CORFO is the Chilean Economic Development Agency founded in 1939 to promote Chile's economic development through investment, innovation, and competitiveness. CORFO oversees various programs aimed at generating economic growth, including promoting inward investment and supporting domestic companies. It provides financial incentives such as grants and tax incentives to attract technology-intensive foreign investment and support innovation projects.

1. Chilean Economic Development Agency(CORFO) Promoting Innovation in the Chilean Economy

2. Lines of Work Investment Innovation Quality & Productivity Finance 1 2 3 4 CORFO, the Chilean Economic Development Agency, founded in 1939, is a government organization that deals with the economic development of the country, through investment attraction and the promotion of competitiveness of domestic companies. Staff: 495 15 regional offices along Chile Representation in the US, Canada, Spain, Italy, Germany, Sweden and New Zealand. Endowment: US$ 4,1billion Annual Operation Budget (2008): US$ 1,2 billion

3. CORFO’s pioneering spirit has played a significant roll in expanding the country’s economic development by promoting investment, innovation, business and cluster development, coupled with a focus on quality and productivity. CORFO oversees a variety of programs aimed at generating the economic development of Chile, through the promotion of inward investment and the advocacy of competitiveness for domestic companies.

4. Contents Chile at a Glance Chile & New Zealand Why Invest in Chile? Investment Opportunities Dairy Industry in Chile Incentives for Investors

5. Chile at a Glance

6. “Increased productivity also involves innovation and the incorporation of new products and technology into our exports. I want a country that exports not only copper but software for the mining industry; that exports not only fruit but food packaging and conservation techniques; not only salmon but vaccines to prevent fish diseases. The public sector will increase its spending on research and development by 50%. Our goal is for our country to spend more than 1% of GDP on research and development by its Bicentennial in 2010.” President Michelle Bachelet

8. Why Invest in Chile?

9. Why Invest in Chile? Latin America’s most competitive, peaceful, and stable economy A transparent and low-risk business climate World-class telecommunications infrastructure Outstanding access to Latin American markets Extensive network of Free Trade Agreements with Asia, Latin America, the EU, and the US Competitive human resources An ‘e-ready’ society Exceptional quality of life Competitive business costs Government support

11. Ranked 1st in the region by WEF in World Competitiveness Index 2006

12. Ranked as Best Place to do Business in the region by EIU in 2006, 4th among emerging countries and 19th in global ranking

13. Lowest country risk in the region (Moody´s, Fitch and S&P)

14. Puerto Varas the best quality of life in Chile

15. Strong, transparent institutions and regulatory framework are an example for the region

16. Ranked best in the region by Transparency International in its Corruption Index, tied with U.S. in 20th place in global rankings

17. Ranked 1st in the region by World Bank in terms of “Ease of Doing Business”, and 28th worldwide

18. Positioned as a gateway to the world

19. Free trade agreements covering over 90% of the world GDP

20. Low tax burden and extensive network of double taxation treaties“

21. Main International Indexes The World Economic Forum ranks Chile as Latin America’s most competitive economy. Chile continues to enjoy a favourable business environment position within a selective group of 125 economies worldwide.

22. Chile is a Gateway to the World Web of trade agreements provides access to more than 90% of OECD economies Web of double taxation agreements covers most of OECD economies Spain Norway Rusia Portugal Denmark Poland UK Sweden Croatia France Finland Hungary Netherlands Czech Republic Switzerland Belgi|um Ireland Italy Iceland Switzerland Lichtenstein Norway Canada USA Russia South Korea Canada USA European Union South Korea Thailand Japan Mexico China Mexico El Salvador Costa Rica Guatemala Nicaragua Honduras Brunei India Malaysia China Cuba South Africa Panama Uruguay Paraguay Angentina Brazil Singapore Argentina Brazil Paraguay Venezuela Colombia Ecuador Peru Australia New Zeland New Zealand Australia In negotation In negotation Source: Direcon www.direcon.cl

23. A “Foreign Investor-Friendly” Environment Strong regulatory framework and dominance of the rule of law New Intellectual Property Law: The law includes the possibility of patenting microorganisms and genes Clinical Trials subject to approval by the National Health Authority Biosafety and bio-prospecting regulations Currently being developed IP in Chile managed by the Intellectual Property Department Industrial Property Law incorporates commitments under the WTO’s TRIPs agreement: Regulates industrial rights related to innovations Protection of trade secrets submitted to health agencies Foreigners protected by: Universal Copyright Convention Berne Convention Rome Convention Inter-American Copyright Convention International Commercial Arbitration Law (UNCINTRAL)

24. Highly Skilled Workforce 608,043 (7% annual growth) Source: Ministry of Education (www.mineduc.cl), 2006

25. Offshoring The 2006 A.T. Kerney survey placed Chile 7th in global country ranking attracting investments. Chile's strength lies in the costs of doing business, particularly in terms of financial and tax expenses.

