How to start a Business in Peru & To get Residency

Written by: Cheryl Harvey, Biz Latin Hub Group

Peru rose as the star of the South American economies in 2016. With a robust growth in metal

exports and the election of business-friendly President Pedro Pablo Kuczynski (PPK),

improvements in economic governance and political stability have emerged, foreign investment

interest is on the increase and the country is set to have an extremely positive start to the year

2017!

Within this article, we will cover the potential opportunities for business in Peru, the

advantageous considerations for starting a business in Peru, how to get started and finally, how

to obtain permanent residency status as a foreign individual by means of having this Peruvian

registered company.

Opportunities for Business in Peru

Peru can interestingly be viewed as pertaining, among many others, the following two business

opportunity characteristics:

A Resource-Rich Country: Peru is a country with an abundance of natural resource and

this of course creates opportunity for, not only the trading of goods on a national scale,

but also exportation worldwide. Due to favorable conditions in international trade, Peru

has experienced average annual growth of 5.5% in the export of goods and services since

the year 2000. Whilst raw resources make up a significant proportion of Peru’s exports,

residents of the country (both local and foreign) are becoming increasingly aware of the

ability to develop raw goods into high quality intermediate or final goods, and thus

creating further start-up business opportunities.

A Developing Country: Whilst Peru is a country boasting much natural resource, let’s

not forget that Peru is still a developing country in need of considerable advances in

technology, communications and variety of product supply. As such, there are endless

opportunities for new start-up businesses to offer higher quality services and a wider

range of products that are currently hard to find or even unavailable in the country at

present. It will come as no surprise that Peru’s imports are, unlike the exports, mainly

composed of final and intermediate goods, and approximately one quarter of the total

imports value is derived from the import of machinery. The country will no doubt

continue to experience an influx in the importation of goods and services as the demand

for outside knowledge and experience grows, and the population seek wider, high quality

product variety.

As such, within the import and export markets of Peru, there are a multitude of start-up business

opportunities for both local and foreign business entrepreneurs and investors to explore.

Good international relations are of vital importance to the development of Peru, and indeed the

economy of any country. The opening of new international markets and signing of Free Trade

Agreements (FTAs) has allowed Peru to achieve a more dynamic economy and increased export

trade. Peru currently has FTAs signed with Canada, Chile, China, the European Union, Mexico,

Panama, the United States, the MERCOSUR countries of Argentina, Brazil, Paraguay and

Uruguay, among others. Peru also benefits from being a member of the Andean Community of

Nations (CAN) alongside Bolivia, Colombia and Ecuador, which has promoted trade

liberalization between these regions and reduced tax obligations. Each of these named trade

agreements, and others still to come into force, are of significant benefit to those looking to do

business in Peru and involving trade between the associated countries.

In reference to the mining sector; Peru has been named as the best destination for mining

investment in Latin America. This in turn creates demand for local start-up businesses, since a

locally registered company is commonly used as the vehicle to manage the operations of a

Peruvian mining project. In the case of foreign mining investors, it is typical for an overseas

holding company to form a subsidiary company in Peru and then administer all local transactions

via this legal entity. The primary concern of overseas investors and related stakeholders; within

the mining sector or in fact any industry of Peru, is the need to have this local company reliably

supported by experienced professionals and that these professionals present quality reporting for

the understanding, monitoring and control by the overseas management and investors.

A further consideration for people when looking to do business in Peru is the quality of life that

living in Peru can bring. You will always be able to find the work-a-holics of this world, but in

most cases, people are ‘working to live’ rather than ‘living to work’! Peruvians themselves are

extremely patriotic, proud of their country and especially their gastronomy. Foreigners are

attracted to life living in Peru. For many, the Latino vibes and even the chaos are a welcomed

change from home. Peru is a heavily diverse country that offers the opportunity to travel city,

coast, mountain regions and jungle, and with each destination maintaining its own distinct

traditions in terms of food, music, clothing, arts, crafts and lifestyle. The climate of Peru is fair

and the locals are extremely friendly and welcoming of tourists and foreign residents. The

international population of Peru; mainly concentrated in the capital of Lima and also Cuzco; the

home of Machu Picchu, is continuously rising as foreigners become increasingly aware of what

the country can offer in terms of adventure, quality of life and business opportunities.

How to Start a Businesses in Peru; Where To Begin…

The Peruvian Government has taken measures to encourage foreign investment in Peru. The

2016 elected President PPK follows this with his intentions to improve the country’s business

environment and boost foreign investment.

The following are some key advantages to starting a business in Peru:

100% Foreign Ownership – Many foreigners do not realize, but the shareholders of a

Peruvian registered company can be 100% foreign (individuals or companies) AND

without residence status. There is no requirement for the company owners to be resident

in Peru, nor to involve a Peruvian investor, which would perhaps unwantedly dilute the

control and share capital arrangement of the desired ownership structure.

Minimal Capital Requirement – The minimum share capital requirement for a standard

company in Peru is extremely low at just PEN500 (Peruvian Soles), or its equivalent in

USD$ (approximately USD$150).

