CHILE Law and Practice Contributed by: Ignacio Errazquin, Adolfo Romero and Florencia Anguita, CMS Carey & Allende
5.3 Restrictions on Foreign Investments Chile is a welcoming venue for foreign investment and the same rules for doing business apply both to domestic and foreign companies. Foreign investment is not subject to approval of any kind, but the Chil- ean Central Bank ( Banco Central ) must be informed of investments, which are normally reported by local banks receiving funds from abroad. For further infor- mation, see in 4.15 Privately Held Companies . 5.4 National Security Review/Export Control There are no restrictions for foreign investors, regard- less of their origin, for acquiring entities in Chile and holding a stake in Chilean companies. Generally, there are no controls for legal imports and exports, except for special cases where the import of products might pose sanitary risks. 5.5 Antitrust Regulations Concentration transactions where the parties surpass specific sales thresholds are subject to mandatory merger control and clearance from the FNE must be obtained before perfecting the transaction. A con- centration transaction occurs when two or more eco- nomic entities that have been previously independent from each other lose their independence as a result of: • two or more economic entities combining their activities or merging to form a single economic entity (merger); • one or more economic entities directly or indirectly acquiring rights that allow such entities ‒ individu- ally or jointly – to decisively influence the adminis- tration of another economic entity (acquisition of rights); • two or more economic entities associating in any form to create a new permanent independent entity (joint venture); or • one or more economic entities acquiring control over the assets of another economic entity in any capacity (acquisition of assets). In the case of a concentration operation, mandatory merger control is triggered when: • the sum of the sales generated in Chile during the previous year by the economic entities that seek
If the turnover of the acquirer and its business group (on one hand) and of the target company (on the other) exceed certain thresholds, the transaction must be notified to the FNE for merger control clearance. 5. Overview of Regulatory Requirements 5.1 Regulations Applicable to Energy and Infrastructure Companies Although there are no requirements for the incorpora- tion of a company, there are fact- and sector-specific regulations for the company’s operation in the ener- gy and infrastructure industry. First, to develop and operate energy and infrastructure projects (and save for a few exceptions), projects must undergo a regu- lated environmental assessment process before the Environmental Assessment Service ( Servicio de Eval- uación Ambiental , or SEA), which can take two-and- a-half years on average. The process takes longer for more complex projects. As for sector-specific regulations, energy projects in general require concessions for the installation and operation of generation, transmission and distribu- tion facilities, which are requested before the SEC and granted by the Ministry of Energy ( Ministerio de Energía ). The obtaining of electrical concessions can take between one and two years, depending on the complexity of the project. Also, energy facilities’ operations are subject to technical regulations that are permanently supervised by the SEC, and the over- all operation of the national grid and dispatching of energy is organised and monitored by the CEN. Infrastructure related to public works (eg, roads, pub- lic services, airports) is also subject to concessions that are granted by the Ministry of Public Works ( Min- isterio de Obras Públicas , or MOP) through a public tender process. It usually takes between ten and 18 months following the launch for the concession to be awarded. 5.2 Primary Securities Market Regulators Where listed companies are involved, the primary securities market regulator for M&A transactions is the CMF.
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