Introduction

The textile industry has been a cornerstone of economic development in many countries, and Honduras is no exception. In recent decades, this Central American nation has emerged as a critical player in the global textile and apparel sector. With favorable factors, including a skilled workforce, strategic geographical location, and trade agreements, Honduras has positioned itself as a textile manufacturing hub, contributing to its economic growth and stability. This article delves into the multifaceted importance of the textile industry in Honduras, highlighting its economic impact, employment opportunities, export potential, and the challenges it faces.

The Economic Impact of the Textile Industry in Honduras

The textile industry is a primary driver of economic growth in Honduras, significantly contributing to the nation’s Gross Domestic Product (GDP). The sector encompasses various activities, from cotton cultivation and fabric production to garment assembly and export. As of my knowledge cutoff date in September 2021, the textile and apparel sector accounted for approximately 18% of Honduras’ GDP. This sector’s substantial economic contribution has played a crucial role in stabilizing and diversifying the country’s economy.

Foreign Exchange Earnings: One of the most notable economic benefits of the textile industry in Honduras is its role in generating foreign exchange earnings. Textile and apparel exports constitute a substantial portion of Honduras’ total export earnings, contributing significantly to the nation’s trade balance. The revenue generated from these exports directly impacts the country’s ability to import goods, technology, and services essential for its development.

Employment Generation: The textile industry in Honduras is a significant source of employment, offering jobs to hundreds of thousands of its citizens. The industry provides stable livelihoods for a diverse workforce in a country where unemployment and underemployment are significant challenges. The employment opportunities extend from factory workers and skilled technicians to managerial positions and support staff.

Investment Attraction: The textile industry has been instrumental in attracting foreign direct investment (FDI) into Honduras. International textile and apparel companies have established a significant presence in the country, often drawn by its competitive advantages, including cost-effective labor, proximity to the North American market, and preferential trade agreements.

Export Potential and Trade Agreements

Honduras’ strategic location has been pivotal in its success in the textile industry. Positioned in Central America, it enjoys proximity to the United States, one of the world’s largest consumer markets. This geographic advantage, combined with a series of trade agreements, has enabled Honduras to become a significant exporter of textile and apparel products.

CAFTA-DR Agreement: The Central America-Dominican Republic-United States Free Trade Agreement (CAFTA-DR) has been a game-changer for Honduras’ textile industry. Under this agreement, Honduras enjoys preferential access to the U.S. market, allowing for duty-free and quota-free exports of most textile and apparel products. This trade agreement has bolstered the industry’s competitiveness and export potential.

Global Supply Chain Integration: Honduras has become integral to the global textile and apparel supply chain. International brands and retailers source a substantial portion of their clothing and textiles from Honduran manufacturers. This integration has increased demand for Honduran-made products, further boosting the country’s export potential.

Diversification of Exports: Honduras has diversified its textile and apparel export offerings over the years. While initially focused on basic garments, the industry has expanded to include a wide range of products, such as activewear, sportswear, and specialty textiles. This diversification has enhanced its resilience and adaptability in the global market.

Employment Opportunities and Social Impact

The textile industry in Honduras has played a crucial role in addressing one of the country’s most pressing social issues – unemployment. In a nation where poverty rates have historically been high, the industry has created numerous employment opportunities, particularly for women and young adults.

Women’s Economic Empowerment: Women comprise a significant portion of the textile industry’s workforce. This has been a transformative force for gender equality in Honduras, as women in the sector have gained economic independence and a means to support their families. The industry’s impact on women’s empowerment cannot be overstated.

Skill Development: The textile industry has facilitated employee skill development and training. Workers receive training in various aspects of textile production, including sewing, quality control, and machinery operation. These skills are transferable and can lead to career advancement within the industry.

Reducing Informal Labor: The industry’s formal employment opportunities have contributed to a reduction in informal labor practices, providing workers with legal protections, fair wages, and access to social benefits such as healthcare and retirement plans.

Challenges and Future Outlook

While the textile industry in Honduras has achieved significant success, it has its challenges and concerns. Addressing these issues is essential to ensure the industry’s continued growth and prosperity.

