Peruvian Tax Regime

In Peru, individuals who are Peruvian tax residents are subject to tax on their income of both domestic and foreign sources. Non-residents are subject to tax only on their domestic source of income. The income tax treatment is as follows.

• In the case of Peruvian tax resident individuals:
1. Income and capital gain related to the investment and utilisation of domestic source assets (ie, interest, dividends, lease of real estate properties and movable goods, capital gains, royalties) are levied with a flat tax rate equivalent to 5%.
2. Income and capital gains related to the investment and utilisation of foreign source assets (ie, dividends, interest, and capital gains from other jurisdictions) are levied with cumulative and progressive tax rates equivalent to 8%, 14%, 17%, 20%, and 30%, depending on the income tax bracket and/or capital gain obtained within the fiscal year.
3. Individual business income will be taxable as any Peruvian corporate income; therefore, it will be subject to the 29.5% corporate tax over the net income plus a 5% dividends tax in the event of any liquid distribution.
• Non-Peruvian tax resident individuals:
1. Income and capital gain related to the investment and utilisation of domestic source assets:
1. Interest: 4.99%; applicable only on interest paid by a Peruvian non-related company where no tax haven is involved and only to a specific cap rate; any other case or any excess to such cap will be subject to 30%.
2. Dividends: 5%.
3. Capital gains derived from securities sales in the Peruvian stock exchange: 5%.
4. Lease of real estate properties and movable goods: 5%.
5. Capital gain derived from the sale of securities outside the Peruvian stock exchange: 30%.
6. Royalties: 30%.
7. Other capital incomes not mentioned above: 30%.
2. Foreign source income and capital gains are not taxed in Peru.

Inheritance and Donations to Individuals

Unsettled estates constitute a separate taxpayer category subject to Income Tax. Consequently, all income and capital gains generated by the deceased’s assets within the estate must be reported utilising the deceased's Tax Identification Number (RUC) until such time as the beneficiaries are legally designated via a declaration heirs.

There is no inheritance or wealth taxes in Peru, but real estate is subject to a tax levied by the local government based on the value of urban and rural properties, with progressive rates, between 0.2% and 1%.

Peruvian Investment Funds and Trusts

Peruvian investment funds and trusts are treated as tax-transparent entities for income tax purposes. The income is attributed to the settlors or beneficiaries.

Foreign Foundations and Trusts

Although foreign foundations, trusts and similar vehicles are not expressly recognised under Peruvian civil law, they are subject to the Peruvian Controlled Foreign Corporation (CFC) regime. Under this regime, resident individuals may be liable for income tax on specific types of passive income (eg, dividends, interest, royalties, capital gains and leases) earned by non-resident entities, regardless of whether actual profit distributions take place. This regime applies when the following conditions are met:

• The resident individual holds a direct or indirect participation in more than 50% in the results of the non-domiciled entity.
• The non-domiciled entity is incorporated in a low, zero-tax or non-cooperative jurisdiction or a country where the passive income is subject to income tax at a rate equal to, or lower than, 75% of the applicable rate in Peru.
• The non-domiciled entity constitutes a legal person or entity other than the taxpayer.

Tax Treaties

Peru has entered into double taxation treaties with Brazil, Canada, Chile, South Korea, Mexico, Portugal, Switzerland and Japan (OECD Model Tax Convention) which aim to eliminate double taxation or reduce withholding rates on certain income (ie, dividends, interest, royalties and capital gains). Furthermore, Peru is signatory to the multilateral agreement with the Andean Community (Bolivia, Colombia, Ecuador and Peru). Pursuant to this agreement, the jurisdiction to tax is exclusively vested in the source country.

Ultimate Beneficiary Affidavit

Peruvian companies and other legal entities, such as Peruvian funds and trusts, foreign trusts or trusts with Peruvian trustees or protectors, are forced to identify and obtain updated information regarding their ultimate beneficiary owners (UBO) and inform the tax administration. An individual is deemed as UBO if:

• he/she holds, directly or indirectly, at a minimum, 10% of an entity’s equity; or
• not being shareholders, he/she exercises control of financial, operational, or commercial decisions or has the power to appoint or remove most of the administrative, management or supervisory bodies.

If no person qualifies as a UBO based on these two criteria, the person who occupies the highest administrative position in the legal entity will be reported as the UBO (eg, a board member, CEO or general manager).

There are no inheritance, gift or similar transfer taxes in Peru, but there are lifetime exemptions.

There are several tax planning opportunities available to individuals. For example, certain legal structures may be established to exempt specific foreign entities from Controlled Foreign Corporation (CFC) rules, thereby deferring taxation until profits or gains are actually distributed. The effectiveness of such strategies depends on factors such as the beneficiaries’ cash flow requirements, the level of economic risk and cost they are prepared to assume, as well as broader estate planning objectives.

