Doing Business In... 2023

Last Updated July 18, 2023


Law and Practice


Muñiz, Olaya, Meléndez, Castro, Ono & Herrera Abogados is a full-service law firm providing cutting-edge legal assistance. Solid commitment blended with best practices and experience allows the firm to provide unparalleled efficient solutions and tailored advice to its clients. Muñiz is the largest law firm in Peru, housing an impressive number of 330 lawyers working in a broad range of practice areas. With a nationwide network of 13 offices, the firm ensures the provision of depth and sophisticated services oriented towards approaching legal problems thoroughly and based on business objectives. Muñiz has extensive experience assisting clients with business transactions both cross-border and locally. The firm does notable work in M&A, banking, capital markets, project development and project finance. With more than 35 practice areas, including tax, labour, environment, antitrust, intellectual property, litigation and arbitration, mining, and oil and gas, among others, Muñiz handles matters in the whole spectrum of industries.

Peru has a civil law legal system. Therefore, the Constitution, along with international treaties to which Peru is a party and other written statutes such as laws, decrees, executive orders and ordinances, among others, are the principal sources of law.

Peru is organised as a democratic and decentralised republic. The territory is divided into 24 departments and one constitutional province. Each department is in turn divided into provinces and the provinces into districts. The government functions are carried out by means of a three-level governance system: National Government (country), regional governments (departments) and local governments (provinces and districts). Although the National Government has jurisdiction over the whole territory, the regional and local governments are politically, economically and administratively autonomous on matters under their competence.

The National Government is vested in the Executive Branch, which is headed by the President. The President is the chief of the Peruvian state and is elected through popular vote for a term of five years. Together with the President, two Vice-Presidents are elected for the same term.

The legislative branch consists of a unicameral Congress made up of 120 congressmen. The Congress is elected through popular vote for a five-year term. Any law enacted by the Congress shall enter into force nationwide from the day following its publication in the Official Gazette, unless otherwise provided in such law.

The Peruvian judicial system has the authority to administer justice within the territory. The jurisdictional bodies are organised as follows:

  • First-instance courts, which consist of (i) professional peace justices in rural and minor urban areas (exercising jurisdiction usually in an area comprising one or more districts); and (ii) specialised and mixed courts with jurisdiction within a province or over disputes based on their specific nature or merit.
  • Superior Courts, which are located in each of the 34 Peruvian judicial districts as appellate courts with (i) jurisdiction to revise the court rulings and resolutions issued by the first-instance courts; and (ii) original jurisdiction over certain disputes based on their nature and amount.
  • The Supreme Court, which is the highest jurisdictional body of the Peruvian judicial system. The Supreme Court acts (i) as the second instance for disputes filed before a Superior Court or the Supreme Court itself; or (ii) as the final instance for cassation appeals, which are ultimate and extraordinary measures aiming to void court rulings with an incorrect law enforcement or issued without the required legal formalities.

Even though it is an independent and autonomous jurisdictional body, and thus not part of the Peruvian judicial system, the Constitutional Court serves as the last and definitive instance for disputes relating to constitutional procedures and constitutional review and interpretation.

The Peruvian state grants all investors, including foreign ones, the protection investment guarantees set forth in the Constitution. Based on its articles 2.2 and 63, which enshrine the principles of equality under the law and equal treatment of national and foreign investments respectively, foreign and Peruvian investors are vested with the same conditions, treatment, rights and obligations. Therefore, both foreign and local investors must be treated as equals by any authority in Peru and must not be discriminated against on grounds of nationality, economic activity, geographical location, or any other feature related to prices, rates, non-customs tariffs or information, among others.

Considering the above, almost all economic activities in Peru may be conducted by foreigners without any restrictions or additional requirements to those applicable to Peruvians. Save for some specific activities, foreign investment does not require prior approval from any authority in Peru. Therefore, foreign investors can freely set up, carry on and direct their business and investments in Peru.

Moreover, Peru does not have currency exchange controls, and the use, conversion and remittance of capitals is permitted. Thus, foreign investors in Peru are entitled without authorisation from the government to (i) acquire shares, participation rights or property rights; (ii) transfer any post-tax profits, royalties and dividends to another jurisdiction in a foreign currency; and (iii) transfer their capital investment to another jurisdiction.

We have already mentioned that Peru does not impose any restrictions or limitations on foreign investments. Certain economic activities, however, are limited and restricted for foreigners. Activities such as those involving media, private security and surveillance, weapons and explosives, air transportation and maritime transportation have restrictions placed upon them for foreign investors, who will require prior approval in order to conduct them.

Furthermore, unless exceptionally authorised by the National Government by means of a Supreme Decree and due to public need and national interest, foreign investors may not acquire or possess, within 50 kilometres of the Peruvian border or inside natural protected areas, mines, lands, forests and water, fuel and energy sources. Any other activity or economic business, besides from the ones mentioned above, may be conducted by foreign investors without restraints.

The Peruvian legal system provides a mechanism aimed at guaranteeing foreign investors with respect to the tax regime in force on a specific date, stability as to the free availability of foreign currency, and stability with respect to the right to not be discriminated against: the legal stability agreement. Foreign investors and the Peruvian state may enter into legal stability agreements for a ten-year term, save for investments in a concession, in which case the term will be the same as the term of such concession. Legal stability agreements have force of law between the parties and can be signed at any time before the investment is made.

When a legal stability agreement is signed, the investor will be assured of (i) stability of the income tax regime applicable at the time of execution of the agreement relating to the income tax rate and the profits and/or dividends to be distributed to the foreign investor; (ii) stability with respect to the free availability of foreign currency; (iii) stability as to the right to freely send abroad profits, dividends, capital and other revenues received; (iv) stability with respect to the right to use the most favourable exchange rate available on the exchange market; and (v) stability as to the right not to be discriminated against.

The foreign investment guaranteed by a legal stability agreement may be (i) contributed to Peruvian companies (already incorporated or to be incorporated); (i) carried out through risk investments with third-party companies; and (iii) used to purchase shares in companies directly or indirectly owned by the state that are under privatisation processes.

A foreign investor may enter into a legal stability agreement to the extent the following requirements are fulfilled:

  • The investment must be channelled through the Peruvian national financial system.
  • The investment may not be less than USD10 million if it is made in the mining and hydrocarbon sectors, nor may it be less than USD5 million if it is made in any other economic sector.

The right to appeal in Peru can be broadly exercised by local or foreign investors. Therefore, any local or foreign investor may challenge any ruling or resolution issued by Peruvian authorities related to the activities that they carry out in Peru.

The resolution or ruling may be initially challenged before the immediate superior administrative body. The decision of such immediate superior administrative body may in turn be challenged before the Peruvian judicial system (in a two-instance procedure).

Arbitration is another dispute settlement mechanism commonly used by local and foreign investors. Both national and international arbitration are admitted in Peru and may be used by local and foreign investors to settle disputes. Peru is also a signatory party and has ratified the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (“ICSID Convention”). Subject to certain requirements, foreign investors in Peru may be subject to arbitration under the rules of the ICSID Convention for disputes with the Peruvian state.

