Incorporating a Company in Peru
Companies looking at a new market need to consider a range of questions. Themes related to the legal system, adherence to the locals laws, rules applicable to foreign investments, contractual frameworks, political or even social situation of the target country, are often discussed during the decision process of investing in a new country.
Nevertheless, when this decision is finally taken, questions regarding the process and timeframes of incorporating a local company becomes an important step for companies. Information found online often do not outline the practical procedures, timeframes, or the required documentation needed to incorporate the local company.
Over the last 10 years, the Axiom team has helped many companies to enter and to operate in Peru. We have put together a comprehensive guideline of the relevant steps, timeframe and some of the important requirements needed to be completed when incorporating a company in Peru.
But first, why it is important to have a local entity when you decide to invest in Peru?
Some benefits of having local entities are:
- Companies can be more tax efficient when repatriating funds because having a local entity allows you take advantage of double taxation treaties Peru has signed.
- Business registration is cost effective due to low government fees and the absence of a rule regulating minimum equity.
- Participation in public tenders to provide services to the Government (in some cases and for particular business areas, only local entities can participate).
- Having a local presence allows you to be easily recognized by local authorities, build brand awareness, compete at a local level, among others commercial advantages.
To start with the process, the company must choose from different types of legal vehicles which can be evaluated together with our experienced legal and commercial team.
Step 1 – Documents Needed from Foreign Shareholders
In case the shareholders are foreign companies, we need to register the power of attorney (POA) granted by the foreign companies, before the Public Registry. Thus, we need to file the list of documents mentioned below:
- The resolution issued by the competent body of the foreign company, granting the POA to incorporate a company in Peru, duly signed before a public notary and apostilled or legalized (whichever is applicable in your country).
- The certificate of good standing of the foreign company. This document also needs to indicate who the shareholders of the company are, and has to be apostilled or legalized (again, whichever is applicable in your country).
- A certificate of incumbency issued by the competent authority evidencing that the person who granted the POA is authorized by the articles of incorporation and the applicable law to act as legal representative of the company and has act within the scope of his/her authority. The certificate shall include the full name and domicile of the person who signs it and must be apostilled or legalized (again, whichever is applicable in your country).
The documents must be sent in original and required an official translation in order to be file to the Peruvian Public Registry for registration. (7 – 10 days)
Axiom Practical Advice: In order to speed up the process while the company is organizing the required documentation, it is also possible to incorporate the new company using us as the shareholder and then by a private agreement, transferring the shares once the foreign shareholder is registered.
Step 2 – Process of incorporating the Company
When Step 1 is completed (if shareholders are foreign), then we can move on to complete the legal formal process as follows:
- Name search and name reservation (if available) before the Public Registry (1-2 days)
- Drafting of the articles of incorporation (by – laws) (2 days)
- Delivery of the articles of incorporation to the Public Notary of preference (1 day)
- Opening of the bank account. With a copy of the bylaws, the amount of the initial capital of incorporation of the new company has to be deposited in a Peruvian bank of preference (1 day).
- Granting of the public deed of incorporation. The public deed of incorporation shall include the entire text of the articles of incorporation and the bank deposit certificate. The public deed of incorporation needs to be signed by the shareholders or their representatives. (1-5 days)
- A copy of the public deed of incorporation duly formalized need to be sent by the Public Notary to the Peruvian Public Registry in order to register the new company(10 days).
Step 3 – Tax Number for the Company
Once the new company is registered before the Public Registry, the tax number can be requested from the tax authority. In this sense, the legal representative must file a form with the tax office together with a set of documents to obtain the new tax number of the company. (1 – 3 days).
Axiom Practical Advice:
- A legal representative that has residence in Peru needs to be appointed in the public deed when incorporating the company. If not, delays and problems may arise with the Peruvian tax authority when trying to request the tax number.
- Also, due to the Covid-19 emergency, it is possible to carry out this administrative procedure on-line through a platform that the Tax Authority has implemented. In this sense, the documents presented to the Tax Authority will vary depending on whether this procedure is carried out online or in person.
Step 4 – Legalization of the Corporate Books.
Once the company is duly registered before the Public Notary and has a Tax number, corporate books must be open and legalize in the Public Notary of preference. (1 – 2 days)
Axiom Practical Advice: Our legal team works closely with prestigious local Public Notaries in order to expedite the process.
Ax Legal is an advisory firm that works with foreign companies in Latin America. Our team of legal and commercial advisors have a distinguished track record of helping foreign technology and services companies to grow and operate in Latin America. Over the years, we have worked with starts up, mid-size businesses, and publicly listed companies. The one common factor that connects are clients is that they are leaders in their field, providing innovative technologies and services to the industrial sectors.
To better understand how we can support you in the Region, please contact Cody Mcfarlane at firstname.lastname@example.org