The Peruvian economy has enjoyed two distinct phases of economic development since the turn of the century. Between 2002 and 2013, Peru’s outstanding GDP growth at a rate of 6.1% annually identifies Peru as one of the fasted-growing countries in Latin America. Between 2014 and 2017, GDP growth fell to an average of 3.1%, particularly due to declining commodity prices. Nevertheless, higher commodity prices and rising business confidence supported GDP to grow again in 2018, which is expected to hold for 2019.
Peru’s extensive mining sector, containing base and precious metals, make Peru a global leader in the mining industry. Additionally, the government’s effort to improve the commercial environment make Peru the 3rd best country in Latin America on the ease of doing business ranking. One of the key reasons why Peru is an attractive jurisdiction to invest in is that foreign investors receive the same treatment as local investors, there is a free transfer of capital and there is unrestrictive access to most economic sectors.
Despite its great investment climate, investors interested in doing business in Peru should be aware of their corporate compliance requirements before beginning operations.
Opening s Business in Peru – Legal Structures
Before jumping into corporate compliance, one should know the most common types of legal structures in Peru:
Joint Stock Companies (S.A.)
- Minimum of 2 shareholders
- No minimum capital required by law
- The initial capital contribution should be deposited in a local bank
- A manager and a board of directors are required
Closely Held Corporations (S.A.C.)
- Minimum of two and a maximum of 20 shareholders
- The minimum share capital is S/500 PEN (for financial institutions it is S/1000 PEN)
- Shares cannot be listed on the stock exchange
- A manager and a board of directors are required
Publicly Held Corporations (S.A.A.)
- No maximum of shareholders
- 35% of companies’ capital must belong to 175 or more shareholders
- Must be registered in the Public Registry and listed on the Stock Exchange
- Transfer of shares is free from restrictions of limitations
Limited Liability Companies (S.R.L.)
- Minimum of two and a maximum of 20 partners
- No shares
- All partners have a limited liability
- Incorporation procedure is the same as all other corporations
Statutory Requirements in Peru
All companies in Peru must appoint a company legal representative. More specifically, this person has to be a legal residency of Peru or have the legal right to live and work in Peru (i.e a foreigner with a working visa).
The constitution of a company can be done following 7 steps, as recommended by the National Superintendence of Public Registries (SUNARP):
This is not a compulsory procedure but it is highly recommended to facilitate the registration of the company name. During the name reservation process, the public registry must verify if there are any other companies with similar names.
Preparation of the minutes of incorporation of the company
In this document, the company shareholders manifest their willingness to constitute the legal entity. The constitutive act consists of the incorporation articles and the company bylaws.
Capital must be contributed to your company to complete the incorporation process. There are (2) methods to subscribe this capital:
- Money contribution: the money has to be validated with a document issued by an entity to the national financial system. The minimum amount depends on the type of legal entity being incorporated.
- Non-tangible capital: the second option can be a capital contribution of a non-tangible asset such as real estate.
Preparation of Public Deed
Once the constitutive act has been drafted, it is necessary to take it to a public notary, so that the notary can review and approve it. This document must be signed and stamped by the notary together with a signature of the owner/partners.
Registration of the company
All types of legal structures should be registered as a legal entity by the Superintendencia Nacional de Registros Públicos (SUNARP).
RUC Registration: natural and/or legal persons
A legal entity or natural person can be the owner of a local company and thus must register to obtain a tax identification number, which is called ‘El Registro Único de Contribuyentes‘ (RUC). The RUC contains the identification data of the company and is issued by the Peruvian Tax Superintendence (SUNAT).
Open a Corporate Bank Account
At the bank, you’ll need to present all relevant company documents and fill out an application form, and the bank should be able to open your account within a matter of hours. A minimum of S/500 PEN should be deposited to activate the bank account. After this, you are ready to begin operations.
Need Local Support?
It can be challenging to expand your business to a foreign country without a complete understanding of all statutory requirements in relation to the business incorporation process. For this reason, it is best to partner with a local group to ensure that the process is painless and you remain in good standing with the local authorities.
To learn more about the Peruvian economy, the business opportunities to form a company in Peru, and how you might take advantage of these political shifts, please contact us today.