Although the Peruvian laws offer a wide range of structures with which to conduct business, corporations are the most widely used vehicle to carry out profitable activities in Peru. The Peruvian General Corporations Law (“GCL”) provides for three types of corporations: (i) corporation (sociedad anónima), (ii) closely held corporation (sociedad anónima cerrada) and (iii) open corporation (sociedad anónima abierta).


Also known by its Spanish abbreviation S.A. It includes in its corporate structure at least a shareholders’ meeting, a board of directors and a general manager. The minimum number of shareholders in this type of legal entity is two. Although no right of first refusal exists for the transfer of shares, this can be freely agreed upon by the shareholders in the bylaws.

Closely Held Corporation

Also known by its Spanish abbreviation S.A.C. Unlike the other types of corporations, the shareholders can decide not to have a board of directors. In such case, the corporate structure will include the shareholders’ meeting and a general manager in charge of the management. There must be a minimum of two and a maximum of 20 shareholders. The transfer of shares is subject to the right of first refusal, which may be exercised by the other shareholders before the shares are transferred to a third party, whether or not a shareholder. The bylaws of an S.A.C. can limit the transfer of shares to the prior approval thereof by the shareholders’ meeting and can even establish that if any of the shareholders dies, the remaining shareholders will have the right of first refusal to purchase the shares, enjoying priority over the lawful heirs of the decedent.

Open Corporation

Also known by its Spanish abbreviation S.A.A. It includes a board of directors, a shareholders’ meeting and a general manager. This type of corporation is contemplated: (i) for corporations which have made a primary public offering of shares or obligations which can be converted into shares; (ii) for corporations which have at least 750 shareholders, or (iii) when more than 35% of the capital stock is held by 175 or more shareholders, without considering shareholders whose shares, individually considered, do not reach 0.5% of the capital stock or exceed 5% of the capital stock. However, there can be a smaller number of shareholders (no fewer than two) when the corporation is incorporated in this way or when 100% of the shareholders holding voting shares agree to incorporate this type of corporation. In such case, it is not possible for the bylaws to contemplate any right of first refusal and all the shares will have to be registered on the Stock Market Public Registry.

Incorporation Procedure

The main steps to incorporate a new corporation (“Newco”) in Peru are the following:

  • Search and reservation of the corporate name of the Newco before the Public Registry, in order to make sure that said name is available.
  • Drafting of the articles of incorporation (once the bylaws are ready).
  • Filing of the articles of incorporation with a notary’s office.
  • The amount of the capital stock of the Newco must be deposited in a Peruvian financial entity designated for such purpose.
  • Conversion of the articles of incorporation into a notarial recorded instrument (public deed) and signing of the public deed. If the Newco has been incorporated by non-domiciled shareholders, then before signing the public deed it will be necessary to take the steps required to have a power of attorney granted at the Peruvian Consulate or pursuant to the apostille system.
  • Filing of the public deed with the Public Registry.
  • Filing of an application to get the corporation’s tax ID number (“RUC”, per its Spanish abbreviation).
  • Legalisation of the register of shareholders and directors (if any) and ledger book.
  • Once the shareholders decide where the principal office of the Newco will be located, an application will be filed with the competent city council to obtain a municipal operating licence. Special licences may be required in special cases in some specific sectors.

Processing time

The time required to organise a corporation in Peru is usually short. In fact, the whole process should not exceed 20 days, except for the process required to obtain a municipal operating licence and other special authorisations required in some specific sectors.

According to the GCL, every Peruvian corporation must hold an annual mandatory shareholders’ meeting once a year within three months after the end of the previous fiscal period to: (i) decide on the results of the management; (ii) approve the financial statements of the previous year and the annual report; (iii) determine the allocation of profits, if any; (iv) appoint a new board of directors, when applicable; (v) appoint external auditors; and (vi) decide on other matters, as provided for in the bylaws.

Once the previous fiscal period ends, the board of directors shall prepare the annual report, the financial statements and the proposed allocation of profits. Such information should be delivered to the shareholders early enough in advance, so that they can deliberate and vote knowledgeably on such matters at the mandatory annual meeting.

Peruvian corporations are also required to file an ultimate beneficial owner report before the Peruvian Tax Authority (“SUNAT”, per its Spanish acronym). Through the report, Peruvian corporations must identify and provide information regarding their ultimate beneficiaries based on the following criteria:

  • Individuals who, directly or indirectly, own at least 10% of the corporation’s capital stock.
  • Individuals who, acting individually or with others as a decision unit, have power to designate or remove the majority of the administrative, management or supervisory bodies, or have decision-making power over the financial, operational and/or commercial matters of the corporation.
  • The individual with the highest administrative position inside the corporation, if the two previous criteria are not sufficient to identify the corporation’s ultimate beneficial owners.

The shareholders’ meeting is the supreme body of a Peruvian corporation. The shareholders’ meeting is empowered to make the most important corporate decisions, such as the approval of the management reports, allocation of profits, bylaw modification, capital increase and reduction, sale of critical assets, and approval of mergers, spin-offs and other types of corporate reorganisations, among others.

The management of a corporation is entrusted to the board of directors and the general manager. While the board of directors is in charge of the most critical and important managerial decisions, the general manager oversees the day-to-day operations. The board of directors comprises at least three members. The bylaws establish the term of office of the board of directors, but in no event shall it be more than three years or less than one year. The general manager is appointed by the board of directors, although the shareholders’ meeting may have that power as well. The term of office of a general manager is indefinite; however, the general manager may be removed by the shareholders’ meeting or the board of directors at any time.

Under Peruvian laws, directors and managers shall perform their functions with the diligence of a prudent businessperson and a loyal representative. They are obliged to maintain the confidentiality of the corporation’s affairs and the information to which they have access, even after resigning. Therefore, both directors and managers have fiduciary duties before the corporation. Directors and managers are responsible before the corporation, the shareholders and third parties for damages caused by breaching their obligations, for agreements or actions against the law and the corporate bylaws, or those made with wilful misconduct, abuse of authority or gross negligence.

Directors are also jointly and severally liable with former directors if they do not report faults committed by the former directors in writing before the shareholders’ meeting. Furthermore, directors and managers may only enter into agreements with the corporation at arm’s length conditions. Finally, when a director or manager has a conflict of interest in any matter with the corporation, such director or manager must disclose it and refrain from participating in the deliberation and resolution concerning that matter.

According to the GCL, the shareholders are not personally liable for the debts of the corporation. Therefore, in Peru the principle of limited liability is recognised in favour of the shareholders of a corporation, meaning that both are different entities. The assets and liabilities of a corporation are different from the ones owned by its shareholders. Notwithstanding, there are a few court cases in which the Peruvian courts have pierced the corporate veil of certain companies based on exceptional conditions.

