 | 2007 | 2006 |
Overall Score: | 75 | 76 |
Regional Ranking: | 1st | 1st |
Chile leads Latin America and the Caribbean in creating a favorable business environment for VC/PE investment. Chile’s competitive advantages well position the nation for a vibrant VC/PE industry, should perceptions of limited market size be overcome.
Strengths: Chile offers the region’s strongest laws for fund formation and operation, straightforward tax rates, and fairly wide freedom for institutional investors. The nation earns high marks for disclosure and board review requirements and has notably less corruption than other countries in the region.
Challenges: Chile’s only drop in score from 2006 applied to the tax treatment criterion. The continued double taxation of funds and restriction of incentives by sector and size of firm provided the rationale for this lowered score. Much also remains to be done to strengthen the protection of minority shareholder rights, particularly with respect to non-listed firms. However, it is anticipated that these and other issues will be positively impacted by the March 2007 passage of the MKII, a broad capital market reform package.
| Score | Change |
| Overall score | 74 | ▼ 3 |
| Laws on VC/PE fund formation and operation | 4 | |
| Tax treatment of VC/PE funds & investments | 3 | ▼ 1 |
| Protection of minority shareholder rights | 2 | |
| Restrictions on institutional investors investing in VC/PE | 3 | |
| Protection of intellectual property rights | 3 | |
| Bankruptcy procedures/creditors' rights/partner liability | 3 | |
| Capital markets development and feasibility of exits | 3 | |
| Registration/reserve requirements on inward investments | 3 | |
| Corporate governance requirements | 3 | |
| Strength of the judicial system | 3 | |
| Perceived corruption | 3 | |
| Quality of local accounting/use of international standards | 3 | |
Indicators are scored from 0-4 where 4=best score.
Overall score ranges from 0-100 where 100=best score. |
