Peru's Business & Investment Guide 2010 / 2011 Machu Picchu Citadel. Photograph: Carlos Sala l Intellectual Property: PromPeru Ministerio de Relaciones Exteriores Contacts – Ernst & Young Peru Jorge Medina Méndez Country Managing Partner Tel +51 1 411 4411 email@example.com Advisory Assurance Tax Paulo Pantigoso Juan Paredes David de la Torre Advisory Leader Assurance Leader Tax Leader Tel +51 1 411 4418 Tel +51 1 411 4410 Tel +51 1 411 4471 firstname.lastname@example.org email@example.com firstname.lastname@example.org Alejandro Magdits Marco Antonio Zaldívar Andrés Valle Tel +51 1 411 4453 Tel +51 1 411 4450 South America Tax Managing Partner email@example.com firstname.lastname@example.org Tel +51 1 411 4440 email@example.com Jorge Acosta Víctor Burga Tel +51 1 411 4437 Tel +51 1 411 4419 Roberto Cores firstname.lastname@example.org email@example.com Tel +51 1 411 4468 firstname.lastname@example.org Numa Arellano Manuel Díaz Tel +51 1 411 4428 Tel +51 1 411 4403 Humberto Astete email@example.com firstname.lastname@example.org Tel + 51 1 411 4477 email@example.com Ciro Bedoya Cristian Emmerich Tel +51 1 411 4456 Tel +51 1 411 4413 Marcial García firstname.lastname@example.org email@example.com Tel +51 1 411 4424 firstname.lastname@example.org Rafael Huamán Moisés Marquina Tel +51 1 411 4443 Tel + 51 1 411 7237 Guillermo Hidalgo email@example.com firstname.lastname@example.org Tel + 51 1 411 4464 email@example.com José Torres-Llosa Fernando Núñez Tel +51 1 411 5055 Tel +51 1 411 4473 Elizabeth Rosado firstname.lastname@example.org email@example.com Tel +51 1 411 4457 firstname.lastname@example.org Wilfredo Rubiños Tel +51 1 411 4444 María Julia Sáenz email@example.com Tel + 51 1 411 4480 firstname.lastname@example.org Carlos Ruiz Tel +51 1 411 4402 Fernando Tori email@example.com Tel +51 1 411 4479 firstname.lastname@example.org Mireille Silva Tel + 51 1 411 4484 email@example.com Víctor Tanaka Tel + 51 1 411 4408 firstname.lastname@example.org Carlos Valdivia Tel + 51 1 411 4409 email@example.com Av. Víctor Andrés Belaúnde 171 San Isidro - Lima 27, Peru Phone: +51 1 411 4444 Fax: +51 1 411 4445 Peru's Business & Investment Guide 2010 / 2011 Peru is one of the most important countries in Latin America. Some of its diverse characteristics include a variety of climates, a large territorial extension, important natural resources, people of great skills and high academic standards and a solid economic and industrial background. Peru is an excellent destination for foreign investment. This guide for business and investment is an aid for foreign investors as it brings key information about major tax, legal, labor and business setting-up in Peru. It also contains general information on how to invest and make business in the country. Finally, it contains a Introduction complete index of Peru's embassies and consulates abroad, as well as many contacts of interest for the investor. 1. Background information 3 1. Government 5 2. Geography 6 3. People 7 4. Currency 7 5. Economy 8 6. Investment grade 15 7. Investment promotion conditions 17 2. Setting up a business in Peru 27 1. Business corporations 29 2. Close corporations 29 3. Public limited corporations 30 Contents 4. Limited-liability companies 30 5. Branches 31 3. Taxes 33 1. Direct taxes 35 2. Excise taxes 39 3. Municipal taxes 39 4. Customs duties 40 5. Tax stability agreements 42 4. Labor legislation 43 1. Job stability 45 2. Fringe benefits 45 3. Expatriates 46 4. Immigration 46 5. Accounting standards 49 Appendixes 53 Stakeholders 55 1. Executive Office for Economic Promotion 57 2. ProInversion 59 3. PromPeru 60 Ernst & Young services for business and 63 investments in Peru Directory of Peruvian Embassies and Consulates 67 abroad Acknowledgments We express our special thanks to the Peruvian Ministry of Foreign Affairs (MRE) and, especially, to