These outcomes can be achieved through vehicles such as trusts, foundations, or other legal entities with discretionary or irrevocable components, as well as real insurance-based structures demonstrating a genuine economic and/or personal purpose – this purpose must be the primary driver of the transaction. However, tax risks arise from the tax administration’s authority to apply the general anti-avoidance rule (Rule XVI of the Tax Code) and recharacterise the transaction if its economic substance cannot be substantiated.

Yes, Peru offers pre immigration and exit planning opportunities. The key points are that Peru taxes residents on worldwide income at progressive rates ranging from 8% to 30% and the majority of Peruvian source income is subject to the 5% rate, while non-residents are taxed only on Peruvian-source income at flat rates, detailed in 1.1 Tax Regimes. There is no formal “exit tax,” but timing the tax residency status can significantly mitigate exposure.

There are no wealth taxes in Peru, but real estate is subject to a tax levied by the local government based on the value of urban and rural properties, with progressive rates between 0.2% and 1%.

In addition, the transfer of real estate is subject to a 3% property transfer tax, with the first ten Tax Units (or “UIT” in Spanish, which is a monetary measurement amount represented in local currency and established by the government at the beginning of each year following inflation and other calculations – approximately USD1,618 per unit today – that tends to increase every year). It is assessed by the local government and must be paid by the acquirer. This tax is not applicable in case of transfers caused by the foretaste of the inheritance.

Peru’s tax laws are generally stable, but recent developments reflect a clear trend toward stricter compliance and broader anti-avoidance measures. For high-net worth individuals, trusts and estates, the concern is not an imminent increase in tax rates but rather the expanding oversight of the Superintendencia Nacional de Aduanas y de Administración Tributaria (SUNAT) and the OECD-aligned anti-abuse framework. SUNAT has adopted a stronger fiscal stance, with a marked emphasis on maximising tax collection through enhanced enforcement and substance over form evaluations.

Peru has taken significant steps to address perceived abuses and loopholes in its tax laws, aligning with global transparency initiatives while balancing privacy concerns. The emphasis is on anti-avoidance, cross border reporting, and beneficial ownership disclosure.

In 2013, international tax transparency rules were introduced, requiring tax residents to pay tax on income derived from foreign entities classified as controlled non-domiciled entities, even in cases where such entities do not distribute dividends.

On the other hand, Peru adopted the Common Reporting Standard (CRS) in 2018 and began the automatic exchange of financial account information with partner jurisdictions. As a result, offshore accounts held by Peruvian residents are reported to SUNAT, while Peru also shares information on foreign residents’ accounts held locally. On this basis, SUNAT has increasingly initiated tax reviews and audits, leveraging the data obtained through CRS to strengthen compliance and enforcement.

With respect to FATCA, Peru signed an intergovernmental agreement with the United States to ensure compliance. Under this framework, local banks and financial institutions are required to identify US persons and report their accounts to SUNAT, which then exchanges the information with the Internal Revenue Service (IRS). However, in tax practice, FATCA implementation has not proven to be as effective or comprehensive as the CRS.

Peru ratified the OECD Multilateral Instrument (MLI), effective January 2026, thereby modifying its double tax treaties to incorporate anti-abuse provisions, principal purpose tests, and strengthened permanent establishment rules.

Peru requires companies, trusts, and foundations and other entities to identify and maintain updated information regarding their ultimate beneficial owners (UBOs), which must be reported to SUNAT. Although the register is not fully public, SUNAT and financial regulators have access to this data. This development has a direct impact on estate planning, as anonymity in offshore structures is no longer a viable option.

All measures adopted have made foreign accounts and structures visible to SUNAT. Estate planners must therefore anticipate disclosure and design vehicles that are fully compliant. Planning now requires balancing asset protection with transparency obligations, while also demonstrating economic substance and a genuine estate or succession purpose. Structures driven purely by tax considerations risk being recharacterised under Rule XVI, the general anti-avoidance rule.

In Peru, succession planning is strongly influenced by the central role of the family as the economic and decision-making core. Therefore, there is a frequent concentration of wealth within the close family group, especially in the context of family businesses and real estate assets. This creates a tendency to preserve the unity of the estate rather than to fragment it among multiple structures or vehicles.

In practice, intergenerational transfer processes are usually gradual and not always formalised from an early stage. Founders or holders of wealth tend to retain control into advanced age, delaying the implementation of structured succession mechanisms. For this reason, instruments such as family protocols and corporate reorganisations acquire particular relevance as tools for order and continuity.

It is also common that high-net-worth families and individuals set foreign structures in order to secure or maximise their foreign financial and other kind of assets.

Wealth transfer and gift taxes are partially simplified domestic planning, but they do not eliminate the effects of foreign taxes or foreign succession rules. In practice, coordinated planning across jurisdictions is used, including multiple wills by country, corporate structures to centralise assets, and a comprehensive review of the heirs’ tax residence.