Global Competition: Honduras faces stiff competition from other textile-producing nations, particularly in Asia. Maintaining cost competitiveness while adhering to labor and environmental standards remains a challenge.

Environmental Sustainability: The textile industry is known for its environmental impact, including water consumption, chemical usage, and waste generation. Honduras must address sustainability concerns to meet the growing demand for environmentally friendly products.

Labor Rights: Ensuring the protection of workers’ rights, including fair wages and safe working conditions, is vital. International scrutiny of labor practices in the industry requires an ongoing commitment to ethical labor standards.

Technological Advancements: To remain competitive in the global market, the textile industry in Honduras must embrace technological advancements, such as automation and digitalization, to improve efficiency and product quality.

Supply Chain Disruptions: Events like the COVID-19 pandemic highlighted vulnerabilities in global supply chains. The industry must develop strategies to mitigate such disruptions in the future.

Conclusion

The textile industry in Honduras is undeniably a linchpin of the nation’s economic landscape. It has contributed significantly to GDP growth and has been a lifeline for many Hondurans, providing employment and economic opportunities that have transformed lives. The industry has emerged as a global player with favorable trade agreements, a strategic location, and an adaptable workforce.

However, challenges remain, including global competition, environmental concerns, and the need to protect labor rights. As the industry evolves, it must embrace sustainability, innovation, and responsible business practices to secure a prosperous future. Honduras’ textile industry has come a long way. With the right strategies and policies, it can continue to be a driving force in the nation’s economic development for years to come.

The Panama Canal, a marvel of engineering and an important symbol of international trade celebrated its 109th anniversary this year since its inauguration on August 15, 1914. This blog post will highlight its importance to global logistics as the waterway creates a commercial connection between the Atlantic and Pacific oceans.

Throughout its over one-hundred-year history, the canal has facilitated international trade by reducing transportation times and costs for thousands of ships that pass through its locks daily.

Panama Canal History

If a story deserves to be told and shared from generation to generation, it is undoubtedly that of the Panama Canal. With its 109th birthday in 2023, this icon of engineering and world maritime trade reminds us of the human capacity to overcome challenges and achieve feats. Its importance to global logistics cannot be overstated.

This extraordinary history of the Panama Canal began in 1880, when the Frenchman Ferdinand de Lesseps, who had successfully directed the construction of the Suez Canal in Egypt, decided to undertake the work on the Panama Canal. However, this vast and ambitious project was initially beset by financial problems, illness, and technical difficulties. Finally, in 1893, the de Lesseps company declared bankruptcy.

However, the vision of connecting two oceans to facilitate global logistics, the Atlantic and the Pacific, continued. At the beginning of the 20th century, under Teddy Roosevelt, the United States took the reins of this monumental challenge. With persistence, innovation, and a massive investment of time and resources, the dream became a reality on August 15, 1914, when the SS Ancon made the first official crossing of the Panama Canal.

A testament to resilience and achievement

Since then, the Panama Canal has grown and evolved, overcoming countless challenges while remaining a vital artery for global logistics and trade. From steamships to the shipping giants of the modern era, this milestone created an impressive nautical connection between more than 140 shipping routes and 1,700 ports in 160 different countries.

In addition to being a vital trade thoroughfare, the Panama Canal is a proud national symbol for Panamanians. In 1999, control of the canal officially passed from the US to Panama. This act was a historic milestone that reaffirmed the sovereignty and national pride of the Central American nation. Today, the canal continues to be a source of employment and economic growth for Panama and a tourist destination of worldwide interest.

Operation and characteristics of the Panama Canal

1. Geographic location

The Panama Canal is located on the Isthmus of Panama, connecting the Atlantic and Pacific oceans. It extends through the Panamanian territory and crosses the province of Panama.

2. Length

The Panama Canal has a total length of approximately 80 kilometers (50 miles). It is made up of a series of locks, lakes, and artificial channels.

3. Main function

The primary function of the Panama Canal is to allow ships to pass between the two oceans more quickly and efficiently, avoiding the need to go around the entire American continent.

The average time to cross it is approximately 8 to 10 hours, depending on the size and speed of the boat. During this process, the ships are assisted by a system of tugs and locomotives called “mules” that guide them through the locks.

