Peru has been one of the fastest growing Latin American economies since 2002 and is known for its prudent fiscal policies. Structural reforms and sound macroeconomic policies created high growth, low inflation, and a greatly reduced poverty rates from 52.2 percent in 2005 to 20.5 percent in 2018. Peru’s Gross Domestic Product (GDP) averaged six percent growth from 2002 through 2013, then slowed to 2.5 to 4 percent, and in 2019 grew by 2.2 percent, significantly higher than the estimated 0.6 percent regional average. The International Monetary Fund (IMF) and the World Bank have estimated that Peru’s GDP will fall between 4.5 and 4.7 percent in 2020 due to the global COVID-19 crisis. To offset the anticipated economic damage, the Government of Peru (GOP) announced a $27 billion stimulus plan to jumpstart the economy, which amounts to 12 percent of GDP. Peru is better placed to recover than others in the region. The IMF projects a rebound in 2021, with estimated 5.2 percent GDP growth, which would be the second highest rate in the region. Peru’s government debt as a percentage of GDP was 26.8 percent in 2019. Its budget deficit was 1.6 percent of GDP with net international reserves of $68.3 billion. Inflation averaged 2.1 percent in 2019. Private investment comprised more than two-thirds of Peru’s total investment in 2019.

Peru is well integrated in the global economy through its multiple free trade agreements, including the United States-Peru Trade Promotion Agreement (PTPA), which entered into force in February 2009. In 2019, trade of goods between the United States and Peru totaled $15.8 billion, up from $9.1 billion in 2009, the year the PTPA entered into force. From 2009 to 2019, Peruvian exports of goods to the United States jumped from $4.2 billion to $6.1 billion (a 45 percent increase) while U.S. exports of goods to Peru jumped from $4.9 billion to $9.6 billion (a 96 percent increase). The United States also enjoys a favorable trade balance in services; exports of services in 2018 to Peru amounted to $3.3 billion and contributed to a $1.2 billion services surplus the same year.

Corruption continues to negatively affect Peru’s investment climate. Transparency International ranked Peru 101st out of 180 countries in its 2019 Corruption Perceptions Index. In 2016, Brazilian company Odebrecht admitted it paid $29 million in bribes in Peru, leading to investigations involving high-level officials of the last four Peruvian administrations and halting progress on major infrastructure projects, which continued through 2019. Odebrecht agreed in December 2018 to pay Peru $180 million in civil reparation. As of December 2019, the Brazilian construction company had paid $24 million in civil reparation.

Social conflicts adversely affect the extractives sector in Peru, which accounts for over 15 percent of Peru’s GDP. According to the Ombudsman, there were 137 active social conflicts in Peru as of March 2020, of which 65 were in the mining sector. Extractive industries are a key draw of foreign investment. According to Peru’s Private Investment Promotion Agency (ProInversion), 23 percent of Foreign Direct Investment (FDI) in 2019 went to the mining sector, 20 percent to the communications sector, and 18 percent to the financial sector. Other destinations for investment included energy (13 percent) and industry (12 percent).

Table 1
Measure Year Index/Rank Website Address
TI Corruption Perceptions Index 2019 101 of 180 http://www.transparency.org/
World Bank’s Doing Business Report “Ease of Doing Business” 2019 76 of 190 http://www.doingbusiness.org/rankings
Global Innovation Index 2019 69 of 129 https://www.globalinnovationindex.org/
U.S. FDI in partner country (M USD, stock positions) 2018 $6, 403  https://apps.bea.gov/
World Bank GNI per capita 2018 $6,470 http://data.worldbank.org/

Policies Towards Foreign Direct Investment

Peru seeks to attract investment — both foreign and domestic — in nearly all sectors of the economy. The country reported $2.8 billion in Foreign Direct Investment (FDI) in 2019. The government seeks increased investment for 2020-2021 and has prioritized $5.5 billion in public-private partnership projects in transportation infrastructure, electricity, mining, broadband expansion, gas distribution, health and sanitation.

The 1993 Constitution grants national treatment for foreign investors and permits foreign investment in almost all economic sectors. Under the Peruvian Constitution, foreign investors have the same rights as national investors to benefit from investment incentives, such as tax exemptions. In addition to the 1993 Constitution, Peru has several laws governing FDI including the Foreign Investment Promotion Law (Legislative Decree (DL) 662 of September 1991) and the Framework Law for Private Investment Growth (DL 757 of November 1991). Other important laws include the Private Investment in State-Owned Enterprises Promotion Law (DL 674), the Private Investment in Public Services Infrastructure Promotion Law (DL 758), and specific laws related to agriculture, fisheries and aquaculture, forestry, mining, oil and gas, and electricity. Article 6 of Supreme Decree No. 162-92-EF (the implementing regulations of DLs 662 and 757) authorizes private investors to enter all industries except investments within natural protected areas and manufacturing of weapons.

Peru and the United States benefit from the United States-Peru Free Trade Agreement (PTPA), which entered into force on February 1, 2009. The PTPA established a secure, predictable legal framework for U.S. investors operating in Peru. The PTPA protects all forms of investment. U.S. investors enjoy the right to establish, acquire, and operate investments in Peru on an equal footing with local investors in almost all circumstances.

The GOP created the investment promotion agency ProInversion in 2002. ProInversion has completed both privatizations and concessions of state-owned enterprises and natural resource-based industries. The agency regularly organizes international roadshow events, including in the United States, to attract investors and manages the GOP’s public-private investment project portfolio. Major recent concession areas include ports, water treatment plants, power generation facilities, mining projects, electrical transmission lines, oil and gas distribution, and telecommunications. Project opportunities are available on ProInversion’s Project Portfolio page at: http://www.proyectosapp.pe/modulos/JER/PlantillaProyectoEstadoSector.aspx?are=1&prf=2&jer=5892&sec=30 .

The GOP passed legislative decrees in July 2018 to attract and facilitate investment. These include measures to reform the Public-Private Partnership (PPP) process. The reforms establish the Economy and Finance Ministry (MEF) as the PPP policymaking authority and allows government entities to contract out PMO services throughout all stages of the PPP process, including through the GOP promotion investment agency ProInversion. The GOP announced on January 2020 a new narrowed focus for ProInversion to place it as a center of excellence for project structuring and a credible PPP project investment pipeline source. The GOP also established an investment research portal within the public investment online database (https://www.mef.gob.pe/es/aplicativos-invierte-pe?id=5455  ).

To spur infrastructure projects and close the $110 billion infrastructure gap, the government published a National Infrastructure Plan (https://www.mef.gob.pe/contenidos/inv_privada/planes/PNIC_2019.pdf  ) in July 2019, with 52 infrastructure projects keyed to critical sectors outlined in a National Competitiveness Plan. Priority projects include two Lima metro lines, an expansion of Jorge Chavez International Airport, and regional rail lines. In January 2020 Peru passed a law allowing the use of Building Information Modelling (BIM) and New Engineering Contract (NEC) mechanisms for public investment projects, institutionalizing international key best practices in infrastructure.

Although Peruvian administrations since the 1990s have supported private investments, Peru occasionally passes measures that some observers regard as a contravention of its open, free market orientation. In December 2011, Peru signed into law a 10-year moratorium on the entry of live genetically modified organisms (GMOs) for cultivation. Peru also implemented two sets of rules for importing pesticides, one for commercial importers, which requires importers to file a full dossier with technical information, and another for end-user farmers, which only requires a written affidavit.

Limits on Foreign Control and Right to Private Ownership and Establishment

The Constitution (Article 6 under Supreme Decree No. 162-92-EF) authorizes foreign investors to carry out any economic activity provided investors comply with all constitutional precepts, laws, and treaties. Exceptions exist, including exclusion of foreign investment activities in natural protected reserves and manufacturing of military weapons, pursuant to Article 6 of Legislative Decree No. 757. While long-term concessions are granted, the law states Peruvians must maintain majority ownership in certain strategic sectors: media; air, land and maritime transportation infrastructure; and private security surveillance services.

Prior approval is required in the banking and defense-related sectors. Foreigners are legally prohibited from owning a majority interest in radio and television stations in Peru; nevertheless, foreigners have, in practice, owned controlling interests in such companies. Under the Constitution, foreign interests cannot “acquire or possess under any title, mines, lands, forests, waters, or fuel or energy sources” within 50 kilometers of Peru’s international borders. However, foreigners can obtain concessions and rights within the restricted areas with the authorization of a supreme resolution approved by the Cabinet and the Joint Command of the Armed Forces.

The GOP does not screen, review, or approve FDI outside of those sectors that require a governmental waiver.