Being a civil law jurisdiction, Peru has a forced heirship system that limits the decedent’s freedom of disposition. The law reserves a significant portion of the estate in favour of forced heirs, mainly descendants, the spouse, and, in their absence, ascendants.

As a general rule, two-thirds of the estate are protected in favour of forced heirs, so only one-third may be freely disposed of. This framework reduces testamentary flexibility, although within the freely disposable portion it is possible to structure more tailored allocations. In practice, planning is complemented by lifetime estate reorganisations, provided these remain within the legal limits.

The Peruvian legal system mainly recognises two property regimes: community property and separation of property. Under the community property regime, assets acquired during the marriage are considered common, whereas assets owned prior to the marriage and those of a strictly personal nature remain separate property.

Dispositions over common property generally require the consent of both spouses, especially when they involve a relevant disposition or encumbrance. By contrast, under the separation of property regime, each spouse retains full ownership and administration of all of his or her assets, which provides greater succession flexibility.

Prenuptial and postnuptial agreements are valid in Peru provided that they comply with legal formalities and do not infringe mandatory rules, especially those related to the protection of forced heirs. Their effectiveness depends on their proper formalisation and registration, where applicable.

For tax purposes, spouses married under a separation of property regime are each taxed individually on their respective income. In contrast, within a community property there are two alternatives: each spouse may be taxed on 50% of the partnership’s income, or they may elect for one spouse to act as the declarant of the community property and be taxed on 100% of its income. This election must be exercised in January of each year.

This framework creates opportunities for tax planning, as spouses can evaluate the most advantageous allocation of income. Such planning may be beneficial given the progressive tax rates applicable to employment income and foreign source income.

The effect of a transfer of assets on the “tax basis” depends on whether it is a transfer upon death or an inter vivos transfer. In both cases, the logic of income tax is to preserve the continuity of the asset’s value for purposes of any future capital gain, avoiding the transfer resulting in an automatic step-up of the tax value.

Inheritance is not subject to Income Tax; however, it directly affects the cost basis assumed by the heirs. In successions, the heir generally retains the decedent’s cost basis, provided that the value can be substantiated. This treatment impacts future taxation when the asset is ultimately sold.

In the case of donations and advancements of forced heirship, the same principle of continuity of basis applies. By contrast, in sales, the tax basis is established at the acquisition price. In all cases, the system is designed to tax the actual capital gain upon disposition, generally at a rate of 5% for individuals in the case of Peruvian income source.

The transfer of real estate is subject to a 3% property transfer tax (“Alcabala tax”). The first ten tax units (UIT) are exempt; each UIT is a monetary reference set annually by the government in local currency, currently around USD1,617, and adjusted yearly. The tax is assessed by the local municipality and must be paid by the acquirer. Importantly, this tax is not applicable in case of transfers caused by the foretaste of the inheritance.

In Peru, succession planning benefits from a key advantage: there is no inheritance or gift tax, which makes it possible to structure transfers of wealth without an immediate tax burden. However, it is always important to bear in mind that income tax is carried over in the event of a future sale and, in the case of real estate, the Alcabala tax as well. In this context, the most commonly used mechanisms combine tax efficiency and asset control, particularly the advancement of forced heirship – frequently with reservation of usufruct – which allows property to be transferred to the heirs without losing the use and enjoyment of the asset, as well as avoiding payment of the Alcabala Tax.

For more sophisticated estates, corporate structures (family holdings) are used, which make it possible to “corporatise” the assets and facilitate transfer through shares, optimising management and governance. Likewise, trusts – although less widespread – offer a robust solution to organise succession, protect assets, and establish conditional distribution rules. In practice, the key lies in combining these tools according to the family profile, balancing control, tax efficiency and intergenerational sustainability.

Digital assets form part of the decedent’s transferable estate under the general rules of succession law, despite the absence of specific regulation regarding “digital inheritance.” Legal practice has been integrating these assets into traditional categories, distinguishing between those with economic content – such as cryptocurrencies, tokens or balances in digital platforms – which do form part of the estate, and those of a strictly personal nature – such as email accounts or social media – whose treatment is more closely linked to privacy rights than to ownership. This distinction is key to defining what may actually be transferred and under what conditions.

The main challenge is actually operational, since access to and control over these assets depends on credentials, private keys, and contractual conditions imposed by technological platforms, often foreign. For this reason, modern succession planning incorporates specific access protocols, the use of digital legacy tools, and, in some cases, custody structures or secure instructions in a will. From a tax perspective, although inherited acquisition is not taxed, a subsequent sale may generate income tax on the capital gain.

