Peru's Business & Investment Guide 2014
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Peru's Business & Investment Guide 2014 / 2015 Contacts I EY Perú Jorge Medina Méndez Country Managing Partner Tel: +51 1 411 4411 [email protected] Paulo Pantigoso Deputy Managing Partner Tel: +51 1 411 4418 [email protected] Jorge Acosta Juan Paredes Fernando Núñez Advisory Leader Assurance Leader Tel: +51 1 411 4473 Tel: +51 1 411 4437 Tel: +51 1 411 4410 [email protected] [email protected] [email protected] Advisory Miguel Quijano • Numa Arellano Assurance Víctor Burga Tel +51 1 411 2114 Tel: +51 1 411 4428 • Tel: +51 1 411 4419 [email protected] [email protected] [email protected] Wilfredo Rubiños José Carlos Bellina Víctor Camarena Tel: +51 1 411 4478 Tel: +51 1 411 6117 Tel: +51 1 411 4488 [email protected] [email protected] [email protected] Carlos Ruiz Elder Cama Daniel Carpio Tel: +51 1 411 4402 Tel: +51 1 411 6102 Tel: +51 1 411 4458 [email protected] [email protected] [email protected] Antonio Sánchez Rafael Huamán Ricardo del Águila Tel: +51 1 411 4404 Tel: +51 1 411 4443 Tel: +51 1 411 7238 [email protected] [email protected] [email protected] Mireille Silva Alejandro Magdits Raúl del Pozo Tel: + 51 1 411 4484 Tel: +51 1 411 4453 Tel: +51 1 411 4467 [email protected] [email protected] [email protected] Simona Settineri Víctor Menghi Manuel Díaz Tel +51 1 411 4402 Tel: +51 1 411 2121 Tel: +51 1 411 4403 [email protected] [email protected] [email protected] Víctor Tanaka Egberto Torres Cristian Emmerich Tel: + 51 1 411 4408 Tel: +51 1 411 2107 Tel: +51 1 411 4413 [email protected] [email protected] [email protected] Carlos Valdivia Renato Urdaneta Elizabeth Fontenla Tel: + 51 1 411 4409 Tel: +51 1 411 4438 Tel: +51 1 411 4436 [email protected] [email protected] [email protected] Marco Antonio Zaldívar Raúl Vásquez César Lucas Tel: +51 1 411 4450 Tel: +51 1 411 4415 Tel: +51 1 411 2148 [email protected] [email protected] [email protected] Moisés Marquina Tel: + 51 1 411 4461 [email protected] David de la Torre Enrique Oliveros Beatriz Boza Tax Tax Leader Tel: +51 1 411 4417 Tel: +51 1 411 2108 • Tel: +51 1 411 4471 [email protected] [email protected] [email protected] Humberto Astete Tel: + 51 1 411 4477 [email protected] María Eugenia Caller Tel: +51 1 411 4412 [email protected] José Ignacio Castro Tel: + 51 1 411 4476 [email protected] Roberto Cores Tel: +51 1 411 4468 [email protected] Beatriz de la Vega and Sustainability Governance Corporate Transactions and Corporate Finance - TAS Finance and Corporate Transactions • Tel + 51 1 411 4482 • [email protected] Verónica Febres Tel + 51 1 411 4442 [email protected] Marcial García Tel: +51 1 411 4424 [email protected] Guillermo Hidalgo Tel: + 51 1 411 4464 [email protected] Elizabeth Rosado Tel: +51 1 411 4457 [email protected] Av. Víctor Andrés Belaúnde 171, San Isidro - Lima 27, Perú Fernando Tori Tel: +51 1 411 4444 Tel: +51 1 411 4479 Fax: +51 1 411 4445 [email protected] www.ey.com/pe/es/home Foreword Peru is one of the most important countries in Latin America. Its diverse characteristics include a variety of climates, a large territorial area, significant natural resources, people with great skills and high academic standards, and a solid economic and industrial background. Today, Peru is considered to be one of the world’s leading emerging markets, with a solid recent history of economic stability based on an uninterrupted average annual growth over the past 14 years of 5.6% of its Gross Domestic Product (GDP), as well as a people who are notable for their productivity and entrepreneurship. These factors make Peru an excellent destination for foreign investment. This Business and Investment Guide is a tool for foreign and national investors, providing key information on the country’s current economic situation and the principal tax, legal, and labor issues, as well as on how to incorporate businesses in Peru, and general information on how to invest and do business in the country. It also contains a complete index of Peru's embassies and consulates abroad, as well as contacts of interest to investors. Cathedral of Trujillo City – La Libertad. Photograph: Paul Vallejos l PromPerú © Contents I. Background Information III. Sectorial analysis 1 Government 11 1 Mining 67 2 Geography 12 2 Financial System, Securities Market and Pension System 78 3 Currency 13 3 Electricity 85 4 Economy 13 4 Energy 88 5 Country Risk and Investment Grade 29 5 Hydrocarbons 90 6 Investment 31 6 Construction 92 7 Population and Human Development 34 7 Manufacture 93 8 Poverty and Employment 38 8 Trade and Domestic Consumption 94 9 Agriculture and Livestock 97 II. Business Environment 10 