Simplified Company Formation: Establishing Your Business in Peru

The process of creating a legal entity may be difficult and time-consuming. However, it is the only one that permits you to own permanent assets like real estate and it provides you the most control over your employees and operations in a foreign country. As a result, you should consider company formation if you have done a thorough analysis of the market and are committed to a long-term growth investment in Peru. In order to be able to complete the company formation process in Peru within six weeks, the aid of a knowledgeable local partner might be necessary.

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There are a number of factors that contribute to a company’s decision to incorporate in Peru. Here are possible benefits:

1. Growing Economy: Over the past ten years, Peru’s economy has grown steadily, making it a desirable location for entrepreneurs. Specifically, the nation’s economy is broad, with areas like mining, agriculture, manufacturing, services, and tourism offering opportunity for a range of businesses.
2. Strategic Location: Furthermore, the geographic position of Peru is advantageous for companies looking to grow. It has trade agreements with many nations, including the United States, Canada, China, and the European Union. That is why it acts as a gateway to other Latin American markets.
3. Investment-friendly Environment: Peru has made reforms to promote an environment that is business-friendly. The administration has made efforts to streamline processes, cut red tape, and encourage foreign investment. Additionally, Peru provides a range of tax breaks and incentives to entice industry, particularly those which invests in particular industries or locations.
4. Access to Natural Resources: Mining and agriculture provide the majority of Peru’s natural resources. Thus, companies operating in these industries can gain from proximity to a wealth of metals, minerals, oil, and agricultural land.
5. Infrastructure Development: Peru has been funding initiatives related to energy, ports, and transportation infrastructure. Accordingly, these continual developments boost logistics, ease trade, and provide chances for companies to run effectively.
6. Skilled Workforce: Last but not least, peru has a workforce with skill, especially in fields like engineering, technology, finance, and business administration. To meet their labor demands and fuel their expansion, businesses can draw from this talent pool.

Read our Blog for more information:
How to start a business in Peru – Ongresso

After deciding on a company name, the next step is to choose a legal structure for the business. This decision is crucial as it should be based on the type of commercial activity that will be carried out. It is important to note that documentation may differ depending on the structure chosen. In Peru, there are several common legal structures to choose from, including the following:

For small to medium-sized firms in Peru, the SAC is a typical type of legal organization. Key characteristics of a SAC:

• Limited Liability: First of all, the Shareholders’ liability is limited to the amount they have invested in the company.
• Shareholders: A minimum of two shareholders or a maximum number of shareholders of 20 is required. What is more, Shareholders can be individuals or legal entities, and their ownership is represented by shares.
• Capital Requirements: SACs must have a minimum amount of capital, which varies depending on the particular operations and rules that the company must follow.
• Reporting Requirements: SACs are required to maintain accurate accounting records and create financial statements. In addition, they must abide by tax laws and file annual financial reports with the Registro Nacional de Identificación y Estado Civil (RENIEC) and the Superintendencia Nacional de Aduanas y de Administración Tributaria (SUNAT). These requirements are essential for the proper functioning of a SAC.

With minimal liability protection for its stockholders, it is a typical legal form that corporations utilize to operate as separate legal entities. Some essential traits of a Sociedad Anónima (S.A) in Peru include the following:

• Separate Legal Entity: Sociedad Anónima is a unique legal entity that exists independently of its stockholders. As a result, the business is able to sign contracts, acquire property, and amass debts under its own name.
• Limited Liability: In a S.A., the debts and responsibilities are often not individually owed by its shareholders. Instead, their financial involvement in the business places a cap on their culpability. This means that their liability is limited to the extent of their investment in the company.
• Shareholders: There is no maximum number of sharholders for a S.A, however there must be at least two. Shares, which signify ownership, are issued to shareholders, who may be either natural persons or legal entities.
• Capital Structure: The capital of a S.A. is made up of shares, which can be freely transferred subject to any limitations stipulated in the rules of the company. Moreover, the company may issue various share classes with various benefits and rights. As a result, this allows for flexibility in the ownership and management of the company.
• Reporting Requirements: S.As must prepare financial statements in compliance with the applicable accounting standards and maintain accurate accounting records. They are required to abide by tax laws and file annual financial reports to the Registro Nacional de Identificación y Estado Civil (RENIEC) and the Superintendencia Nacional de Aduanas y de Administración Tributaria (SUNAT).

A SRL is a business with legal status independent of its owners (partners). Because of the limited liability protection it provides, owners are typically not held personally accountable for the obligations of the firm. Generally, small and medium-sized businesses frequently choose it. Key characteristics of a Sociedad de Responsabilidad Limitada (SRL):

• Limited Liability: One of the main benefits of an SRL is that it offers its members (owners) limited liability protection. This means that members’ liability is typically limited to the amount they have contributed to the business. As a result, the company’s debts and responsibilities are often shielded from their personal holdings, providing an additional layer of protection for the members.
• Members: An SRL can include a diverse range of members, with as few as two and as many as 20 being allowed. These members can be either natural persons or corporations, providing flexibility in the composition of the company. In terms of ownership, participation quotas serve as a proxy, showing the members’ ownership stake in the company’s capital.
• Capital Structure: An SRL’s capital is split up into participation quotas that represent the ownership of the members. A member’s capital contribution to the company is based on their participation quotas.
• Reporting Requirements: S.As must prepare financial statements in compliance with the applicable accounting standards and maintain accurate accounting records. They are required to abide by tax laws and file annual financial reports to the Registro Nacional de Identificación y Estado Civil (RENIEC) and the Superintendencia Nacional de Aduanas y de Administración Tributaria (SUNAT).

The process of starting a business in Peru can be complicated, but as long as you have the guidance and support of a local legal partner for your business formation, the incorporation procedures result much easier.

While there is a more significant investment of time and money when establishing a legal entity, some businesses choose to outsource back office tasks related to PEO/HR Outsourcing, accounting, tax advisory and legal representation to external specialists to reduce complexity and time spent on non-core activities. As a result, this allows them to become operational faster with a smaller team and put their principal focus on strategic instead of administrative tasks.

In conclusion, Peru offers a desirable environment for company owners considering starting or growing their enterprise. By following the instructions in this guide and seeking out expert guidance if necessary, you may effectively finish the company creation process in Peru. You receive assistance from Ongresso to ensure a quick and easy softlanding in Peru.