Trusts (Fideicomisos)

Trusts, regulated by the General Law of the Financial and Insurance System (Law No. 26702), are a legal arrangements whereby the settlor (fideicomitente) transfers fiduciary title (dominio fiduciario) over certain assets to a trustee (fiduciario) to create an independent trust estate (patrimonio fideicometido), This estate is administered to achieve a specific purpose for the benefit of either the settlor or a third party (fideicomisario). Its primary legal effect is the creation of an autonomous estate that is legally separate from the personal assets of the settlor, the trustee and the beneficiary.

The most commonly utilised structures include:

• administration trusts, under which the trustee manages the assets in accordance with the terms established in the trust agreement, including the management of inherited property; and
• testamentary trusts, through which a testator appoints a licensed trustee via a will to administer their estate upon death.

Notwithstanding the foregoing, trusts remain subject to the mandatory provisions of Peruvian succession law, specifically the forced heirship rules set.

Foundations

Under the Peruvian Civil Code, a foundation is a non-profit legal entity established through the permanent allocation of one or more assets to pursue religious, charitable, cultural or other purposes of public or social interest. Accordingly, unlike in certain other jurisdictions, Peruvian foundations were not designed as estate or wealth planning vehicles. Their legal purpose must serve a public or collective interest, and they may not be established primarily for the exclusive benefit of a particular family or a defined group of individuals.

Peruvian investment funds and trusts are treated as transparent (non-opaque) entities for income tax purposes, with applicable tax rates determined by the specific nature of the income earned.

Foreign foundations, foreign trusts and similar vehicles are not expressly recognised in Peru; nonetheless, they are subject to the Peruvian CFC regime, through which resident individuals may be subject to income tax on certain types of passive income obtained by non-resident entities (ie, dividends, interest, royalties, capital gains and leases) even though it does not distribute dividends.

Other Structures

Another commonly used succession and wealth planning structure is the establishment of a family holding company to hold equity interests and other strategic assets. Through this structure, families may centralise ownership, exercise indirect control over operating companies, facilitate intergenerational succession, strengthen corporate governance and preserve the continuity of the family business.

Company structures entail tax costs, as Peruvian corporations are subject to income tax on their profits, plus an additional 5% upon dividend distribution. Foreign companies classified as non-resident controlled entities fall under Peru’s CFC regime. Under this regime, resident individual shareholders may be taxed on certain types of passive income earned by non-resident entities – such as dividends, interest, royalties, capital gains and rental income – even when those entities do not distribute dividends.

Peruvian civil law does not expressly recognise or regulate the concept of a “trust” as understood in common law jurisdictions. However, the closest functional equivalent under domestic legislation is the trust, which is governed by the General Law of the Financial and Insurance System (Law No. 26702).

In this regard, pursuant to the Peruvian Civil Code and Directive No. 007-2008-SUNARP-SN, the transfer of assets to the trust estate (patrimonio fideicometido) results in the transfer of legal title in trust (dominio fiduciario) to the trustee. Such transfer may be registered with the relevant public registry, depending on the nature of the assets involved. Accordingly, once registered, the transfer is enforceable against third parties, thereby providing the trust estate with legal certainty, public notice and enhanced asset protection.

Consequently, although foreign trusts are not specifically regulated under Peruvian law, their legal effects are generally recognised and assessed on a case-by-case basis by the Peruvian public registries and other competent authorities, subject to compliance with the applicable rules of private international law, public policy and any mandatory provisions of Peruvian law.

For tax purposes, Peruvian trusts are treated as transparent (non-opaque) entities. The applicable tax rates are determined by the specific nature of the income earned, which is attributed directly to the settlor or beneficiaries, depending on the trust’s structure.

When a Peruvian citizen or resident serves as a fiduciary or is a beneficiary of a trust, foundation, or similar entity established abroad, several tax consequences may arise. Peru’s tax and transparency framework is designed to capture these roles, even when the structure is offshore.

Fiduciary and beneficiary roles in foreign trusts or foundations are fully visible to SUNAT under UBO rules. While distributions may be taxable depending on their nature, careful structuring allows for estate planning benefits – such as continuity of basis and optimised allocation of income – provided transparency and substance requirements are met.

When a Peruvian resident acts simultaneously as donor/settlor and fiduciary (trustee) or as a beneficiary and fiduciary of a foreign trust, foundation, or similar entity, the tax consequences are shaped by Peru’s transparency and anti-avoidance rules.

Fiduciaries, donors and beneficiaries are all treated as UBOs. Fiduciary status itself does not generate taxable income, but the donor’s control may trigger scrutiny to ensure the trust/foundation is not used to defer or avoid taxation. Nevertheless, it should be noted that, since there is no specific tax regulation governing trusts in Peru, SUNAT cannot impose joint liability on the fiduciary for their administration. In practice, there does not appear to be any cases in which the fiduciary has been held responsible for taxes unpaid on income generated or distributed by the trust. The tax obligation is instead enforced against the beneficiary or the settlor of the trust.

