Peru is loved by travellers for its world-class cuisine and an incredible range of exotic fruit and vegetables and is a very popular place for business formation. It is a stable economy growing at a very impressive 13.3% year on year (2021) and has a GDP valued at over $220 billion.
There are several other benefits to company incorporation in Peru. There’s a lot more on offer than just culinary and tourist investment opportunities. Whilst these are undoubtedly two of the most interesting options, there are more. The textile industry is growing at a rate of 11% year on year and is renowned for its very competitive prices and generated USD$ 1 billion in Foreign Direct Investment between 2010 and 2019. Another industry that is performing well and worth considering for business formation is IT services. There are now 37 projects with FDI funding and as of April 2021, over 200 fintech worth between $15-20 billion collectively.
Are you interested in starting a business in Peru but unsure about the legal requirements? It can be daunting to navigate the company incorporation process in a foreign country. In this article, we provide all the information you need to register a company successfully in Peru, including the essential legal requirements.
Let’s get right into it.
Table of Contents
Incorporate Company Peru – What Type of Company Should I Form in Peru?
There are different types of company structures you can choose from to start your business in Peru. The right one depends on your business needs and goals. However, which type of company do most people form in Peru and what are its requirements?
The short answer:
You will most likely be forming a Sociedad Anonima Cerrada (S.A.C.) when starting a business in Peru due to its limited liability and flexible nature. An S.A.C is similar to a Private Limited Company. Check out the next section to see the other requirements for this type of company.
What Are the Company Formation Requirements for S.A.C. in Peru?
In order for your company to be considered and formed as a S.A.C. it must meet the following requirements and characteristics:
- Have a minimum of 2 shareholders – no more than 20 shareholders, and can be of any nationality/residency or individual/corporation.
- No minimum capital requirements – However, we recommend at least $350 USD.
- Be of limited liability – liability is limited to the par value of the shares they hold.
- Have a Chief Executive Officer (CEO) or General Manager domiciled in Peru.
- Have the company name end in Sociedad Anónima Cerrada or the abbreviation S.A.C.
*This type of company structure does not require a board of directors and does not quote on the stock exchange
Now let’s move on to see what you need to do to get your company incorporated in Peru.
How to Form a Business in Peru
When starting a business in Peru, there is a list of things you should do and keep in mind when forming your company.
Power of Attorney in Peru
To establish a closely-held corporation (S.A.C.) a Power of Attorney is required.
The Power of Attorney must be
- Granted by Deed
- Legalised by the Peruvian Consul in the correct/relative country
- Recorded at the Public Register of Companies in Peru
*Each one of the shareholders must grant a separate power of attorney
Register your Business in Peru
You will need to register your business with the Peruvian Public Register of Companies. Some documents you might need include:
- Your company’s name (approved by the public register)
- Company director details and registered office address
- Description of your companies activities
- Shareholders’ details along with their identity cards
- Memorandum of association and articles of association
- Amount of capital and proof of capital payment
* Proof of capital should be a certificate from the bank – at least 25% of share capital must be fully paid before you incorporate your business in Peru.
What Are the Accounting Requirements in Peru?
You must keep accurate accounting books and financial statements of your company.
Financial statements must be:
- Filed in accordance with the tax and accounting requirements in Peru
- Kept in Spanish
- In the national currency (Peruvian nuevo sol)
- Presented at shareholder meetings (at least once a year)
How Long Does It Take to Incorporate a Business in Peru?
It takes about 6-8 weeks to incorporate a business in Peru when you have the best lawyers to get you through the process.
Challenges of Incorporating a Company in Peru
Peru offers plenty of business opportunities for anyone looking to start a business in the country. However, you have to make sure your company is set up the right way so you can avoid legal problems in the future. After setting up your company, make sure you are always in compliance with tax laws and employment laws in Peru.
If you need help setting up your company, Biz Latin Hub has a group of experts that can offer you specialized advice and guidance to set up your business. In addition to company formation and incorporation, we offer tailored and professional accounting, legal and financial services in Lima Peru. Contact us now for more information.
If you are thinking of incorporating a company in Latin America, learn how our market entry services can be a useful tool for a successful entry into the Latin American region.
