Today, Peru has a more diversified economy thanks to a stable and globalized economic-monetary policy established by its government in order to attract greater foreign investment. Spain is the country with the highest direct investment in Peru; there are more than 500 formal Spanish companies which generate an average investment of 4,500 million dollars. Even Peru has gaps of investment mainly in the infrastructure, energy and telecommunications sector, which foreign investors can make the most of.

These are principles on which the promotion of investing in Peru is based:

  • Foreign and local investors have the same rights over their investment.
  • No restrictions or specific requirement to foreign investment in the vast majority of economic activities.
  • Foreign investment does not need prior authorization from the Government.
  • Transfer of capital investment freely.
  • There is an authority responsible for promoting private investment in Peru. This is the agency Proinversión.
  • Investors may enter into stability agreement with the Government to guarantee for a ten-year period the current income tax regime in force at the time of subscription.
  • Stability of monetary policy: total absence of exchange control; foreign currencies could be acquired or sold freely at whatever exchange rate of the market offers and funds can be remitted abroad without prior authorization.
  • Guarantee of private property.
  • Royalties and dividends resulting from the investment can be remitted abroad freely.


Updating the business framwork

Accounting framework

These are the most important precepts that make different the Peruvian accounting environment:

  • In Peru, the Financial Statements must be prepared in accordance with peruvian GAAP. The Consejo Normativo de Contabilidad (CNC) has established that these are IAS and IFRS.
  • Only public companies, who has issued debt or whose share is listed on stock market exchange (Lima Stock Exchange) are obliged to submit audited financial information.
  • The Financial Statements must be signed by a Chartered Public Accountant.
  • The Tax Administration (SUNAT) establishes minimum requirements for the preparation of Official Accounting Books. Its printing and legalization are mandatory.
  • Consolidated Financial Statements are mandatory when the company owns more than 50% of the voting rights of another company, with some exceptions..

In summary, this business environment has not had many modifications; the most outstanding have been the entry in force of some new IFRS, such as:

  • IFRS 9 “Financial Instruments”
  • IFRS 15 “Revenue from contracts with customers”
  • IFRS 16 “Leases”


Fiscal framework

In Peru there are three types of taxes: Indirect, Direct and Municipal. Below we show their respective rates and their proper equivalence with the denomination in Spain:

Others aspects to consider:

  • Transfer pricing operations must be supported in accordance with SUNAT requirements. This is applicable to transactions between related companies and with companies located in tax havens.
  • From tax submission and during four subsequent years, the accounting period can be audited by SUNAT.

Since year 2019:

  • Electronic invoicing will be mandatory only for companies of the banking and insurance and HORECA sector (hotels, restaurants and cafeterias).
  • The withholding tax for “non-domiciled” subjects will be made at the time of payment of the invoice.
  • Credit and tax incentives
  • Taxes paid abroad can be deducted in the fiscal period in which they are generated according to the principle of Foreign Source Income applied by the Peruvian Income Tax Law (PITL).
  • Taxpayers can deduct 150% or 175% of expenses incurred in projects related to scientific research, technological development and technological innovation.
  • Companies in pre-operational phase of large projects can request early recovery of VAT before starting operations.
  • Foreign investors can apply double taxation agreements in order to avoid that the same income pays taxes in one or more countries at the same time. Currently there are agreements with: The Andean Community (Bolivia, Colombia, Ecuador and Peru), Chile, Canada, Brazil, Mexico, Switzerland, South Korea and Portugal. The agreement to avoid double taxation with Spain is pending of approval.


Employment framework

In Peru, employment contracts are signed with Peruvian citizens and foreigners. These contracts can be for an indefinite period, fixed term and / or part-time. Labor benefits and obligations are applied in equal manner to all contracted workers.

Employee’s benefits

  • Vacations: equivalent to 30 calendar days for each labored year. In Peru, pending days of vacations do not expire.
  • Gratificaciones: two extra payments, to be paid in July and December.
  • Compensation for service time: equivalent to a monthly payment, to be paid in May and November.
  • Profit sharing: when the company has more than 20 workers, the company is obliged to distribute between 5% and 10% of the financial profit before taxes to its workers.
  • Household allowance

Employer’s obligations

  • Contribution to social security, equivalent to 9% of monthly salary for each worker.
  • Contribution to life insurance (mandatory since the 4th year) and Complementary Risk Work Insurance.
  • Retention of 13% of monthly salary in favor of the worker’s pension fund manager.

The minimum monthly salary: S / 930.00 (equivalent to 240 euros)

The number of foreign workers must not exceed to 20% of total payroll or 30% of its total cost.

According to law, workers are entitled to workday of 8 hours or 48 hours per week.

Since year 2019:

  • Only medical examinations will be mandatory at the beginning of the employment relationship, provided that the worker carries out a high-risk activity.
  • Employer can substitute his manual signature with: digital, electronic signature or micro-form.
  • Employer may substitute the printing and physical delivery of pay lips with electronic manners. In this case, the signature of reception from worker will not be required.
  • Employers are required to maintain support documents related to payroll only for 5 years.