4. Expansion

In 2016, the expansion of the Panama Canal was inaugurated. This allowed for the passage of larger vessels known as Neo-panamax. This expansion increased the canal’s capacity, making it a vital route for international trade and global logistics.

5. Components

The canal has several fundamental physical elements that offer navigation services to all types of vessels, from small floating units to large, well-known ocean-going vessels. These elements are the locks, the navigation channels, the lakes, the anchorage areas, and the mooring stations.

There are three sets of locks: the Miraflores locks, the Pedro Miguel locks on the Pacific side, and the Gatún locks on the Atlantic side. These allow ships to ascend and descend at different levels as they pass through the canal.

Some interesting facts about the Panama Canal

• The total cost to build the Panama Canal was around $375 million (equivalent to over $9 billion today).
• More than 30,000 people are estimated to have died during the canal construction, primarily due to tropical diseases such as malaria and yellow fever.
• Protected natural areas surround the Panama Canal, such as the Soberanía National Park and the San Lorenzo National Park.
• The canal has been described as a true source of biodiversity, hosting more than 500 species of birds and 1,000 species of trees.
• In 2019, the Panama Canal recorded a record for maritime traffic, with more than 13,000 vessel transits and 450 million tons of cargo transported.
• The Panama Canal is considered one of the seven wonders of the modern world by the American Society of Civil Engineers.
• The highest cost paid for a single Canal transit was $829,468 for the Norwegian Pearl cruise ship in 2010.
• Richard Halliburton paid the lowest toll in the canal’s history, just 36 cents. He decided to swim across in 1928.
• Each ship that passes through the Panama Canal is raised and lowered 85 feet.

Pivotal infrastructure for global logistics and international trade

The Panama Canal has played a pivotal role in global logistics and world trade history for more than a century. Its construction and operation have been a testament to engineering and human determination to overcome seemingly insurmountable challenges. In addition to shortening distances for commerce, the Panama Canal has become a symbol of unity and collaboration between nations.

As the Panama Canal celebrates its 109th anniversary, it is essential to recognize its lasting impact on the global economy and international business. As a true wonder of the modern world, the canal continues to push boundaries and adapt to the changing needs of the maritime industry, establishing a legacy that transcends geographic and cultural boundaries.

In order to explore opportunities for investment in Panama, contact LATAM FDI.

Introduction

The automotive industry in Argentina has long been a cornerstone of the nation’s economy, playing a pivotal role in shaping its economic landscape and development. With a rich history dating back to the early 20th century, Argentina’s automotive sector has become one of Latin America’s largest and most influential. This essay explores the multifaceted role of the automotive industry in Argentina’s economy, delving into its historical roots, economic significance, challenges, and prospects.

Historical Overview

Argentina’s automotive industry has a storied past that can be traced back to the early 20th century. The first automobile assembly plant, Ford Motor Argentina, was established in 1913 in Buenos Aires, marking the industry’s formal inception. Over the decades, the industry experienced significant growth, with various international automakers setting up shop in the country. The growth was driven by increased demand for automobiles, favorable government policies, and a skilled labor force.

One of the critical milestones in the industry’s history was the enactment of Law 24,449 in 1995, which aimed to promote the automotive sector. This law introduced several incentives, including tax breaks and import restrictions, to encourage domestic production and stimulate industry growth. These measures attracted significant investments from global automakers, leading to the expansion of manufacturing plants and the development of a comprehensive supply chain ecosystem.

Economic Significance of the Automotive Industry in Argentina

The automotive industry is crucial in Argentina’s economy, contributing significantly to various aspects of its economic well-being.

Employment Generation: The industry is a significant employer in Argentina, providing direct and indirect jobs to a substantial portion of the population. It encompasses various activities, including manufacturing and assembly, research and development, logistics, and sales. The sector’s extensive value chain creates employment opportunities not only within the automakers themselves but also among suppliers and service providers.

Contribution to GDP: The automotive industry substantially contributes to Argentina’s Gross Domestic Product (GDP). It generates revenue by producing and selling vehicles, parts, and related services. Additionally, the sector’s multiplier effect further enhances its economic impact by stimulating demand in other industries, such as steel, plastics, and electronics.