In Peru, the trust is the most widely used mechanism for asset protection, regulated by the General Law of the Financial System and Insurance System (Law No. 26702). Under this structure, specific assets are transferred to an autonomous estate administered by an authorised fiduciary, remaining separate from the patrimony of the settlor, the fiduciary, and the beneficiaries. The principal advantage of the trust lies in the creation of an autonomous estate that is not liable for the personal obligations of the settlor, fiduciary or beneficiaries.

Nevertheless, certain limitations must be considered:

• Asset transfers may be challenged in court if proven to have been carried out in fraud of creditors or as an abuse of rights.
• Succession law restrictions prevent the use of trusts to circumvent mandatory inheritance rules, including those related to forced heirship, requiring case by case analysis.
• Compliance obligations must be observed in relation to taxation, anti money laundering, fiscal transparency, and ultimate beneficial owner identification, as explained in other sections of this document.

One of the most commonly used succession planning structures for family-owned businesses in Peru is the establishment of a family holding company, through which business assets and equity interests are consolidated under a parent company. This structure facilitates the centralised management of the family’s wealth, streamlines the ownership of shareholdings and simplifies the intergenerational transfer of ownership and control.

Holding structures are typically complemented by succession planning instruments, such as trust, wills and lifetime forced heirship advances (anticipos de legítima), as well as corporate governance mechanisms, including tailored articles of association, shareholders’ agreements and family protocols. These instruments enable families to define, in advance and on a gradual basis, the process for the intergenerational transfer of ownership and control of the family business, while ensuring business continuity and minimising the risk of family disputes.

In Peru, when a partial interest in an entity is transferred – either during lifetime or at death – the valuation for tax purposes is generally based on fair market value without explicit statutory recognition of discounts for lack of marketability or lack of control. SUNAT applies the “market value” principle, and while international valuation practices may consider such discounts, Peruvian tax law does not expressly provide for them.

In Peru, wealth disputes are mainly driven by succession conflicts due to the prevalence of intestate successions, the concentration of family wealth in real estate, and the persistent problem of informality or lack of registry regularisation. Likewise, the transfer of control and management of family businesses constitutes an increasingly relevant source of disputes among members of the same family.

These disputes usually take the form of the inclusion or exclusion of heirs, challenges to wills, proceedings for division and partition of assets, challenges to transfers made during the decedent’s lifetime, and corporate disputes related to the management, valuation, or control of family businesses. For the most part, such disputes are handled before the civil courts and, in the case of family businesses, may also give rise to arbitrations or corporate disputes.

Wealth and succession disputes are mainly governed by the general rules of civil liability set forth in the Civil Code. The mechanisms of compensation seek to restore the injured party to the position in which it would have been had the breach or wrongful act not occurred, through compensation for the damages effectively suffered. In the case of trusts and other wealth structures, disputes are resolved in accordance with the general rules of contractual or non-contractual liability, as applicable.

Compensable damages mainly include actual damages, loss of profits and moral damages, provided that there is a causal link between the imputed conduct and the harm caused. In succession matters, in addition to actions aimed at obtaining the restitution or partition of hereditary assets, it is possible to claim compensation for damages arising from fraudulent acts, concealment, or improper disposition of assets belonging to the hereditary estate.

In general terms, compensation in wealth disputes is obtained through proceedings aimed at restoring the assets improperly affected, repairing the damaged estate, declaring the nullity or ineffectiveness of legal acts and, where appropriate, ordering the payment of compensation.

Pursuant to the General Law of the Financial and Insurance System (Law No. 26702), only certain authorised entities may act as trustees (fiduciaries) in Peru. These include financial institutions, licensed trust service companies and securitisation companies, as applicable depending on the nature of the trust arrangement.

Under the same legal framework, the trustee is vested with legal title in trust (dominio fiduciario) over the assets comprising the trust estate (patrimonio fideicometido). Such title includes the powers to manage, use, dispose of and recover the trust assets, all of which must be exercised strictly in accordance with the terms of the trust instrument and any limitations expressly set forth therein. Any act performed in breach of those terms or limitations may be subject to legal challenge and annulment.

Accordingly, the trustee’s primary duty is to safeguard and manage the assets and rights comprising the trust estate with the diligence of a prudent merchant and loyal administrator, while carrying out the purposes for which the trust was established. To fulfil its fiduciary duties, the trustee is authorised to participate in such acts, agreements, transactions, investments and other legal arrangements as may be necessary or appropriate to achieve the objectives of the trust.

In addition, corporate trustees are subject to the supervision of the Superintendency of Banking, Insurance and Private Pension Funds (SBS). As regulated entities, they are required to maintain specified records and information available to the SBS and to comply with the applicable regulatory framework governing risk management, internal controls, anti-money laundering and counter-terrorist financing obligations, as well as other prudential requirements.