Other Investment Policy Reviews

The World Trade Organization (WTO) published a Trade Policy Review on Peru in October 2019. The WTO commented that foreign investors receive the same legal treatment as local investors in general, although foreign investment on property at the country’s borders, air transport, and broadcasting is restricted. The report also noted that the previous foreign investment restriction on maritime services was resolved by a GOP Legislative Decree issued in September 2108 that lifted the restrictions on the provision of cabotage transport services. The report highlights the continuous government efforts to promote PPPs and strengthen its legal framework incorporating the Organization for Economic Cooperation and Development (OECD) principles on PPPs. The report notes that Peru maintains a regime open to domestic and foreign investment that fosters competition and equal treatment.

Report available at: https://www.wto.org/english/tratop_e/tpr_e/tp493_e.htm

Peru aspires to become a member of the OECD. Peru launched an OECD Country Program on December 8, 2014, comprising policy reviews and capacity building projects, and allowing it to participate in substantive work of OECD’s specialized committees. An 18-month OECD review identified economic, social, and political obstacles that could hamper Peru’s OECD membership aspirations. The government noted that the study would act as a “roadmap” for Peru’s goal to achieve membership by 2021. The OECD published the Initial Assessment of its Multi-Dimensional Review in October 2015, finding that, in spite of economic growth, Peru “still faces structural challenges to escape the middle-income trap and consolidate its emerging middle class.” In every year since this study was published, Peru has enacted and implemented dozens of governance reforms to modernize its governance practices in line with OECD recommendations.

Report: www.oecd.org/countries/peru/multi-dimensional-review-of-peru-9789264243279-en.htm 

Peru has not had any third-party investment policy review through the OECD, or UNCTAD in the past three years.

Business Facilitation

The GOP does not have a regulatory system to facilitate business operations but INDECOPI (the Antitrust, Unfair Competition, Intellectual Property Protection, Consumer Protection, Dumping, Standards and Elimination of Bureaucratic Barriers Agency) regulates the enactment of new regulations by government entities that can place burdens on business operations. INDECOPI has the authority to block any new business regulation. In addition, the GOP approved a “sunset law” in 2016 that requires a review of existing regulations by government agencies to reduce paperwork. The Prime Minister’s Office created a Secretary of Public Management (https://sgp.pcm.gob.pe/ ) in order to improve and upgrade public management. INDECOPI has also a Commission for Elimination of Bureaucratic Barriers (https://www.indecopi.gob.pe/web/eliminacion-de-barreras-burocraticas/presentacion  ).

Peru allows foreign business ownership, provided that a company has at least two shareholders and that its legal representative is a Peruvian resident. The process is described in the GOP’s digital platform (https://www.gob.pe/269-ministerio-de-la-produccion-registrar-o-constituir-una-empresa ). Incorporating a company involves the following steps: (1) Process to incorporate a company (Legal person); (2) Name search and reservation; (3) Incorporation Act (Minute); (4) Public Deed preparation; (5) Public Record registration; (6) Tax ID Number (RUC) registration for the legal entity. An entrepreneur must reserve the company name through the national registry, SUNARP (www.sunarp.gob.pe ), and prepare a deed of incorporation through a Citizen and Business Services Portal (http://www.serviciosalciudadano.gob.pe/ ). After a deed is signed, entrepreneurs must file with a Public Notary, pay notary fees of up to one percent of a company’s capital, and submit the deed to the Public Registry. The company’s legal representative must obtain a Certificate of Registration and tax identification number from the National Tax Authority SUNAT (www.sunat.gob.pe). Finally, the company must obtain a license from the municipality of the jurisdiction in which it is located. Depending on the core business, companies might need to obtain further government approvals such as: sanitary, environmental, or educational authorizations.

An entrepreneur must reserve the company name through the national registry, SUNARP (www.sunarp.gob.pe ), and prepare a deed of incorporation through a Citizen and Business Services Portal (http://www.serviciosalciudadano.gob.pe/ ). After a deed is signed, entrepreneurs must file with a Public Notary, pay notary fees of up to one percent of a company’s capital, and submit the deed to the Public Registry. The company’s legal representative must obtain a Certificate of Registration and tax identification number from the National Tax Authority SUNAT (www.sunat.gob.pe). Finally, the company must obtain a license from the municipality of the jurisdiction in which it is located. Depending on the core business, companies might need to obtain further government approvals such as: sanitary, environmental, or educational authorizations.

Companies should register all foreign investments with ProInversion. The agency helps potential investors navigate investment regulations and provides sector-specific information on the investment process.

Outward Investment

The GOP promotes outward investment by Peruvian entities through the Ministry of Foreign Trade and Tourism (MINCETUR). Trade Commission Offices of Peru (OCEX), under the supervision of Peru’s export promotion agency (PromPeru), are located in numerous countries, including the United States, and promote the export of Peruvian goods and services and inward foreign investment. The GOP does not restrict domestic investors from investing abroad.

The PTPA eliminated the need for a bilateral investment agreement between the United States and Peru. Peru also has free trade agreements with Australia, Canada, Chile, China, Venezuela, Costa Rica, the European Union, the European Free Trade Association (Iceland, Liechtenstein, Norway, and Switzerland), Honduras, Japan, Mexico, Panama, Singapore, South Korea, and Thailand. It has Framework Agreements with the South American Common Market trade bloc (MERCOSUR) countries, which include Argentina, Brazil, Paraguay, Uruguay, and Venezuela. It has a partial preferential agreement with Cuba.

More agreements have been signed and await full implementation, including with Guatemala, the Pacific Alliance (Mexico, Colombia, and Chile), Brazil, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership CPTPP (Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Singapore and Vietnam). Peru as of May 2020 has not yet ratified the CPTPP. Peru ratified the WTO Agreement on Trade Facilitation, which entered into force in February 2017.

Peru has bilateral investment agreements in force with Argentina, Australia, Belgium-Luxembourg, Bolivia, Canada, Chile, China, Colombia, Cuba, Czech Republic, Denmark, Ecuador, El Salvador, Finland, France, Germany, Italy, Japan, Korea, Malaysia, Netherlands, Norway, Paraguay, Portugal, Romania, Singapore, Spain, Sweden, Switzerland, Thailand, United Kingdom, and Venezuela. In total, Peru is a party to 32 bilateral investment agreements.

Peru does not have a bilateral taxation treaty with the United States. Peru has signed and ratified tax treaties with the Andean Community (Bolivia, Colombia, Ecuador), Chile, Brazil, Canada, Mexico, Switzerland, South Korea, and Portugal. Peru has also signed bilateral taxation treaties with Spain and Thailand, but these have not been ratified by the Peruvian Congress.

Transparency of the Regulatory System

Laws and regulations most relevant to foreign investors are enacted and implemented at the national level. Most ministries and agencies make draft regulations available for public comment. El Peruano, the state’s official gazette, publishes regulations at the national, regional, and municipal level. Ministries generally maintain current regulations on their websites. Rule-making and regulatory authority also exists through executive agencies specific to different sectors. The Supervisory Agency for Forest Resources and Wildlife (OSINFOR), the Supervisory Agency for Energy and Mining (OSINERGMIN), and the Supervisory Agency for Telecommunications (OSIPTEL), all of which report directly to the President of the Council of Ministers, can enact new regulations that affect investments in the economic sectors they manage. These agencies also have the remit to enforce regulations with penalties varying by sector, with information on enforcement published. Enforcement actions can be appealed through administrative processes. Regulation is reviewed on the basis of scientific and data-driven assessments, but public comments are not always received or made public.

Accounting, legal, and regulatory standards are consistent with international norms. Peru’s Accounting Standards Council endorses the use of IFRS standards by private entities. Public finances and debt obligations, including explicit and contingent liabilities, are transparent and publicly available at the Ministry of Economy and Finance website: https://www.mef.gob.pe/es/estadisticas-sp-18642/deuda-del-sector-publico 

International Regulatory Considerations

Peru is a member of regional economic blocs. Under the Pacific Alliance, Peru looks to harmonize regulations and reduce barriers to trade with other members: Chile, Colombia, and Mexico. Peru is a member of the Andean Community (CAN), which issues supranational regulations – based on consensus of its members – that supersede domestic provisions. Peru follows International Food Standards – CODEX Alimentarius (food safety), World Organization for Animal Health (OIE), and International Plant Protection Convention – (IPPC) guidelines for Sanitary and Phytosanitary (SPS) standards. When CODEX does not have limits or standards established for a product, Peru defaults to the U.S. maximum residue level or standard. Peru’s system is more aligned with the U.S. regulatory system and standards than with its other trading partners. Peru notifies all agricultural-related technical regulations to the World Trade Organization (WTO) Technical Barriers to Trade (TBT) committee.

Legal System and Judicial Independence

Peru uses a civil law system. Peru’s Civil code includes a contract section and a General Corporations Law that regulates commercial aspects of companies. Peru has a civil court responsible to solve conflicts or discrepancies that might arise between companies. Companies can also access conflict resolution services in civil courts for conflicts and litigations for which a legal claim has been filed. Peru has an independent judiciary. The executive branch does not interfere with the judiciary as a matter of policy. Regulations and enforcement actions are appealable through administrative process and the court system. Peru is also in the process of reforming its justice system, led by the National Justice Board which began operating in January 2020. This board replaced the former National Magistrates Council. The new institution is charged with establishing the selection processes for judges, appointments, evaluations, and disciplinary actions.