Peruvian employment relationships are governed by the Constitution, laws enacted by the Congress, and decrees and other regulations issued by the National Government.

According to the Constitution, work is a duty and right that constitutes the basis of social welfare and a means of self-fulfilment for individuals. Furthermore, work is a matter of priority attention by the Peruvian state through employment promotion and work-oriented education policies. Employees are entitled to a fair and sufficient remuneration. The Constitution also guarantees the exercise of labour rights of a collective nature, such as unionisation, collective bargaining and the right to strike. Subject to some conditions and requirements, employees also have the right to participate in the distribution of a percentage of the net income of their employer.

In Peru, labour laws are scattered. Although there is a general labour regulation contained in the Peruvian Labour Productivity and Competitiveness Law (“LPCL”), it does not cover all the heterogeneous types of labour activities that are recognised in the Peruvian legal system. Special labour regimes in private activities with singular characteristics are governed by their own regulations.

Since unionisation in Peru is equivalent to approximately 8% of all Peruvian formal workers, the scope of collective agreements is generally limited to companies and corporations. Employment agreements and other covenants executed with employees individually are more common than collective agreements and usually govern the labour relationships.

The requirements and characteristics of employment contracts are governed by the LPCL. Those contracts can be for an indefinite term or a fixed term.

By default, employment contracts have an indefinite term. Indeed, the general rule regarding the private activity labour regime in Peru is to hire personnel for an indefinite period. However, due to the special nature of some services, the LPCL has exceptionally provided for fixed-term employment. Peruvian law allows employers to hire employees for a fixed term if justified by the temporary nature of the services to be provided. To execute a fixed-term contract, the employer must evidence that the service to be provided has a temporary nature. The fixed-term contract should list the facts that support its temporary nature.

Fixed-term contracts will become indefinite in the following cases:

  • if the worker continues to work after the termination date of the fixed-term contract, or their extensions if they exceed the maximum limit; or
  • when the employee proves the existence of pretence or fraud by the employer in regard to the rules that regulate fixed-term contracts.

Ordinary Working Day

The ordinary working day is limited to eight hours a day, or 48 hours a week.

Some workers are not subject to this maximum working time, eg, managerial personnel, confidence personnel and employees whose activities are not subject to immediate supervision (work outside the employer’s premises).


For employees subject to the maximum ordinary working day as described above, overtime is remunerated at a rate of 1.25 times the normal wage for the first two hours and at 1.35 for any additional hour. Working on a rest day or holidays is remunerated with a surcharge of 100%. Alternatively, the employer could grant paid compensation in lieu.

Causes for Termination

According to the LPCL, an employment contract may be terminated in the following events:

  • Death of the employee or the employer (if an individual).
  • Resignation or voluntary retirement of the employee.
  • Completion of the work or service, fulfilment of the resolutory condition or expiration of the term in fixed-term contracts legally entered into.
  • Mutual agreement between employee and employer.
  • Absolute permanent disability of the employee.
  • Retirement.
  • Dismissal (if permitted by law).
  • Termination of the employment relationship for objective reasons (if permitted by law).

Peru is not an ‘employment at will’ jurisdiction.

Collective Dismissals

Collective dismissal for objective reasons may be carried out, with the approval of the labour administrative authority and at the sole discretion of the employer, due to any of the causes described below:

  • Acts of God or force majeure events.
  • Economic, technological, structural or any other similar reasons.
  • Dissolution and liquidation of the employer, and bankruptcy.
  • Asset restructuring of the employer.

The measure must affect at least 10% of the total employees and be supported by an expert report.

Individual Dismissals

The individual dismissal of an employee subject to the private activity regime who works four or more hours a day and who has passed the legal or conventional trial period requires the existence of a duly verified just cause (causa justa).

The just cause may relate to the capacity or conduct of the employee, and the burden of the proof falls upon the employer within any judicial process that the employee might file to challenge the dismissal.

Dismissal without just cause triggers following payments by the employer:

  • If the employee was hired under an indefinite-term contract, then the employer must pay as compensation to the employee one-and-a-half times the monthly remuneration for each full year of service (or the proportional part).
  • If the employee was hired under a fixed-term contract, then the employer must pay as compensation to the employee one-and-a-half times the remuneration for each month left to work until the expiration of the contract (or the proportional part).

In both cases, the compensation will be capped at 12 months of remuneration. Said amount is exempted from social contributions and income tax.

Alternatively, employees may sue the employer to be reinstated at work and be paid compensation for damages that arose from the dismissal. Reinstatement shall not be possible for confidence employees. In such a case, the employer may terminate the employment relationship due to a loss of confidence. Regarding this, the Supreme Court has ruled that if an employee who began his labour relationship with a confidence position is terminated on the basis of a loss of confidence, then such employee will not be entitled to compensation. However, if the employee was promoted to a confidence position having occupied a previous ordinary position, then such employee will be entitled to compensation equal to what an employee with an indefinite-term contract would be entitled to.

Mutual Agreement

The employment relationship may be terminated by mutual agreement between the employee and the employer, provided that such agreement is in writing. The mutual agreement usually contains a provision pursuant to which the employer grants the employee an extraordinary gratuity for termination. In Peru, employers usually prefer to reach mutual agreements to terminate employment relationships in order to prevent further labour complaints.


Employees’ representation by unions is free and voluntary. The employment conditions may not be conditional upon to an employee’s decision to join or not to join a union, or to withdraw from one. An employee cannot be obliged to be part or prevented from being part of a union. The Peruvian state and employers should refrain from participating in any act that may somehow force, restrict or impair in any way the employees’ right to unionise and participate in the incorporation or management of unions.

Collective Bargaining

Collective bargaining refers to the negotiations held between an employer and a union in order to reach a collective agreement establishing economic benefits, favourable conditions at work, productivity levels, and other aspects that facilitate the labour relationship between the employer and the employee.

Collective Agreements

When an agreement between the union and the employer is reached, either by direct negotiation or through settlement, a collective agreement shall be signed and shall enter into effect on the day following the expiration of the previous collective agreement. The minimum term of a collective agreement is one year. Upon expiration of the agreed term, the collective agreement will continue in effect as long as it is not modified by a subsequent collective agreement.


A strike is a collective suspension of work agreed upon on a majority basis by the employees. It is voluntary and shall be peacefully performed by the employees, with the consequent abandonment of the workplace. Consequently, employees are not allowed during a strike to:

  • Resort to any form of violence, either against third parties and/or the employer’s assets.
  • Remain inside the workplace.
  • Prevent or hinder access to the workplace.
  • Perform any irregular form of strike, such as suddenly bringing work to a halt, bringing operations to a halt in a key area or section, working without zest, working at a slow rate or deliberately reducing performance, among other acts.

Types of Representation

The functions of a union are limited to the representation of its members in both their collective and individual rights and the promotion of its members through savings mechanisms and cultural or educational training. In a nutshell, the functions of the union shall be oriented on the conduct of acts in favour of its members. Thus, its scope of action is focused only on promoting the progress and protection of the professional and economic rights of its members through collective negotiations.

