An employer of record in Peru can hire staff for you, so you won’t need to establish a local entity, meaning that your international expansion can be completed in only the time it takes to find the overseas workers you need.
If you already have those people lined up, that means you will be able to get to work as soon as all necessary documentation has been gathered and the services agreement with your provider has been signed.
Such an arrangement is of particular interest to companies seeking to hire an overseas team for a limited period of time, or who want a local representative or small number of executives in Peru.
Where the people being hired have not already been identified, an employer of record in Peru will also be able to assist with the recruitment process, as well as the onboarding and eventual offboarding of staff.
SEE ALSO: Do You Need a Corporate Lawyer in Peru?
It is worth noting that an employer of record in Peru is commonly referred to as an EOR, and may also advertise themselves as a professional employer organization (PEO). While some providers differentiate between EOR and PEO services, they are effectively the same.
With an employer of record also managing the payroll of the staff they hire on a clients behalf, another common name for a PEO firm is a PEO payroll company.
If outsourcing your recruitment and hiring through an employer of record in Peru is something you wish to explore, contact us today to discuss how we can support you.
Peruvian economy attractive to investors
Peru has been an increasingly popular destination for foreign direct investment (FDI) over recent years, with FDI as a percentage of GDP rising from 1.57% in 2000 to 3.89% in 2019.
The South American country is well-known for its large mining industry and rich deposits of the likes of copper and gold, and in 2021, investment in mining hit $5.24 billion (all figures in USD).
Beyond mining, agriculture and fishing are also major contributors to the economy, and popular destinations for investment, with the likes of fruits and nuts, soy, and seafood among the country’s key exports. Coffee is also an increasingly significant crop, with demand from China driving the industry.
Peru is also known as a major hub for trade, with the port of Callao, which is just 12 kilometers from capital Lima, being one of the busiest ports in Latin America in terms of container throughput.
Peru’s trade credentials are bolstered by its membership of the Pacific Alliance — an economic association including Chile, Colombia, and Mexico, and to which Ecuador has formally applied to join.
Moreover, in a sign of the Pacific Alliance’s ambitions to make inroads into the Asia-Pacific region, in the latter part of 2021, Singapore was inaugurated as an associate member, while Australia, Canada, New Zealand, and South Korea are among other nations that have been mentioned as candidates for similar status in the future.
Peru is also a founding member of the Andean Community of Nations (CAN) alongside neighbors Bolivia, Colombia, and Ecuador. Despite being more than half a century old, CAN continues to actively promote integration, implementing a range of measures to that end in recent years.
All of these factors contribute it its attractiveness for foreign investors, be that through entity formation or hiring local staff via an employer of record in Peru.
What will an employer of record in Peru do for you?
An employer of record in Peru will find and hire staff on a client’s behalf through its locally established entity. Depending on the profile of the staff you are seeking, that could take weeks, or even just days.
Those staff will officially be employees of the employer of record, however they will report directly to the client, who will have full control over their schedules and tasks.
The employer of record will also oversee their payroll, billing the client for their salaries and all related statutory contributions, as well as the fee that the employer of record charges, which will generally be on a per employee basis.
That fee will usually work out to be significantly less than the cost of going through company incorporation and liquidation, not to mention substantially quicker and more convenient.
What’s more, when you hire via an employer of record in Peru, you do so knowing that their legal staff are experienced at guaranteeing compliance with all local regulations and norms.
Legal concerns handled by an employer of record in Peru
Beyond the recruitment and hiring process, an employer of record in Peru will also take care of the likes of drawing up contracts, and enforcing statutory regulations such as:
- A maximum 48-hour working week
- Enforcing the minimum wage, where applicable.
- Payment for overtime
- Payment of bonuses
- Honoring of all paid leave entitlements, including vacation allowance and other types of leave
As part of its payroll outsourcing service, your employer of record in Peru will also oversee the following deductions from salaries and contributions are made:
- Pension Fund contributions, which stand at 12% of an employee’s salary and a contribution
- Income tax contributions, which stand at between 8% and 30% of an employee’s salary
- Social security contributions that equate to 9% of an employee’s salary
- Contributions to the unemployment fund which total one average month of salary, including average overtime, plus one sixth of the annual bonus
Biz Latin Hub can be your employer of record in Peru
At Biz Latin Hub, we provide integrated market entry and back office services throughout Latin America, with offices in 17 major cities throughout the region.
Our portfolio includes accounting & taxation, company formation, due diligence, hiring & PEO, and corporate legal services, and we are ideally placed to support multi-jurisdiction market entries and cross-border operations.
If you need an employer of record in Peru, or any other support for your business, contact us today to find out more about how we can assist you.
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