Export Potential: Argentina’s automotive industry has a significant export orientation. The country has established itself as a major exporter of automobiles and auto parts, primarily to neighboring countries in Latin America. Exports are vital in earning foreign exchange and balancing the trade deficit, contributing positively to the country’s external accounts.

Technological Advancement: The automotive industry has driven technological advancements in Argentina, fostering innovation and research and development activities. These advancements have a spill-over effect, benefiting other industries and sectors, such as metallurgy, electronics, and software development.

Regional Development: The automotive industry’s presence extends beyond the major urban centers, helping to promote regional development. Manufacturing plants and related infrastructure are often located in areas with a significant economic impact, stimulating growth in previously underserved regions.

Challenges Faced by the Automotive Industry

While the automotive industry has played a crucial role in Argentina’s economy, it has faced various challenges over the years.

Economic Volatility: Argentina has a history of economic volatility, including hyperinflation and currency devaluation. These economic uncertainties can impact the industry’s stability, affecting domestic sales and export competitiveness.

International Competition: The global automotive industry is highly competitive, with numerous countries vying for market share. Argentina must contend with countries that offer lower production costs and more favorable business environments, making it necessary to enhance competitiveness continuously.

Regulatory Changes: Changes in government policies and regulations can have a significant impact on the automotive industry. Shifts in import/export rules, tax policies, and incentives can create uncertainty for automakers and suppliers.

Infrastructure and Logistics: Efficient logistics and transportation infrastructure are essential for the industry’s success. Delays in the supply chain and challenges in transportation can disrupt production schedules and increase costs.

Technological Advancements: While technological advancements are beneficial, they pose challenges for traditional manufacturing processes. The industry must continuously invest in research and development to stay ahead of technological changes.

Future Prospects of the Automotive Industry in Argentina

Despite the challenges, the automotive industry in Argentina has a promising future. Several factors contribute to its long-term prospects:

Investment and Innovation: Argentina’s automotive industry is expected to attract further investment from domestic and international players to remain competitive. Investments in research and development and innovation will be crucial to producing technologically advanced and environmentally friendly vehicles.

Export Potential: The industry’s export potential remains robust, with opportunities to expand into new markets. Capitalizing on regional trade agreements and exploring global markets can boost exports further.

Electric and Sustainable Mobility: The global shift towards electric and sustainable mobility presents an opportunity for Argentina to position itself as a key player in producing electric vehicles and related components. With abundant natural resources, such as lithium, the country is well-positioned to excel in this emerging market.

Government Support: Continued government support through favorable policies and incentives can help drive growth and stability in the automotive sector. Collaboration between the public and private sectors will be crucial for the industry’s success.

Conclusion

The automotive industry in Argentina has played a vital role in the country’s economic development, providing employment, contributing to GDP, and driving technological advancements. The industry’s prospects remain promising despite various challenges, including economic volatility and international competition. With a focus on innovation, sustainability, and global competitiveness, Argentina’s automotive sector is poised to continue making significant contributions to the nation’s economy in the years to come.

In order to explore opportunities for investment in Argentina, contact LATAM FDI.

The Interoceanic Corridor of the Isthmus of Tehuantepec will interconnect the Southern Mexican ports of Coatzacoalcos and Salina Cruz. It will impact the movement of goods and the economy with ten development poles along its 324 kilometers.

Through the Interoceanic Corridor of the Isthmus of Tehuantepec (CIIT), the current administration of Manuel Andres Lopez Obrador seeks to improve and accelerate the passage of goods of all kinds between the Pacific Ocean and the Gulf of Mexico.

The project, promoted by the Mexican federal government, proposes modernizing the ports of Salina Cruz, in Oaxaca, and Coatzacoalcos, in Veracruz, and rebuilding and modernizing the infrastructure that interconnects them. The project will directly or indirectly impact 79 municipalities: 46 in Oaxaca and 33 in Veracruz.

