Economic public order

EXECUTIVE MAP

What protects you and what does not

The economic guarantees of the 1980 Constitution — whose validity was confirmed after the rejection of the 2022 and 2023 reform proposals — operate as the baseline protection framework for every investment in Chile.

Guarantee What it means for your company Limit or real risk

Freedom of economic You can operate in any lawful business without asking Regulated businesses (banking, insurance, activity permission for being foreign. Freedom is the rule; regAFPs, media, fishing, cabotage) have specific Art. 19 N° 21 ulation is the narrow exception. sectoral requirements. See Business legal structures.

No State discrimination The State cannot treat you differently from a local The test is arbitrariness, not mere inequality; Art. 19 N° 22 competitor without legal grounds. If a competitor lawful, proportionate differences are valid. receives an arbitrary regulatory advantage, that difference can be challenged.

Intellectual and industrial Trademarks, patents and intangible assets enjoy Effective protection depends on prior registraproperty autonomous constitutional protection, in addition to tion; unregistered rights are harder to defend. Art. 19 N° 25 the Industrial Property Law.

R E G U L ATO R Y E X P R O P R I AT I O N

The real risk: regulatory, not formal, expropriation

Direct expropriation — decree, seizure of assets, compensation — is the risk investors fear most and the one that occurs least in Chile. The real operational risk is regulatory or indirect expropriation: a regulatory change that strips your concession, license or business model of value without formally transferring the property.

The constitutional guarantee is not enough Chile’s constitutional guarantee does not automatically cover indirect expropriation. The protection of Article 19 No. 24 operates against the formal deprivation of property, not against rule changes that erode the value of the business.

Treaties add the missing layer A bilateral investment treaty (BIT) or the investment chapter of an FTA can provide additional coverage through fair and equitable treatment standards. See Foreign investment.

The entry jurisdiction defines access The choice of the jurisdiction from which the investment is structured can be decisive for accessing that arbitral protection. An intermediate holding company in a country with a BIT in force with Chile makes the difference.

AVENUESOFRECOURSE

How to seek redress: the three avenues

Faced with a State act affecting the investment, Chilean law offers three paths, with very different deadlines and scope.

Avenue When to use it Key deadline Practical limitation

Constitutional protection An unlawful or arbitrary act 30 calendar days High inadmissibility rate if another action threatening an economic constifrom the act or from suitable avenue exists; it does not Art. 20, Constitution tutional right; an emergency when it became resolve disputes on the merits. response. known.

Ordinary courts Expropriation, damages, breach Depends on the type Lengthy procedural timelines; it is of contract by the State. of action. advisable to agree to arbitration in contracts with the State where the law allows.

INSTITUTIONS

Institutions that reduce sovereign risk

Three independent bodies limit arbitrary State behavior and provide operational certainty.

Judiciary Courts of Appeals and a Supreme Court with guarantees of independence. The Constitutional Court can declare a rule inapplicable in a specific case. The system is predictable though not always fast; define dispute resolution mechanisms in your contracts and consider arbitration.

Office of the Comptroller General It reviews the legality of administrative acts before they take effect (toma de razón). It reduces executive arbitrariness and gives certainty about the validity of the acts authorizing your operation.

Autonomous Central Bank It is constitutionally barred from financing public spending by issuing money. It anchors monetary stability and access to the formal foreign exchange market. See Foreign investment for the foreign exchange access rules.

BUSINESS READING

The right question is not “Can the State expropriate me?” but “What do I do if the rules

of my sector change?”

The constitutional protection action allows 30 days — a period that runs out before the board even meets — and the ordinary courts are not fast. Real protection comes from three decisions taken before investing: structuring from a jurisdiction with a BIT in force with Chile, documenting asset value from day one, and negotiating stabilization clauses in contracts with the State where possible. The constitutional guarantee is the floor, not the ceiling, of your protection.

1 Structure from a jurisdiction with a BIT in force with Chile.

2 Document asset value from day one.

3 Negotiate stabilization clauses in contracts with the State where possible.