its Executive Office for Economic Promotion (OPE) for its assistance in gathering the necessary information for this Guide. Jorge Medina Méndez Country Managing Partner Ernst & Young Peru Red-headed parrot. Photograph: Michael Tweddle l Intellectual Property: PromPeru information 1. Background 1. Background information 1. Government Peru is a Constitutional democratic Republic with a multi-party system. Under the current constitution of 1993, the President, who is the Head of the State and Government, is elected for a five year period and cannot run for an immediate re- election. The President designates the Prime Minister and the rest of the Cabinet of Ministers. There is a 120 member unicameral Congress elected for a five-year term. Bills may be proposed either by the Executive or by the Legislative branch, and they become law after being passed through Congress and enacted by the President. The Judiciary is an independent institution. The Peruvian government is directly elected and voting is compulsory for all citizens aged 18 to 70. In the recent democratic election of 2006, former president Alan García was non-consecutively re-elected as President of the Republic. Peru has some of the best macroeconomic indicators of the region with an expected Gross Domestic Product (GDP) growth rate that is well above the Latin American average. Country overview Government type • Constitutional Republic Legal system • Based on civil law • Head of the State and Government: President Alan García Pérez (since July 2006) Executive branch • Elections: Every five years by popular vote (consecutive re-election is not permitted). Next elections: April 2011 • The Cabinet is appointed by the President • Unicameral Congress Legislative branch • 120 seats • Members elected by popular vote, for a five-year term • Next presidential and legislative elections: April 2011 Judiciary • Judges are appointed by the National Judicial Council • Peru has several economic cooperation and free trade agreements with different countries • The Peruvian Diplomatic Academy is internationally recognized as one of the best in Latin America • Member of the United Nations since 1945 and member of International relationships the Security Council in 2006 and 2007 • In 1998, Peru joined the Asia-Pacific Economic Cooperation (APEC) and was the host of its 2008 summit. That same year, Peru was also host of the LAC-UE (Latin American and the Caribbean - European Union) summit. Source: Peruvian Constitution / CIA - The World Factbook / UN / Ministry of Foreign Affairs Peru's Business & Investment Guide 5 2. Geography Peru is located on the west central coast of South America. It is bordered by the Pacific Ocean to the west, by Chile to the south, by Bolivia and Brazil to the east, and by Colombia and Ecuador to the north. With a total land area of 1,285,215.60 km2, Peru is the third largest country in South America after Brazil and Argentina, and can be divided geographically in three natural regions: • The Coast: a narrow desert strip with a maritime coastline 3,080 km long, accounts for only 10.7% of Peru's territory, even when it contains approximately 63% of its population. Lima, the political and financial capital of the country, is located in this region. • The Highlands (“Sierra”): the Andean Mountain range covers 31.8% of the territory and holds almost 28% of the country's population. This region contains the country's major mineral deposits. • The Amazon Jungle (“Selva”): the largest region of Peru, occupies 57.5% of its territory, and is rich in petroleum and forestry resources. Peru Population 29.4 million Urban: 75.9% Rural: 24.1% Area 1,285,215.60 km2 Currency* Nuevo Sol (S/.) S/.1 = US$ 0.35 US$1 = S/. 