Low Bank Account Opening Deposits – Again, the standard company bank account

opening deposit requirements in Peru are minimal at just PEN500 for a Peruvian Soles

bank account, USD$500 for a USD$ bank account and €500 for a Euros bank account.

The company may choose whether to have just one or multiple currency bank accounts.

Quick Formation Process – Whilst in other Latin American countries it can take a

number of months to constitute a legal corporate entity, in Peru as with the support of

experienced legal professionals, this process can take just 2-3 weeks. This not only

includes the company legal constitution, but also registration with the local tax authorities

(SUNAT), obtaining a unique company tax reference number (known as a RUC number),

obtaining the company official legalized social and accounting books (obligatory in Peru)

and also processing the application for the opening of a local company bank account.

Visa Support – For foreigners looking to start a business in Peru and also stay in the

country long term (more than 6 months in any one year), this Peruvian registered

company can be used as a vehicle to obtain a longer term visa and residency in Peru

(more details below).

In order to begin the process of forming a company in Peru, it is simply the case of contracting a

legal professional who is experienced in the procedures involved. For many foreigners who may

not be so confident with their grasp of the Spanish language, the contracting of an English

speaking (or alternative suited language) service provider is essential for the understanding of the

agreement to be reached with the provider and also the legal work and documents involved.

How to get Permanent Residency Status in Peru; Visa Options

Starting with the simplest of the longer term visa options for foreign individuals, an application

for a Family Resident Visa can be made on the basis of direct descendance or marriage to a

Peruvian national.

Ruling out these circumstances and considering the options available in conjunction with a

company start-up, the most common visa types are as follows:

Investment Visa

The key requirement in order to obtain an investment visa in Peru, is the USD$30,000 capital

investment into a Peruvian registered company. This investment must be a single-sum bank

transfer to be made directly from a bank account in the name of the investor/visa applicant. In

addition, a business plan must be presented for the company and certified as viable by a local

Certified Economist. Finally, the investor/visa applicant must commit to employing a minimum

of (5) local staff within the first year of business.

An investment visa is valid for (1) year and renewable on the basis that commitments are proved

to have been met during this first year. A foreign individual with an investment visa does not

have the right to work in Peru, but to reside in the country in their capacity as a business

investor. It is required that this individual be present in Peru for at least (183) days in the year

(although special permission may be granted by the immigration office for extra time out of the

country under certain circumstances).

Working Visa

In order to apply for a working visa, a foreign individual must receive an employment contract

with a Peruvian registered company for a minimum period of (1) year. The employer company is

required to verify that the employee/visa applicant has the experience and skills required to

perform the contracted job role.

As with an investment visa, a working visa is valid for (1) year and renewable on the basis that

the employment contract of the individual is renewed or still valid for a further (1) year

period. As the name of the visa suggests, a foreign individual with a working visa does have the

right to work in Peru. It is also required that this individual be present in Peru for at least (183)

days in the year (although special permission may be granted by the immigration office for extra

time out of the country under certain circumstances).

In both cases, a foreign individual may form a company in Peru and use this company as a

vehicle in which to invest or be employed in order to obtain the relevant visa and longer term

stay in Peru. After two years as resident in Peru, foreigners can apply for Naturalization and

permanent stay.

Finally, just to note that outside of these visa options linked to Peruvian ties or starting a business

in Peru, the alternative resident visa options include a student visa, independent professional

visa and a foreign income visa; each of which carry their own specific application requirements.

In order to fully understand the visa application requirements, the process, timeframe and costs

involved, it is highly recommended to contract a well experienced immigration lawyer who is

familiar with the local authorities, including Notary offices, Interpol, the Labour Ministry (where

applicable) and of course the immigration office based in central Lima. Whilst there are many

components that make up a visa application process, the headache to understand and also battle

with the language barrier can be overcome by having this procedure managed by the right

people. If efficiently managed, a typical visa procedure should take (2)-(3) months from start to

finish.

2017 is set to be an exciting year for both the local and international business environments of

Peru! As detailed in this article, there are many opportunities for doing business and living a

quality life in Peru. Foreign investment is greatly welcomed by the country and as such, the

constitution of a company in Peru is widely available to foreign investors and with modest

requirements for compliance. Once a foreign individual has formed a Peruvian registered

company, this opens many doors in terms of obtaining longer term stay in the country and,

within time, permanent residence.

The team at Biz Latin Hub are excited to see what this coming year will bring in terms of further

investment into the emerging economy of Peru. The Biz Latin Hub group is a market leader in

supporting both local and foreign individuals and companies to successfully do business in Latin

America, by providing a full suite of multi-lingual back-office services, including:

Market Entry Support

Legal & Immigration Services

Accounting, Financial & Taxation Services

Recruitment Services

Security & Investigations Services

The company is owned and managed by an experienced team of local and expatriate

professionals, with offices in Colombia, Peru, Mexico, Chile, Argentina and Panama. The Biz

Latin Hub offers services that are reliable, economic and tailored to meet client needs. For more

information, please contact us at: peru@bizlatinhub.com