Laws and Regulations on Foreign Direct Investment

Peru has a stable and attractive legal framework used to promote private investment both from domestic and foreign entities. The 1993 Peruvian Constitution includes provisions that establish principles to ensure a favorable legal framework for private investment, particularly for foreign investment. A key principle is equal treatment to domestic and foreign investment. Some of the main private investment regulations include:

  • Legislative Decree 662 that approves foreign investment legal stability regulations,
  • Legislative Decree 757 that approves the private investment growth framework law, and
  • Supreme Decree 162-92-EF that approves private investment guarantee mechanism regulations

Peru’s legal system is available to investors. All laws relevant to foreign investment along with pertinent explanations and forms can be found on the ProInversion website at: http://www.ProInversion.gob.pe/modulos/LAN/landing.aspx?are=1&pfl=1&lan=9&tit=institucional 

Competition and Anti-Trust Laws

The Institute for the Protection of Intellectual Property, Consumer Protection, and Competition (INDECOPI) is the GOP agency responsible for reviewing competition-related concerns of a domestic nature. Peru passed a mergers and acquisitions (M&A) control law in November 2019. The law requires INDECOPI to review and approve M&As involving companies, including multinationals, that have combined annual sales or gross earnings over $146 million in Peru and if the value of the sales or annual gross earnings in Peru of two or more of the companies involved in the proposed M&A operation exceed $22 million each. Pending Congressional review, the law enters into force in August 2020.

Expropriation and Compensation

Congress passed a law streamlining expropriation procedures in August 2015. The Peruvian Constitution states that Peru can only expropriate private property based on public interest, such as public works projects or for national security. In order to expropriate, Congress is required to pass a legislative decree, although a law implemented in 2020 allows for fast track expropriation of lands tied to 52 projects in Peru’s National Infrastructure Plan. The government has expressed its intention to comply with international standards concerning expropriations. Peruvian law bases compensation for expropriation on fair market value.

Illegal expropriation of foreign investment has been alleged in the extractive industry. A U.S. company alleged indirect expropriation due to changes in regulatory standards. Landowners have also alleged indirect expropriation due to government inaction and corruption in ‘land-grab’ cases that have, at times, been linked to local government endorsed projects.

Dispute Settlement

  • ICSID Convention and New York Convention

Peru is a party to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) and to the International Center for the Settlement of Investment Disputes (ICSID convention). Disputes between foreign investors and the GOP regarding pre-existing contracts must still enter national courts, unless otherwise permitted, such as through provisions found in the PTPA. In addition, investors who enter into a juridical stability agreement may submit disputes with the government to national or international arbitration if stipulated in the agreement. Several private organizations – including the American Chamber of Commerce, the Lima Chamber of Commerce, and the Catholic University – operate private arbitration centers. The quality of such centers varies and investors should choose arbitration venues carefully.

The PTPA includes a chapter on dispute settlement, which applies to implementation of the Agreement’s core obligations, including labor and environment provisions. Dispute panel procedures set high standards of openness and transparency through the following measures: open public hearings, public release of legal submissions by parties, admission of special labor or environment expertise for disputes in these areas, and opportunities for interested third parties to submit views. The Agreement emphasizes compliance through consultation and trade-enhancing remedies. The Agreement also encourages arbitration and other alternative dispute resolution measures for disputes between private parties.

  • Investor-State Dispute Settlement

The PTPA provides investor-state claim mechanisms. It does not require that an investor exhaust local judicial or administrative remedies before a claim is filed. The investor may submit a claim under various arbitral mechanisms, including the Convention on the Settlement of Investment Disputes (ICSID Convention) and ICSID Rules of Procedure, the ICSID Additional Facility Rules, the United Nations Commission on International Trade Law (UNCITRAL) Arbitration Rules, or, if the disputants agree, any other arbitration institution or rules. Peru has paid previous arbitral awards; however, a U.S. court found in one case that Peru altered its tax code prior to payment, thus reducing interest payments.

In 2011, a claimant filed an arbitral challenge against Peru stemming from the alleged failure by the state to undertake agreed-upon environmental remediation at a mining facility. The arbitration was dismissed in 2016 on grounds of jurisdiction.

In February 2016, a U.S. investor filed a Notice of Intent to pursue international arbitration against the GOP for violation of the U.S.-Peru Trade Promotion Agreement. The investor, which refiled its claim in August 2016, holds agrarian land reform bonds that it argues the GOP has undervalued.

In September 2019, a U.S. investor filed an arbitration claim against the GOP over alleged interference over environmental permitting and contractual issues for a hydro power project.

In February 2020, a claimant filed an arbitration claim against Peru for violation of the U.S.-Peru Trade Promotion Agreement regarding a tax and royalty dispute between its mining subsidiary and Peru’s tax authority SUNAT.

There is no recent history of extrajudicial action against foreign investors.

  • International Commercial Arbitration and Foreign Courts

The 1993 Constitution allows disputes among foreign investors and the government or state-controlled enterprises to be submitted to international arbitration. The Supreme Court ruled in 2005 that all arbitration awards are final and are not subject to appeal.

Bankruptcy Regulations

Peru has a creditor rights hierarchy similar to that established under U.S. bankruptcy law, and monetary judgments are usually made in the currency stipulated in the contract. However, administrative bankruptcy procedures under INDECOPI have proven to be slow and subject to judicial intervention. Compounding this difficulty are occasional laws passed to protect specific debtors from action by creditors that would force them into bankruptcy or liquidation. In August 2016, the GOP extended the period for bankruptcy from one to two years. Peru does not criminalize bankruptcy. World Bank’s 2019 Doing Business Report ranked Peru 90th of 190 countries for ease of “resolving insolvency.”

Investment Incentives

Peru offers both foreign and national investors legal and tax stability agreements to stimulate private investment. These agreements guarantee that the statutes on income taxes, remittances, export promotion regimes (such as drawbacks, or refunds of duties), administrative procedures, and labor hiring regimes in effect at the time of the investment contract will remain unchanged for that investment for 10 years. To qualify, an investment must exceed $10 million in the mining and hydrocarbons sectors or $5 million within two years in other sectors. An agreement to acquire more than 50 percent of a company’s shares in the privatization process may also qualify an investor for a legal or tax stability agreement, provided that the added investment will expand the installed capacity of the company or enhance its technological development.

Foreign Trade Zones/Free Ports/Trade Facilitation

MINCETUR Minister Edgar Vásquez announced in June 2019 that Peru was accepted as a member of the Association of Free Zones of the Americas (AZFA), as well as the World Free Zone Organization (WFZO). Peru has seven Special Economic Zones (SEZ): a Free Zone in Tacna and Special Development Zones (SDZ) in Ilo, Matarani, Paita, Tumbes, Loreto and Puno (the last three are not in operation). Companies can become SEZ users through public auctions. This condition gives them access to tax benefits and customs advantages promoting entry, permanence, and exit facilitation procedures for goods and tax exemptions in the development of their activities.

Specific benefits are as follows:


  • Income Tax exemption (rate outside of the EEZ is 29.5 percent)
  • General Sales Tax (IGV) exemption (rate outside of the EEZ is 16 percent)
  • Municipal Promotion Tax exemption (rate outside of the EEZ is 2 percent)
  • Excise Tax (ISC) exemption (rate outside of the EEZ goes from 2 to 30 percent depending on the product)
  • Ad Valorem tariff exemption when importing products from overseas (rates outside of the EEZ are 0, 6, and 11 percent)
  • Exemption from all central, regional or municipal government taxes created in the future, except for social security (EsSalud) contributions and fees


  • Entry of machinery, equipment, raw materials and supplies from abroad is eligible to the suspension of import duties and taxes payments
  • Indefinite permanence of goods within the SEZ, as long as company maintains user status
  • Products manufactured in the SEZ can be exported directly without having to undergo a nationalization customs regime
  • Products manufactured in the SEZ can be entered into national territory under international agreements and conventions
  • Entry of goods into the SEZ is direct and does not require prior storage

MINCETUR Supreme Decree 005-2019 published in August 2019, implemented regulations for the SDZ of Tumbes, Ilo, Matarani and Paita. SDZ businesses can perform activities in seven economic sectors: industrial, logistics, repair/overhaul, telecommunications, information technology, scientific, technological research, and development. SDZs enjoy the same economic benefits as the SEZs.

The MINCETUR Foreign Trade Facilitation Office oversees Peru’s free trade zones. The general function of the office is the application of effective foreign trade facilitation mechanisms to promote infrastructure development and to allow access and provision of services in improved quality and price conditions. The MINCETUR Foreign Trade Facilitation Office Director is Mr. Francisco Ruiz Zamudio fruiz@mincetur.gob.pe, +51 1 5136100 Annex 1650.

