Chile

Sam Jorgens

Overall score: 78.5

Overall ranking: 7th

Chile Quick Facts/United States

Population: 17.6 billion/316.4 million

GDP: $334.8 billion/16.8 trillion

GDP Growth %: 4.2% growth/1.9% growth

GDP Per Capita: 19,067/53,101

Unemployment: 5.9%/7.5%

Inflation: 1.8%/1.5%

Foreign Direct Investment: $20.3 billion/187.5 billion

Legal System

Chile's legal system is one of the least corrupt in South America. Chile has an independent and competent judiciary and will keep that going. The courts in Chile are generally free from political interference. Expropriation is very rare and property rights are strongly respected.

Competitive Markets

Chile's average tariff rate is 4% and the tariffs have been decreased by the Pacific Alliance. Chile is very open to foreign investment. Their financial system is one of the most advanced in the region. Credit is issued on market terms, while domestic and foreign markets are treated the same.

Limits on Government Regulations

Chile's regulatory system helps business formation and sustains them. Starting up a business in Chile takes an average of six days and costs less than one percent of the average annual income. There are plenty of unions for the labor workers and plenty of wage settlements. They have lots of monetary freedom as well in Chile.

An Efficient Capital Market

Chile has an efficient capital market. Their regulatory system and monetary, business, and labor freedom fosters this efficiency.

Monetary Stability

The monetary freedom for Chile is 85.6% while the fiscal freedom is 76.5%. The tax rates are 40% and 20% for individual income and corporate taxes, respectively. There is a lot of government spending but little corruption, so the spending is probably going towards something that will benefit Chile.

Low Tax Rates

As stated above, the tax rate remains at 40% for individual income tax. The top corporate tax rate is 20%. They also have property taxes and value-added taxes. For domestic income, the total tax burden is about 18.8%.

Free Trade

Chile has very few trade restrictions and trades a lot, which is very beneficial for the country. Their tariff rate is about 4% and their tariffs have been reduced because of the Pacific Alliance. This free trade is why Chile is so profitable.
Chilean spending boost will help economy grow near 3.6% in 2015 - Arenas
This video, in essence, explains how Chile's economy is growing and why.

Extra Credit

Chile is the world's largest producer of copper which is primarily what their economy depends on. They also have a very large wine industry. The United States, China, Brazil, Argentina, and South Korea are all major trading partners of Chile.