2.824 Language Spanish / Quechua / Aymara Religion Freedom of religion Mostly Roman Catholic Climate Varies from tropical in the Amazon region to dry desert in the Coast; temperate to frigid in the Highlands Natural resources Gold, copper, silver, gas, petroleum, ﬁsh, phosphate, timber agricultural products. * Exchange rate as of July 31, 2010 Source: BCRP / INEI 6 Ernst & Young 1. Background information 3. People The estimated population of Peru for 2010 is approximately 29.4 million, of which 9.1 million (almost 30%) live in Lima. The labor force is estimated to be around 16.4 million people. The main religion is Roman Catholicism and the main official languages are Spanish and Quechua. Aymara is also spoken in some parts of the southern Sierra Region. With respect to the literacy rate, 92.9% aged 15 and over can read and write. People overview Population 29.4 million (forecast for 2010) Age structure 0 - 14 years 29.1% 15 - 64 years 65.2% 65 years and over 5.7% Growth rate 1.22% Birth rate 19.38 births per 1,000 population Death rate 6.14 deaths per 1,000 population Sex ratio At birth 1.005 male per female Life expectancy at birth 73.1 years (forecast for 2005-2010) Source: INEI / CIA Factbook 4. Currency The Peruvian official currency is the Nuevo Sol (S/.). The country has a free- floating exchange rate regime where the government intervenes to avoid excessive fluctuations. As of July 31, 2010, banks bought US dollars at S/. 2.824 and sold them at S/. 2.826. Parallel market exchange rates are similar. There are no restrictions or limitations to either the number of bank accounts held in foreign currency or to the remittance of funds abroad by individuals or legal entities. Peru's Business & Investment Guide 7 5. Economy Gross Domestic Product (GDP) US$ 127 billion (2009) Net international reserves US$ 40.7 billion (as of August 24, 2010) External debt US$ 31.3 billion (2009) Investment 20.6% of the GDP (2009) Unemployment rate 8.5% (2009) Population below poverty line 34.8% (2009) Brazil, Canada, Chile, China, Germany, Italy, Main destination of Peruvian Japan, Spain, Switzerland, United States and exports Venezuela Gold, copper, zinc, crude petroleum and by-products, coffee, potatoes, asparagus, Main exports paprika, organic banana, cacao, textiles and fish meal Main countries of origin of Argentina, Brazil, Chile, China, Ecuador, Peruvian imports Mexico and United States Petroleum and by-products, plastics, machinery, Main imports vehicles, iron and steel, wheat and paper Source: BCRP / Apoyo Consultoría / MEF / OIT With 29.4 million habitants, Peru is a country with rich deposits of copper, silver, gold, lead, zinc, natural gas and petroleum. Due to the weather and natural and cultural variations along its natural regions, Peru is internationally recognized as a mega- diverse country. Peru's economy reflects its varied geography. Its abundant resources are mainly found in the Highlands, through its mineral deposits, and in its vast coastal waters that has traditionally provided excellent fishing. Despite the recent global crisis, the administration has resisted tax spending pressures and used the accumulated savings from rising commodity prices between 2006 and 2008 to invest in infrastructure, pay down a portion of the public debt and increase the domestic assets. Peru has achieved significant advances in macroeconomic performance in recent years with very dynamic GDP growth rates, stable currency exchange rate and low inflation. The country's impressive 9.8% development rate obtained in 2008 elevates it among the fastest-growing economies in the region. This trend has been driven by rising international commodity prices for minerals and metals, investor-friendly market policies and aggressive trade liberalization strategies. Although the rate fell to 0.9% in 2009 due to the global crisis, Peru's economy has begun to recover and is oficially expected to increase from 6.8% in 2010, and to 5.5% in 2011 (recently reestimated