Performance and Data Localization Requirements

The PTPA has greatly reduced burdensome investor requirements in Peru. Under the PTPA, Peru made concessions beyond its commitments to the World Trade Organization (WTO), eliminating investment barriers such as the requirement for U.S. firms to hire nationals rather than U.S. professionals, and measures requiring the purchase of local goods. Peru does not maintain any measures that are inconsistent with Trade-Related Investment Measure (TRIM) requirements, according to a WTO Committee on Trade-Related Investment Measure notification dated August 19, 2010.

Current law limits foreign employees to 20 percent of the total number of employees in a local company (whether owned by foreign or national interests). However, under the PTPA, Peru has agreed not to apply most of its nationality-based hiring requirements to U.S. professionals and specialty personnel. The combined salaries of foreign employees are limited to no more than 30 percent of the total company payroll. However, DL 689 from November 1991 provides a variety of exceptions to these limits. For example, a foreigner is not counted against a company’s total if he or she holds an immigrant visa, has a certain amount invested in the company (approximately $4,000), or is a national of a country that has a reciprocal labor or dual nationality agreement with Peru. The United States and Peru recognize dual nationality, but do not have a formal agreement. Furthermore, the law exempts foreign banks, and international transportation companies from these hiring limits, as well as all firms located in free trade zones. Companies may apply for exemptions from the limitations for managerial or technical personnel. Sector-specific regulating bodies enforce performance requirements.

Although there are no discriminatory or onerous visa requirements, residence, or work permit requirements that inhibit foreign investors’ mobility, the application and approval process can be cumbersome and lengthy.

There are no performance requirements that apply exclusively to foreign investors. Peruvian civil law applies to legal stability agreements, which means the GOP cannot unilaterally alter agreements. Notwithstanding these protections, investors should be aware that government officials have delivered negative remarks to the press regarding companies exercising their contractual rights and obligations.

Peru does not follow a policy in which foreign investors must use domestic content in goods or technology.

Data Storage

A data controller who processes personal data must notify the National Authority for Personal Data Protection (ANPDP for its Spanish acronym), which keeps a public register of data processors and the type of data they collect. Personal data is defined by the Law as any information on an individual which identifies or makes him/her identifiable through means that may be reasonably used. Sensitive personal data means any of the following: biometric data, data on racial and ethnic origin; political, religious, philosophical or moral opinions or convictions, personal habits, union membership, and information related to health or sexual preference. Unless otherwise exempted by statute, data controllers are generally required to obtain the consent of data subjects for the processing of their personal data. Consent must be prior, informed, expressed, and unequivocal. In the case of sensitive personal data, consent must also be given in writing, which may be done digitally. Even without the consent of the subject, sensitive data may be processed when authorized by law, provided it is in the public interest.Data controllers may process personal data without consent:

  • When the personal data are compiled or transferred for public entities in control of the personal data and in the performance of its duties;
  • When personal data is accessible to the public or is intended to be accessible to the public;
  • To comply with other laws related to financial solvency and credit;
  • In the case of a law for the promotion of competition in regulated markets under certain circumstances;
  • When necessary to perform a contract to which the data subject is a party;
  • For personal data related to health, under certain circumstances;
  • When processing is carried out by non-profit organizations with political, religious or union purposes, under certain circumstances; or
  • In an anonymization or disassociation procedure.

A data controller may transfer personal data to places outside of Peru only if the recipients have adequate protection measures. The ANPDP supervises compliance with this requirement. That provision does not apply in the following cases:

  • When the data subject has given his/her prior, informed, express and unequivocal consent;
  • Agreements under international treaties to which Peru is a party;
  • International judicial cooperation;
  • International cooperation between intelligence agencies for the fight against terrorism, illegal drug trafficking, money laundering, corruption, human trafficking and other forms of organized crime;
  • When necessary to implement a contract to which the data subject is a party;
  • To comply with laws concerning the transfer of bank or stock exchanges; or
  • When the transfer is for the prevention, diagnosis or medical or surgical treatment of the data subject; or when necessary to carry out epidemiological or similar studies (provided that adequate disassociation procedures are applied).

Data controllers must adopt technical, organizational, and legal measures to guarantee the security of personal data and avoid their alteration, loss, unauthorized processing or access. Peru’s law does not require any notifications to any data subject or any other entity upon a breach. Peru does not mandate special regulations be enacted for the processing of personal data of minors. The ANPDP is responsible for enforcement and can issue the following administrative sanctions/fines based upon whether the violation is mild, serious or very serious. The law provides a “principle for availability of recourse for the data subject” stating that any data subject must have the administrative and/or jurisdictional channel necessary to claim and enforce his/her rights when they are violated by the processing of his/her personal data. There are no requirements for foreign IT providers to turn over source code and/or provide access to encryption.

Peru adopted the Personal Data Protection Law (N° 29733) in July 2011 and went into effect on March 22, 2013. The Law is available here in English: https://www.huntonprivacyblog.com/wp-content/uploads/sites/28/migrated/Peru percent20Data percent20Protection percent20Law percent20July percent2028_EN percent20_2_.pdf 

The implementing regulations are available in Spanish here: http://spij.minjus.gob.pe/normas/textos/220313T.pdf  (page 28)

http://spij.minjus.gob.pe/normas/textos/220313T.pdf  (page 28)

A GOP Executive Order (Urgency Decree 007-2020) published in January 2020 establishes the Digital Trust Framework for the country encompassing a) personal data protection and transparency, b) consumer protection, and c) digital security. The Order establishes the National Digital Secretariat (SEGDI) under the Prime Minister’s Office as the overall coordinator and digital trust governing body but places data protection and transparency under the Ministry of Justice and Human Rights MINJUS (The ANPDP falls under MINJUS). The Order also establishes that all personal data processing must comply with applicable legislation issued by the ANPDP. The Order creates the National Data Center, run by SEGDI, as a digital platform to manage, direct, articulate, and supervise the operation, education, promotion, collaboration and cooperation of data nationwide. A separate Executive Order (Urgency Decree 006-2020) also published in January 2020 creates Peru’s National Transformation System including personal data protection and security preservation as one of its guiding principles. The system aims to foster and encourage digital transformation in public entities, private sector, and society; drive digital innovation, promote the digital economy, and strengthen access to digital technology in the country.

Real Property

World Bank’s 2019 Doing Business Report ranked Peru 55 of 190 for ease of “registering property.” Peru enforces property rights and interests.  Mortgages and liens exist, and the recording system is reliable, performed by SUNARP, the National Superintendency of Public Records. Foreigners and/or non-resident investors cannot own land within 50 km of a border.

Intellectual Property Rights

Peru is listed on the Watch List in the United States Trade Representative’s (USTR) 2020 Special 301 Report. The country also appears on the 2019 Notorious Markets List.

Peru’s legal framework provides for easy registration of trademarks, and inventors have been able to patent their inventions since 1994. Peru’s 1996 Industrial Property Rights Law provides an effective term of protection for patents and prohibits devices that decode encrypted satellite signals, along with other improvements. Peruvian law does not provide pipeline protection for patents or protection from parallel imports. Peru’s Copyright Law is generally consistent with the World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property (TRIPS).

INDECOPI, established in 1992, continues to be the most engaged GOP agency and is a reliable partner for the USG, the private sector, and civil society, having made good faith efforts to decrease the trademark and patent registration backlog and filing time. The average filing time is two months for trademarks and 43 months for patents.

Peruvian law provides the same protections for U.S. companies as Peruvian companies in all intellectual property rights (IPR) categories under the PTPA and other international commitments such as the World Intellectual Property Organization (WIPO) and the TRIPS Agreement. Peru joined the Global Patent Prosecution Highway Agreement (GPPH) with Japan effective in 2019. Peru is reinforcing its Patent Support System with the adoption of the WIPO – Technology and Innovation Support Center (TISC) Program.

Although INDECOPI is the GOP agency charged with promoting and defending intellectual property rights, IPR enforcement also involves other GOP agencies and offices: the Public Ministry (Fiscalia), the Peruvian National Police (PNP), the Tax and Customs Authority (SUNAT), the Ministry of Production (PRODUCE), the Judiciary, and the Ministry of Health’s (MINSA) Directorate General for Medicines (DIGEMID).

The GOP continues to improve its enforcement of IPR. The Commission for Fighting Customs Crimes and Piracy (CLCDAP) is made up of the Ministry of Production, Public Ministry, the Judiciary, the National Police, the Ministry of the Interior, SUNAT, the Ministry of Transport and Communications (MTC), the telecommunications agency (OSIPTEL), The IP Agency (INDECOPI), and the private sector. The CLCDAP was designed to provide solutions to IPR issues through operational actions, institutional strengthening, improvement of the legal framework, and public awareness activities. The CLCDAP has set up a number of working groups, including ones on software piracy, editorial piracy, online and pay TV piracy, and audiovisual piracy. Importantly, the participation of the private sector in these working groups has led to increased private sector coordination with numerous agencies.

