What a foreign company or investor needs to know before entering Peru, and what to expect once the Peruvian entity is operating: vehicles, documents, taxes, payments to the parent, payroll and reporting to headquarters.
Foreign groups usually begin with a company incorporation question. In practice, entering Peru is a sequence of decisions and registrations that should be planned together, because choices made at the start shape taxes, reporting and liability for years.
Subsidiary (usually an S.A.C.) or branch, shareholders, capital and who will manage the entity in Peru.
Powers of attorney, resolutions and certificates, apostilled and officially translated into Spanish.
Public deed before a Peruvian notary, registration with SUNARP and tax registration (RUC) with SUNAT.
Bank account, electronic invoicing, monthly filings, payroll and reporting to headquarters.
This is the first decision and the hardest to change later. Both can operate fully in Peru; they differ in liability, governance and how profits and payments reach the parent.
| Subsidiary (S.A.C.) | Branch (sucursal) | |
|---|---|---|
| Legal status | A separate Peruvian company | Part of the foreign company, registered in Peru |
| Liability | Limited to the capital invested | The foreign company is liable for its obligations |
| Owners | 2 to 20 shareholders, individuals or companies | Belongs to the foreign company |
| Representation | General manager and attorneys-in-fact registered in Peru | Permanent legal representative in Peru |
| Changes | Decided by its own shareholders' meeting and managers | Most changes start with a decision of the parent abroad |
Because an S.A.C. needs at least two shareholders, wholly owned subsidiaries are usually held by the parent plus a second group company or individual with a minority stake. Our step-by-step guide on how to incorporate a company in Peru covers the process in detail.
Foreign shareholders do not need to travel to Peru. They grant powers abroad so that someone in Peru signs on their behalf. For those documents to be accepted, they must be apostilled (or legalized through a Peruvian consulate when the issuing country is not part of the Hague Convention) and officially translated into Spanish.
The company also needs people in Peru who can act for it: sign tax returns, receive SUNAT notifications, operate the bank account and appear before authorities. A branch must appoint a permanent legal representative in Peru. A subsidiary acts through its general manager and attorneys-in-fact, and in practice at least one of them should live in Peru.
The local steps follow a predictable sequence. What usually takes longest is outside Peru: apostilles, official translations and the bank's due diligence on foreign shareholders. We review each document before it reaches the notary, which avoids the most common cause of delay: a rejected power of attorney.
Request a document checklist for your country →An overview for planning conversations with headquarters. The treatment of a specific transaction always depends on its facts.
| Tax | General rule | What it means for the group |
|---|---|---|
| Corporate income tax | 29.5% of net taxable income, with monthly prepayments | The main tax on the profits of the Peruvian entity |
| IGV (VAT) | 18% | Applies to local sales and to services from non-domiciled suppliers used in Peru |
| Dividends | 5% withholding when paid to non-domiciled shareholders | The cost of bringing profits back to the parent |
| Payments for services abroad | Withholding, commonly 30%; technical assistance can be 15% when requirements are met | Management fees, royalties and services from the parent are taxed in Peru |
| Transfer pricing | Arm's-length standard; documentation (local file, master file) above certain thresholds | Intercompany prices and charges must be supportable |
Compliance starts the month the RUC is active, even before the first sale: monthly IGV and income-tax prepayment returns, electronic invoicing and electronic registers. More detail on cross-border tax advisory.
Most tax issues for foreign-owned companies arise when cash leaves Peru. Before the Peruvian entity pays its parent or another group company, three questions should be answered.
If withholding is not applied, the Peruvian company can be held liable for the tax. Intercompany services without evidence of the benefit received may not be deductible.
Peru has double tax treaties with Brazil, Canada, Chile, Japan, Mexico, Portugal, South Korea and Switzerland, and applies Andean Community Decision 578 with Bolivia, Colombia and Ecuador.
A treaty may reduce withholding on certain payments. The foreign recipient must provide a tax residence certificate, ideally before the first payment.
Tax planning for foreign investors →The Peruvian entity keeps its accounting books in Peru, under Peruvian rules and IFRS as approved in Peru, normally in Spanish and in soles. Headquarters needs something different: figures in its own chart of accounts, currency and calendar. Treat these as two deliverables and agree both from the start.
Kept in Peru for SUNAT and local reporting, with electronic registers and annual financial statements.
Trial balance mapped to the group chart of accounts, figures in USD and commentary in English.
A documented bridge between local figures and group policies, so differences do not surface at year-end.
Employment runs through the registered Peruvian entity. Payroll includes statutory bonuses, a severance fund (CTS), paid vacation and employer health contributions, so the annual cost is higher than twelve salaries. See payroll and labor.
Banks apply enhanced due diligence to companies with foreign shareholders. Prepare the information on owners and signatories early.
Electronic invoicing is mandatory. An ERP configured for Peruvian rules and group reporting, such as Odoo, reduces manual work.
Powers, annual meetings, capital increases and changes of signatories need local formalities. See corporate services.
Incorporation is quoted per project; notary fees, SUNARP registry fees, apostilles and official translations are quoted separately. Monthly support: pre-operational from USD 100, ongoing operation USD 300–800 and strategic control from USD 1,000 per month, all + 18% VAT (IGV). See fees.
We start with a call about your shareholders, activity and timing, then send a proposal and a document checklist.
Lynch Contadores & Abogados is a firm of lawyers and accountants in Santiago de Surco, Lima. We work with headquarters, regional finance teams and external advisers in English, and with Peruvian authorities in Spanish, so your team has one counterpart for incorporation, accounting, tax, payroll and corporate matters.
Occasional cross-border sales can be made from abroad, but payments from Peruvian customers may be subject to withholding. To invoice locally, hire employees or hold assets in Peru, a foreign company normally needs a subsidiary or a registered branch with its own RUC.
Most incorporate an S.A.C., a closely held corporation with 2 to 20 shareholders that limits the parent's liability. A branch is an alternative when the group prefers not to create a separate legal entity; it requires a permanent legal representative in Peru and the parent remains liable for its obligations.
Corporate income tax at 29.5%, IGV (VAT) at 18%, a 5% withholding on dividends paid to non-domiciled shareholders and income-tax withholding on many payments to non-domiciled entities, commonly 30%. Transactions with related parties abroad are subject to transfer pricing rules.
Peru has double tax treaties with Brazil, Canada, Chile, Japan, Mexico, Portugal, South Korea and Switzerland, and applies Andean Community Decision 578 with Bolivia, Colombia and Ecuador. A treaty may reduce withholding on certain payments, provided the recipient obtains a tax residence certificate.
The statutory books are kept in Peru under Peruvian rules and IFRS as approved in Peru. Reporting to headquarters in English, in the group chart of accounts and in US dollars is prepared as a separate deliverable that reconciles to the local books.
Incorporation is quoted per project, with notary fees, SUNARP registry fees, apostilles and official translations quoted separately. Monthly support starts from USD 100 per month for a pre-operational entity, USD 300–800 per month for an operating company and from USD 1,000 per month for strategic support, all + 18% VAT (IGV).
We review the structure before you incorporate, while there is still a choice. Tell us about your shareholders and plans.