Peru is one of the the fastest growing economies in Latin America. Peru’s economy has grown by an average of 6.4 percent per year since 2002 and is projected to continue on an upward trajectory in 2017, fueled by external demand and the return of fixed investment to growth. LatinFocus panelists expect GDP to accelerate and increase over the coming years. This growth in the Peruviana economy has resulted in an increase in FDI, particularly in the mining and export sectors. Government policies have encouraged this investment which has benefited investors, local communities and the economy in general. There is vast range of business opportunities available in Peru, and both local and foreign investors are getting involved.
Entity Types in Peru – Which Legal Entity Should You Use?
Do you have a great business idea and are looking to find the right structure for your company in Peru? Depending on the activity that you plan to undertake, there are different legal entities regulated by the Peruvian Companies Law under which you can set up your new venture.
Below is a list of 5 types of legal entities to setup your business in Peru most commonly used by foreign investors. Should you require more information regarding each of these legal entities, we recommend that you make contact with a professional company who have a extensive understanding of the legal Peruvian entities and have experience in the formation and incorporation of companies depending on the types of operations being conducted.
Joint Stock Company (Sociedad Anónima or S.A)
This type of company is the most popular for business entities as its fairly easy to open. The legal entity requires a minimum of two shareholders and an initial capital contribution of s/.1000; approximately $350. Liability is limited to the amount of the contribution and the joint stock company must have a Board of Directors and General Manager.
Private Closed Corporation (Sociedad Anónima Cerrada or S.A.C)
This legal entity requires a minimum of two and maximum of twenty shareholders. Although a Board of Directors is not necessary, the corporation must have a General Manager.
Public Corporation (Sociedad Anónima Abierta)
For companies with a large number of shareholders, a publicly held corporation can be a good option. To create this legal entity, an initial public offering should be made, the company must have more than 750 shareholders, and/or over 35% of share capital distributed among more than 175 shareholders.
Limited Liability Company (Sociedad Comercial de Responsabilidad Limitada or S.R.L)
A minimum of two and a maximum of twenty partners are allowed. All partners have limited liability and capital is divided up amongst them. This company corporation does not issue shares and its procedures are the same as those of other corporations.
Established outside its legal address, the branch should realize the same activities as its head office. The branch has the same status as a head office but can be considered as an independent company for tax purposes. To open a branch, a permanent legal representative or General Manager must be present.
If you need more information about the different types of legal entities in Peru, Biz Latin Hub will be glad to assist you in the process. Our team can help you to form a company and begin operations in Peru. Contact Craig here.