However, there are specific concerns that remain. These include Peru’s limited progress in developing internet service provider limited liability regulations and a system of pre-established damages, and issues such as enforcement against camcording. Another area of concern relates to the standards of patent eligibility for inventions involving new methods of using previously approved pharmaceutical products. In addition, stakeholders are concerned that penalties are not sufficient to be deterrent.

There is insufficient political commitment to IPR, and widespread counterfeiting and piracy exist with insufficient judicial, prosecutorial, and law enforcement processes in Peru.

The World Economic Forum’s 2019 Global Competitiveness Index ranked Peru as 65th out of 141 economies. Peru’s competitiveness has slightly decreased (it was ranked 72nd in 2017 and 63rd in 2018), and it is still behind fellow South American countries Colombia (57), Chile (33), and Mexico (48). http://www3.weforum.org/docs/WEF_TheGlobalCompetitivenessReport2019.pdf 

For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at https://wwww.wipo.int/directory/en/.

Capital Markets and Portfolio Investment

Peru allows foreign portfolio investment and does not place restrictions on international transactions. The private sector has access to a variety of credit instruments. Mutual funds managed $10.7 billion in December 2019. Private pension funds managed a total of $52.7 billion in December 2019.

The stock market, the Lima Stock Exchange (Bolsa de Valores de Lima or BVL), is a member of the Integrated Latin American Market (MILA), which includes the stock markets from Pacific Alliance countries (Peru, Chile, Colombia, and Mexico) and seeks to integrate their stock exchanges to develop their capital markets. In December 2017, the GOP implemented a capital markets promotion law that enables mutual funds registered in Pacific Alliance countries to trade in the Lima Stock Exchange starting in July 2018. In July 2018 the Securities Market Superintendence published implementing regulations to enable the trade of funds in Pacific Alliance countries.

The Securities Market Superintendence (SMV) is the GOP entity charged with regulating the securities and commodities markets. SMV’s mandate includes controlling securities market participants, maintaining a transparent and orderly market, setting accounting standards, and publishing financial information about listed companies. SMV requires stock issuers to report events that may affect the stock, the company, or any public offerings. This requirement promotes market transparency, and aims to prevent fraud. Trading on insider information is a crime, with some reported prosecutions in past years. SMV must vet all firms listed on the Lima Stock Exchange or the Public Registry of Securities. SMV also maintains the Public Registry of Securities and Stock Brokers. SMV is studying ways to improve the regulatory system to encourage and facilitate portfolio investment.

Morgan Stanley Capital International (MSCI) maintained the Emerging Market status of the Lima Stock Exchange (BVL), which was under review for reclassification to Frontier status in 2017. London Stock Exchange Group FTSE Russell reclassified Peru from Secondary Emerging Market to Frontier status in March 2020. In a statement, the BVL stated that the decision is not necessarily replicable among the other index providers adding that MSCI, which is considered a main benchmark for emerging markets, is not expected to reconsider the BVL’s status.

Money and Banking System

Economic opening since the 1990s, coupled with competition, has led to banking sector consolidation. Fifteen commercial banks comprise the system, with assets accounting for 89 percent of Peru’s financial system. In 2019, three banks accounted for 71 percent of local loans and 70 percent of deposits among commercial banks. Of $150 billion in total banking assets at the end of December 2019, assets of the three largest commercial banks amounted to $88.32 billion.

The banking system is considered generally sound, thanks to lessons learned during the 1997-1998 Asian financial crisis, and continues to revamp operations, increase capitalization, and reduce costs. Non-performing bank loans accounted for three percent of gross loans as of December 2019, down from a high of 11 percent in early 2001. Strong bank supervision coupled with robust GDP growth over the last decade also helped banks weather the 2008-2009 global financial crises. The COVID-19 pandemic is likely to have a negative impact on banking loan portfolios. The fast implementation of the $9 billion BCRP loan guarantee will attenuate loan default risk, but banks will still feel an impact on credit operations from sensitive sectors such as tourism, services, and retail, which will take much longer to recover.

The Central Reserve Bank of Peru (BCRP) is an independent institution, free to manage monetary policy to maintain financial stability. The BCRP’s primary goal is to maintain price stability via inflation targeting. Inflation at year-end in Peru reached 0.2 percent in 2009, 2.1 percent in 2010, 4.7 percent in 2011, 2.6 percent in 2012, 2.9 percent in 2013, 3.2 percent in 2014, 4.4 percent in 2015, 3.2 percent in 2016, 1.4 percent in 2017, 2.2 percent in 2018, and 1.9 percent in 2019. Peru’s target inflation range is 1 to 3 percent.

Under the PTPA, U.S. financial service suppliers have full rights to establish subsidiaries or branches for banks and insurance companies.

Peruvian law and regulations do not authorize or encourage private firms to adopt articles of incorporation or association to limit or restrict foreign participation. There are no private or public sector efforts to restrict foreign participation in industry standards-setting organizations. However, larger private firms often use “cross-shareholding” and “stable shareholder” arrangements to restrict investment by outsiders — not necessarily foreigners — in their firms. As close families or associates generally control ownership of Peruvian corporations, hostile takeovers are practically non-existent. In the past few years, several companies from the region, China, North America, and Europe have begun actively buying local companies in power transmission, retail trade, fishmeal production, and other industries. While foreign banks are allowed to freely establish banks in the country, they are subject to the supervision of Peru’s Superintendent of Banks and Securities (SBS).

The country has not explored or made announcements on its intention to implement or allow the implementation of blockchain technologies in banking transactions.

Peru’s financial system has 10 specialized institutions (“financieras”), 28 thriving micro-lenders and savings banks (although several large banks also lend to small enterprises), one leasing institution, two state-owned banks, and one state-owned development bank. In 2019, the Economist Intelligence Unit again ranked Peru number two worldwide, after Colombia, as one of the countries with the best microfinance business environment because of its competitive microfinance sector, market entry, and credit portfolio for middle and low income customers. In January 2019, Peru established regulations to require SBS supervision of savings and loan associations and 437 saving and loan cooperatives are registered with the SBS for supervision.

Foreign Exchange and Remittances

Foreign Exchange Policies

There are no reported difficulties in obtaining foreign exchange. Under Article 64 of the 1993 Constitution, the GOP guarantees the freedom to hold and dispose of foreign currency. The GOP has eliminated all restrictions on remittances of profits, dividends, royalties, and capital, although foreign investors are advised to register their investments with ProInversion to ensure these guarantees. Exporters and importers are not required to channel foreign exchange transactions through the Central Bank and can conduct transactions freely on the open market. Anyone may open and maintain foreign currency accounts in Peruvian commercial banks. U.S. firms have reported no problems or delays in transferring funds or remitting capital, earnings, loan repayments or lease payments since Peru’s economic reforms of the early 1990s. Under the PTPA, portfolio managers in the United States are able to provide portfolio management services to both mutual funds and pension funds in Peru, including funds that manage Peru’s privatized social security accounts.

The 1993 Constitution guarantees free convertibility of currency. However, limited capital controls still exist as private pension fund managers (AFPs) are constrained by how much of their portfolio can be invested in foreign securities. The maximum limit is set by law (currently 50 percent since July 2011), but the BCRP sets the operating limit AFPs can invest abroad. Over the years, the BCRP has gradually increased the operating limit. Peru reached the 50 percent limit in September 2018.

The foreign exchange market mostly operates freely. Funds associated with any form of investment can be freely converted into any world currency. To quell “extreme variations” of the exchange rate, the BCRP intervenes through purchases and sales in the open market without imposing controls on exchange rates or transactions. Since 2014, the BCRP has pursued de-dollarization to reduce dollar denominated loans in the market and purchased U.S. dollars to mitigate the risk that spillover from expansionary U.S. monetary policy might result in over-valuation of the Peruvian Sol relative to the U.S. dollar. U.S. dollars account for a decreasing share of banking system transactions, according to the Bank Supervisory Authority (SBS). In 2001, U.S. dollars accounted for 82 percent of loans and 73 percent of deposits. In December 2019, dollar-denominated loans reached 26 percent, and deposits 33 percent. The U.S. Dollar averaged PEN 3.34 per $1 in 2019.

The U.S. Dollar averaged PEN 3.34 per $1 in 2019.

Remittance Policies

There have not been any new developments related to investment remittance policies.

Peruvian law grants foreign investors the following rights: freedom to buy shares from national investors; free remittance of earnings and dividends; free capital repatriation; unrestricted access to local credits; freedom to hire technology and to pay back royalties; freedom to hire investment insurance abroad; possibility to sign juridical stability agreements for their investments in Peru with the Peruvian state.

