Peru is a nation in western South America. Its official name is the Republic of Peru. Ecuador and Colombia border it on the north, Brazil on the east, Bolivia on the southeast, Chile on the south, and the Pacific Ocean on the west and south. Peru is a megadiverse nation with habitats ranging from the dry plains of the Pacific coastline area in the west to the peaks of the Andes mountains reaching from the north to the southeast of the country to the tropical Amazon basin rainforest with the Amazon River in the east. Lima, Peru's capital and biggest city, with a population of 34 million people. Peru is the 19th biggest nation in the world and the third-largest in South America, with 1.28 million km2 (0.5 million mi2).
Several ancient civilizations lived in Peruvian land. From the Caral-Supe civilization, which began in 3500 BCE and is one of the five cradles of civilization, to the Inca Empire, the largest known state in the pre-Columbian Americas, the territory now encompassing Peru has one of the longest histories of civilization of any country, dating back to the 10th millennium BCE.
In the 16th century, the Spanish Empire conquered the area and built a viceroyalty that included most of its South American lands, with Lima as its seat. Higher education in the Americas began in 1551 with the formal foundation of the National University of San Marcos in Lima. Peru declared independence in 1821, and after the foreign military operations of José de San Martin and Simón Bolvar, as well as the critical battle of Ayacucho, Peru achieved freedom in 1824. In the years that followed, the nation experienced political turmoil before entering a period of relative economic and political stability as a result of guano harvesting. Later, the Pacific War (1879–1884) with Chile caused a crisis in Peru, from which the aristocracy took power via the Civilista Party. Throughout the twentieth century, the nation saw coups, social unrest, and internal wars, as well as times of peace and economic growth. The nation embraced a neoliberal economic strategy in the 1990s, which is still in use today. Peru enjoyed a period of consistent economic expansion and poverty reduction throughout the 2000s commodities boom.
Peru is a sovereign state organized into 25 regions that are governed by a representative democratic republic. Peru has a high degree of human development, ranking 82nd on the Human Development Index, with an upper middle-income level. It boasts one of the most wealthy economies in the area, with an average growth rate of 5.9 percent, and one of the world's highest industrial growth rates, with an average of 9.6 percent. Its primary economic activities include mining, manufacturing, agriculture, and fishing, as well as other rapidly emerging industries such as telecommunications and biotechnology. The nation is a member of The Pacific Pumas, a political and economic association of Latin American Pacific coast countries that share shared tendencies of good development, strong macroeconomic foundations, better governance, and openness to global integration. Peru ranks high in social freedom; it is an active member of the Asia-Pacific Economic Cooperation, the Pacific Alliance, the Trans-Pacific Partnership, and the World Trade Organization; and it is regarded as a middle power. Mestizos, Amerindians, Europeans, Africans, and Asians make up Peru's population. Although Spanish is the most widely spoken language, a considerable proportion of Peruvians speak Quechuan, Aymara, or other Indigenous languages. This blending of cultural traditions has produced a broad range of manifestations in domains like art, gastronomy, literature, and music.
Every year, employees are entitled to 30 days off. A minimum of 15 days must be taken, with the remaining 15 days being able to be paid out.
Peru recognizes twelve public holidays.
The employer pays for the first 20 days, while the state pays for the rest (ESSALUD).
Mothers are entitled to 98 days of fully paid leave, which is funded by ESSALUD.
Fathers in Peru are granted 10 days of paid leave which is shouldered by the employer.
Peru labor laws do not require companies to employ parental leave.
Employees may be terminated objectively or for cause, provided that documentation is provided. In general, employees should receive at least six calendar days of written notice to answer in writing or thirty calendar days to demonstrate their capabilities. The firing decision and justification should also be communicated in writing to the employee's trade union. Employees who are terminated without cause are normally entitled to up to 12 months of severance compensation.
Termination of temporary employment must occur in accordance with the contract's expiration date. Permanent termination of employment must be either voluntary resignation or dismissal for cause.
Employees must give at least 30 days notice when resigning. Employers must generally give an employee at least six calendar days' notice to prepare a written defense to any charges brought against them, or 30 calendar days to demonstrate the employee's performance capability or to correct any error. There is no requirement for notice if the employee has engaged in serious misconduct that makes requiring the employer to continue the employment relationship unreasonable.
Three months may be included in the probationary period. An extension may be granted if the work requires training and adaptation or if the nature of the work necessitates it. Extensions must be in writing and are limited to six months for skilled workers and employees in positions of trust, and one year for managerial positions.
Severance is generally not required in cases of separation due to an employee's conduct or capacity. In general, an employee who is terminated without cause is entitled to severance pay for up to twelve months, depending on the circumstances surrounding the former employee's employment history. Under Peruvian law, no specific redundancy pay is required. If a court finds that a dismissal was unlawful because the employer failed to provide a valid reason to the employee or the reason could not be legally substantiated, the employee is typically entitled to a payment equal to the employee's average monthly compensation for each year of service, up to a maximum of twelve months.
The standard workweek is 48 hours and the day is eight hours.
Overtime compensation should be agreed upon between the employer and employee. However, the first two hours cannot be compensated at less than 25% of the employee's total compensation. The surcharge cannot be less than 35% per hour for each additional hour.
The monthly minimum wage in Peru is set at 930 PEN.
Peru features a hybrid public-private healthcare system.
Supplemental health insurance is often provided by employers.
Employees are usually eligible to life insurance after four years of employment.
Companies established in Peru are deemed tax residents in Peru and therefore liable to a corporate income tax (CIT) rate of 29.5 percent on global net income.
