New Direct Foreign Investment Law

On January 1, 2016 Law No. 20,848 which sets forth a new legal framework for foreign direct investment in Chile (the "New Law") was enacted. The New Law also regulates the effects of contracts entered into during the term of Decree Law No. 600 of 1974 ("DL 600"), in order to guarantee the full validity of the rights and duties acquired by foreign investors under said legal regime. Foreign investors which executed foreign investment agreements with the Republic of Chile under DL 600 before January 1, 2016, will preserve all rights and obligations thereunder.

The New Law introduces a series of modifications:

First, it includes a definition of direct foreign investment, which involves any transfer of foreign capital or assets into Chile, owned by a foreign investor or controlled by it, in an amount equal to or higher than USD5,000,000, through the transfer of freely convertible foreign currency, the contribution of physical assets, the reinvestment of earnings, the