Peru has one of the fastest growing economies in Latin America. Over the past two decades, the country has experienced economic growth thanks to the process of modernization and development. This includes the establishment of a reliable legal framework that supports the stability of private sector activities and investment.
Despite having experienced slower economic growth and investment in the last two years, Peru remains one of the most stable and promising economies in the region. The country is currently the sixth largest economy in Latin America, and the seventh among the top 20 border markets ahead of economies such as Colombia, Russia, Mexico and South Africa.
Doing Business in Peru – Peru’s Advantage in the Mining Industry
Historically, mining has always been one of the strongest sectors for Peru’s economy. The country currently produces copper, gold, silver, lead, tin, molybdenum, iron, cadmium, mercury, selenium and indium among others. The efficient mining practices in the country have enabled Peru to become one of the largest mining producers in both the region and the world.
The abundance of natural resources that Peru possesses, coupled with the ease of entry and low start-up costs for foreign entities make Peru an attractive destination for foreign investment. Many foreign companies have taken advantage of this. In addition to company profits, mining provides benefits to the local community through employment, which in turn positively impacts on the economy.
The following statistics highlight the strength and success of the mining industry in Peru:
- 3rd largest producer of copper, silver, tin and zinc in the world
- 7th largest producer of gold in the world
- Mining accounts for 12% of GDP and 57% of exports
- Las Bambas (a Peruvian copper mine) produced 330 227 tonnes of copper during 2016
New Registration – Forming a Company in Peru
Ease of doing business in Peru is one of the main factors foreigners take into consideration when choosing this destination for either direct or indirect investment. This includes market-entry, company formation and company incorporation. There are no restrictions for foreign shareholders, foreign investment, foreign exchange or the remittance of profits. Legal Stability Agreements are available to investors who meet the minimum legal amounts. In addition, the company incorporation process in Peru is relatively simple and straight-forward. The most frequent company structures are the corporation and the limited liability company; both protect the shareholders up to a certain extent. It takes up to 15 business days to complete the company formation process should the founding partners be in Peru at the time of incorporation. However, if they are unable to be in the country, registered powers of attorney are required. This can take up to 15 additional business days.
Doing Business – International Trade in Peru
Another factor that attracts foreigners to do business in Peru is the extent of the countries international trade which is highlighted in the country’s multiple free trade agreements and partnerships that encourage international investment. Peru has:
- 27 bilateral investment treaties with countries all over the world, including China and the UK
- Investment chapters in 13 free-trade agreements, including the European Free Trade Association and the US
- 8 double tax treaties, which help avoid double taxation for residents of the contracting states
Additionally, Peru is involved in the Trans-Pacific Partnership (along with Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Singapore, United States and Vietnam) and is a member of the Pacific Alliance (along with Mexico, Chile and Colombia).
Before engaging in international trade, one should make contact with an international trade lawyer who can help one to navigate through the Peruvian laws and regulations relating to the importation and exportation of products.
Peru Visa Requirements
Despite having quite relaxed regulations in terms if foreign investment in Peru, expats should note that work visas are required to relocate to Peru. There are different kinds of visas for foreigners looking to enter Peru. These visas will vary greatly depending on the purpose of the visit. Anyone looking to relocate to Peru should contact an immigration lawyer to assist in application and to better understand the requirements, process, timeframe and costs in obtaining a Peruvian Visa.
For more information regarding foreign investment, company formation, visa services or doing business in Peru, please contact the Biz Latin Hub team, a global law firm with local expertise here.