by the BCRP to approximately 7.5% in 2010 and to 6% in 2011). The country's rapid expansion has helped to reduce the national poverty rate in almost 15% in the last years 8 Ernst & Young 1. Background information to about 34.8% of its population in 2009. The country's recent positive development performance has much to do with the competent monetary and tax policy pursued over the last two decades, with falling levels of public debt (from 37.8% of GDP in 2006 to 21% in 2009) and consistent budget surpluses prior to the global downturn (2.4% of GDP in 2008). All this has occurred together with the liberalization of the goods and labor market, the opening of the trade and foreign direct investment (FDI), and the maximization of the country's revenues resulting from its rich natural resources. Peru also benefits from strengths such as the increasing size of its domestic market and the development of its financial sector. Peru has signed Free Trade Agreements (FTAs) with the United States, China, Thailand, Canada, Singapore and with the European Free Trade Association (EFTA) made up of Switzerland, Iceland, Liechtenstein and Norway. It has also concluded negotiations with the European Union. Finally, Peru has begun trade talks with Korea, Japan and other countries. The FTA with the United States entered into force on February 1, 2009 and opened the way to greater trade and investment between the two economies. Peru's main exports consists of gold, copper, zinc, textiles and fish meal; and its major trade partners are the United States, China, Brazil and Chile. Devaluation and inflation The annual inflation rate for 2009 was 0.3 % (6.7 % in 2008). The annual devaluation rate during 2009 was 2.9 % (revaluation of 6.5 % in 2008). Devaluation and inflation 15 10 11.1 6.7 5 3.7 3.7 2.5 2.9 2.5 1.5 3.5 4.5 1.1 3.1 0.5 3.9 0 -0.1 0.3 0.3 -1.1 -0.7 -1.9 -3.4 -5 -4.4 -6.5 -7.0 -10 -15 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010* Inﬂation Devaluation *Estimate Source: BCRP / Apoyo Consultoría Peru's Business & Investment Guide 9 Main economic activities by region Peru's main economic activities are agriculture, fisheries, mining and manufactured products. Of the latter, textile products stand out. Peru's uneven geography has made it a mega-diverse country which is reflected in a great variety of eco-systems and, consequently, of flora and fauna. Peru is the first world producer of fishmeal, fresh asparagus, paprika and organic banana; the second world producer of artichoke and the sixth world producer of coffee. In the mining industry, Peru is the first world producer of silver, the second of zinc, the third of copper, the fourth of lead and the fifth of gold. Additionally, it possesses large deposits of iron, phosphate, tin, manganese, oil and gas. One of the most recent and potentially viable economic activities includes the use of wood resources such as cedar, oak and mahogany. The following map shows the main economic activities through out the different regions in Peru. Iquitos Cabo Blanco Talara Cajamarca Chiclayo Au Pacasmayo C Pucallpa Ag Zn Trujillo Pb Ag Chimbote C Pb La Oroya Cu Zn Au Ag Paramonga Zn Au Ag Huacho - Chancay Cusco Zn Au Ica Ag C C C Puno Lima - Callao Arequipa Cu Petroleum Pisco Mollendo Au Gold Ag Silver Ilo Cu Copper Sugar reﬁnery Oil reﬁnery Natural gas Fish meal plant Metal Industry Zn Zinc Textile Industry Smeldering Pb Lead C Cement plant Fisheries Fe Iron Chemical plant Metallurgical industry Source: University of Texas - Perry Castañeda Library Map Collection 10 Ernst & Young 1. Background information GDP / Trade balance The GDP at the end of year 2009 was of US$127 billion. Total FOB exports reached US$26.8 billion, while total imports reached US$21 billion. The leading exports are mining and fishing products. Peru's real GDP (in US$ billion) 160 140 128 134 