Peruvian law does not recognise a specific doctrine equivalent to the “piercing of the trust veil.” Instead, a Peruvian trust constitutes an autonomous estate (patrimonio fideicometido), legally separate from the assets of the settler, the trustee and the beneficiaries. Accordingly, liabilities arising from the administration of the trust must, as a general rule, be satisfied solely out of the assets comprising the trust estate.

Nevertheless, this asset segregation is not absolute. Peruvian courts may declare certain trust-related transactions ineffective or unenforceable where the trust structure has been used for unlawful purposes, to defraud creditors, through sham transactions, abuse of rights or in violation of mandatory provisions of law. In such cases, the statutory grounds for the nullity of a trust set forth in the General Law of the Financial and Insurance System (Law No. 26702) apply in the first instance. Additionally, the general remedies available under Peruvian civil law – such as actions for nullity, ineffectiveness or the “acción pauliana” (fraudulent conveyance action) – apply, rather than a distinct doctrine of piercing the trust veil.

Likewise, the trustee is not personally liable for the obligations of the trust estate solely by virtue of acting as trustee. However, the trustee may incur contractual, civil, administrative and, where applicable, criminal liability for breaching the fiduciary duties imposed by the General Law of the Financial and Insurance System (Law No. 26702), the regulations issued by the Superintendency of Banking, Insurance and Private Pension Funds or the terms of the trust instrument itself.

In particular, where a corporate trustee breaches its fiduciary duties through wilful misconduct or gross negligence, it is required to restore to the trust estate the value of the assets lost or diminished as a result of such breach, together with compensation for any damages suffered, without prejudice to any additional civil, administrative or criminal liability that may arise under applicable law.

Under Peruvian law, a trustee is required to administer the trust assets in accordance with the purpose of the trust and the fiduciary duties of diligence, loyalty, prudence and good faith inherent in its role as administrator of an autonomous trust estate. Accordingly, investment decisions must be consistent with the objectives established by the settlor and the interests of the beneficiaries, while avoiding speculative transactions or investments that are inconsistent with the purpose of the trust.

In this regard, the Peruvian legal framework adopts a predominantly contract-based and fiduciary duty-oriented approach, rather than a system of detailed statutory rules governing permitted investments or portfolio allocation. Consequently, the scope of the trustee’s investment powers and the applicable investment strategy are determined primarily by the terms of the trust instrument, subject to the trustee’s general fiduciary obligations and the applicable regulatory framework.

From a tax perspective in Peru, there are no specific fiscal incentives designed to reward or encourage fiduciaries to invest assets prudently.

Peruvian law does not recognise a statutory rule equivalent to the “prudent investor rule”, nor has it expressly adopted the Modern Portfolio Theory (MPT) as the standard governing the administration and investment of trust assets. Instead, the General Law of the Financial and Insurance System (Law No. 26702) establishes a framework based on the trustee’s fiduciary duties of diligence, loyalty and good faith, supplemented by the provisions of the trust instrument and the regulatory oversight exercised by the Superintendency of Banking, Insurance and Private Pension Funds.

Likewise, Peruvian law does not impose a general statutory duty to diversify trust investments. Whether diversification is appropriate depends on the nature of the trust estate, the objectives of the trust and the powers expressly granted to the trustee under the trust instrument. In practice, it is common for wealth planning trusts to maintain significant concentrations in particular assets – such as shares in a family-owned business, real estate or other strategic investments – without such concentration being regarded, in itself, as inconsistent with prudent administration, provided that it is consistent with the purpose of the trust and the settlor’s intentions.

In this context, where the trust estate holds shares or equity interests in a company, the trustee may exercise the rights attached to such ownership, including both voting and economic rights, in accordance with the terms of the trust instrument. As a result, trusts are frequently used to hold and preserve controlling interests in family businesses as part of succession and wealth planning strategies.

Nevertheless, the exercise of these powers is subject to important limitations. First, the trustee must act strictly within the scope and purpose of the trust and comply with the instructions set out by the settler in the trust instrument. Second, the trustee remains bound by its fiduciary duties of diligence, loyalty and the avoidance of conflicts of interest, as well as by the regulatory requirements applicable to licensed fiduciary institutions supervised by the SBS.

From the perspective of civil law, domicile in Peru is mainly governed by the Civil Code. Domicile is defined as the place where a person resides with the intention of remaining there and, therefore, it comprises an objective element (habitual residence) and a subjective element (intention to remain).

Every person has a general domicile, which is unique, without prejudice to the fact that he or she may establish special domiciles for certain legal purposes (for example, contractual or procedural domicile). Likewise, the law recognises cases of legal domicile, such as in the case of legal entities (domiciled in the place where their administration or principal centre of activities is located).

A change of domicile occurs when the person establishes his or her residence in a new place with the intention of remaining there, and the burden of proof regarding the change of domicile lies with the person alleging it.

