamic sectors, and represents an industry with great potential in which Chile participates successfully. There are currently over sixty world-class centers operating in the country and exports for the sector surpassed US$800 million last year.

To get to this, CORFO, The Chilean Economic Development Agency, created the InvestChile program, sponsored by the Ministry of Economy and in coordination with the Ministry's Foreign Investment Committee, to encourage these business operations in Chile.

In the way of the Global Services Industry, InvestChile is positioning the country as a technology platform for companies planning to launch investment projects serving Latin America and the world. This program supports the setup of operations such as shared service centers, call centers, technical support centers, software development centers, and electronic integration and assembly operations.

It also supports the setup of operations for biotechnology and life sciences companies, clinical trials initiatives and other high value technology projects including research, development and transfer of emerging technologies.

In 2008, the InvestChile program supported 304 projects and provided a total of around US$16 million in subsidies. The resulting materialized investment amounted to approximately US$374 million.

What does Chile have to offer?

Chile offers numerous advantages to the potential investor. The Chilean market is open, stable and well-regarded both regionally and worldwide. Free trade agreements allow companies in Chile to access 86% of the world's GDP while the government's macroeconomic policies provide market stability and decreased investor risk.

In a joint study by the América Economía magazine and the Washington D.C.-based consulting firm CG/LA, Chile was ranked as having the best infrastructure in Latin America and the Caribbean. The study grouped numerous factors into three major areas: existing infrastructure stock, macro-economic situation, and capacity for growth in the future.

In a separate study by the World Economic Forum, Chile was found to have the smallest infrastructure quality gap (difference between current infrastructure and the need to improve to support development) and was rated as the most attractive destination for private investment in infrastructure in Latin American1 . With highly developed infrastructure, Chile's port system was rated close to the level of Germany's.

Based on the World Bank's 2009 rankings, Chile is the most business-friendly country in Latin America. This ranking is comprised of various factors such as the ease of starting a business, access to credit, investor protection, contract enforcement and cross-border trade, among others. Chile scored particularly well against its Latin American counterparts in the areas of contract enforcement, cross-border trade and tax procedures.

In Chile, a new business is able to begin operations within a shorter period of time, with less paperwork, and having to spend less money than in any other Latin American country. Taking ideas from the drawing board to operation in Chile is simpler and more cost-effective than anywhere else in the region. All of this, combined with an excellent location and highly-developed public infrastructure, make Chile an ideal investment location.

In terms of the Human Resources "[Chile] outshines its neighbors, luring investment with educated workers and strong IT skills. According to UNCTAD's data Chile is currently the strongest performing Latin American country."(EIU: 2005)

Chile's well-educated pool of workers, benefits from the government's commitments to digital education and foreign language training, as well as a wide range of higher education opportunities. Through the Enlaces program, Chile's government is working towards its goal of better digital education at all levels, including having one computer per child in the country. Chile currently has the highest school internet access rate in Latin America and spends 3.2% of its GDP on education2.

The Chilean government's efforts to promote foreign language education include the "Languages Open Doors" program and awarding numerous scholarships to study languages. The goal is to have all students' graduate high school with at least an intermediate level of English and provide advanced language training to professionals in specific fields such as global services.

For the professionals and technicians of the Global Services industry, the Chilean government through CORFO offered 3.000 English Scholarships between 2008 and 2009, helping to consolidate a mass of professional in the foreign language.

Higher education opportunities abound in Chile with 61 universities, 41 professional institutes and 100 vocational training centers to choose from. Enrolment in higher education is rising steadily; it increased by 6% in 2008 with respect to 2007 and by 78% since 20003.

Global Services (Offshoring)

Chile has positioned itself as a premier destination for those companies looking to benefit from offshoring. The country is ranked as one of the safest and most attractive global services locations in the world.

The country's commitment to the industry is demonstrated by the creation of the Global Services Strategic Council in 2007, which works toward the continued development of global services in Chile. The results of those efforts can be seen in the dramatic growth in the value of global services exports and the increasing number of multinationals with operations in the country.

In addition to the strong government support of the industry, companies that choose Chile benefit from competitive labor costs, a transparent and low-risk business environment, access to a skilled labor force, as well as Chile's extensive network of free trade and double taxation agreements.

About CORFO

The Chilean Economic Development Agency (CORFO) is a government organization, founded in 1939, to foster economic growth in Chile by encouraging investment, innovation, business and cluster development.

CORFO's work involves the provision of incentives, services and comprehensive information regarding business opportunities in various sectors of the Chilean economy. In 2008, the agency awarded US$153 million in grants and around US$657 million in loans, providing services and support to almost 80,000 companies (mainly SMEs).

CORFO's board of directors is comprised of five Ministers of State and its CEO, who is appointed by the President of Chile.

Assistance & Services for Investors

InvestChile can help you to:

• Meet with industry and government leaders both in Chile and abroad.
• Arrange itineraries with relevant contacts and introductions for prospective investors visiting Chile.
• Find the most suitable business locations in Chile.
• Arrange meetings with Lawyers, Accounting Offices, Real State, Telecom and Recruitment.

InvestChile offers a range of financial incentives to help establish your investment project in Chile:

• Pre-Investment Studies: funding for studies to assess the feasibility of your investment project.
• Project Launch: funding to help with start-up expenses.
• Job Training: grants for the training of new employees.
• Fixed Assets and Long-Term Leases: funding for the acquisition of land, buildings, infrastructure, equipment, and for long-term office rentals.
• R&D: grants for R&D and innovation projects.

New incentives for high value technology projects

Companies planning to develop high value technology projects that involve R&D and technology transfer operations can apply for special financial incentives to support the acquisition of technology assets.

These incentives can also cover part of the costs related to training of the workforce required by the projects, including scientists and highly qualified professionals needed for the operation of facilities such as research centers, specialized laboratories, technology development and knowledge centers.

Chilean delegation

The delegation is lead by Mr. Mario Castillo, Head of Invest Chile-CORFO. The other members of the delegation are:

• Mr. Raúl Rivera, Chairman, The Innovation Forum
• Mr. Miguel Pérez, President, ACTI (Chilean Association of IT companies)
• Mr. Ignacio Andrada, Director, Industrial Engineering Program, Andres Bello University
• Mrs. Gordana Stojkovic , ITBS Program Manager, InvestChile - CORFO, Head Office Santiago
• Mr. Parul Lala, Investment Executive, InvestChile - CORFO, Delhi Office