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Seven months after its start-up, the service’s first customer, BNP Paribas Securities Services, says it has allowed them to expand their foreign investment opportunities to Chile.
During the second quarter of 2021, Depósito Central de Valores (DCV), through its subsidiary, DCV Asesorías y Servicios S.A., introduced its new Tax Responsible Agent service to the market. Its main objective is to manage investors (assigning them a taxpayer ID number), ensure compliance with transactions, collect invoices, calculate and pay taxes at SII (IRS), and file annual sworn statements. Similarly, it is in charge of coordinating corporate actions tax management activities such as dividend payments, maturities, and IPOs.
BNP Paribas Securities Services became DCV’s first direct participant with this goal in mind. In this interview, Dafne Yianatos, Senior FIC Banker and BNP Paribas Securities Services Chile Representative, addresses the impact of this new service during these first months of operation.
What is your opinion on the service’s first months of operation?
The tax agent service plays a crucial role in foreign investment in Chile, which keeps US$30 billion in investments in total. It took us some time to start the project, but we are pleased to count on DCV as our strategic partner.
What is the perception of clients in this sense?
As the fifth-largest global assets custodian, BNP Paribas understands the significance and appetite to access the Chilean market since it is a strategic country in its portfolio diversification in emerging markets. In this sense, the reception has been excellent. Having DCV as a tax agent allowed us to expand our possibilities of foreign investment in Chile with an innovative business model compared to the competition. We have an agile and straightforward model because we have a single access point for three markets in the region under one operational team working with one contract.
What are the main benefits that stand out?
The strong commitment, professionalism, and support provided by the DCV team during the start-up and transition processes. We also appreciate the improvements to the DCV platform that have provided a higher automation level and a greater expeditiousness in tax processes, which are vital for foreign investors. At BNP Paribas, we are continuously working to streamline our operations. Considering this, we believe it essential to continue making progress on automating processes to make them more efficient with the Tax Agent and with Depósito Central de Valores to reduce risks and remove operational double work.
Are you thinking about any improvement plans considering these months of learning?
BNP Paribas has a robust strategy in Latin America; we recently opened the Funds Administration service in Mexico. We have a bank in Brazil and offer local custody services in Brazil, Colombia, Peru, and Chile for foreign investment. We are continuously challenging the status quo, and we are always looking to implement improvements and automate our processes. Our purpose is also to have more developments and implement best practices in the market to benefit foreign investors.
How do you see the growth of this service looking forward?
We have a robust global business plan, promoting Chile as part of the 27 markets of our proprietary network. In all the conversations with foreign investors in which we have been involved, Chile is still in the spotlight, especially under the framework of the recent regulation of the Central Bank intended to internationalize the Chilean Peso. And here is where taxpayer agents can play a vital role.
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