The Institutional Program, published on July 3 in the Official Gazette of the Federation, details that the main objective of the corridor is to “consolidate itself as a promoter and coordinator of public policies and national activities focused on the economic and social development of the region with objectives and strategies that seek to promote economic reactivation, the internal market and employment.”

According to President Andrés Manuel López Obrador, the highway currently being built is on the road route that has connected both ports for decades. It is expected to be ready in December.

In addition, the railway linking both ports on the Interoceanic Corridor of the Isthmus of Tehuantepec is being reconstructed, and the creation of 10 industrial parks along 324 kilometers is being promoted.

More than a railway

The Interoceanic Corridor of the Isthmus of Tehuantepec  is a comprehensive project that includes:

• Industrial parks.
• Development and innovation poles.
• Free zone of the Isthmus of Tehuantepec.
• Merchandise transport.

After many years of attempts, the Federal Government launched a vast infrastructure project to accelerate the passage of all types of merchandise between the Pacific Ocean and the Gulf of Mexico.

One of the most relevant projects of the current administration contemplates improving and accelerating the passage of goods of all kinds between the Pacific Ocean and the Gulf of Mexico, an aspiration of the Mexican government for centuries.

This is the Interoceanic Corridor of the Isthmus of Tehuantepec (CIIT), a project promoted by the federal government, which aims to modernize the ports of Salina Cruz, in Oaxaca, and Coatzacoalcos, in Veracruz.

There is a distance of 324 land kilometers from port to port, and it currently takes about six hours to travel by land from one to the other.

The roadway currently being built is on the highway route that has linked both ports for decades. However, it is a new asphalt strip with better features for transporting heavy trucks and cargo.

In addition, the railway linking both ports on the Interoceanic Corridor of the Isthmus of Tehuantepec is being reconstructed. It will be essential for the transfer of all kinds of merchandise at a lower cost than by truck.

The train track will be essential because it will connect the interoceanic corridor with the Mayan Train, with a branch from Coatzacoalcos to Palenque.

In addition, the train is expected to have a diversion to the border with Guatemala, going from Salina Cruz along the coast to Tapachula.

Renewed ports on the Interoceanic Corridor of the Isthmus of Tehuantepec

In addition to the modernization of land roads, the project also includes expanding the ports of Coatzacoalcos and Salina Cruz.

In Coatzacoalcos, the platforms of the port area have already been expanded, and the bottom of the port has been dredged to expand its draft and allow the arrival of larger cargo ships.

Currently, most activity is concentrated in the port of Salina Cruz.

A breakwater is being built to give the port more stability. It will be a vital port that will take a while to build in stages.

In Salina Cruz, work is also being done on the modernization of the refinery and the construction of a coking plant to process fuel oil and convert it into gasoline. Only in the refinery it is an investment of more than 100 billion Mexican pesos.

More industrial parks

The Mexican government launched the bidding contests for the ten industrial parks or development poles that will form part of the interoceanic corridor of the Isthmus of Tehuantepec, between Coatzacoalcos and Salina Cruz ports. There are ten parks along the entire strip of the isthmus, with an average of 300 hectares per park, with water, gas, and electricity.

The intention of the Mexican president is that, in the industrial parks, goods of all kinds can arrive, be processed, have value-added, and be dispatched to one of the two ports to transport them by road, train, and ocean conveyance to the markets of the United States, Asia, and America from the south.

Two power plants will be built to provide electricity for the project, and wind energy equipment will be purchased from the Spanish company Iberdrola.

From colonial times, a corridor was contemplated to go from the Pacific to the Gulf. The isthmus was the object of the desire of the United States government to create a fast passage between both ports. Still, its attention focused on the Panama Canal, which is now saturated.

Currently, President López Obrador asserts that the interoceanic corridor of the Isthmus of Tehuantepec will be an alternative to the overcrowded canal and an opportunity to reduce the economic and social backwardness of the Tehuantepec isthmus. Additionally, the project will reverse the deterioration that has prevailed for a long time in the region’s industrial sector.

According to a diagnosis included in the institutional program, “the root cause of this situation, described in very general terms, is the absence for an excessively long period of public investment in key areas for economic development. This includes the maintenance and development of infrastructure communications, transport and telecommunications, and the supply of electricity, water, public services and other inputs that industry requires.”

