Setting up a Company in Peru for Mining Suppliers

Peru is one of the largest recipients of foreign direct investment in Latin America after Brazil, Colombia, and Chile. Even with political instability these past few years, it continues to attract investment with mining being a strategic sector for the economy. 

Mining technology and service companies are looking at Peru for good reason. The country already has a significant number of operational mines that are investing in new equipment and technology making it a great market for foreign suppliers. The future could look even brighter if the country can turn around community problems that have delayed projects for years. That alone could unlock the gigantic USD$53b project pipeline that is in development.

For now though, Anglo American opened last year one of the world’s most technology advanced mines to date – Quellaveco.  In addition, Teck announced a few months ago that it’s Zafranal copper project received regulatory approval from the Peruvian Environmental authorities which should go into construction starting in 2025. 

Many foreign METS companies have visited Peru over the last few years looking to check out the market. They are excited by what is happening and many of these same companies are pushing proposals forward with their potential Peruvian clients. 

As these opportunities develop though, companies will need to decide how they will service the market. Do they work through a partner, try to service the market from their home country, or do they incorporate a company. The answer to these questions will largely depend on the exact product and solution being offered. In our experience, technology and more complex solutions will need to be locally supported so opening an entity is generally the route most companies will take. 

Ax Legal has put together a comprehensive guideline of the relevant steps and timeframe for incorporating a company in Peru. We have also included some practical tips.

Step 1 – Documents Needed from Foreign Shareholders

In case that the shareholders are foreign companies, we will need powers to act on thier behalf. This requires a power of attorney (POA) granted by the foreign company which is then registered before the Public Registry. Thus, we need to file the documents mentioned below:

1. POA to incorporate a company in Peru, duly signed before a public notary and apostilled or legalized (whichever is applicable in your country).
2. 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).
3. A certificate of incumbency issued by the competent authority evidencing that the person who grants the POA is authorized by the articles of incorporation to act as legal representative of the company and has acted 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 requires an official translation in order to be file to the Peruvian Public Registry for registration. (7 – 10 days)

Ax Legal Practical Advice:

• In order to speed up the incorporation process while the documentation is being organized by the shareholder, it is also possible to incorporate the new company using Ax Legal as the shareholder and then transferring the shares once the foreign shareholder is registered. This allows us to set up the company and not wait for documents that can take a few months to collect, notarize, and appostle. 

Step 2 – Process of Incorporating the Local Company

When Step 1 is completed (if shareholders are foreign), we can then move on to complete the legal formal process as follows:

1. Name search and name reservation (if available) before the Public Registry (1-2 days)
2. Drafting of the articles of incorporation (bylaws) (2 days)
3. Delivery of the articles of incorporation to the Public Notary of preference (1 day)
4. 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).
5. 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)
6. 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).

Ax Legal Practical Advice: 

• We have provided the most common time frames but since we are dealing with government offices and banks, it is important to plan for delays. The timing of the incorporation is particularly important for companies who have waited to secure a contract and are now rushing to get the company set up so that they can import goods, hire staff, etc. It is important that commercial teams are aware of time frames so they can plan accordingly with clients.  

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 and the company can initiate activities. The legal representative will 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).

Ax Legal Practical Advice:

• The company can set up the legal structure but not initiate activities with the tax office.  This is a good way to have everything ready but not have any on-going requirements or costs such as accounting. Once a company is ready, they can initiate activities and finish the remaining steps. 
• 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. We generally recommend that this is our firm.

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)

Conclusion

The Peruivan mining industry is a very important market for mining suppliers which is why it has attracted so much attention. Foreign companies will each need to choose how they will service the market. There are many considerations that companies will take into account when making that decision. Often factors such as the type of solution being provided, size of the contract, and other considerations will determine whether a physical presence is really needed.

Once the decision has been made, it is important for companies to understand the incorporation process and the time frames to be operational. With proper guidance, the process is relatively straight forward but it is important to have a trusted partner who will show you how to do it correctly and efficiently.  

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 cmm@ax.legal