Peru is among the fastest growing economies in Latin America, and investors and entrepreneurs choose to start a business in Peru due to several benefits this country offers.
Peru is one of the most favorable countries in Latin America to consider starting a business because the opportunities it offers are plenty. The country has strong economic growth, there are also no constraints when it comes to foreign shareholding, foreign exchange, and foreign investment. Peru’s business setup process is simple, and the prosperity of natural resources that Peru possesses, mixed with the ease of entry for foreign entities make Peru a desirable destination for foreign investment.
Business structures in Peru
Depending on the activity that the investors plan to undertake, there are several types of legal entities which investors can use to incorporate businesses in Peru. The major legal forms of companies in Peru are the following;
Joint Stock Company (Sociedad Anónima/S.A)
This is the most famous type of legal entity in Peru for business as it’s relatively easy to open. A minimum of two Peruvian or foreign shareholders is needed, which may be individuals or legal entities. Its Liability is limited to the amount of the contribution and this type of company must have a Board of Directors and a General Manager.
Private Closed Corporation (Sociedad Anónima Cerrada/ S.A.C)
This type of entity can be classified as closely held if it does not have more than 20 shareholders and its shares are not listed on the Stock Exchange. The closely held corporation has specific features found in a limited liability company.
Publicly-Held Corporations (Sociedades Anónimas Abiertas/S.A.A.)
This type of corporation is primarily formulated for companies with a large number of shareholders or in which more than 35% of the capital stock belongs to one hundred seventy-five or more shareholders, not including those shareholders whose personal stake is less than 0.002% of the capital stock or exceeds 5% of the capital stock.
Limited Liability Company (Sociedad Comercial de Responsabilidad Limitada/S.R.L)
Under this type of company, a minimum of two and a maximum of twenty partners are allowed. This type of corporation does not issue shares and the requirements for its establishment are the same as those for other companies. Its capital stock is divided into ownership interests and may not be incorporated in securities.
Branch (Sucursal)
This is another type of legal entity in Peru. It’s established outside its legal address and it realizes the same activities as its head office.
It has legal representation and enjoys management independence in the activities established by the parent company. A branch is assigned capital by its parent company.
Steps to register a company in Peru
There are a couple of legal formalities which need to be acknowledged before registering a company in Peru, and they include the following:
- Select the appropriate company type: choosing the right company type is the first step when registering a company in Peru. The type of company chosen in Peru has to better align the business objectives and goals.
- Select a name for the company: once you’ve selected a name for the company, you need to search for the availability of the name in the Registry of Legal Entities and reserve it as the name of the company. This is not a compulsory step, but it’s recommended as it makes it easier to register the company in the National Public Registry records.
- Prepare the Articles of Incorporation: the company’s articles of incorporation have to be signed by a Peruvian lawyer and must include the following information:
- Identification of Shareholders
- Company Type
- Description of leadership positions
- Company objective
- Bylaws, and
- Authorized capital.
Note that to register a company in Peru, you also have to appoint a registered office address and a legal representative for the company. In order to appoint a legal representative you would need a Power of Attorney (POA), this POA has to be signed and legalized by the Ministry of Foreign Affairs of Peru.
- Register the company at SUNARP: the next mandatory step is to process the public deed registration with the registration authority, the National Superintendency of Public Registries (SUNARP). Once the company is registered in SUNARP, it officially exists.
- Obtain a Taxpayer ID: next, you have to submit the necessary forms and requirements to the SUNAT, the National Revenue Authorities, to obtain the tax identification number. All the registration forms for SUNAT have to be completed by the legal representative of the company.
- Formalize the company books: the next step involved in forming a company in Peru is the legalization of statutory books and accounting records.
- Obtain municipal operation license: the Municipal Operations License is required to operate for commercial, services, industrial, and professional service establishments.
- The Municipal Operations License is the authorization given by the corresponding Municipality to companies to start operations. This is requested in the Municipality of the district where the company will operate physically. This is then followed by a safety inspection carried out by the National Institute of Civil Defense (INDECI).
- Open a company bank account in Peru: the final step is choosing a bank to open the company’s bank account. Do a little research in order to choose a local bank that offers the best pricing structures regarding international transactions. It’s recommended to contact a professional who is knowledgeable, about this process.
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