In order to explore opportunities for investment in Mexico, contact LATAM FDI.

If you are interested in doing business in Peru, the country offers many commercial opportunities. Among the most prominent sectors are construction, architecture, engineering services, mining suppliers, higher education services, the software industry, gourmet products, and packaging and labels for agribusiness. Not surprisingly, many foreign companies are turning their attention to Peru as a gateway to Latin America.

To start a business in Peru, creating a network of contacts and establishing meetings with the key players in the market or niche of interest is crucial. Having a local partner is essential to succeed in the Peruvian market. Peruvian businessmen value the quality of products, speed of delivery, competitive prices, and compliance with commitments. When doing business in Peru, arranging and confirming meetings in advance is advisable.

Negotiations in Peru usually start with the most senior people within the company, both in the public and private sectors. However, on occasion, middle-ranking people may also participate. During negotiations, haggling is common and is used to reach an agreement. To achieve a successful negotiation while doing business in Peru, it is vital to show mastery of the subject matter at hand, be congenial, and avoid confrontations with Peruvian counterparts.

Regarding legal issues related to doing business in Peru, having an agent or legal representative is mandatory if you want to do business with the State. The country offers a favorable legal framework for foreign investment, although it can sometimes be complicated. In addition, Peru has essential industries such as mining, manufacturing, energy, tourism, and real estate, providing opportunities for business in different sectors.

Advantages of doing business in Peru

Peru offers several advantages for those interested in doing business in the country. Next, we will mention some main reasons why doing business in Peru is an excellent option.

Despite recent economic challenges, Peru stands out as one of the most stable economies in the region. Thanks to its solid legal framework and focus on economic development, Peru has maintained a robust economy that is resistant to external fluctuations. This provides a safe and conducive environment for foreign direct investment and business growth.

Peru offers a wide range of business opportunities in various sectors. The construction industry, engineering, mining, higher education, information and communication technology, and gourmet food production are just a few examples of the sectors where entrepreneurs can find interesting business opportunities. In addition, the country has low establishment costs for foreign companies, which makes doing business in Peru even easier.

Peru is known for its abundance of natural resources. This is another crucial reason for making it an attractive foreign investment destination. The country is one of the leading mineral producers in the region and the world. The country stands out in producing copper, silver, tin, zinc, and gold. In addition, Peru has a great diversity of natural resources, from fertile soils for agriculture to a wide variety of flora and fauna, which offers opportunities for agribusiness and ecological tourism.

The most lucrative sectors to do business in Peru

For businesses looking for profitable opportunities in Peru, several sectors stand out for their growth and investment potential. Here are the main sectors that may be of interest to foreign investors:

• Tourism: Peru is a popular tourist destination thanks to its history and impressive landscapes. The hotel industry, gastronomy, transportation, and tourist services are areas where business opportunities can be found.
• Agriculture and agroindustry: With its diversity of climates and soils, Peru is ideal for agricultural production. The export of Peruvian farm products, such as asparagus, mangoes, and specialty coffees, has experienced significant growth.
• Renewable energy: The Peruvian government has implemented policies to promote the development of renewable energy in the country. The solar, wind, and biomass energy sectors offer opportunities for doing business in Peru in the generation and distribution of clean energy.
• Information technology: The information technology sector in Peru has experienced significant growth in recent years. Software development, technological services, and digital solutions offer opportunities for foreign investors.
• Mining: Peru is one of the leading mineral producers worldwide. The exploration, extraction, and processing of minerals are areas where you can find business opportunities.

It is crucial to note that each sector has regulations and legal requirements. Before investing in any business or doing business in Peru, it is advisable to conduct a detailed analysis to understand the specific opportunities and challenges of operating in each sector.

The process to establish a business in Peru

Establishing a business in Peru involves several essential steps that must be followed. First of all, it is necessary to evaluate the type of business you want to start, the place of work, the obligations, and the benefits obtained by establishing a formal enterprise.

First, it must be decided if the business will be established as a Natural Person or Legal Entity. If the second option is chosen, it will be necessary to select the business name and the type of company, considering whether it will be established individually or with partners, as well as the capital with which the business will be started.

