Peru Economy Overview

Currency

Peruvian Sol (PEN)

Working hours

48 hours/week

Public/bank holidays

12 public holidays

Capital

Lima

Languages

Spanish (official), Quechua, Aymara, and other indigenous languages

Population

~34 million

Minimum hourly salary

PEN 5.21

Tax year

1st Jan – 31st Dec

Date format

DD/MM/YYYY

Misclassification penalties

In Peru, misclassifying employees as independent contractors can result in significant fines, back payments of social security contributions, and labor benefits including severance and vacation. Authorities may conduct inspections and impose penalties based on the severity and duration of non-compliance. Employers are expected to ensure accurate classification and registration with SUNAT and EsSalud.

Fun fact

Peru is home to the highest sand dune in the world—Cerro Blanco—towering over 2,000 meters above sea level in the Nazca region.

Peru is well-known for its diverse cultural heritage and unique landmarks, from Machu Picchu to the Amazon rainforest. But the Latin American country is also an attractive business destination because of its regional trade opportunities and investment potential.

Peru’s stable economy is attributed to its abundant mineral resources, which make up more than 60% of its exports. Peru’s economy is expected to grow steadily due to fiscal stimulus encouraging public investments and continued mineral exports. 

If you are looking to do business in Latin America, Peru offers legal stability agreements that protect the interests of foreign investors. This includes financing through PPPs, income tax remittances, and the stabilization of tax rates. While Peru’s employment laws are relatively straightforward, hiring skilled job candidates is made easier with the professionalism of a recruitment agency or an Employer of Record (EOR). 

To help your company expand in Peru, this guide looks at the country’s business regulations, the benefits of operating in Peru, and options for expansion, from registering subsidiaries to hiring an EOR.

Overview of Peru's Economy

Peru has a large mining sector with its main exports being zinc, silver, gold, and copper. In 2024, Peru saw its highest export value of $74.7 billion owing to its attractive mineral prices and trade laws.

Peru’s economic development is also attributed to key industries such as agriculture, tourism, and finance. The GDP in Peru reached $267.60 billion in 2023 and is expected to continue to rise due to reduced public debt, free trade agreements (FTAs), and fiscal policies.

Economic Indicator Details
GDP (Nominal, 2023 est.) ~$267.6 billion USD
GDP Growth Rate (2024 est.) ~2.9%
Major Industries Mining (copper, gold, silver, zinc), agriculture, tourism, financial services
Top Employers Mining companies, agribusinesses, government, financial institutions, tourism operators
Labor Force Size ~17 million
Unemployment Rate (2024) ~3.6%
Business Incentives Free trade agreements, tax relief for SMEs (e.g., Reactiva Perú), investor protection laws
Key Economic Drivers Mineral exports, foreign direct investment (FDI), tourism, fiscal stability, SME credit access programs

According to the World Bank, programs such as the Reactiva Perú have facilitated funding to the value of 8.5% of the GDP, allowing SMEs to access loans for economic stability and recovery.

Furthermore, Peru’s Foreign Direct Investment inflows totaled $11.6 billion in 2022, over double the rate of that in 2021. The Latin American country’s strong economic growth, in addition to policies aimed at protecting foreign investment, makes Peru an attractive business destination.

Taxes

Employer Tax: 9%

EsSalud (Public Health Insurance)

9%

Employee Tax: 13% – 30%

Pension Contribution (ONP or AFP)

13%

Income Tax

Peru applies a progressive income tax system for individuals and a flat corporate tax rate of 29.5%. Employees contribute to either the National Pension System (ONP) or a Private Pension Fund (AFP), both amounting to around 13% of gross salary. Peru also has tax treaties that may reduce withholding rates for international companies.

Tax Units (tax unit = 5,350 PEN)

Up to 5

5 to 20

20 to 35

35 to 45

More than 45

Tax Rate

8%

14%

17%

20%

30%

Which Services Do PEOs Provide in Canada?

To establish professional operations and hire a workforce in Peru, it is necessary to understand Peru’s business regulations. These laws cover the formation of companies, tax laws, and contracts and are explored in detail below:

Business Incorporation

To start a business or enterprise in Peru, you must choose between a traditional corporation (Sociedad Anónima) and closely held or open corporations. According to the General Law of Companies, or “Ley General de Sociedades,” companies in Peru must have a board of directors, except for closely held corporations.

The Peruvian company must have a minimum of two shareholders and requires the appointment of a manager. Companies are required to register with the National Superintendence of Public Registries (SUNARP) and obtain a tax ID.

Tax Benefits

Peru’s current corporate tax rate is 29.5%. New companies can apply for VAT recovery before starting their formal operations. Investors can enter stability agreements with the Peruvian government for tax breaks.

Under the general regime, businesses are guaranteed advantages for 10 years, including a stabilized income tax regime and the absence of restrictions on foreign exchange. The mining regime offers benefits such as a stable tax regime, free product trade, and access to tax refunds for 10 to 15 years.

Regulatory Requirements

When employing a workforce, the newly incorporated company in Peru is responsible for employee training. Training is provided when new employees are onboarded and throughout the employment relationship. 

In Peru, employees work 48 hours a week and receive mandatory benefits such as 30 days of paid annual leave and social security contributions covering healthcare and pensions.

