General Regulations

With the purpose of promoting private investments, Peru has established a stable and attractive legal framework to national and foreign investors.

The Constitution of the Republic of Peru (1993)provides regulations that constitute essential principles to guarantee a favorable legal framework to private investments in general and to foreign investments in particular. One of its key principles is the equality in the treatment of national and foreign investments. The main regulations of the treatment of private investments are:

  •  Legislative Decree N° 662, approval of the Legal Stability Scheme for Foreign Investments,
  • Legislative Scheme N° 757, approval of the Framework Law for Private Investment Growth, and
  • Regulations on Private Investment Guarantee Schemes, as approved by the Supreme Decree 162-92-EF. 

According to these regulations, some important items for foreign investors in Peru are the following:

 

Basic Rights of Foreign Investors

- Non-discriminatory treatment compared to national investors.
- Freedom of trade and industry, and export and import freedom.
- To send remittances abroad for the profit or gains, after having paid any applicable taxes.
- Guarantee to freely possess and use foreign currency.
- To use the most favorable exchange rate in the market.
- To freely re-export any capital investments.
- Unlimited access to domestic credit.
- Free hiring of technology and remittance of royalties.
- To purchase shares owned by national investors.
- To take investment insurances abroad.
- To enter into Legal Stability Agreements with the Peruvian Government, for their investments in Peru.

Foreign Investment Models Foreign investments can be freely made under any of the business legal forms recognized by law, and under the following models:
- Direct Foreign Investment, as contributions to social capital.
- Contributions to the development of contractual joint ventures.
- Investments in goods and property located within Peruvian territory.
- Portfolio investments.
- Intangible technology contributions.
- Any other mode of investment contributing to the development of Peru.
Free Access to Financial Sectors Private investments are allowed, without restrictions, in almost all financial activities, and do not require any prior authorization. Activities with restrictions to foreign investments are very few, such as air transportation, sea transportation, private security and surveillance, investments in protected natural areas and the manufacture of weapons of war.
Property Rights

According to the Constitution of Peru, the property right is inviolable except under exceptional circumstances, when expropriation is allowed after the payment of a fair indemnification that includes a compensation for eventual damages. 

 
Additionally, when it comes to ownership, foreign and Peruvian entities are in the same conditions. However, foreign entities cannot purchase or own mines, land, forests, water, fuel or energy sources within 50 kilometers from international borders, with the exception of cases of public necessity that are specifically declared as such by a Supreme Decree approved by the Council of Ministers.

Performance Requirements In accordance with the commitments made at the WTO, no mechanism of selection or performance requirement is applied or required to foreign investors.
Freedom of Organization and Performance of Activities Every company has the right to organize and perform activities in the manner that it deems convenient. The Government has repealed any legal provisions establishing production modalities or performance rates, prohibiting the use of supplies or technology processes and, in general, intervening in the production processes of a company, with the exception of legal provisions dealing with hygiene and industrial safety, environment preservation and health.

 

 

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