4 Benefits of Starting a Business in Peru
In the past years, Peru has significantly improved its economic performance, allowing local and foreign investors to apply for better business opportunities. Currently, it is considered the seventh-largest economy in Latin America as well as an ideal destination for businesses looking for economic stability.
Before expanding your business in Peru, let's consider all the benefits you can encounter.
Positive Economic Growth and Stability
The Peruvian economy offers a favorable environment for foreign investment. From 2009 to 2019, the country's gross domestic product (GDP) increased at an average of 4.4 percent annually, according to the Peruvian Central Reserve Bank. This means that over the past years, Peru's economy has experienced sustained growth and stability at rates higher than the average in the Latin American region.
Moreover, it is projected that the country's GDP will accelerate gradually from 4 percent in 2020 to 5 percent in 2023. Thanks to its significant progress in maintaining dynamic GDP rates, low inflation percentage, and stable exchange rates, Peru has become an attractive destination for protecting foreign investors' interests.
Ease of Doing Business
Thanks to its favorable legal framework, foreign investors do not require previous authorization for starting a business in the majority of economic activities ―some of these restricted activities are private safety and surveillance, air and sea transportation, and manufacturing of war weaponry.
As a foreign investor, you will obtain equal treatment and rights as domestic companies. For example, freedom to transferring profits or capital abroad (only after complying with local taxes), no restrictions of trading (export and import), unrestricted access to domestic or foreign credit, freedom to possess and use local or foreign currency for most operations, freedom on purchasing Peruvian corporate shares, and guaranteed legal stability when it comes to incomes taxes and distribution of dividends.
Top Industries for Foreign Investment
Peru is recognized for its abundance and diversity in natural resources; that's why the country is one of the strongest economies in the mining industry. Currently, Peru ranks worldwide as the second-largest producer of copper, silver, and zinc; fourth in the production of lead and molybdenum; and sixth when it comes to gold and tin.
Foreign companies can take advantage of Peru's large resources and deposits of manganese, iron ore, petroleum, gas, and phosphates. Moreover, the main industries and activities in Peru include:
- Mining and Hydrocarbons
- Agriculture and Livestock
- Real estate
International Trade Agreements
In Peru, you can also take advantage of the following international trade agreements and partnerships:
- MERCOSUR (Southern Common Market) offers trade opportunities with other Latin American countries such as Argentina, Paraguay, Brazil, and Uruguay.
- The European Free Trade Association (EFTA) promotes regional agreements with Switzerland, Norway, Iceland, and Liechtenstein.
- Pacific Alliance (Alianza del Pacífico) includes FTA's with Chile, Mexico, and Colombia.
- Multiple Free Trade Agreements (FTA's) with the US, China, Canada, Japan, Singapore, South Korea, Thailand, Chile, Mexico, Costa Rica, Panama, Cuba, Honduras, and Venezuela.
- Double tax treaties with Canada, Brazil, Chile, Mexico, Switzerland, South Korea, and Portugal.
- Andean Community of Nations Countries involving Bolivia, Ecuador, and Colombia.
An International PEO for your Business Expansion
Before venturing into foreign markets, it is essential to find the right partner who can manage all the processes related to Peruvian employment laws and regulations. By partnering with PEO experts, you can entirely focus on your company's needs in order to achieve a positive economic growth rate.