27. Best academic center for professionals within the region

28. Most attractive place for offshoring professionals to live and work

29. A highly cosmopolitan, vibrant offshoring hub

30. A strong web of partnerships between global and Chilean firms

31. To generate 100,000 offshoring jobs within 5 years

34. Aquaculture Cluster

35. Mining Cluster

37. Fruticulture Cluster

38. Financial Services Cluster

39. Swine-Poultry ClusterPérez, Carlota (Sussex), 2007

40. Cluster Development: Towards value creation Source: Based on Carlota Pérez presentation at CORFO in 2005

41. Technology Investment Attraction Program : “Priority on Value Creation” This Investment Attraction Program offers a range of incentives to help companies successfully establish in Chile. Value Low High NIVEL I: Basic using capacities NIVEL II: Capacity to manage and use existing NIVEL IV: Design and Development capacity NIVEL III: Development capacity to adapt and integrate NIVEL V: R&D based companies of acquired technology High levels of applied knowledge in engineering Technology development and transfer to the country technologies for specific purposes solutions incrementally in products and processes

43. Traceability

44. Seed development

45. Functional foods

46. Bioenergy

47. Process automation

48. Grassland management and fertilization

50. Blueberries (1st)

51. Avocados (2nd)

52. Prunes (2nd)

54. The production of poultry has been the most dynamic in the last 5 years. The poultry industry has seen a 71% increase in growth.

55. Tariff and quota free beef exports to the US began January 1st, 2007. The EU has enjoyed a tariff of 0% since 2003 with an annual amount that has seen an increase of 100 tons per year (over the original amount of 1,000 tons). Chile’s favorable sanitary conditions are a great advantage for the raising of animals and the exportation of meat as Chile is considered free of health risks, as the Foot & Mouth Disease and BSE or “mad cow disease”. Beef production is an activity with potential for greater development and productivity, both in terms of primary production (cattle-raising and feeding) and in the industrial phase (slaughtering and meat processing). The production of meat, exceeds 1,200 tons, of which 46% corresponds to poultry, 34% to pork, and 18% to beef.

57. Cheese exports to the US grew 400% in 2004 as a result of the FTA.

59. Renewable Energy Industry CORFO offers instruments to finance studies: 3 Contests to present NCRE projects (2005-2007) More than 100 projects have been approved If implemented, there is a potential to produce over 800 MW. Estimated investment of over US$ 1.2 million Subsidies estimated at US$ 4.500.000 Economic study on the impact of “Ley Corta I y II”: Improves the internal rate of retunr by an average of 2% Great opportunities for small hidraulic, biogas and eolic projects.

60. Forestry Exports (1994-2004) 3.500 X million dollars 1.500 1994 2004 Forestry Industry The forestry sector accounts for 3.8% of the country’s GDP. Chile is ranked 17th in the world’s forestry exports. Cellulose (or wood pulp) is the main forestry product and Chile is the world’s 5th-largest exporter and the 7th worldwide producer. Exports of products with greater added value have increased over 20% per year during the last five years.

62. The value of Chile’s salmon exports has grown 1,000% in the last fifteen years.

64. Investment Opportunities: Value-creation Losses related to diseases: Endemic pathogens. Over US$ 600 millions last per year Development of new vaccines. Diets: Elaboration of new diets based on vegetable proteins v/s fish meal and oils. New functional foods, pigments and vitamins. Genetics: Improving fish genetics to increase smolt production, disease management and controls, and conversion rates. Environment: Management and technology development to avoid eutrification, sediment contamination and industrial wastes. Environmental analytics to develop technology and provide services for monitoring and chemical analysis, on fish as well as the environment. Improvement of water supplies (natural and potable). Logistics: Transportation (wellboats), infrastructure, connectivity and security problems.

65. CORFO’s Financial Incentives

67. This incentive applies to all regions in Chile except for metropolitan Santiago.

68. To be eligible, your project must fulfill the following criteria:

69. New Investment Projects must involve a minimum investment of US $400,000. Expansion Investment Projects must involve a minimum investment of US $250,000.

70. Financial support: CORFO offers matching funds for studies required for evaluating the feasibility of your investment project.

72. D.F.L. 15

73. D.L. 889

74. Arica Plan

75. Tocopilla Law

76. Austral Plan

77. Navarino and Tierra del Fuego Laws

78. Special Economic Zones:

79. Arica an Parinacota

80. Valparaiso

81. Arauco, Lota and Coronel

83. The Program encourages foreign investment by offering a range of services to help companies set up successful ventures in Chile.

85. Application Process

86. Pre-investment Phase All incentives are rendered in the form of refunds

87. Investment Phase

89. It enables Chilean companies to innovate, both in products and processes; to use top quality technological equipment and gather the world’s most advanced information through research abroad and the hiring of international experts.

91. Contact Us Head Office

92. Contact Us Investment Representatives Abroad

93. THANK YOU! For further information please visit our website at: http://www.investchile.com