For its part, citizenship is governed by the Political Constitution of Peru and the rules on nationality. Peruvian citizenship is acquired by birth (whether in Peruvian territory or abroad to Peruvian parents, subject to registration) or by naturalisation, in accordance with the applicable legal requirements. Citizenship is independent from domicile and does not depend on residence.

Regarding tax residency, Articles 7 and 8 of the Peruvian Income Tax Law establish that Peruvian citizens are considered tax residents as long as they do not acquire residency abroad and do not leave the country or remain absent for more than 183 days within any 12–month period.

Foreigners will acquire tax residence after being in the country for 183 days in a continuous or discontinuous permanence in Peru, including the days of arrival and departure during any period of 12 months. Tax residency will be maintained provided that they do not leave the country for more than 183 days within any 12-month period. Any change in tax resident status during a fiscal year shall enter into force as of 1 January of the next fiscal year.

In the case of Peruvian nationals who have lost their domicile status in Peru, they will recover the same once they return to the country, but this domicile change shall take effect in the fiscal year following their arrival in the country, unless their stay in the country is less than 184 calendar days any 12-month period.

In Peru, there are no automatic or expedited citizenship programs, nor “citizenship by investment” regimes that allow nationality to be obtained in an accelerated manner through the making of economic investments, as occurs in other jurisdictions. The acquisition of Peruvian citizenship by foreigners is governed by the Political Constitution of Peru and the Nationality Law, mainly through the naturalisation process, which is not of an expedited nature.

In order to acquire Peruvian nationality by naturalisation, the applicant must comply, among others, with the following general requirements:

• have legally resided in Peru for a continuous period of no less than two years;
• have an enabling and valid immigration status (for example, resident);
• prove good conduct and have no relevant criminal record;
• demonstrate lawful means of subsistence; and
• pass, if required, basic examinations in the Spanish language, Peruvian history, and Peru's social, political, and cultural context.

There are special cases in which the residence period may be relaxed, or the procedure may be more agile in relative terms, such as marriage to a Peruvian citizen or having Peruvian children. However, even in these cases, there is no immediate or automatic citizenship regime, but only a route with mitigated requirements or more direct procedures within the general framework of naturalisation.

Consequently, the Peruvian system prioritises criteria of rootedness, integration, and effective permanence in the country, discarding schemes for the acquisition of citizenship based exclusively on economic investment or financial contributions.

The Civil Code provides for various mechanisms of protection and wealth planning in favour of minors and persons with disabilities. In the case of the latter, following the reform introduced by Legislative Decree No. 1384, a system of supports and safeguards was adopted, which allows adults to designate, even in advance and by means of a public deed, the assistance measures that facilitate the exercise of their rights, while at the same time guaranteeing respect for their will and the prevention of abuse.

Likewise, the Civil Code contemplates traditional institutions of protection, such as parental authority and guardianship for minors, as well as the constitution of family property, through which certain assets may be allocated to the support of the family for the benefit, among others, of minor or incapacitated children. Curatorship remains in place for specific situations provided by law and for cases of conflict of interests requiring the appointment of a special curator.

In the Peruvian legal system, the appointment of a guardian, curator, or equivalent figure does not always require judicial proceedings, as this depends on the applicable protection mechanism. Guardianship of minors requires judicial confirmation of the appointment, whereas curatorship for certain situations of restricted capacity requires a prior judicial declaration. By contrast, following the reform introduced by Legislative Decree No. 1384, people with disabilities who are able to express their will may appoint support by public deed before a notary, with judicial intervention being reserved for exceptional cases or where the person is unable to express his or her will.

Regarding supervision, the Peruvian legal system provides mechanisms of ongoing oversight over those who administer the interests of the protected person. Guardians and curators are subject to periodic accountability and require judicial authorisation for certain acts of disposition over assets. Likewise, under the system of supports and safeguards, the judge may establish periodic review measures and adopt the steps necessary to verify that the supports act in accordance with the will, preferences, and rights of the assisted person, with the purpose of preventing abuse or undue influence.

Planning for a possible mental disability or future difficulty in making decisions is mainly based on the system of support and safeguards incorporated by Legislative Decree No. 1384, which replaced the traditional model of substituted decision-making with one aimed at guaranteeing the exercise of legal capacity. Thus, any adult may designate in advance, by public deed, the persons who will act as support, specifying the circumstances in which such designation will take effect, as well as the applicable scope, duration and control mechanisms. Likewise, older adults with full capacity may provide for a future declaration of interdiction by means of the advance designation of curators.

In practice, these mechanisms are used to facilitate patrimonial, contractual, banking, succession, or asset management decisions, without substituting the person’s will.

The main recent initiative in Peru to address the challenges arising from increased life expectancy is the pension system reform introduced by Law No. 32123 and its regulations, which seeks to integrate the National Pension System and the Private Pension System within a multi-pillar scheme. Among other measures, the reform contemplates universal affiliation from the age of 18, the strengthening of minimum and proportional pensions, the progressive incorporation of notional accounts in the public system, as well as incentives to make voluntary and consumption-based contributions.

