The direct foreign investment in Chile we are talking about is a bit different from how economist and politicians typically use the term. The direct foreign investor in Chile we are talking about comes in the form of retirees, families, and small businesses. They are typically self-financed, using their own savings or pensions, and the returns they are looking for from their investment often simply come in the form of beautiful sunset or other very intangible assets.

Let's take a hypothetical case, but what we believe from our experience at Spencer Global to be a very typical case of a retiree in Chile. We will take our typical retiree / direct foreign investor in Southern Chile. Let's call her Barb. Barb is a U.K. Citizen, retired school teacher, lived in several other countries, and has a modest pension. Barb chooses Chile because her Pension is tax free, and her savings would not stretch far in Europe.

Barb travels to Chile on a tourist visa, picks a small town in the south of Chile she falls in love with, and decides to make the move to Chile. Let's say Barb picks the small town of Frutillar. It really could be one of hundreds of towns in the South, but Frutillar happens to have all the typical services and perks that most people moving to Southern Chile either want or need. So we will use Frutillar for now.

Barb's first direct investment goes in to renting a hotel room. She spends a couple of weeks getting to know the town, and looking for a place to rent. Typically she would spend somewhere around 100,000  pesos a day including food, lodging, transportation, and so on.

Barb decides to buy a car. Say she buys a decent used car, a few years old, and spends around $8,000 US on it.

Barb's next major direct investment in Chile will be a short to long-term house rental, while she decides if she likes living in Chile and searches for a property to buy and build on. Barb came to southern Chile to get in touch with nature and also loves animals, so a house. Let's say Barb spends 400,000 a month on a fairly good size house rental. This would likely be a going average for towns like Puerto Varas or Frutillar, but also most other towns around Southern Chile. Barb signs up for a 1 year  contract, puts 400,000 down in deposit (one month is typical for damage deposit).

Barb immediately decides to furnish her house. Barb is off to visit all the furniture stores and buys the major brands. She goes for combination of locally made stuff and some imported stuff from the big department stores. So, Let's say Barb spends another $7,000 US in getting going with basic furnishings like beds, washer, dryer, TV, and so on.  

Barb's next major investment is her dream property to put her small dream home on. She wants a view, something near town (Barb is getting up there in years after all), but still sufficiently rural feeling to have a bit of nature around. Barb buys a 5,000 square meter parcel for let's say 18 million pesos (about $40,000 US) from an old farmer near the edge of town. With closing cost, real estate agent fees, cost of her lawyer in Chile, and other miscellaneous cost, let's say it in total cost Barb $20 million pesos when all is said and done.

Now Barb owns real estate in Chile. She needs a house built. Barb shops around, gets some recommendations, and settles on a builder. The builder agrees for 30 million pesos (about $55,000 US) to build her a small 3 bedroom 2 bath house / cabin overlooking the lake to her liking. It will take about   7 months to build, and it will be keys in hand when done.

So, in the first year, Barb has easily placed over $100,000 US directly in to the community. Obviously, most direct investment will happen by foreigners in their first year or two in Chile. What is not covered is how Barb spends the next 10-20 years in her new home, paying caretakers, housekeepers, going out to restaurants each week ( long after all the tourist have left for the season), buying vegetables and fruit from the local vendors, and so on. Barb, once established, will live very happily on what is a relatively small pension tax free in Chile; but, that small pension will have a big impact as it circulates around the community in the form of jobs and other investments. Imagine what 10, 20, or 50 foreigners contribute to the economy of a typical small tourist town in Chile?  So, some direct investment is larger than others; but, some foreign direct investment is also more direct than others.