Salary Tax

Employees are obliged to pay a salary tax on their remunerations and any other type of income received in connection with a labour relationship. The tax shall be calculated and withheld by the employer on a monthly basis.

Social Security Contribution

An employer is obliged to pay a contribution equal to 9% of its employee’s monthly salary to make up for the health coverage provided by the Social Security to the latter.

Income Tax

Income tax is levied, broadly speaking, on any gain or income obtained from transactions carried out with third parties. The income tax rate is 29.50% and it is calculated on the net income. The net income is calculated by subtracting, from the gross income, the expenses deemed to be necessary to produce income and maintain its source, as well as any expenses relating to capital gains, so long as their deduction is not expressly disallowed, in whole or in part, by Peruvian laws.

Gross income is the aggregate of income obtained in a fiscal year, and when the income derives from the transfer of assets, the gross income is equal to the difference existing between the net revenue proceeding from those transactions and the cost basis. Said rule defines the cost basis as the acquisition cost, production cost, construction cost or the value of incorporation to the equity, incremented by the amount of any subsequent cost. In no event will the interest be deemed part of the cost basis for tax purposes.

Income tax shall be paid annually within the timetable set by SUNAT. Generally, the timetable coincides with the first three months of the year following that in which the tax was accrued.

Taxpayers are obliged to make monthly advance payments, which are calculated by applying, to the monthly net revenues, the higher of the following coefficients:

  • The one calculated by dividing the tax calculated in the preceding year (or the year before the preceding one, in case of the advances of January and February) by the annual net revenues of the preceding year (or the year before the preceding one, in case of the advances of January and February); and
  • 0.015.

Advance payments are tax credits against the annual income tax. Any balance of advance payments resulting after the liquidation of the annual income tax may be (i) refunded to the taxpayer if requested, (ii) offset against any other tax debt, or (iii) carried forward indefinitely, to be offset against future advance payments or future annual income tax.

Temporary Tax on Net Assets

The Temporary Tax on Net Assets (“ITAN”, per its Spanish acronym) is applicable to individuals and entities (including branches and permanent establishments of foreign entities) subject to the corporate income tax and is charged on the value of net assets as of 1 January of each tax year.

Individuals and entities which have not yet started operations as of 1 January of any given year are not levied with this tax. The taxable base of ITAN is the historic value of assets, reduced by the amount of certain specific deductions allowed, such as (i) the value of shares of other entities subject to this tax, (ii) the value of machinery and equipment not older than three years, and (iii) in the case of exporters, the value of inventories and accounts receivable related to their export activities. A flat PEN1 million deduction is available to all individuals and entities levied with ITAN.

The current ITAN rate is 0.4%, and it can be paid according to one of the following alternatives: (i) in one instalment, within the timetable set for the payment of the taxes accrued in March, or (ii) in nine monthly equal instalments, starting in April.

ITAN effectively paid is a tax credit against the following tax liabilities of the taxpayer:

  • the advance payments of the corporate income tax corresponding to the months of March to December of the same tax year; and
  • the corporate income tax.

If, after offsetting ITAN against any of the preceding tax obligations, there would exist an unapplied balance, that amount can be refunded to the taxpayer, following an expeditious refund proceeding before SUNAT.


Locally called the Impuesto General a las Ventas or IGV, per its Spanish abbreviation, Value Added Tax (“VAT”) is the only tax charged on the price of services in Peru. VAT is levied on the value of sales, services and construction contracts performed in Peru, and on imports of goods, services and intangibles.

The taxable base is the positive difference between (i) the so-called “fiscal debit” (output VAT), which is equal to 18% of the value of taxable sales of goods and services and construction contracts, and of the imports of goods, services and intangibles, and (ii) the so-called “fiscal credit” (input VAT), which is equal to the VAT paid on the acquisition of goods and services, construction contracts and imports related to taxable transactions.

The current VAT tax rate is 18% (16% of VAT and 2% of the Municipal Promotional Tax). VAT accrues monthly and must be paid:

  • on local sales of goods and services, and construction contracts, within the timetable set by SUNAT for the payment of the monthly taxes;
  • in the case of the import of goods, at the moment of asking for their nationalisation; and
  • in the case of imports of services and intangibles, within the timetable set by SUNAT for the payment of the taxes of the month when the first happens of (i) the payment to the service provider or to the intangible’s seller, and (ii) the annotation of the invoice in the purchase ledger.

Export of goods and services is exempt from the application of VAT. To that end, a service is deemed to have been exported when all of the following conditions are satisfied:

  • It is rendered in exchange for a consideration and performed from Peru. These conditions must be evidenced with the invoice, which shall be written down in the service provider sales ledger.
  • The exporter is a resident in Peru for tax purposes.
  • The user or the beneficiary of the service is a person not resident in Peru.
  • The use, exploitation or enjoyment of the service by its non-resident user occurred abroad.
  • The exporter is registered with the Registry of Exporters of Services kept by SUNAT.

In turn, any import of services is levied with VAT. So long as services imported are related to activities subject to VAT carried out by a local entity, any VAT paid at the import of services will be treated as an input VAT. Note that VAT shall be paid directly by the local entity, and this entity will be able to credit that as an input VAT as per the tax period (month) in which said VAT was paid to SUNAT.

Withholding Taxes on Payments to Non-domiciled Persons

1. Technical assistance

Payments for technical assistance (any independent service, performed either in Peru or from abroad, by means of which the service provider commits to use its abilities, through the use of certain processes, arts or techniques, with the aim of providing specialised, non-patentable knowledge, which is necessary in the process of production, commercialisation, the provision of services or any other activity carried out by the user) are subject to a 15% withholding tax.

The following services are also deemed to be technical assistance for tax purposes:

  • Engineering services: the execution and supervision of the erection, installation and commissioning of machinery, equipment and plants, the calibration, inspection, repair and maintenance of machinery and equipment, and the carrying out of tests and assessments, including quality controls, feasibility studies and definitive projects of engineering and architecture.
  • Research and development of projects: the preparation and execution of pilot projects, research and laboratory experiments, exploitation and planning or technical programming of productive units.
  • Financial advice and consultancy: advice on the valuation of financial and banking entities and on the making of plans, programmes and international promotion for the sale of those, and assistance with the distribution, placement and sale of securities issued by financial entities.

Note that in the case of services whose value exceeds the equivalent of 140 Tax Units (each Tax Unit equals PEN4,950, or approximately USD1,360 in 2023), the application of this rate is conditional upon the obtainment of a report from an audit firm evidencing that the technical assistance was effectively provided; otherwise, the tax rate will be 30%. The withholding shall be made in the month of payment to the service provider.

2. Digital services

Payments for services made available to the user through the internet or any other similar network by means of online access and that are characterised by being essentially automatic and unviable in the absence of information technology are subject to a 30% withholding tax rate.

