The development of the agribusiness, fishing, and mining industries, as well as the completion of major infrastructure projects, primarily in the fields of energy, gas, and transportation, have all contributed to the growth of the domestic market and to increased international trade, making Peru one of Latin America’s most attractive countries for investment, and a rising star in the region.

In addition to its ambitious entry into a series of free trade agreements with key commercial partners, such as the United States, China and other international players, Peru is continuously working towards positioning itself in the global market and obtaining a larger share of benefits from the global economy by strengthening its business ties with nations throughout the Pacific basin and further entering into a series of comprehensive and far reaching international treaties. As such, since 2011 Peru is a member of the Pacific Alliance together with leading Latin American economies (Mexico, Chile and Colombia), and has recently entered into the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) along with important economies of the Pacific.

This paper briefly describes the legal framework that applies to any individual or entity interested in doing business in Peru. Regulations regarding foreign investment, alternative corporate structures and other relevant provisions are summarized in order to explain the legal structures available for conducting business in Peru.

It goes without saying that the most favorable structure for any business must be determined on a case-by-case basis, and therefore, this document does not aim to take the place of appropriate legal advice.

I. PERU TO THE WORLD

In an effort to enter into the global market and create incentives to develop and expand its economy, Peru has entered into a number of international instruments aiming to attract national and international investment.

1. Investment Agreements

Peru has entered into a number of bilateral investment treaties, as shown in the list below.

Peru has also entered into trade agreements with several countries, as detailed in “Customs” (Section V, item C) hereof, aiming to reduce customs duties and facilitate the trade of goods.

3. Double Taxation Treaties

Likewise, Peru has entered into tax treaties, with the objective of avoiding double taxation for taxpaying residents in the contracting States. Currently, the agreements in force are:

4. Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)

In March 2018, the CPTPP was executed. Peru shall enter into said treaty along with important economies of the Pacific such as Australia, Brunei, Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Singapore and Vietnam as its original members.

This agreement reinforces Peru’s strategic presence in the Asia-Pacific region, whose countries are important APEC economies; strengthens its goal to achieve free trade; and contributes to its desire of being considered a stable and friendly country for foreign investors. The CPTPP entered into force for Peru on September 19, 2021.

5. The Pacific Alliance (Alianza del Pacífico)

Peru is firmly committed to the development and success of the Pacific Alliance, a dynamic mechanism of economic and commercial integration composed by Chile, Colombia, Mexico and Peru. It seeks to create a deep integration towards the free circulation of goods, services, capital and people in order to boost the economic growth and competitiveness of the member countries. Also, it aims to become a platform to project itself into the world, particularly toward the Asia Pacific region.

Upon a formal establishment of the Framework Agreement, the Additional Protocol to the Framework Agreement was enforced by the Pacific Alliance member countries in May 2016 –a commercial agreement representing a first substantial advance towards the free circulation of goods and services. The aforementioned Protocol allowed the immediate elimination of 92% of the tariff universe, with full liberalization to be expected by 2030.

Likewise, by means of negotiated areas in the aforementioned document, the bilateral commercial agreements entered into by Chile, Colombia, Mexico and Peru were enhanced and complemented in order to create more opportunities related to the accumulation of origin and the insertion in regional production chains with broad and diverse supply of products with higher added value.

Additionally, in order to connect with the Asia Pacific region, the Pacific Alliance is currently negotiating agreements with high commercial and economic standards with Australia, Canada, New Zealand and Singapore looking to grant the category of Associated States to these countries and contribute to the establishment of production chains.

In sum, the Pacific Alliance provides tools to economic operators of the four member countries by defining clear rules for the exchange of goods and services, reinforcing the facilitation of commerce and generation of higher investment flows. In this sense, at its moment, commercial and corporate strategies and actions will be promoted. In its almost 10 years of creation, the Pacific Alliance has become a mechanism that contributes to the citizen welfare.

Further, Peru’s participation in the CPTPP, the Pacific Alliance and APEC represents an opportunity to consolidate a platform with the Pacific as an articulating axis of our international insertion, participating in valuable global chains and driving competitiveness.

6. Organization for Economic Cooperation and Development (OECD)

On the other hand, Peru’s economic success and continual expansion has prompted an interest in the country in adopting the best international standards and public policies. To accomplish this, Peru has sought the cooperation of the Organization for Economic Cooperation and Development (OECD) through the Country Program. This program will create a plan to implement and execute reforms that will increase productivity and set the foundations for sustainable economic growth and development. This will reduce poverty levels in the country and increase public welfare, without damaging the environment. This commitment to reaching the standards set by the OECD offers foreign investors a guarantee that the country is implementing the correct policies to ensure solid economic growth in the future.

7. Basic Considerations for Investing in Peru

The following table provides potential investors an overview of basic considerations for investing in Peru:

Source: AllBright Law Offices

Contributor：Peru Rodrigo, Elías & Medrano Law Office

Chinese Translation: WANG Liang, E-mail: wangliang@allbrightlaw.com

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