Overview of Peru's Investment Environment
Peru is Latin America's fourth-largest economy, endowed with abundant natural resources and a stable macroeconomic environment. As a member of the Pacific Alliance and a signatory to several free trade agreements, Peru offers a highly attractive investment environment for foreign investors. Many foreign companies have successfully established operations in Peru, capitalizing on its strategic location and market advantages.
Key Benefits
- Stable economic growth: 20 consecutive years of economic growth, low inflation, and stable exchange rates
- Rich in mineral resources: China is a major mineral producer in the world, with copper, gold and silver reserves ranking among the highest in the world.
- Friendly investment environment: Foreign investors enjoy national treatment and profits can be remitted freely
- Extensive trade agreements: Free trade agreements with more than 50 countries, covering major markets around the world
- Strategic location: an important port on the Pacific coast, connecting Asia and South America markets
China-Peru economic and trade relations
China is Peru's largest trading partner and second-largest source of investment. Since the China-Peru Free Trade Agreement came into effect in 2010, bilateral trade has grown significantly. Chinese companies are actively investing in Peru's mining, energy, and infrastructure sectors, making Peru a key destination for Chinese investment in Latin America.
Comparison of Company Types
Peru offers a variety of corporate forms for foreign investors. The most common options for foreign investors are SAC (Closed Stock Corporation), SRL (Limited Liability Company) and Branch:
| Compare Projects | Closed Stock Corporation (SAC) | Limited Liability Company (SRL) | Branch |
|---|---|---|---|
| Number of shareholders | 2-20 people | 2-20 people | Not applicable (Headquarters) |
| Registered capital requirements | 25% payment upon registration | No minimum requirement | Assigned by the head office |
| Share form | Issuance of shares | No shares issued | Not applicable |
| Management structure | Board Governance | Manager Management | Branch Manager |
| Work visa | Can be used as collateral | Can be used as collateral | Can be used as collateral |
| Applicable situations | Most popular with foreign investors | Small Business | Temporary Project |
Recommendations
For Chinese companies interested in investing in Peru, we recommend the SAC (Closed Stock Corporation) format. The SAC is the most common corporate form chosen by foreign investors. It can serve as a sponsoring entity for Peruvian work visa applications and offers flexible management, making it suitable for most business activities.
Registration requirements
Basic Requirements
- Shareholder identity: natural persons or legal persons are both accepted. Foreign shareholders need to prepare additional documents.
- Legal Representative: a legal representative must be appointed who resides in Peru
- Registered address: must have a physical office address in Peru
- Registered capital: SAC needs to deposit at least 25% of its registered capital in a bank
- Company name: name search and reservation are required in the public registry
Special requirements for foreign investors
Setting up a Peruvian company with foreign shareholders requires additional steps, which may extend the registration time to up to 2 months:
- Apply for contract signing permit or power of attorney at the Immigration Bureau
- All foreign documents must be notarized and legalized by the consulate
- The document must be translated into Spanish and certified by an official Peruvian translator
- The parent company must be recognized in the Peruvian Commercial Registry (if setting up a branch)
Note: Chinese documents need to go through the complete process of notarization, legalization by the Ministry of Foreign Affairs and certification by the Peruvian Consulate.
Registration Process
Apply for contract signing permission or power of attorney (3-5 days)
Get permission from the immigration office or authorize a local agent
Drafting of Articles of Association (2 days)
Articles of incorporation prepared and signed by a Peruvian lawyer
Bank account opening and capital deposit (1-2 days)
Open a bank account in Peru in the name of the company and deposit the registered capital
Director accepts appointment (1 day)
Affidavit of acceptance of appointment signed by the company director
Registration in the Public Registry (5-7 days)
Complete the company registration in the Public Registry (Registros Públicos)
Tax registration (1-2 days)
Register with the Tax Office (SUNAT) to obtain an RUC tax number
Municipal business license (5-10 days)
Obtain a business license from the municipal government (Licencia de Funcionamiento)
Time and cost
Registration Time
- Local shareholders: 15-20 working days
- Foreign shareholders: 30-60 working days (including document preparation and certification)
- Branch: 45-60 working days
Cost Structure
Peruvian company registration fees mainly include:
- Notarization fee: approximately $800-1,500
- Registration fee: approximately US$300-600
- Municipal license: approximately $200-1,000, depending on the region and scope of business
- Document certification and translation: approximately US$500-1,000
- Attorney fees: determined based on the scope and complexity of the services
Capital requirements
Upon registration, a SAC must pay at least 25% of its registered capital and deposit it in a bank within the Peruvian national financial system. While the law does not stipulate a minimum registered capital, it is recommended to set a reasonable amount based on the scale of the business to meet operational needs and visa application requirements.
Post-registration matters
After the company is successfully registered, the following important matters need to be completed:
1. Accounting book registration
- Purchase and register statutory accounting books
- Legalization of accounting books at the tax office
- Establishing an accounting system that complies with Peruvian accounting standards
- Hire a local accountant to handle daily accounting
2. Registration with the labor department
- Register as an employer with the Ministry of Labor
- Registering employees for social insurance
- Developing employment contracts that comply with Peruvian labor law
- Understand relevant regulations on employee rights protection
3. Special Permit Application
- Apply for special business license according to industry
- Environmental Impact Assessment (Specific Industries)
- Health permit (food, medicine, etc.)
- Import and export license (trading enterprises)
3. Bank account management
- Improve company bank account functions
- Apply for a business credit card and checkbook
- Open a foreign exchange account (if necessary)
- Establishing online banking services
Taxation Points
Peru offers tax incentives to specific industries and regions:
- Corporate income tax: 29.5% (applicable to resident companies on their global income)
- Value Added Tax (IGV): 18% (including 2% municipal promotion tax)
- Dividend tax: 5% (distributions to external parties)
- Financial Transaction Tax (ITF): 0.005%
- Monthly prepayment of income tax: 1.5% of business income or the actual tax rate of the previous year
Tax incentives
Peru offers tax incentives to specific industries and regions:
- Amazon region: corporate income tax 10% or 5% (depending on the region)
- Agricultural enterprises: corporate income tax 15%
- Mining investment: tax stabilization contract, locked-in tax rate
- Export enterprises: VAT refund, export exemption from VAT
Key points of tax compliance
Peru's tax system is strict, requiring businesses to file monthly tax returns. Non-resident branches are taxed only on Peruvian-source income. It's recommended to hire a professional accountant to ensure compliance. Lawshi Lawyers can assist you in establishing a comprehensive tax management system.