3. Other service income

Payments in connection with the performance of services in our territory are levied with a 30% withholding tax rate.

4. Interest

Withholding tax rates applicable on interest of foreign credits are the following:

(a) In case the borrower and the lender are not related parties: 4.99%, so long as the following conditions are fulfilled:

  • The money enters Peru through the Peruvian financial system.
  • The money will be used to finance any activity proper to the borrower’s corporate purpose of business, or the refinancing of existing liabilities.
  • There is no relationship between the borrower and the lender.
  • The interest rate does not exceed Libor plus 7%. Any excess thereof will be subject to a 30% withholding tax rate.

(b) In case the borrower and the lender are related parties, or the intervention of the lender is intended to conceal a financing granted between related parties, or any of the first three conditions in (a) above is not fulfilled: 30%.

The withholding tax rate applies on the gross amount of interest; and the withholding of the tax shall be made at the time of its payment.

5. Royalties

Royalties are subject to a 30% withholding tax rate that applies on the gross amount of the payment, at the time the payment is made.

6. Dividends

Dividend payments are levied with a 5% tax rate. The tax shall be withheld on the gross amount of dividends by the company distributing the dividends, at the moment in which the first happens of (i) the payment to the shareholder and (ii) the adoption by the shareholders’ meeting of the resolution to distribute dividends.

Dividends paid to another Peruvian entity are tax exempt. The value of shares issued as a result of the capitalisation of any kind of retained earnings is also exempt.

Financial Transactions Tax

This tax is levied on any debits or credits made to any type of bank account opened with an entity of the Peruvian financial system, except for debits, credits or transfers between accounts of the same account holder.

The tax rate is 0.005%, which applies on the gross amount of any taxable movement of funds, and the tax is withheld by the bank in which the account is opened, at the moment that each debit or credit is made, save for the following cases, where the payment shall be made by the entity incurring in the tax event:

  • The delivery or reception of money be it money of its own or of third parties which constitutes a so-called organised payment system, either in Peru or abroad, without the intervention of an entity of the Peruvian financial system. In this case, the tax is levied at a doubled rate.
  • Payments, in a tax year, of more than 15% of the obligations of an entity without using money or bank payment means. In this case, the tax is levied at a doubled rate.

Agricultural Regime

Agricultural companies whose revenues do not exceed 1,700 Tax Units will enjoy a 15% corporate income tax rate until 2030. They can also enjoy a credit equal to 10% of reinvested profits, which may not exceed 70% of the total profits.

Investment in irrigation and hydraulic infrastructure by these companies can be depreciated at a 20% rate.


The value of mining concessions can be amortised over a term equal to the estimated life of the pit, in consideration of both the proven and probable reserves, starting in the earlier of (i) the year in which exploitation begins, and (ii) the year in which the minimal production requirement must be fulfilled.

Investments in the Amazon

Companies which carry out agriculture, fishery and tourism, and manufacturing activities relating to the processing, transformation and commercialisation of primary products from the foregoing activities, and forestry in the Amazon are subject to a 10% corporate income tax rate.

However, those which carry out said activities in the departments of Loreto and Madre de Dios, the districts of Iparia and Masisea in the Coronel Portillo province and the provinces of Atalaya and Purus of the Ucayali department are subject to a 5% corporate income tax rate.

Finally, companies engaged in the agricultural production and/or transformation or processing of native and/or alternative produce are exempt from income tax, as well as those which engage in the agricultural production of coffee, cacao and palm.


Aquacultural companies whose revenues do not exceed 1,700 Tax Units will enjoy a 15% corporate income tax rate until 2030. They can also enjoy a credit equal to 10% of reinvested profits, which may not exceed 70% of the total profits.

Investment in canals and harvesting infrastructure by these companies can be depreciated at a 20% rate.

Forestry and Wildlife

Companies engaging in forestry and wildlife activities whose revenues do not exceed 1,700 Tax Units will enjoy a 15% corporate income tax rate until 2030. They can also enjoy a credit equal to 10% of reinvested profits, which may not exceed 70% of the total profits.

Investment in infrastructure for the management of forests and wildlife by these companies can be depreciated at a 20% rate.

Small and Medium-Sized Businesses

Small and medium-sized businesses whose revenues do not exceed 1,700 Tax Units are subject to a 10% corporate income tax rate on their net income not exceeding 15 Tax Units, and 29.5% on any excess thereof.

There are no tax consolidation regimes available in Peru.

Interest expenses from any type of financing are deductible up to a limit equal to 30% of the EBITDA, calculated upon the taxable income. Interest exceeding this limit could be carried forward for up to four additional years. This limitation does not apply in the following cases: (i) interest from notes issued via a public offering under the provisions of the Peruvian Securities Market Law in the Peruvian market, so long as there are, at least, five noteholders, (ii) interest from financings to entities the net revenues of which are less than 2,500 Tax Units, (iii) interests from financings granted to financial institutions, insurance companies and factoring companies, and (iv) interest from financings to companies developing public infrastructure o utilities projects.

Transfer pricing rules apply to all transactions carried out between related parties or with parties residing in countries or territories of low or null taxation, or in non-cooperative jurisdictions or in those that are preferential tax regimes. For this purpose, a preferential tax regime is one which meets at least two of the following conditions: (i) there is no effective exchange of information; (ii) it lacks legal, regulatory or administrative transparency; (iii) the tax rate applicable upon income is 0% or less than 60% of the rate applicable in Peru on income of the same nature; (iv) the fiscal regime is ring-fenced to locals, or the persons subject to that regime are ring-fenced from operating in the domestic economy; and (v) it has been classified by the Organization for Economic Co-operation and Development as a harmful or potentially harmful tax regime.

The Peruvian Tax Code contains a general anti-avoidance rule, which enables SUNAT to claim the payment of taxes or to reduce the amount of credits or losses in case of detection of tax avoidance. Tax avoidance, for this purpose, consists in the partial or total avoidance of the occurrence of the taxable fact or the reduction of the taxable base or of the tax debt, or the obtainment of credits or balances or losses by means of the carrying out of acts which fulfil both of the following conditions: (i) they are artificial or unfit for the obtainment of the goals achieved; and (ii) the legal or economic effects arising out of their use, other than the tax advantages, are equal or similar to those which would have been obtained with the proper or usual acts. This rule does not prohibit tax planning as such but restricts the ability of taxpayers to do so to the extent that they are able to evidence that any actions which allowed the obtainment of a tax saving were motivated by reasons other than obtaining that advantage.

In Peru, concentration operations may include:

  • The merger of two or more previously independent economic agents, regardless of the corporate types of the merging parties or the entity resulting from the merger.
  • The acquisition of rights by one or more economic agents that, directly or indirectly, allows them to, individually or jointly, exercise control over one or more economic agents, totally or partially.
  • The incorporation, by two or more independent economic agents, of a joint company; a joint venture; or any other similar form of agreement that involves the acquisition of joint control over one or more economic agents, so that such economic agent(s) may formally perform the functions of an autonomous economic entity.
  • The acquisition by an economic agent, by any means, of direct or indirect control over productive operating assets from another economic agent or agents.