Article 7 of the Legislative Decree N° 662 provides that foreign investors may send, in freely convertible currencies, remittances of the entirety of their capital derived from investments, including the sale of shares, stocks or rights, capital reduction or partial or total liquidation of companies, the entirety of their dividends or proven net profit derived from their investments, and any considerations for the use or enjoyment of assets that are physically located in Peru, as registered with the competent national entity, without a prior authorization from any national government department or decentralized public entities, or regional or municipal Governments, after having paid all the applicable taxes.

Sovereign Wealth Funds

Peru’s Ministry of Economy and Finance (MEF) manages the Fiscal Stabilization Fund. The fund had a balance of $5.5 billion at the end of 2019 and consists of treasury surplus, concessional fees, and privatization proceeds, with a cap of four percent of GDP. The MEF released investment guidelines for the Fiscal Stabilization Fund in December 2015. The guidelines permit investment in demand deposits, variable and fixed interest rate time deposits, and seven currencies including the U.S. dollar. The Fund is not a party to the IMF International Working Group or a signatory to the Santiago Principles. The fund serves as a buffer for the GOP’s fiscal accounts in the event of adverse economic conditions, such as the economic impact of the global COVID-19 crisis.

Several electricity, water and sewage, bank, and oil companies remain state-owned and state-operated. Peru wholly owns 35 SOE’s, 34 of which are under the parastatal conglomerate FONAFE. The list of SOEs under FONAFE can be found here: https://www.fonafe.gob.pe/empresasdelacorporacion . The most notable area of SOE activity pertains to the petroleum sector, where the state-owned petroleum company PetroPeru refines oil, operates Peru’s main oil pipeline, and maintains a stake in select concessions. Over the last two decades, PetroPeru has experienced significant attrition in managerial and technical expertise. This, coupled with limited financial resources, cast into doubt the company’s ability to complete its long-held plans to expand and upgrade its aging Talara refinery.

Peru is not party to the Government Procurement Agreement (GPA) within the framework of the World Trade Organization.

The GOP’s role as an enterprise owner is specified through several publicly available laws and regulations. Ownership practices are generally consistent with OECD guidelines, although not all guideline subsections are specifically addressed. Central entity FONAFE (http://www.fonafe.gob.pe/ ) exercises ownership of SOEs with the exception of those considered intangible under the Peruvian constitution (including public university services). FONAFE appoints an independent board of directors for each SOE using a transparent selection process. There is no notable third party analysis on SOEs’ ties to the government.

Privatization Program

The GOP initiated an extensive, but imperfect and not yet complete, privatization program in 1991, in which foreign investors were encouraged to participate. Since 2000, the GOP has promoted multi-year concessions as a means of attracting investment in major projects, including 30-year concession to a private group (Lima Airport Partners) to operate the Lima airport in 2000 and in 2006 a 30-year concession to Dubai Ports World to improve and operate a new container terminal in the Port of Callao.

The PPP procurement processes in Peru is challenging for U.S. and other international companies interested in bidding on large infrastructure projects. ProInversion, the government agency responsible for structuring and procuring PPP concession projects, has come under considerable criticism over the years for offering projects that are not adequately prepared and presenting processes with unrealistic timetables. Despite the criticism, ProInversion is actively working to improve “project readiness” and the PPP process.  The agency hired the law firm Hogan Lovells to develop a standard contract and KPMG to develop a guide for financial structuring. It is also working to streamline its processes to ensure better project management.  ProInversion re-designed its website to provide project listings in both Spanish and English and is holding outreach events to increase competition.

Project opportunities are available on ProInversion’s Project Portfolio page at  ProInversion Projects: http://www.proyectosapp.pe/modulos/JER/PlantillaProyectoEstadoSector.aspx?are=1&prf=2&jer=5892&sec=30 .

Peru does not have a holistic action plan or national standards for responsible business conduct (RBC). Peru has prioritized implementing the UN Principles on Business and Human Rights. The Human Rights and Business Working Group is pressing Peru to join the Voluntary Principles on Human Rights and Security Initiative as part of its work towards implementing the UN Principles. Many multinational companies already adhere to high standards for RBC. Several independent NGOs monitor and promote RBC, notably Peru 2021. These organizations are able to work freely. Standards for conduct on environmental, social, and governance issues are implemented through sector-specific regulation. In some regions, lack of capacity hinders the government’s ability to enforce regulations. In February 2011, INDECOPI adopted the Peruvian Technical Regulation of Social Responsibility ISO 26000 that serves as a voluntary guide to CSR activities.

Given its importance to the Peruvian economy, the extractives sector has been a governmental priority for promoting RBC. Supreme Decree No. 042-2003-EM promotes social responsibility in the mining sector, encouraging local employment opportunities, support to communities’ projects, development activities, and purchase of local goods and services. The decree requires mining companies to publish an annual report on sustainable development activities. The Ministry of Energy and Mines has a guidebook for community relations, as well as public information on social measures related to the mining and energy sectors. On February 15, 2012, Peru was listed as a compliant country under the Extractive Industries Transparency Initiative (EITI), as the GOP and extractive industries openly publish all company payments and government revenues from oil, gas, and mining. Peru is one of two EITI-compliant countries in Latin America. Peru is, however, at risk of being suspended from the compliant country category for failing to comply with two EITI observations of the 2019 validation process. Peru received a prior notice from the international EITI board for the delay in presenting the Seventh EITI Conciliation Report 2017-2018, which should have been delivered by December 2019. The deadline has been extended until June 30, 2020 and, if unmet, might result in Peru’s suspension.

Peru continues to implement its National Strategy to Combat Forced Labor, which emphasizes the state’s role to protect and promote labor rights. The plan simultaneously prioritizes building capacity and empowering vulnerable groups to transform their environment and enforce their rights. The plan addresses both medium and long-term multi-sector plans to eliminate or reduce conditions that enable forced labor. Despite these efforts, the government did not effectively enforce labor laws in all cases. Child labor (particularly in informal sectors), forced labor, and employers engaging in antiunion practices remain significant problems.

In February 2013, the superintendent of the Lima Stock Exchange published the Code on Good Corporate Governance for Peruvian Companies, developed in conjunction with thirteen public and private entities including the Ministry of Economy and Finance. The document outlines shareholder protections.

ProInversion serves as the National Point of Contact (NCP) for the OECD Guidelines for Multinational Enterprises (MNE), to which Peru is an adherent. The NCP participates in activities with the CNP OECD Network located in 50 countries and is in permanent coordination with the OECD Responsible Business Conduct working group. The NCP participated in the OECD Business Responsible and NCP OECD network meetings in Paris in December 2018. The NCP also co-hosted with the OECD an international workshop in Lima in November 2019 on best Latin American practices for investment promotion and sustainable development. The workshop included investment promotion agency experts from Latin America, government representatives from investment and development areas, and business representatives. The NCP also held several workshops throughout 2018 such as the Responsible Mining and OECD Directives in Cajamarca (August 2018) and the Peru Investment Climate and Directives for OECD businesses in Cusco (October 2018). Peru is currently in the adhesion process to the OECD Codes of Liberalization of Capital Movements and of Current Invisible Operations and is the first country in doing so outside of an OECD access process.

It is illegal in Peru for a public official or employee to accept any type of outside remuneration for the performance of his or her official duties. The law extends to family members of officials and to political parties. Regulations published in March 2017 aim to limit conflicts of interest. In 2019, Peru made the irregular financing of political campaigns a crime, carrying penalties up to eight years jail time.

Peru has ratified both the UN Convention against Corruption and the Organization of American States Inter-American Convention against Corruption. Peru has signed the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and has adopted OECD public sector integrity standards through the GOP’s National Integrity and Anticorruption Plan. The Public Auditor (Contraloria) is the responsible government agency for overseeing proper procedures in public administration. In January 2017, the GOP passed legislative decrees extending the scope of civil penalties for domestic acts of bribery, including by NGOs, corporate partners, board members, and parent companies if its subsidiaries acted under authorization.  Penalties include an indefinite exclusion from government contracting and substantially increased fines. The Public Auditor also began implementing audits of reconstruction projects that run in parallel to the project, rather than after project implementation, in an effort to improve transparency. It is also running parallel audits to the different government actions at all levels (central, regional, and local) to combat the COVID-19 crisis.

U.S. firms have reported problems resulting from corruption, usually in government procurement processes and in the judicial sector, with defense and police procurement generally considered among the most problematic in spite of the PTPA’s stipulations and Peru’s Government Procurement Law (Legislative Decree No. 1017, DL 1017, one of several laws passed with the specific intention to implement PTPA). Transparency International lowered Peru’s ranking to 101st out of 180 countries in its 2019 Corruption Perceptions Index from 105th in 2018.