Fisheries 99 1 Investment Promotion Conditions 45 11 Transport and Communications 101 2 Trade Agreements 50 12 Automotive 103 3 Integrated Latin American Market - MILA 58 13 Food and Beverages 104 4 Mechanisms for the Promotion of 14 Tourism, Cuisine and Hospitality 107 Investment in Infrastructure and Public Services 59 IV. Incorporating a company in Peru 5 Socio-environmental Responsibility 64 1 Joint Stock Companies 111 2 Closely Held Corporations 111 3 Publicly Held Corporations 112 4 Limited Liability Companies 112 5 Branches 112 Contents V. Taxes 2 Ministry of Foreign Trade and Tourism - MINCETUR and PromPerú 157 1 Direct Taxes 116 3 Agency for the Promotion of Private 2 Indirect Taxes 124 Investment - ProInversión 158 3 Municipal Taxes 125 4 Peruvian Foreign Trade Association - 4 Customs System 126 ComexPerú 159 5 Legal Stability Agreements 130 5 National Confederation of Private 6 Mining Law 130 Business Institutions - CONFIEP 159 6 Association of Capital Markets Business Promoters - Procapitales 160 VI. Labor and Employment Law 7 inPERU 161 1 Hiring System 137 8 Lima Chamber of Commerce - CCL 161 2 Current Fringe Benefits 138 9 National Association of Industries - SNI 162 3 Taxes and Contributions Levied on 10 Peruvian Association of Exporters - Remunerations 139 ADEX 162 4 Termination of the Employment 11 National Institute of Statistics and Contract 140 Information - INEI 163 5 Immigration 141 • Services of EY for Businesses and 6 Supervisory Body 141 Investment in Peru • Advisory 167 VIII. Accounting Standards • Assurance 170 1 Accounting Standards 145 • Tax 172 • Transactions Advisory Services - TAS 174 Exhibits • Directory of principal Chambers of • Principal regulatory and promotion Commerce 179 entities in Peru 151 • Acknowledgments 185 • Economic promotion institutions 1 Ministry of Foreign Affairs: Executive Office for Economic Promotion MRE - DPE 155 Machu Picchu Citadel, Cusco. Photograph: Renzo Tasso l PromPerú © I. Background Information Opportunity in Peru Globalization is one of the distinguishing features of our times, where world markets merge -thus becoming larger and more attractive- where technology reduces distances and time, where information flows freely and abundantly through cyberspace, and significant investment opportunities arise for those emerging countries which, like Peru, are experiencing great success. Success in their efforts to consolidate their sustainable development, not only economically, but in social and human aspects as well. In this context, small, medium, and large companies play an Jorge Medina Méndez important role in diversifying and decentralizing sources for the Country Managing Partner generation of wealth, investing and creating high-quality jobs in EY Peru order to create wellbeing in society. This Peru's Business & Investment Guide is EY’s contribution to the promotion, undertaking, and development of investments in Peru, by presenting information about the environment, economic situation, tax and regulatory framework, the specific characteristics of our country, and its advantages to potential investors, all contained in one easy-to-read document. EY’s multidisciplinary teams help evaluate opportunities, drive competitiveness, ensure revenues, mitigate risks, control costs, and maximize the results of transactions, contributing to the success of those ventures undertaken in Peru. We would like to thank the Ministry of Foreign Affairs and ProInversión for their important technical contributions, and their valuable collaboration in gathering the information for the preparation of this Guide. We invite you to read our Peru's Business & Investment Guide, a country of entrepreneurs that is friendly and welcoming, and full of great opportunities waiting to be discovered. Peru's Business & Investment guide 5 Peru: A time of growth and challenges From the beginning of the new millennium through 2013, Peru has achieved an impressive cumulative growth of 113% of its Gross Domestic Product (GDP) accompanied by a cumulative inflation during the same period of just 48%, the best rates of their kind in all of Latin America. In monetary terms, poverty has been reduced by half in recent years, with more Peruvians living in better conditions, with a brighter future. Nowadays, Peru is a true economic miracle nearly 20 years after the end of its history of hyperinflation and terrorism, which have given way to the best possible conditions of stability, respect, and promotion of investment in the Region, becoming the fifth-largest Paulo Pantigoso economy in South America—measured in purchasing power parity-- Velloso da Silveira after Brazil, Argentina, Colombia, and Venezuela.