Concentration operations are subject to a prior merger control clearance when the following thresholds are concurrently met:

  • The total sum of the value of annual sales or gross income or the value of assets in Peru of the companies involved in the concentration operation have reached, during the fiscal year prior to the one in which the operation is notified, a value equal to or greater than 118,000 Tax Units.
  • The value of annual sales or gross income or the value of assets in Peru of at least two of the companies involved in the concentration operation have reached, during the fiscal year prior to the one in which the operation is notified, a value equal to or greater than 18,000 Tax Units.

Pre-notification Phase

Applicants can contact the Competition Bureau of the National Institute for the Defence of Competition and Protection of Intellectual Property (“INDECOPI”, per its Spanish acronym) with prior information or queries about the relevant transaction. This phase is voluntary but advisable. The opinion of the Competition Bureau of INDECOPI is not binding. The length of this phase may vary according to the transaction’s features.

Admission Phase

The parties involved in the transaction shall submit the notification form along with information about themselves and about the transaction for admission and processing. This phase can last up to 25 business days.

Phase 1

INDECOPI assesses whether the concentration raises serious competition concerns. If it does, Phase 2 is started. Phase 1 can last up to 30 business days.

Phase 2

When serious competition concerns are raised, INDECOPI starts a second phase for a more in-depth analysis. Phase 2 can take up to 120 business days.


Applicants can appeal the decision of the first administrative instance within 15 business days. The appeal proceeding can take up to 90 business days.

The term of any steps of the process may be suspended if commitments are proposed by any of the applicants or INDECOPI requires information from other entities. The term may be extended in case of oral hearings.

In order to protect the competitive process nationwide, the Peruvian Competition Law (“PCL”) prohibits and sanctions anti-competitive agreements, whether horizontal or vertical.

Cartels are subject to absolute prohibition (including any conduct complementary or ancillary to other lawful agreements) and are punishable per se without having to verify their effects on the market. Cartels include horizontal price fixing; market, customer or supplier allocation; bid rigging; and output or sales limitation.

Vertical agreements require a dominant position on the part of one of the companies involved and are subject to relative prohibition. This means that they shall only be illegal when negative effects on the markets or on the consumers’ welfare are evidenced. The PCL also sanctions the facilitation of horizontal agreements, which are subject to absolute prohibition.

Abuse of dominant position is subject to relative prohibition in Peru. The PCL only punishes exclusionary abuse, through conducts such as discrimination, tying or bundling, and refusal to deal, among others.

The abuse of dominant position rules contained in the PCL are applicable to conducts that produce or may produce anti-competitive effects in the whole or part of the Peruvian national territory, even when such actions have been initiated abroad.

Patents are inventive-level novel solution products or processes in all fields of technology for industrial application, which grant an inventor with an exclusive right to use, license or commercialise such products or processes for a 20-year term.

The patent application initiates with a patentability examination and a search to know whether such solution has been previously invented. Upon filing of the application, INDECOPI evaluates whether the patent meets the requirements of novelty, inventive level and industrial application. INDECOPI also examines whether the formal requirements have been met and publishes the patent so that any third party may file an opposition. Afterwards, a patentability test is carried out by INDECOPI, which concludes with a technical report. Patent applicants may file a formal response to the technical report. Finally, INDECOPI will decide whether the patent will be granted or not.

Patent owners can file cease-and-desist letters for infringers. They may also file injunctions for cessation of use, and infringement actions for unauthorised use or counterfeiting, among other measures, before the relevant administrative bodies of INDECOPI. The patent owner may bring legal actions in case of disagreement with INDECOPI decisions, or to request indemnification as well.

Trade marks are signs that identify certain products or services, distinguishing them from similar competitors. Trade marks could be traditional, such as denominative, figurative or mixed, or non-traditional, such as three-dimensional, moving, a position mark or auditory, among others. Trade marks can be registered for a ten-year renewable term.

The registration process starts with the application for the trade mark. Then, INDECOPI evaluates the formal requirements. Afterwards, the trade mark is published in the Official Gazette, so that any third party may file an opposition. Opposition may be filed by (i) Peruvian trade mark holders; (ii) Colombian, Bolivian and Ecuadorian trade mark holders (according to Decision 486 of the Andean Community); and (iii) trade mark holders subject to the General Inter-American Convention for Trade Mark and Commercial Protection. After the publication, INDECOPI will issue a resolution granting or denying the trade mark registration. The grounds of any opposition shall be evaluated by the authority in such resolution.

Industrial design is the protection right given by Peruvian laws to the particular appearance, visual aspect or design of a product or packaging. The exclusive protection in favour of the industrial design titleholder is for a ten-year term. Protection cannot be extended. Novelty and particular appearance are evaluated by INDECOPI when granting the protection.

After application, INDECOPI will check whether the formal requirements have been met. Then, the application is published in the Official Gazette, so that any third parties may file oppositions. Afterwards, a patentability test is carried out by the authority. If there is no opposition filed, the protection right is granted by INDECOPI.

Copyrights protect the moral and economic rights of an author of a work, such as musical works, literary works, sculptures, paintings and audio-visual works, among others. It also includes protection of related rights for artists, producers and broadcasters, among others. The basic requirement for the existence of a copyright is the originality and imprint of the author. The duration varies according to the holder, but the maximum for an author is the whole of his or her life plus 70 years after his or her death. Protection cannot be extended.

If the application is filed by an individual other than the author, an assignment contract duly signed by the parties must also be filed. Once the application is filed, INDECOPI will conduct an examination to review whether the formal requirements have been met. Then, INDECOPI will move forward with the publication of the application. Finally, the authority will issue a resolution certifying that the copyright application complies with the originality required for protection.

As for enforcement and remedies, cease-and-desist letters to an infringer of the right may be filed. It is also possible to file a complaint for infringement before the administrative bodies of INDECOPI and then bring claims before the Peruvian court in case of disagreement with the resolution of such administrative instance. Collective management entities may also act on behalf of authors to exercise legal actions against copyright infringers.

In Peru, the following IP rights are also protected:

  • Utility models.
  • Collective knowledge of indigenous peoples, layout designs of integrated circuits, and certificates of the breeder of new plant varieties.
  • Software.
  • Other distinctive signs such as commercial slogans, trade names, denominations of origin, collective marks, and certification marks.
  • Personal data.
  • Trade secrets.

The main applicable regulations regarding data protection in Peru are the Personal Data Protection Law (“PDPL”) and its regulations, approved by Supreme Decree No. 003-2013. The PDPL establishes the principles, rights and obligations that entities must follow when processing personal data.