During the January 2020 congressional elections, 74 candidates had ongoing criminal proceedings for alleged corruption (Andina). Of the 25 regional governors elected in 2018 regional elections, at least five were under preliminary investigation or had been convicted of corruption-related charges. Eleven of the elected Congress representatives have completed sentences for various crimes and seven had judicial investigations pending for corruption-related crimes. A study published in August 2017 counted 395 investigations of corruption or trials against current or former governors, with 30 percent of the cases in the regions of Pasco, Tumbes, and Ucayali. It also identified 1,052 investigations of corruption or trials against 530 current or former mayors, with Lima leading the list with 109 cases (10.4 percent of the total). https://plataformaanticorrupcion.pe/wp-content/uploads/2017/07/INFORME-CORRUPCION-SOBRE-GOBERNADORES-Y-ALCALDES.pdf 

Corruption in Peru is widespread and systematic, affecting all levels of government and the whole of society, which, until recently, had developed a high tolerance to corruption. Cases of grand corruption have significantly increased in recent years, including embezzlement, collusion, bribery, extortion or fraud in the justice system, politics and public works, involving high level authorities or key public officers who abuse their public power for private gain. Corruption has become more rampant, malign and pervasive in public procurement, due to weak control and risk management systems, lack of ethical or integrity values in some public officials (and society), lack of transparency and accountability in procurement processes, social tolerance of corruption, with little or no enforcement. This has led to Peruvian participation in regional cases like Odebrecht, but also in public and private sector corruption related to conflict of interests, nepotism, abuse of discretion, favoritism, and illegal contributions, as well as illicit financing of political interests, candidates and processes. This embedded dynamic has eroded trust, credibility and integrity of public entities and engendered mistrust in the private sector. As a result, Peru has increasingly become home to criminal and transnational enterprises such as drug trafficking, money laundering, illegal logging and mining, and human trafficking, among others.

collusion, bribery, extortion or fraud in the justice system, politics and public works, involving high level authorities or key public officers who abuse their public power for private gain. Corruption has become more rampant, malign and pervasive in public procurement, due to weak control and risk management systems, lack of ethical or integrity values in some public officials (and society), lack of transparency and accountability in procurement processes, social tolerance of corruption, with little or no enforcement. This has led to Peruvian participation in regional cases like Odebrecht, but also in public and private sector corruption related to conflict of interests, nepotism, abuse of discretion, favoritism, and illegal contributions, as well as illicit financing of political interests, candidates and processes. This embedded dynamic has eroded trust, credibility and integrity of public entities and engendered mistrust in the private sector. As a result, Peru has increasingly become home to criminal and transnational enterprises such as drug trafficking, money laundering, illegal logging and mining, and human trafficking, among others.

In December 2016, Brazilian company Odebrecht admitted in a settlement with the United States, Brazil, and Switzerland that it had paid $29 million in bribes in Peru between 2004 and 2015. In 2017, the Peruvian Government issued an emergency decree restricting the sale of Odebrecht assets to ensure payment of corruption-related reparations. In May 2018, the Peruvian Government formally filed a request with the United States to extradite former President Alejandro Toledo (2001-2006) who resides in the United States, for allegedly laundering over $20 million in Odebrecht bribes in exchange for facilitating Odebrecht’s winning bid to build the Inter-Oceanic Highway. High-ranking officials from the last four Peruvian administrations have also been investigated in connection with the Odebrecht scandal, including former presidents. Under Odebrecht-related investigations, local giant Credicorp also confessed irregularly financing the 2011 campaign of Keiko Fujimori, including through illicit cash above amounts allowed by law.

The future of President Vizcarra’s signature political and anti-corruption reform agenda, which was opposed by the last congress in 2019 leading to its dissolution and new legislative elections, looks uncertain. With limited support in congress, a growing economic crisis, and challenges to flattening the COVID-19 curve, and the distraction of upcoming general campaigns in April 2021, Vizcarra can expect a difficult road ahead to push forward his agenda. Though he remains popular, Vizcarra has reiterated he will not stand for reelection and the field potential presidential candidates is wide open. The handoff to a new administration remains on schedule for July 2021.

Resources to Report Corruption

Susana Silva Hasenbank
Secretary of Public Integrity of the Prime Minister Office and General Coordinator
High Commission to Fight Corruption (CAN)
Jr. Carabaya Cdra. 1 S/N – Lima,
(51) (1) 219-7000, ext. 7118

General Comptroller’s Office

Jr. Camilo Carrillo 114, Jesus Maria, Lima
(51) (1) 330-3000

Contact at “watchdog” organization (international, regional, local, or nongovernmental organization operating in the country/economy that monitors corruption, such as Transparency International):

Samuel Rotta
Executive Director
ProEtica, the Peruvian chapter of Transparency International
Calle Manco Capac 816, Miraflores, Lima
(51) (1) 446-8581, 446-8941, 446-8943

According to the Ombudsman, there were 137 active social conflicts in Peru as of March 2020, of which 65 affected mining projects. Although political violence against investors is rare, protests, sometimes violent, have taken place in or near communities with extractive industry operations. Environmental and service delivery concerns were often the reason cited. In many cases, protestors sought public services not provided by the government. Ideological opposition to foreign mining firms, not opposition to mining itself, often leads to protests incited by NGOs. Protests related to extractives activities stopped operations of Peru’s northern oil pipeline for nearly two months in 2018 and effectively closed Peru’s second largest copper mine, Las Bambas for a month in early 2019. In October 2019, protests erupted in the mining province of Arequipa over Peru’s approval of a construction license for Mexico-based Southern Copper Corporation’s planned $1.4 billion Tia Maria copper mine. Protestors main grievances centered on environmental concerns. In response, Peru established a commission comprised of the private sector, academia, and NGOs, in September 2019 to provide mining reform recommendations. The commission delivered its final report in February 2020, including non-binding recommendations on community relations and land use; environmental management; tax framework; artisanal and illegal mining; and regulatory conditions. The final report incorporated USG recommendations related to regulatory reform and regional natural resource planning.

Peru issued the Prior Consultation Law in 2011, approving implementing regulations in 2012. The law requires the GOP to consult with indigenous communities before enacting any legislation, administrative measures, or development projects that could affect communities’ rights of territorial demarcation. There have been several successful prior consultation processes related to the extractive industry, but the law remains controversial. Critics believe it creates burdensome processes and results in delays. The National Society of Mining, Electricity and Petroleum (SNMPE) and the government have become involved in assisting local governments to access the extractive industry “canon” (tax revenue-sharing scheme with funding for public works projects) as a way to both stimulate local development and prevent conflicts. Although these efforts have been effective in some mining regions, in others, conflicts have continued or expanded.

Violence remains a concern in coca-growing regions. The Shining Path (Sendero Luminoso, “SL”) narco-terrorist organization continued to conduct a limited number of attacks in its base of operations in the Valley of the Apurimac, Ene, and Mantaro Rivers (VRAEM) emergency zone, which includes parts of Ayacucho, Cusco, Huancavelica, Huanuco, and Junin regions. Estimates vary, but most experts and Peruvian security services assess SL membership numbers between 250 and 300 members, including 60 to 150 armed fighters. SL collects “revolutionary taxes” from those involved in the drug trade and, for a price, provides security and transportation services for drug trafficking organizations to support its terrorist activities. In November 2016, the Department of State designated Victor Quispe Palomino, Jorge Quispe Palomino, and Tarcela Loya Vilchez as Specially Designated Global Terrorists (SDGTs) under Executive Order (E.O.) 13224, which imposes sanctions on foreign persons and groups determined to have committed, or pose a significant risk of committing, acts of terrorism that threaten the security of U.S. nationals or the national security, foreign policy, or economy of the United States. Son of an SL founder, Victor Quispe Palomino allegedly oversees all MPCP illicit activities, including extortion, murder, and drug trafficking. A State Department reward offers up to $5 million for information leading to his arrest and/or conviction. The Department of Defense offers an additional $1 million for the capture or neutralization of Quispe Palomino.

At present, there is little government presence in the remote coca-growing zones of the VRAEM, although President Vizcarra has pledged to “pacify” the VRAEM by Peru’s bicentennial in 2021. Despite protests and violence from coca farmers, Peru initiated coca eradication in the VRAEM for the first time in November 2019. The GOP’s national anti-narcotics strategy also includes alternative and sustainable development, drug supply reduction, drug demand reduction, and assistance from the international community. The U.S. Embassy in Lima restricts visits by official personnel to these areas because of the threat of violence by narcotics traffickers and columns of the Shining Path. Information about insecure areas and recommended personal security practices can be found at http://www.osac.gov  or http://travel.state.gov.

Labor is abundant, although several large investment projects in recent years led to localized shortages of highly skilled workers in some fields. While the legal framework to uphold international labor standards is well defined, the government does not effectively enforce the law in all cases.

Mining sector contacts praise the technical knowledge and professional dedication of Peruvian engineering graduates. Wages are sometimes higher than U.S. wages in the mining sector for management positions and consulting services. Workers in Peru are usually paid monthly. Some workers, like formal miners, are highly paid and also (per statute) receive a share of company profits up to a maximum total annual amount of 18 times their base monthly salary.

Since the 1960s, the number of jobs created by the Peruvian economy was consistently below the number of new entrants to the labor market. The situation meant underemployment or seeking work in the informal economy. According to the National Bureau for Statistics (INEI), 73.2 percent of the labor force is informal.

