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Doing business in Peru: Things to consider

by | Aug 26, 2023

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.

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