Such entities are permitted to deduct expenditures for the purpose of calculating taxable income to the extent that they are required to produce or sustain the source of taxable revenue. Certain expenditures (thin capitalization regulations), bad debt provisions, wages, travel expenses, gifts, contributions, fines, and so on may be subject to requirements, restrictions, and/or caps.
Individual income taxation in Peru is based on domicile rather than residency. Non-domiciled people are solely taxed on their Peruvian-source income, while domiciled individuals are taxed on their global income.
Generally, the tax rate imposed on domiciled individuals ranges from 8 percent to 30 percent. The actual percentage varies depending on the income bracket the individual belongs to.
Income tax on non-domiciled employees is imposed at a flat rate of 30% on their gross Peruvian-source income. No deductions or credits apply to non-domiciled individuals.
Capital gains derived from the sale of stocks by domiciled individuals are subject to an effective 5% income tax rate. Likewise, income from leases is subject to an effective 5% income tax rate.
When there is no withholding obligation, income tax must be paid upon the filing of the annual income tax return.
The general rate of VAT is 18%. (16 percent of VAT itself plus 2 percent of municipal promotion tax). VAT is levied on the following transactions:
(1) Sale of goods within the country;
(2) Rendering or first use of services within the country;
(3) Construction contracts;
(4) The first sale of real estate made by constructors; and
(5) Import of goods.
The seller is liable to VAT on all transactions, with the exception of importation of products or services provided abroad but economically utilized inside Peru, for which VAT is self-assessed by the importers and users, respectively.
The VAT system is based on a debit/credit basis, and input VAT may be offset by output VAT. If there is an excess of input VAT in a given month, it must be offset against output VAT collected in subsequent months until it is depleted.
The exportation of moveable commodities (including the sale of products in international zones of ports and airports) is not subject to VAT, nor is the exportation of services that satisfy the four criteria outlined in the VAT legislation. Thus, VAT paid on products purchased, services rendered, construction agreements, and importation of commodities linked to exported goods or services results in a positive VAT export balance.
The positive balance may be used to offset production VAT, income tax, or any other outstanding tax obligation owed to the government. If the positive balance is not entirely offset because the amount of the aforementioned tax obligations is inadequate, the taxpayer may request a refund.
Peru's visa policy is fairly lax, allowing individuals from all over the globe to visit the country. According to Peru's current visa policy, numerous people from specified countries may enter the country without a visa. To go to Peru, they will need to have a valid passport and a few additional supporting papers.
In addition to visa-exempt countries, the Peru visa policy includes a number of other categories that may allow you to travel to Peru without a consular visa. If you are a Chinese citizen with a visa for Australia, Canada, the United Kingdom, or any Schengen country, you may stay in Peru without a visa for 180 days every 6 months.
These relaxations have helped Peru's economy and tourism. The country has amicable ties with the majority of the world's nations. So much so that any diplomatic passport holders from throughout the globe (excluding Venezuelans) may enter Peru without a visa.
There are several sorts of Peruvian visas. The length of your stay in Peru influences the simplicity with which you may get permission from them and other aspects of the application procedure. A Peru tourist visa is one of the simplest methods to visit Peru.
You may stay in Peru for a maximum of 180 days with the aid of a tourist visa or a business visa. The student, artist, and regional visas all have a 90-day validity period. A visa for an airline or cruise crew member is valid for up to 58 hours, while diplomats may remain in the nation for up to 90 days.
Those who come to Peru through the visa waiver program are also allowed to remain for 180 days. There are several exceptions to these norms.
In Peru, an employment contract might be indefinite or fixed duration. A fixed-term contract must be in writing and must indicate the objective reason the parties are contracting for a defined period, the length of the contract, and any additional terms agreed to by the parties. A fixed-term contract cannot last more than five years. The contract should be made in three copies: one for the employer, one for the employee, and one for the Labor Ministry.
Employment contracts involving foreign workers are subject to additional regulations.
There is no set length for assignments. This is usually indicated in the employment contract for fixed-term employments.
Peruvian Nuevo Sol
If you wish to expand to Peru, you must first select what form of subsidiary you want to create. The most prevalent is a Sociedad Comercial De Responsabilidad Limitada (S.R.L), which is a business corporation with limited liability. You might, however, incorporate as a Sociedad Anónima, which is a regular company. Standard companies are classified into three types:
(a) Ordinaria Anónima Sociedad (S.A.)
(b) Anonyma Abierta Sociedad (S.A.A.)
(c) Cerrada Anonyma Sociedad (S.A.C.)
Peru subsidiary regulations vary depending on the sort of subsidiary you establish. In general, no minimum proportion of capital is required by the government. However, many banking institutions may need a minimum deposit of 1000 sol (about $306 in US money). To apply for an investment visa if you have migratory status, you must have a foreign investor with a minimum share capital of US$30,000.
The number of shareholders required is determined on the Peru subsidiary arrangement you choose. An S.A. must have at least two shareholders but no more than 750. Any ordinary company must nominate three directors, all of whom must be Peruvian citizens. To sign off on any legislation on their behalf, all foreign stockholders will require an attorney-in-fact.
Opening a local bank account is another stage in the incorporation procedure. Before you can start your firm, you must deposit your capital contribution in either local or international money. You'll also need to double-check and register your company's name to ensure it's unique.
Peru subsidiary laws are outlined in the General Law of Companies. When a company is formed under this legislation, it must have at least two shareholders of any nationality who are either persons or corporate legal entities.
Because a limited liability subsidiary is the most common choice, knowing the regulations governing its formation is critical. A limited liability company (S.R.L.) is a business partnership separated into equal sections. Every partner's participation is restricted to the number of non-transferable business shares they own. An S.R.L. requires at least two but no more than twenty partners of any nationality who do not have to reside in Peru. When naming your company, insert "Sociedad de Responsabilidad Limitada" or "S.R.L."
