On 3 August 2023, PwC Chile hosted a panel discussion on “Foreign Investment Protection: Analysing the tax challenges linked to investment treaties”. Experts from PwC Chile, together with Alejandro García of Stewarts’ International Arbitration team, commented on the benefits and challenges of these treaties, the ways in which investors can obtain protection under these agreements and their tax consequences.
Alejandro discussed what investment treaties are and how they came to be. He explained that many states enter into bilateral or multilateral treaties for the protection of foreign investment. These treaties were created in order to attract foreign investment and provide a stable regulatory framework for investors. The aim of these treaties is to protect against political risk, in relation to the actions and omissions of the state (such as expropriation and lack of protection from the state against third-party actions).
PwC’s Astrid Schudeck addressed this issue from the perspective of tax effects, noting some of the treaties signed by Chile, their scope, benefits and characteristics, as well as double taxation agreements. She highlighted the importance of analysing Chile’s investment treaties in particular, as they have gained a certain notoriety in relation to protecting investments of international investors. Treaties must also be considered in tandem with the tax consequences that the use of these agreements may have.
Chilean publication Reporte Minero covered the PwC Chile panel discussion in a recent article (in Spanish).
Our investment treaty arbitration practice undertakes high value and complex disputes between investors and States, as well as related litigation before the English courts, such as enforcement actions and challenges. Our team has deep experience and understanding of the conduct of investment treaty arbitration proceedings including under the ICSID, UNCITRAL, PCA and SCC Rules. We have represented and advised both investors and States in disputes around the world.
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