Then, when doing business in Peru, the investor must select the appropriate tax regime for the company. This will depend on the type of activity that will be engaged in. Once these decisions are made, the next step is to formalize the business. To do this, investors doing business in Peru can register as a Natural Person or follow the process for the Registration/Incorporation of a company as a Legal Person.

If you are an investor who plans to open the business in your own or rented premises, it will be necessary to obtain an operating license. These licenses are requested in the corresponding municipalities. It is essential to contact the appropriate municipality for specific requirements and more information on obtaining an operating license when doing business in Peru. In addition, the National Institute of Statistics and Information’s (INEI) Geographic Information System for Entrepreneurs (SIGE) can be used to verify the existence of similar businesses in the area where you want to establish your own.

If investors need to hire staff to start a company, it is vital to consider the labor law and obligations that this implies. Finally, depending on the type of products to be sold, it may be necessary to obtain special permits. Remember that these are the general steps to establish a business in Peru, and it is crucial to investigate and comply with the specific requirements of each case.

The culture of doing business in Peru

Some specific practices and customs characterize the business culture in Peru. First of all, it is common for meetings not to start at the established time. Despite this, it is advisable to arrive on time as a sign of seriousness and respect. Business meetings are usually held in the morning from 9:00 a.m. to 12:00 p.m. or in the afternoon from 3:00 p.m. to 6:00 p.m.

The most common greeting in business is the handshake for both men and women. However, among people in a friendly relationship, it is common to use hugs, pats, or kisses on the cheek for women. During the greeting, touching the other person’s arm with the left hand is common, especially among men.

In conversations, it is crucial to consider the volume and tone of voice since Peruvians tend to speak in a low voice and consider speaking loudly disrespectful. In addition, when doing business in Peru, avoiding ideological or political discussions is advisable since they can affect commercial relations.

• As for negotiations, they usually start with the most senior people within the company, whether private or public. However, representatives of middle-level positions can sometimes participate, especially if the meeting concerns the transaction’s technical aspects. During negotiations, it is common to use “bargaining” as part of the process, both in large deals and everyday life.
• If you want to do business with the State, having an agent or legal representative is mandatory.
• Regarding business opportunities in Peru, construction, architecture, and engineering services, suppliers for mining, higher education services, the software and ICT industry, gourmet products, as well as containers, packaging, and labels for agribusiness stand out.
• To start a business in Peru, it is essential to establish a network of contacts and have a local partner. Peruvian businessmen value the quality of the products, the delivery opportunity, competitive prices, quality and quantity compliance, supplier certifications, and the absence of intermediaries.
• Regarding cultural barriers, the handshake is the most common greeting when introducing yourself.

Legal environment for business in Peru: A detailed overview

The legal environment for business in Peru presents important aspects that must be considered. One is the need for local support to set up and run a business. This involves providing detailed information, such as identifying the personnel in charge of the management and administration of the company.

Another relevant aspect in Peru is transparency in business practices. Corruption remains an issue to be dealt with in the country. Therefore, companies must maintain legal and transparent business practices to comply with Peruvian law. Additionally, Peruvian law recognizes corporate criminal liability applicable to bribery, emphasizing the importance of maintaining ethical and transparent business practices.

Doing business in Peru presents an array of enticing opportunities for both local and international entrepreneurs. The country’s strategic geographical location, boasting access to multiple global markets, serves as a gateway for trade in South America. Peru’s commitment to economic liberalization and open-market policies has created a favorable business environment, promoting foreign investment and stimulating growth across various sectors. With a steadily growing economy and abundant natural resources, Peru offers a strong foundation for flourishing industries such as mining, agriculture, and tourism. The government’s initiatives to streamline bureaucratic processes and enhance infrastructure further enhance the appeal of investing in Peru. Additionally, a young and increasingly skilled workforce and an expanding middle class contribute to a growing consumer market ripe with potential. As political stability becomes more entrenched and efforts to improve transparency and governance continue, the allure of doing business in Peru only strengthens.

For more information on doing business in Peru, contact LATAM FDI.