127 120 108 100 92.3 79.4 80 69.7 61.7 53.9 56.8 60 53.3 40 20 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010* *Estimate Source: BCRP / Apoyo Consultoría / MEF Annual GDP variations 10.00 9.8 8.9 8.00 7.7 6.8 6.8 6.00 5.0 5.0 5.5 4.00 4.0 3.0 2.00 0.9 0.00 0.2 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010* 2011* *Estimate Source: BCRP Peru's Business & Investment Guide 11 GDP by industry Annual variation 2008 2009 2010* 2011* Agriculture and livestock sector 7.2 2.3 2.7 3.6 Agriculture 7.4 0.9 1.4 3.5 Livestock 6.0 4.4 4.2 4.2 Fisheries 6.3 -7.9 0.3 0.4 Mining and hydrocarbons 7.6 0.6 2.8 3.8 Metal mining 7.3 -1.4 -0.7 3.1 Hydrocarbons 10.3 16.1 28.4 8.1 Manufacturing 9.1 -7.2 6.5 5.3 Raw materials processing 7.6 0.0 2.7 4.4 Non primary manufacturing 8.9 -8.5 7.3 5.5 Electricity and water 7.7 1.2 4.9 5.5 Construction 16.5 6.1 12.5 9.5 Commerce 13.0 -0.4 5.1 5.2 Other services 9.1 3.1 5.4 5.6 GDP 9.8 0.9 5.5 5.5 *Estimate, before recent reestimation to approximately 6.8% - 7.5% for 2010, and to 6% in 2011. Source: MEF and BCRP Peru's GDP by economic sector (2009) Commerce 14.9% Non primary manufacturing 11.4% Taxes Other 9.4% services 39.2% Construction 6.2% Mining 4.7% Manufacturing of raw Agriculture materials Fisheries 4.7% 0.4% 2.8% Hydrocarbons Livestock 0.6% Electricity and water 2.4% 2.0% Source: BCRP 12 Ernst & Young 1. Background information Exports (in US$ billion) 35,000 33.4 31.5 30,000 27.8 26.8 25,000 23.8 20,000 17.3 15,000 12.8 10,000 9.0 7.7 6.9 7.0 5,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010* *Estimate Source: BCRP Exports by economic sector (2009) Agriculture 9% Fisheries 8% Oil and gas 7% Mining 61% Textile 6% Chemicals 3% Metallurgy and iron steel industry 2% Other Metal working 1% 1% Non metallic minerals 1% Wood and paper, and their manufactured products 1% Source: BCRP Peru's Business & Investment Guide 13 Mining exports by product (2009) Tin Others 2.90% 4.97% Lead 6.80% Gold Zinc 41.57% 7.49% Copper 36.27% Source: ProInversion Evolution of the fiscal standing (as GDP %) 4.0 3.1 3.0 2.1 2.0 1.8 1.0 - -0.5 -1.0 -1.1 -1.6 -1.6 -2.0 -2.1 -2.1 -3.0 -2.8 -2.6 -4.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010* *Estimate Source: Ministry of Economy and Finance (MEF), Banco de la Nación and Peruvian Tax Authority (SUNAT) 14 Ernst & Young 1. Background information Tax Income increase (in US$ million) 25,000 19,905 20,000 19,026 17,451 16,764 15,000 13,891 10,795 10,000 9,123 7,877 6,840 6,524 6,710 5,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010* *Estimate Source: Ministry of Economy and Finance (MEF), Banco de la Nación and Peruvian Tax Authority (SUNAT) 6. Investment grade In December 2009, Peru's credit rating was raised to investment grade by Moody's Investors Services and matched similar moves made by Standard & Poor's and Fitch Ratings in the previous years. Sound economic prospects, with estimated medium-term GDP growth rates of 6.8% for year 2010, is the key factor that supports the upgrade. These robust development prospects are supported by rapidly increasing investment levels and by the significant decline in Peru's tax and external vulnerabilities. All this is within a context of high and diversifying sources of growth with low inflation and strengthening macroeconomic fundamentals. The upgrade to investment grade has brought Peru a great deal of positive attention worldwide. More importantly, it has produced a positive impact on the local economy and is currently boosting the stock market and the appreciation of the Peruvian currency, the Nuevo Sol, in the short term. Nowadays, many multinational corporations are watching the country with greater interest. The consequent improvement in employment opportunities and the decrease in poverty should contribute to improve the social welfare. Peru's Business & Investment