Auditor in Peru: Why do you need one?

Often overshadowed by richer neighbors, more and more C-Suite executives are now turning their attention to how to incorporate a company in Peru. The economy has plenty of room to grow and solid long term prospects. Just like any other country, you will need local representation, which includes an auditor in Peru.

Before you launch or move your business to the country it is crucial that you understand the local tax and accounting requirements, as they may differ from your home market. An auditor in Peru can help you navigate these new waters and make sure that your business stays compliant under both local and international law overseen by SUNAT.

Partnering with a local specialist such as Biz Latin Hub means that you will have an experienced guide on your side as you enter the new market. We can set you up with an auditor in Peru or elsewhere in Latin America and the Caribbean, with our 18 dedicated local offices across the region. Our array of back office services can help you through company formation and ongoing support such as help with accounting and elsewhere.

Why invest in Peru?

Since the beginning of the 21st century, Peru has drastically increased its trade activity. The biggest export sectors are natural resources, such as copper ore and gold, whereas the most important imports into Peru are refined petroleum and cars.

Fundamental to Peru’s international trade success are its strategic free trade agreements (FTA). Peru is a member of the World Trade Organization and has FTAs with several key Latin America economies including Mexico and Chile. In Asia, Peru has FTAs with China and Singapore, among others. Additionally, Peru fosters an important FTA with the European Union, established in 2013.

Most exporting companies in Peru are small-medium sized entities (SMEs), accounting for around 82% of all exporting companies. SMEs that engage in exporting activities are able to expand their target market immensely, enlarging it by six to seven times, which motivates more SMEs to start exporting their products.

However, before starting an international trading business, companies need to understand the legal procedures involved with accountancy compliance.

Why does a company need an auditor in Peru?

Local expertise is crucial for foreign investors to navigate the complexities of doing business in a new country. Financial regulations in Peru, for example, can be particularly intricate, requiring several months or even years to fully comprehend.

As a precaution against potential issues, utilizing the services of local specialists is highly recommended. The two most common legal entity (company) structures in Peru are a Corporation/Joint Stock Company (Sociedad Anónima – S.A) or a Limited Liability Company (Sociedad de Responsabilidad Limitada – S.R.L). The S.A. is the most common legal entity structure in Peru.

An auditor in Peru is a legal necessity for companies that are considered to have a significant presence in the country. This is defined locally as companies with more than 3,000 UIT (the local tax reference unit, around USD$1,380) in annual revenue. That’s over 4 million US dollars per year, so a relatively high bar.

It is also important to note that accounting records must be kept in Spanish.

What is the role of an auditor in Peru?

The auditor is there to check that the company is conducting its business appropriately to aid financial transparency. That means that they may not be an employee of the company, nor may they be connected to the company in any way. This allows them to be impartial and independent when conducting the audit.

What qualities does an auditor need?

When looking for an auditor in Peru, there are certain factors to keep in mind, including:

• Experience: Look for an auditor that has experience working with foreign investors and in your industry.
• Reputation: Check online reviews and feedback to assess the quality of service you can expect.
• Language: Ensure that the auditor you work with is fluent in a language you are comfortable communicating in.
• Communication: If you will be spending extended periods outside of Peru, choose a lawyer or firm that is proficient in using online tools for easy management and reporting.

FAQs on an auditor in Peru

Biz Latin Hub can provide you with an auditor in Peru

Starting a company in Peru requires the support of a qualified financial team from the outset to ensure that your business complies with local laws and is well-regarded by the authorities.

Without this, even a well-planned business may struggle to thrive. At Biz Latin Hub, we have a team of locally-based specialists who possess a comprehensive understanding of the Peruvian business environment, including its laws and complications.

We are well-equipped to assist foreign companies looking to conduct commercial activity in the region with all accounting, taxation, and financial matters.

If you’re interested in learning more about the Peruvian economy, the opportunities for starting a company there, and need an auditor in Peru, please contact us today.