Benefits of Doing Business in Peru

From affordable taxes to a skilled labor force, discover the multitude of benefits of doing business in Peru: 

  • Strategic Location: Peru borders the Pacific Ocean, with trade ports facilitating imports and exports between the United States and Asia. Peru easily conducts business with Latin American countries due to its central South American position.        
  • Strong Economy: Peru possesses one of the fastest-growing economies in Latin America. Despite mineral resources being its largest export, the country has made efforts toward diversifying its economy through growth in tourism, agriculture, and retail industries. Peru has joined the OECD’s “Tax Challenges Arising from Digitalisation of the Economy” project to promote sustainable economic growth.

    The Central Reserve Bank of Peru (BCRP) is also considered credible and has successfully targeted inflation through effective and transparent monetary policies, further contributing to economic stability and strength.
  • Investor-friendly Policies: Peru does not place strict limitations on foreign investment and protects international businesses from discriminatory practices, making it easier to expand in the country. The free trade agreements encourage trade of goods and services with partnering countries, in which tax breaks and incentives are provided to investors.

    In addition to fiscal stimulation and FTAs, Peru eliminates foreign ownership restrictions and clearly outlines the rights and protections of foreign investors in the Supreme Decree 162-92-EF.

Downsides of Doing Business in Peru

International businesses can take advantage of lower labor costs and a favorable trade and transport location; however, it is important to be mindful of potential challenges and how to overcome them: 

  • Bureaucratic Hurdles: Peru’s bureaucratic challenges make setting up a business time-consuming as several lengthy procedures are involved in establishing an enterprise. Fortunately, hiring an EOR in Peru can help companies expand quickly in adherence to employment laws.
  • Labor Laws: The Peru Labor Regime has strict labor laws governing overtime, employment contracts, and payroll. Employers in Peru must be aware of the payroll cycle, and employee benefits laws to prevent being penalized for non-compliance.
  • Tax Complexities: Peru offers stability agreements and unique tax regimes based on the business sector. For example, Peru offers general regimes, mining regimes, and the option for oil and gas companies to enter into stability agreements. The country has specific withholding taxes based on the industry.

    Income tax exemptions on royalties for editorial products will be implemented until 2026. The various tax laws, regimes, and applications for businesses can be challenging to understand; however, partnering with a professional employment provider in Peru can assist in overcoming potential obstacles while benefiting from qualifying tax breaks.

International Expansion Into Peru

For successful expansion into Peru, foreign businesses must consider the following options:

Peru Employer of Record (EOR)

An EOR in Peru acts as a legal employer for the workforce by sharing liability with the client company. EORs allow you to hire employees and operate in Peru without registering a legal entity. They offer quick and compliant hiring solutions by helping you adhere to Peru’s labor laws.

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Recruitment Agency

A professional recruitment agency in Peru specializes in hiring local professionals. Recruiters work with you to identify your goals and shortlist candidates for interviews to find the right fit for your Peruvian team.  A recruiter in Peru provides access to top talent and makes hiring more efficient.

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Peru Professional Employer Organization (PEO)

A PEO in Peru is an HR services provider handling benefits administration and payroll management. The PEO serves as a co-employer and is suited to businesses in Peru that need to outsource payroll or do not have an experienced payroll team.

LEARN MORE

Subsidiary Incorporation

Incorporating a subsidiary in Peru requires:

  • Registering a unique company name.
  • Possessing two shareholders of any nationality.
  • Appointing a legal representative in Peru.
  • Opening a local bank account and making the required capital deposit.
  • Preparing the minutes of incorporation.

The company must be registered with SUNARP and receive a tax ID by registering with RUC (Registro Único de Contribuyente) at SUNAT once incorporated.

Branch Registration

Registering a branch in Peru requires a Public Deed of Incorporation, the preparation of articles of incorporation, and a certificate of good standing on behalf of the parent company. A statement describing the branch’s activities (in Spanish) and physical address is necessary. A single legal representative must be appointed to complete branch registration. Opening a branch is a flexible solution providing additional entry options for foreign businesses. 

Staffing Agency

A staffing agency provides temporary staffing solutions for short-term needs. The staffing agency can find freelancers and contractors in Peru as per the labor laws.

Business Opportunities in Peru

Peru is a beautiful country offering strong economic opportunities for international businesses. Its economic development is attributed to its mineral resources, tourism, and services sectors, while fiscal policies and global FTAs facilitate imports and exports of goods and services. Non-discriminatory regulations protect national and foreign investors, and businesses can benefit from an attractive tax system.

Business OpportunityReason 
Mining and Mineral ProcessingPeru is a global leader in copper, silver, and gold production, creating strong export demand and steady investment returns.
Agriculture and High-Value Agri-ExportsThe country ranks among the top exporters of avocados, blueberries, grapes, and coffee, driven by year-round growing conditions and rising global demand.
Tourism and Eco-Tourism VenturesMachu Picchu and Peru’s cultural and natural attractions draw millions of visitors annually, fueling opportunities in hospitality, tours, and sustainable travel experiences.

To help you expand with confidence in Peru, you can rely on Remote People’s market entry services. Remote People makes hiring a skilled workforce easier and they assist with personalized employment solutions when doing business in Peru.