Guide 15 Peru's investment rating As shown in the chart below, a recent international survey indicates that Peru will have one of the lowest inflation levels of the region, with a projected inflation rate of 2.5% in 2010 and 2.7% in 2011. Country S&P Fitch Moody’s Chile A+ A A1 Mexico BBB BBB Baa1 Peru BBB- BBB- Baa3 Brazil BBB- BBB- Baa3 Colombia BB+ BB+ Ba1 Venezuela BB- B+ B2 Argentina B- RD B3 Bolivia B- B B2 Ecuador CCC+ CCC Caa3 Source: Standard & Poor's, Fitch Ratings and Moody's Estimated inflation rates in Latin America 2.5 Peru 2.7 3.5 Chile 3.2 3.7 Colombia 3.8 2010 4.1 Ecuador 3.9 4.1 2011 Bolivia 4.1 Brazil 5.0 4.8 Paraguay 5.0 5.3 Mexico 5.2 3.9 Uruguay 6.4 6.1 Argentina 10.5 10.7 Venezuela 33.8 31.0 0 5 10 15 20 25 30 35 Source: Latin Focus Consensus Forecast 16 Ernst & Young 1. Background information Estimated Latin American GDP growth rates 5.6 Brazil 4.5 6.8 Peru 5.5 4.6 Chile 5.3 4.6 Paraguay 4.1 4.2 Argentina 3.2 3.9 Mexico 3.4 3.9 Uruguay 3.8 3.8 Bolivia 3.6 2010 2.7 Colombia 3.6 2011 1.6 Ecuador 2.3 -1.2 Venezuela 1.1 -1 1 3 5 7 Source: Latin Focus Consensus Forecast and Ministry of Economy and Finance (MEF) 7. Investment promotion conditions a. Foreign investment legislation and trends in Peru Peru actively seeks to attract both foreign and domestic investment in all sectors of the economy. It has therefore taken the necessary steps to establish a consistent investment policy that eliminates the obstacles to foreign investment. As a result, Peru is now considered to have one of the most open investment regimes in the world. Peru has adopted a legal framework for investments that offers automatic investment authorization. Moreover, it has established the necessary economic stability rules to protect private investors from arbitrary changes in the legal terms and conditions of their ventures and to reduce government interference with economic activities. The Peruvian government guarantees foreign investors legal stability on income tax and dividend distribution regulations. The foreign investors entitled to obtain this tax and legal stability are those willing to invest in Peru at least for a two-year term; to invest a minimum amount of US$10 million in the mining and/or hydrocarbon sectors or of US$5 million in any other economic activity; or to acquire more than 50% of the shares of a privatized state-owned company. Peruvian laws, regulations and practices do not discriminate between national and foreign companies. Foreign investors receive a domestic treatment. There are no restrictions to earnings' repatriation, international transfers of capital or currency exchange practices. There are also no restrictions on the remittance of dividends, Peru's Business & Investment Guide 17 interests and royalties. Foreign currency may be used to purchase goods abroad or to cover financial obligations so long as the operator is in compliance with the relevant Peruvian tax legislation. Peru ranks first in its region for best legal and regulatory framework The Economist Peru 66.7% Chile 61.1% Costa Rica 50% Mexico 50% Brazil 47.2% Venezuela 8.3% Ecuador 5.6% Nicaragua 5.6% Source: The Economist 2009 b. Favorable legal framework for foreign investors Peru offers a legal1 framework that protects foreign investors' interests by offering them: • ► An equal and non-discriminatory treatment • ► Unrestricted access to most economic sectors • ► Free capital transfer • ► Free competition • ► Guarantee to private property (no expropriations or nationalizations) • ► Freedom to purchase domestic stocks • ► Freedom to access internal and external credit • ► Freedom to transfer royalties • ► To be under a network of investment agreements and under the membership of the Investment Committee of the Organization for Economic Cooperation Development (OECD) ► • To be under the membership of the ICSID - International Centre for Settlement of Investment Disputes and MIGA – Multilateral Investment Guaranty Agency (international arbitration institutions) Foreign direct investment must be registered in the Agency for Promotion of Private Investment (ProInversion). 