In the case of Peru, when transferring personal data to another country, measures must be taken to ensure that the processing of that data in the recipient country meets the same standards of protection that would apply if the data were to remain in Peru. This implies ensuring that the foreign country, as the recipient, has general regulations in place that provide an adequate level of protection for personal data. The primary objective is to protect the rights and privacy of individuals whose personal data is being transferred to other countries, thereby preventing transfers to countries where those rights may not be adequately respected.

The agency in charge of enforcing data protection rules in Peru is the National Authority for the Protection of Personal Data (“ANPDP”, per its Spanish acronym). ANPDP is the agency responsible for ensuring compliance with the PDPL and its regulations. Specifically, its main function is to oversee the respect for and the protection of individuals’ rights regarding the processing of their data. In addition, it is responsible for supervising, investigating and sanctioning non-compliance with data protection regulations.

Criminal Code Reform

The Congress has recently passed Law No. 31775. Law No. 31775 modifies the Peruvian Criminal Code to:

  • extend the anti-competitive conduct leniency programme benefits to criminal proceedings; and
  • limit the criminal offence to anti-competitive conduct subject to absolute prohibition.

Constitutional Reform

Another important reform under discussion in the Congress is a Constitutional Reform Bill pursuant which INDECOPI might be declared as a constitutionally autonomous agency. If approved, INDECOPI will be vested with organisational autonomy and economic independence.

Muñiz, Olaya, Meléndez, Castro, Ono & Herrera Abogados

Calle Las Begonias 475
San Isidro

+51 1 611 7000
Author Business Card

Trends and Developments


Muñiz, Olaya, Meléndez, Castro, Ono & Herrera Abogados is a full-service law firm providing cutting-edge legal assistance. Solid commitment blended with best practices and experience allows the firm to provide unparalleled efficient solutions and tailored advice to its clients. Muñiz is the largest law firm in Peru, housing an impressive number of 330 lawyers working in a broad range of practice areas. With a nationwide network of 13 offices, the firm ensures the provision of depth and sophisticated services oriented towards approaching legal problems thoroughly and based on business objectives. Muñiz has extensive experience assisting clients with business transactions both cross-border and locally. The firm does notable work in M&A, banking, capital markets, project development and project finance. With more than 35 practice areas, including tax, labour, environment, antitrust, intellectual property, litigation and arbitration, mining, and oil and gas, among others, Muñiz handles matters in the whole spectrum of industries.


The COVID-19 pandemic heavily affected the Peruvian economy. Among other effects, it caused a sharp drop in formal employment, rocketed poverty to levels not seen since 2004, and brought to the fore serious problems relating to social and economic imbalances, informal employment and inadequate access to basic public services. Despite the severe economic contraction, Peru is showing a quick post-pandemic recovery underpinned by strong macroeconomic fundamentals.

The recent return to an unusual period of calm from a prevailing political and social crisis also appears to be a vital variable in the rapid overcoming of the economic slump. Political instability in Peru, mainly caused by minimal institutional structures in the country and a weakened political system, reached boiling point in December last year when left-wing former president Pedro Castillo was impeached due to a failed coup attempt. The removal of Castillo was followed by violent protests and civil unrest primarily focused on the south of Peru. The situation led to a stoppage of certain economic activities during the first two months of 2023, as a result of blockades in some major cities, fires and attacks from protesters on the premises of local businesses, media and public institutions.

Nowadays, it seems that the new government headed by Dina Boluarte (former vice-president) is finding a path to reach pre-pandemic norms again. The expected fast-pace growth of the GDP, along with efficient central bank policies, the second lowest country risk in the region and an investment-grade rating, have placed Peru in a key moment to return to the creation of competitive conditions for investors and entrepreneurs. This situation has now resulted in some trends to note in the Peruvian market.

M&A activity

Peru has seen unprecedented activity in the M&A market since last year, with steady growth between the last quarter of 2022 and the first quarter of 2023. Among other factors, M&A operations in Peru are currently driven by (i) private equity funds that have reached maturity levels for their investments and are liquidating their positions; (ii) political instability due to the short term of presidential mandates (during the last five years, Peru has had six presidents); (iii) market risk in the whole Latin American region; and (iv) the search by investors for other regions with higher stability (eg, Asia and Europe).   

Although there is an extraordinarily full pipeline of ongoing transactions, not all these processes are reaching the closing stages. Many of them will probably result in successfully closed deals during the second half of the year, mainly in the infrastructure, logistics and energy sectors. However, others will not be reflected in completed operations. The reason behind the low conversion ratio between ongoing and closed M&A transactions can be traced to the sense of instability that investors still feel about the Peruvian market. This has in turn prompted slower processes or operations that take longer compared with transactions in pre-pandemic years.

It is worth noting, however, that the perception of instability is not confined solely to Peru but has reached the whole region. Countries such as Chile and Colombia are also facing an economic contraction primarily due to certain policies and decisions made by newly-elected left-wing governments. Still under an instability scenario, Peru has the second lowest country risk in the region and is a jurisdiction with significant possibilities to continue growing, which can lead investors to look at Peru as an interesting investment opportunity. The risk is a reason that triggers the sale/acquisition of a company, but not the sole reason. There are investors and entrepreneurs with a deep understanding of the social and economic situation of Peru that are looking for opportunities. They have understood that the instability in the country has a cyclical structure and as such they can seize the opportunity to (i) acquire assets that in other circumstances they would not have the possibility to buy; (ii) obtain market-beneficial prices; and (iii) make strategic investments in long-run businesses.

In a nutshell, the present balance of the Peruvian M&A market allows us to reassure readers that an increase in M&A activity is coming this and the next year. Many controlling shareholders will be keen to sell part or the whole of the interests they own in a number of companies pertaining to their economic groups. Several highly diversified economic groups in Peru probably will make the decision to sell companies with operations in different economic sectors based on the perception of instability surrounding the country. Entrepreneurs will also be interested in selling their companies as a direct consequence of an aversion to a potential systemic risk in Peru. In any case, the reasons behind the interest in selling might ultimately be triggered by (i) companies being in the middle of a financial imbalance situation as a result of the economic contraction in Peru, (ii) fierce competitors that could make them lose important market shares; (iii) risk perception arising from asset concentration in the Peruvian market; and (iv) loss of interest in the Peruvian and Latin American markets by investors.

Value of companies and earn-outs

A continuing trend in year 2023 is the impairment of the value of some target companies in Peru. Mainly due to the social crisis and the economic problems derived from the COVID-19 pandemic, some businesses and assets have faced a decay in their intrinsic worth. This particular decline, however, is losing ground at least with respect to the political risk affecting Peru. As we mentioned before, the government led by Dina Boluarte is showing reassuring signs when it comes to the protection of investment guarantees and the equal treatment of both local and foreign investors. Initially viewed as an interim government, nowadays it is perceived as a legitimate one that will complete the presidential mandate in year 2026.