At the same time, families usually resort to traditional wealth and financial planning mechanisms, such as the acquisition of life and health insurance, the making of voluntary contributions to pension funds, the constitution of family property, and succession planning through wills and advancements of forced heirship.

In Peru, children born within marriage, children born out of wedlock, and adopted children enjoy the same succession rights, provided that filiation has been legally established. In the case of children born out of wedlock, this may occur through voluntary acknowledgment or judicial declaration of filiation, after which they are considered descendants of their legal parents and inherit on equal terms with the other children. Adopted children acquire the status of children of the adopter and, consequently, are fully integrated into the line of succession of their adoptive parents and are included within any category of beneficiaries or descendants provided by law.

With respect to children born through surrogacy, the Peruvian legal system does not contain comprehensive regulation that expressly authorises or prohibits such arrangements, nor does it establish a specific filiation regime. Consequently, the determination of filiation is governed by the general rules and by case law, taking into account the biological or genetic link, as well as the best interests of the child. Once filiation has been recognised judicially or registrable, the child will have the same succession rights as any other child with respect to his or her legal parents. As for posthumously conceived children, their treatment is not expressly regulated, so the determination of their succession rights will depend on the general rules on filiation and on the particular circumstances of the case.

In the Peruvian legal system, marriage and de facto unions are legally reserved for opposite-sex couples. Consequently, same-sex couples currently do not enjoy the property or succession effects that the law grants to spouses or cohabitants, nor are they considered forced heirs of one another. Therefore, in the absence of a testamentary disposition, the surviving member of a same-sex couple has no succession rights under the rules of intestate succession, and the decedent’s assets are transferred to his or her relatives in accordance with the order of succession provided for in the Civil Code. For tax purposes, there are no regulations on this matter either.

In view of the lack of legal recognition of such unions, same-sex couples usually resort to wealth and succession planning mechanisms in order to protect their interests. Among the most commonly used are testamentary planning, which allows the partner to be benefited with the freely disposable portion or, in the absence of forced heirs, with the entirety of the estate; the acquisition of assets in co-ownership; the use of corporate structures for the holding of assets; as well as the granting of powers of attorney and the advance designation of supports and safeguards to ensure personal and patrimonial assistance in the event of disability or loss of capacity.

In Peru, de facto unions between a man and a woman free of marital impediment, maintained continuously and permanently for at least two years, are recognised by the Civil Code and give rise to a community of property subject, where applicable, to the community property regime. Once cohabitation has been proven, whether by notarial recognition or judicial declaration, cohabitants acquire certain patrimonial and succession rights, including the status of forced heirs, so that, in succession terms, their situation is substantially similar to that of spouses. By contrast, cohabitation relationships that do not meet the legal requirements to qualify as a de facto union do not generate automatic succession rights nor confer the status of forced heirs.

Unlike married couples, cohabiting couples in Peru are not governed by specific tax regulations; therefore, each partner must report and pay taxes on their own income independently.

Peru encourages charitable giving through income tax deductions for donations to qualified entities, but these incentives are capped and carefully regulated. For estate planning, the rules mean that philanthropy can reduce taxable income while also shaping succession strategies.

Donations made to public sector entities (excluding state–owned companies), accredited international organisations, and non–profit institutions with recognised social purposes – such as charity, social assistance or welfare, education, culture, science, the arts, literature, sports, health, indigenous historical and cultural heritage, and other similar purposes – are deductible from taxable income. The deduction is limited to 10% of net taxable income, and all donations must be supported by official certificates issued by the authorised recipient entity.

In Peru, income earned by qualifying foundations and non–profit associations is exempt from Income Tax, provided that their constitutive instrument is exclusively dedicated to one or more of the following purposes: charity, social assistance, education, culture, science, art, literature, sports, politics, trade union activities and/or housing. Both entities must be formed by two or more individuals or legal entities; a foundation can be constituted through a will. After the liquidation process of an association, its remaining assets go to the purpose established in the bylaws, but due to legal prohibition, they are not distributed among its members; while in the case of a foundation, the remaining assets are destined to another foundation with a similar purpose or to a public charity, in its absence. Neither of these entities is usually used for the administration of family assets in Peru.

Charitable planning is particularly useful for estate planning and succession, as it can provide ongoing support to beneficiaries or institutions. Its flexibility allows for tailored distribution structures that align with philanthropic and family objectives. However, such arrangements are subject to disclosure of ultimate beneficial owners (UBOs), and offshore trusts face heightened scrutiny under CRS and FATCA reporting. To remain compliant, they must demonstrate genuine charitable intent and sufficient economic substance, or risk being challenged under anti–avoidance rules.