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Peru Commercial Guide

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Peru Commercial Guide Peru Table of Contents Doing Business in Peru _____________________________________________ 4 Market Overview _______________________________________________________________ 4 Market Challenges _____________________________________________________________ 4 Market Opportunities ___________________________________________________________ 5 Market Entry Strategy ___________________________________________________________ 5 Political Environment _______________________________________________ 8 Political Environment ___________________________________________________________ 8 Selling U.S. Products & Services _____________________________________ 9 Using an Agent to Sell U.S. Products and Services __________________________________ 9 Establishing an Office __________________________________________________________ 9 Franchising __________________________________________________________________ 10 Direct Marketing ______________________________________________________________ 11 Joint Ventures/Licensing _______________________________________________________ 11 Selling to the Government ______________________________________________________ 11 Distribution & Sales Channels ___________________________________________________ 13 Express Delivery ______________________________________________________________ 13 Selling Factors & Techniques ___________________________________________________ 14 eCommerce __________________________________________________________________ 15 Trade Promotion & Advertising __________________________________________________ 16 Pricing ______________________________________________________________________ 19 Sales Service/Customer Support ________________________________________________ 19 Protecting Intellectual Property __________________________________________________ 19 Due Diligence ________________________________________________________________ 21 Local Professional Services ____________________________________________________ 21 Limitations on Selling U.S. Products and Services __________________________________ 24 Web Resources _______________________________________________________________ 24 Leading Sectors for U.S. Exports & Investments _______________________ 25 Agricultural Sector ____________________________________________________________ 25 Commercial Fishing Equipment _________________________________________________ 32 Construction Equipment _______________________________________________________ 35 Education ____________________________________________________________________ 39 Food Processing and Packaging Equipment _______________________________________ 41 Medical Equipment ____________________________________________________________ 43 Mining Industry Equipment _____________________________________________________ 46 Security and Safety Equipment __________________________________________________ 50 Water Resources Equipment and Services ________________________________________ 53 Customs, Regulations & Standards __________________________________ 55 Trade Barriers ________________________________________________________________ 55 Import Tariff __________________________________________________________________ 55 Import Requirements & Documentation ___________________________________________ 55 U.S. Export Controls ___________________________________________________________ 56 Temporary Entry ______________________________________________________________ 56 Labeling/Marking Requirements _________________________________________________ 57 Prohibited & Restricted Imports _________________________________________________ 58 Customs Regulations __________________________________________________________ 58 Standards for Trade ___________________________________________________________ 59 Trade Agreements _____________________________________________________________ 60 Licensing Requirements for Professional Services _________________________________ 61 Web Resources _______________________________________________________________ 61 2 Investment Climate Statement ______________________________________ 62 Executive Summary ___________________________________________________________ 62 Openness to and Restrictions upon Foreign Investment _____________________________ 63 Bilateral Investment Agreement and Taxation Treaties ______________________________ 66 Legal Regime _________________________________________________________________ 67 Industrial Policies _____________________________________________________________ 69 Protection of Property Rights ___________________________________________________ 72 Financial Sector ______________________________________________________________ 74 State-Owned Enterprises _______________________________________________________ 78 Responsible Business Conduct _________________________________________________ 79 Corruption ___________________________________________________________________ 80 Political and Security Environment _______________________________________________ 82 Labor Policies and Practices ____________________________________________________ 84 OPIC and Other Investment Insurance Programs ___________________________________ 86 Foreign Direct Investment and Foreign Portfolio Investment Statistics _________________ 86 Contact for More Information____________________________________________________ 87 Trade & Project Financing __________________________________________ 88 Methods of Payment ___________________________________________________________ 88 Banking Systems _____________________________________________________________ 88 Foreign Exchange Controls _____________________________________________________ 90 U.S. Banks & Local Correspondent Banks _________________________________________ 91 Project Financing _____________________________________________________________ 91 Financing Web Resources ______________________________________________________ 92 Business Travel __________________________________________________ 93 Business Customs ____________________________________________________________ 93 Travel Advisory _______________________________________________________________ 93 Visa Requirements ____________________________________________________________ 93 Currency_____________________________________________________________________ 93 Telecommunications/Electric ___________________________________________________ 93 Transportation ________________________________________________________________ 94 Language ____________________________________________________________________ 95 Health _______________________________________________________________________ 95 Local Time, Business Hours and Holidays ________________________________________ 95 Temporary Entry of Materials or Personal Belongings _______________________________ 97 Travel Related Web Resources __________________________________________________ 97 INTERNATIONAL COPYRIGHT, U.S. & FOREIGN COMMERCIAL SERVICE AND U.S. DEPARTMENT OF STATE, 2017. ALL RIGHTS RESERVED OUTSIDE OF THE UNITED STATES. 3 Doing Business in Peru Market Overview Peru continues leading Latin America as one of the fastest growing economies in the region, with an average annual growth rate of 5.7% per year between 2005 and 2016. Peru’s economy grew 3.9% in 2016 and is forecast to grow 2.7% in 2017. The government’s counter-cyclical stimulus spending, consumption, and private investment are the driving forces of this growth. The mining sector and agricultural exports continue to drive the economy, offsetting the losses from the collapse of the Southern Gas Pipeline project and the impact of the Odebrecht scandal on private sector-led investment. The central government has initiated plans for Public Private Partnership infrastructure projects and announced an updated catalog of 61 projects valued at over USD 14 billion. As the economy has grown, poverty in Peru has steadily decreased, falling by more than half from 56% in 2005 to 20.7% in 2016, according to the Peruvian Information and Statistics Agency (INEI). Peru’s steady economic growth began with the pro-market policies enacted by former President Alberto Fujimori in the 1990’s. All subsequent governments have continued those policies, including the administration of President Pedro Pablo Kuczynski, which began its five-year term in July 2016. President Kuczynski campaigned on dislodging stalled infrastructure projects and bringing potable water and sanitation to 100% of Peruvians by 2021. President Kuczynski is a former World Bank official who is committed to private sector-led growth and macroeconomic stability. He is married to an American and is very pro-U.S. Peru’s currency, the “Sol” (PEN), has been among the least volatile of all Latin American currencies in the past few years. Since the mid-1990’s, the PEN’s exchange rate with the USD has fluctuated between 1.25 and 3.55 per USD. The PEN closed at 3.28/USD on May 26. The PEN appreciated 2.41% against the USD since January 1, 2017 having appreciated 2.06% over the past 12 months. In its Doing Business 2017 publication, the World Bank ranked Peru 54th among 190 countries surveyed in terms of ease of doing business. The report rates the ease of processes like starting a business, dealing with construction permits, registering property, and obtaining credit. For the complete report please see Doing Business Market Challenges The U.S. Embassy in Lima receives regular complaints from U.S. firms of Peru’s cumbersome and inefficient government procurement processes. We continue to work with the
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