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#Written by David Tam, 1996.           #
#davidkftam@netscape.net Copyright 1999#
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David Tam
Wednesday, November 20, 1996.

                             Business Press Review
                             =====================

Church, Elizabeth. "How to conduct business in Chile". The Globe and Mail.
Friday, November 15, 1996. B11.                        ------------------

    This article looks at expanding Canadian business operations into Chile.
Canada and Chile announced a tentative free-trade deal last week.  Hopefully,
this bilateral agreement will encourage Canadian businesses to look at the
opportunities that are available in the South American country.  Last year,
two-way trade with that country totalled $665-million.  Several companies have
taken the initiative, such as Falconbridge Ltd, which has already started
mining operations.  From their experience, they have some pretty valuable
business advice.

    Despite the fact that Chile is located in South America, it is not a
developing country; it's an already-developed country.  Before entering the
Chilian market, take time to understand the culture, market, customs, and
traditions.  Chile's business environment is very competitive.  Companies from
the United States, Europe, and Asia have already established businesses in the
country, not to mention local competition.  The society is very structured and
hierarchal.  Susan Nation, a consultant with Toronto-based Bariston Inc says,
"You really have to watch what you say and to who.  It helps if you have
someone to introduce you around".  Personal contact is also very important in
business.  Canadian companies can not expect to do business over the phone or
via fax.  To close a deal, you must be there. Learning to speak Spanish is
advantageous because will give more respect in business and social
relationships.  Many business deals are made in social situations, and
friendships can open more doors of opportunity.  Compared to Canada, decisions
are not made as quickly.  Compared to many South American countries, businesses
operate fairly efficiently, and ethically.  As far as bureaucratic red tape
goes, the government has cut a tremendous amount of it out.  Finally,
telecommunications networks are fairly sophisticated, and customers have a
choice of several telephone providers.

    The one negative aspect of this tentative agreement is that it will not
eliminate Chile's past capital investment policy.  This policy requires foreign
investors to deposit 30 % of the capital they bring into the country with the
central bank.  These funds must remain for in the account for one year, without
interest paid either.

    From a small business perspective, this potential free-trade deal presents
opportunities for business growth and expansion.  As we have discussed in
lectures, business must get to know the business, social and cultural
environment of the markets they wish to enter.  However, the capital investment
requirements may present a barrier to some small businesses.  To medium-sized,
and large-sized businesses who are looking for long-term, stable investments,
Chile provides many opportunities.