The statutory monthly minimum wage is PEN 930/month (approximately $273). INEI estimated the poverty line to be PEN 344/month ($101) per person, although it varied by region due to different living costs. The Ministry of Labor (MOL) enforces the minimum wage only in the formal sector. Many workers in the unregulated informal sector, most of them self-employed, make less than the minimum wage. Peru’s labor law provides for a 48-hour workweek and one day of rest, and requires companies to pay overtime for more than eight hours of work per day and additional compensation for work at night. Noncompliance with the law is a punishable infraction. There is no prohibition on excessive compulsory overtime. Micro-enterprise workers are entitled to social security and pensions.

Unemployment was 3.7 percent in 2019. Urban unemployment is most prevalent among 14-24-year olds (8 percent unemployment in 2019). Additionally, 96 percent of unemployed people reside in urban areas. The ILO’s Global Wage Report 2018/2019 stated that average real wages in Peru grew at over 0.8 percent in 2016 and decreased by 0.2 percent in 2017.

Foreign employees may not comprise more than 20 percent of the total number of employees of a local company (whether owned by foreign or Peruvian persons) or more than 30 percent of the total company payroll. However, under the PTPA Peru has agreed not to apply most of its nationality-based hiring requirements to U.S. professionals and specialty personnel.

Employers are not obligated to pay severance if the reason for dismissing an employee is covered by law. If the dismissal is found to be arbitrary, severance pay is required. Unemployed workers are eligible for benefits through the Compensation for Time of Service program.

Peru does not have a specific unemployment insurance program. The country does, however, have the “Compensation for Time of Service” (CTS) requirement that mandates an employer pay one month’s salary of an employee per year worked into the employee’s CTS Account. When the employee stops working for the employer (willingly or not), she/he can access the CTS Account. The amount will vary according to how much the employee earned and how long she/he worked for the employer. In addition, a fired employee receives one month’s salary per year worked, up to a maximum of twelve months.

Peru’s Decree Law 22342 relaxed labor laws for the non-traditional exports (NTE) sector, which includes textiles and certain agricultural products. Law 27360, published in 2000, also gave such exceptions in the agricultural sector.  The laws allow businesses in the NTE and agricultural sectors to employ workers indefinitely on consecutive short-term contracts, in contrast to the 5-year limit on consecutive short-term contracts in place for other sectors.  Peru used the exceptions to boost these industries. On March 18, 2016, the U.S. Department of Labor identified serious concerns that the provisions may violate the U.S.-Peru Trade Promotion Agreement by infringing on workers’ freedom of association. The GOP published on December 2019 an Executive Order (Urgency Decree 043-2019) that extended the exemptions until 2031 and included the forestry and aquaculture sectors.

Labor unions are independent of the government and employers. Approximately six percent of Peru’s private sector labor force was organized in 2017, with unionization highest in electricity, water, construction, and mining (from 39 percent to 22 percent) and generally low in the rest of the economy. The labor procedure law (No.29497) requires the resolution of labor conflicts in less than six months, allows unions or their representatives to appear in court on behalf of workers, requires proceedings to be conducted orally and video-recorded, and relieves the employee from the burden of proving an employer-employee relationship. The law was in effect in 30 of Peru’s 31 judicial districts in 2017.

Either unions or management can request binding arbitration in contract negotiations. Strikes can be called only after approval by a majority of all workers (union and non-union), voting by secret ballot, and only in defense of labor rights. Unions in essential public services, as determined by the government, must provide a sufficient number of workers during a strike to maintain operations.

While the government has made improvements in recent years, it often does not dedicate sufficient personnel and resources to labor law enforcement. The Ministry of Labor created the National Labor Inspectorate Superintendence (SUNAFIL) in April 2014 and opened nine regional offices to represent the labor inspectorate nationally. SUNAFIL opened new regional labor inspections offices in Junin, Lima, Madre de Dios, Pasco, and San Martin in 2019. There are now 26 SUNAFIL offices in 26 of Peru’s regions, including offices established in Ancash, Arequipa, Ayacucho, Callao, Cajamarca, Cusco, Huanuco, Ica, Junin, Lambayeque, La Libertad, Lima, Loreto, Madre de Dios, Moquegua, Pasco, Piura, Puno, San Martin, and Tumbes. As of December 2019, SUNAFIL had 607 labor inspectors. SUNAFIL labor inspectors also help identify and investigate cases of forced and child labor. Additional information on forced labor in Peru can be found in the 2019 Trafficking in Persons Report: https://www.state.gov/trafficking-in-persons-report-2019.

The DFC is an independent agency of the U.S. Government that provides financing for private development projects. It was created by the Better Utilization of Investments Leading to Development (BUILD) Act of 2018, which consolidated the Overseas Private Investment Corporation (OPIC) and Development Credit Authority (DCA) of the United States Agency for International Development (USAID). In addition to OPIC and DCA’s existing capabilities, DFC is equipped with a more than doubled investment cap of $60 billion and new financial tools.

Prior to establishment of the DFC, there was an OPIC agreement between Peru and the United States that, from 2010 thru 2014, supported solar power plants, consumer lending, operation and expansion of retail stores, microfinance, installation/operation of stereotactic radiosurgery equipment, consulting services, export services, import-export logistical services, and portfolio expansion of SME, micro-credit and consumer loans, in the form of commitments totaling more than $21 million. Peru is a member of the Multilateral Investment Guarantee Agency.

The Growth in the Americas (América Crece) initiative is an innovative, whole-of-government approach to support economic development by catalyzing private sector investment in energy and other infrastructure projects across Latin America and the Caribbean. Peru is close to signing a Memorandum of Understanding (MOU) to boost US investments in infrastructure and energy under the Growth in the Americas program. The main goals are to expand U.S. exports, improve energy and infrastructure security in Peru, and increase U.S. investment in Peru.

and other infrastructure projects across Latin America and the Caribbean. Peru is close to signing a Memorandum of Understanding (MOU) to boost US investments in infrastructure and energy under the Growth in the Americas program. The main goals are to expand U.S. exports, improve energy and infrastructure security in Peru, and increase U.S. investment in Peru.

Peru also works closely with the Inter-American Development Bank (IADB). Over the course of 2017-2021, the IADB’s aim is to support Peru in achieving sustained growth to promote social progress, in a context of environmental sustainability. Three areas are prioritized: (1) Productivity, with an emphasis on the labor market, business climate, business development and infrastructure; (2) Institutional strengthening and provision of basic services, with an emphasis on public management, health and citizen security; and (3) environmental sustainability and climate change, with an emphasis on water resources, environmental management, and agribusiness. The IADB estimate a sovereign financing demand scenario for annual approvals for $ 300 million on average or $ 1.5 billion for the period 2017-2021.

In April, 2020 the U.S. Export Import Bank (EXIM) unanimously approved four new, time-limited emergency measures in response to the Covid-19 global pandemic. The measures will temporarily expand the types of financing EXIM can provide as part of the U.S. government’s efforts to address and mitigate the economic crisis in the coming months. The emergency measures will be in place for one year from May 1, 2020. EXIM currently has about $80 billion available under its $135 billion overall financing cap that could be deployed for these emergency measures as well as regular business. Further information may be found at https://www.exim.gov/coronavirus-response .

In 1991, the Peruvian Congress ratified the subscription of the convention establishing the Multilateral Investment Guarantee Agency (MIGA) of the World Bank. Important investments, mainly of the mining and financials sectors, are covered by the MIGA.

Peru has concluded agreements for the promotion and protection of investments with more than 20 countries of Europe, Asia and America. Negotiations to conclude these agreements with 23 more countries are underway. Peru also joined China’s ambitious “Belt and Road” in June 2019 but, has not undertaken any significant projects under this infrastructure initiative. 13. Foreign Direct Investment and Foreign Portfolio Investment Statistics


Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy
Host Country Statistical source USG or international statistical source USG or International Source of Data:  BEA; IMF; Eurostat; UNCTAD, Other
Economic Data Year Amount Year Amount  
Host Country Gross Domestic Product (GDP) (M USD) 2018 $225,25 2019 $226,848 www.worldbank.org/en/country
Foreign Direct Investment Host Country Statistical source USG or international statistical source USG or international Source of data:  BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country (M USD, stock positions) 2019 $2,775 2018 $6,403 BEA data available at https://www.bea.gov/international/
Host country’s FDI in the United States (M USD, stock positions) N/A N/A 2018 $199 BEA data available at https://www.bea.gov/international/
Total inbound stock of FDI as % host GDP N/A N/A 2018 46.4% https://unctad.org/en/pages/diae/

Table 3: Sources and Destination of FDI
No data available.

Table 4: Sources of Portfolio Investment
No data available.

Elizabeth Powers
Economic Officer
U.S. Embassy Peru
+51 1-618-2414

2020 Investment Climate Statements: Peru
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