Doing Business in Peru

🇵🇪 Legal System in Peru

Peru is a civil law country with a democratic unitary government. Moreover, it is composed of 24 decentralized regions, Lima, and Callao.

Each region has its own budget, regulations, and Governor. Additionally, the Governor and Regional Council, elected by residents, form the executive body.

“Local” laws apply only within regional jurisdictions. In contrast, patents, copyrights, foreign relations, and national interests remain under central government authority.

🌐 Foreign Investment

The Peruvian government actively promotes foreign investment. Furthermore, legislation guarantees equal treatment for national and foreign capital.

As a result, foreign capital may enter all economic sectors without prior authorization. However, a few restricted areas remain off-limits.

🏢 Entity Choice

Foreign companies must choose a legal structure to operate in Peru. The most common forms are:

• Sociedad Anónima (S.A.), including Sociedad Anónima Cerrada (S.A.C.) – equivalent to a Corporation.

• Sociedad Comercial de Responsabilidad Limitada (S.C.R.L.) – equivalent to a Limited Liability Company.

Each entity type has its own framework. Therefore, the choice depends on legal and business considerations.

Alternatively, companies may operate through a branch office. Unlike subsidiaries, branches are extensions of the foreign company itself. Moreover, foreign nationals may serve as Directors or Managers.

🧾 Obtaining a R.U.C.

To operate in Peru, companies must obtain a Registro Único del Contribuyente (R.U.C.) from SUNAT. Additionally, the R.U.C. is required to conduct business, issue invoices, and open bank accounts.

💰 Taxes

Companies in Peru pay several taxes:

• Income tax

• Capital gains tax

• Taxes on dividends, interest, and passive income

• Payroll taxes

The Goods and Services Tax is called I.G.V. (Impuesto General a las Ventas). It applies incrementally at each stage of production or sale. Similarly, it functions like the global VAT system. Finally, the I.G.V. rate is 18%.

👥 Labor

Peru recognizes three main employment contracts:

• Indefinite-term contracts

• Fixed-term contracts

• Part-time contracts

Additionally, companies may hire independent contractors for specific tasks.

Employees under indefinite contracts face a trial period of up to three months. However, in some cases, this period may extend to six months.