Under the scenario described, earn-outs have arisen as a protection mechanism for potential acquirers of Peruvian companies. In general, earn-outs have become a bridge between buyers and sellers over their differences regarding the value of a target company, the business that it carries out or the assets related to such business. The risk perception in Peru is creating some issues regarding the cash price that buyers are willing to pay to sellers. Since there is not a clear foreseeability on how businesses are going to perform in the next years under the social and political instability in Peru, a significant number of sellers and buyers are agreeing to include earn-out mechanisms in M&A transactions.

On the one hand, this approach mitigates the uncertainty of buyers in respect of the upfront cash price to be paid for the acquisition of the Peruvian target (buyers will fell that they are not overpaying); on the other hand, it works as an incentive for the seller to leave an effectively running business (sellers will make their business decisions with the aim of having a robust target that can perform adequately in an unstable scenario). Of course, there usually will be points of disagreement related to the financial milestones and metrics to be met after the acquisition, restrictions on how the business should be run, the time period for the earn-out to be earned, and accounting standards, among other things. However, at least under the scenario that Peru is facing, earn-outs appear to be a useful tool to promote the closing of M&A transactions.       

Legal analysis of financial statements and asset imbalance situations

Since the middle of the pandemic, there has been an increasing trend to involve legal advisers, to a greater extent than in the past, in the review of the annual financial statements of Peruvian companies. The rationale behind this decision is to avoid events where the directors and the management of a Peruvian company may be held liable for economic results that might place such company under an asset imbalance situation. As we have highlighted, the aftermath of the COVID-19 crisis has hit the economic performance of several companies harshly. Even though the pandemic has come to an end, the social and political instability in the country is another severe hurdle for the economic turnaround of some businesses. These facts have sparked a wave of less profitable, financially weakened and cash flow lowered companies with asset imbalance problems.

The Peruvian General Corporations Law (“GCL”) provides for the following three asset imbalance situations that companies might face:

  • Accumulated losses greater than 50% of the capital stock. According to the GCL, a mandatory capital stock reduction is required when accumulated losses are greater than 50% of the capital stock and such asset imbalance situation has not been resolved during the following fiscal year. The mandatory capital stock reduction is not required if the company under such asset imbalance situation has legal or voluntary reserves or if new contributions to increase the capital stock are made by the shareholders in sufficient quantity to offset the accumulated losses.
  • A total net equity lower than one-third of the capital stock. The GCL establishes that a company shall be wound up if it has accumulated losses that cause the total net equity to be less than one-third of the paid capital stock, except if such losses are reimbursed or the paid capital stock is reduced or increased in sufficient quantity to avoid the imbalance situation.
  • Assets are not sufficient to address liabilities. If all the assets of a company in Peru are no longer sufficient to address its liabilities, or if such shortfall should be predicted, the board of directors (or the management) shall immediately call a shareholders’ meeting to disclose the situation. Within 15 days following the date on which the shareholders’ meeting is called, the board of directors (or the management) should also call the creditors and, if applicable, apply for insolvency.

Peruvian companies struggling with asset imbalance situations are deciding, among other things, to:

  • Apply for insolvency and initiate bankruptcy proceedings before the competent authority.
  • Initiate winding-up proceedings to formally note their financial situation and asset/liability structure, and proceed to an orderly close of business.
  • Initiate a corporate restructuring process to negate the imbalance situation through new cash contributions of shareholders, debt capitalisations, capital stock reductions, or a combination of such mechanisms.
  • Undertake a financial restructure by means of debt refinancing, private agreements with creditors and other sources of funding.
  • Undertake an operational restructure with the identification and in-depth understanding of the causes of underperformance.
  • Be part of a distressed buyout process based on the premise that a turnaround is feasible.

Foreign investment, appetite for infrastructure and impact of e-business

In general, foreign companies and investors are still showing an interest in the Peruvian market, whether as a way to consolidate or expand their presence in the region or for the purpose of increasing their revenues. As explained above, the fluctuating political nature of the region is now better understood by both local and foreign investors, especially in economic sectors with long-established businesses. Therefore, Peru is seen as a market with opportunities in multiple sectors and an attractive one for foreign investment.

The outlook seems to be a continued and steady flow of investment with an expected rise by the end of the year provided that (i) political stability is re-established, and (ii) the financial recovery of the markets affected by the pandemic during the last two years is achieved. In particular, it is predicted by experts that the investment flow will be focused on infrastructure projects throughout the country. It is important to note that the Peruvian Private Investment Promotion Agency (ProInversión) has reactivated some of the most important infrastructure projects in Peru. Some examples are the Longitudinal Mountains Highway Section 4 (Carretera Longitudinal de la Sierra Tramo 4) for a total investment of USD929 million, the Lima Peripheral Ring Road (Anillo Periférico de Lima) for a total investment of USD2,380 million, the Huancayo-Huancavelica Railway and the Ancon Industrial Park.

Finally, the formation or arrival of e-businesses in Peru will be a trend in the upcoming months and years. These kinds of businesses do not require a physical presence or defined facilities to operate. Overall, the overview is an increasing tendency for these businesses due to their high mobility and capability to create cash flows with low fixed costs.

Muñiz, Olaya, Meléndez, Castro, Ono & Herrera Abogados

Calle Las Begonias 475
San Isidro

+51 1 611 7000
Author Business Card

Law and Practice


Muñiz, Olaya, Meléndez, Castro, Ono & Herrera Abogados is a full-service law firm providing cutting-edge legal assistance. Solid commitment blended with best practices and experience allows the firm to provide unparalleled efficient solutions and tailored advice to its clients. Muñiz is the largest law firm in Peru, housing an impressive number of 330 lawyers working in a broad range of practice areas. With a nationwide network of 13 offices, the firm ensures the provision of depth and sophisticated services oriented towards approaching legal problems thoroughly and based on business objectives. Muñiz has extensive experience assisting clients with business transactions both cross-border and locally. The firm does notable work in M&A, banking, capital markets, project development and project finance. With more than 35 practice areas, including tax, labour, environment, antitrust, intellectual property, litigation and arbitration, mining, and oil and gas, among others, Muñiz handles matters in the whole spectrum of industries.

Trends and Developments


Muñiz, Olaya, Meléndez, Castro, Ono & Herrera Abogados is a full-service law firm providing cutting-edge legal assistance. Solid commitment blended with best practices and experience allows the firm to provide unparalleled efficient solutions and tailored advice to its clients. Muñiz is the largest law firm in Peru, housing an impressive number of 330 lawyers working in a broad range of practice areas. With a nationwide network of 13 offices, the firm ensures the provision of depth and sophisticated services oriented towards approaching legal problems thoroughly and based on business objectives. Muñiz has extensive experience assisting clients with business transactions both cross-border and locally. The firm does notable work in M&A, banking, capital markets, project development and project finance. With more than 35 practice areas, including tax, labour, environment, antitrust, intellectual property, litigation and arbitration, mining, and oil and gas, among others, Muñiz handles matters in the whole spectrum of industries.

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