1 Constitutional Regulations “Foreign Investment Bill”, Executive order # 662, “Private Investment Growth Frame Bill”, Executive order # 757, “Public Construction of Infrastructure and Public Services Private Investment Promotion Bill”, Consolidated Text (TUO) approved under Supreme Executive order # 059-96-PCM. Extracted from ProInversion. 18 Ernst & Young 1. Background information Foreign investors may remit the net benefits resulting from their registered investments without any restrictions. In the same way, foreign investors may also transfer their shares, property or participation rights, reduce their capital and dissolve their companies. Recognition of the favorable investment climate The following table shows the Peruvian positioning in the favorable infrastructure and macroeconomic investment climate index. World Economic Forum Peru is top ranked in the region regarding Peru ranks top in the world regarding government preparation in macro-economic level infrastructure’s private investment Position Country Points Position Country Points 1 Peru 5.80 1 Peru 6.53 2 Colombia 5.60 6 China 5.82 3 Chile 5.50 8 Switzerland 5.70 4 Uruguay 4.80 9 France 5.49 5 El Salvador 4.60 10 Netherlands 5.48 6 Bolivia 4.50 11 Mexico 5.43 7 Brazil 4.20 17 Argentina 5.30 8 Dominic. Rep. 4.20 35 Brazil 4.78 9 Mexico 4.10 39 Chile 4.66 10 Guatemala 4.00 41 Colombia 5.51 11 Venezuela 3.20 51 Venezuela 3.18 12 Argentina 3.10 Source: World Economic Forum, Benchmarking Source: World Economic Forum, The Financial National Attractiveness for Private Investment Development Report 2009 in LA Infrastructure 2007 c. Ease of doing business in Peru The following chart shows the most relevant indicators with respect to doing business in Peru: Latin America Indicators Peru and Caribbean Business establishment � Number of formal proceedings 9.0 9.5 Time (days) 41.0 61.7 Cost (as % of income per capita) 24.5 36.6 Construction permits handling � Number of procedures 21.0 16.7 Time (days) 205.0 225.0 Registry of properties � Number of formal proceedings 4.0 6.8 Time (days) 14.0 70.4 Cost (as % of property’s value) 3.3 5.9 (it continues) Peru's Business & Investment Guide 19 (continuation) Latin America Indicators Peru and Caribbean Credit � Legal rights strength index (0-10) 7.0 5.5 Credit information scope index (0-6) 6.0 3.3 Public records ofﬁce coverage (0-10) 23.0 10.0 Private organizations coverage (0-10) 31.8 33.2 Investment protection � Transparency index grade (0-10) 8.0 4.0 Board of directors responsibility index (0-10) 5.0 5.3 Facility index for Shareholders trials (0-10) 7.0 6.0 Investment protection strength index (0-10) 6.7 5.1 Taxes Number of taxes per year 9.0 33.2 Income tax (%) 12.1 20.2 Labor taxes and contributions (%) 11.0 14.8 Other taxes (%) 17.2 13.2 Total tax rate (as % over the earnings) 40.3 48.3 Frontier trade Number of documents required for exports 7.0 6.8 Time to export (days) 23.0 18.6 Export cost (US$ per container) 875.0 1,243.6 Number of documents required for imports 8.0 7.3 Time to import (days) 24.0 20.9 Import cost (US$ per container) 895.0 1,481.0 Business closing Time (days) 3.1 3.3 Cost (as % of the assets) 7.0 15.9 Recovery rate (cents per US$) 25.4 26.8 Source: World Bank - Doing Business 2010 d. Promotion and reciprocal protection investment agreements Foreign investors are protected against inconvertibility, expropriation, political violence and other non-commercial risks through access to the multilateral and bilateral conventions such as the Overseas Private Investment Corporation (OPIC) and the Multilateral Investment Guaranty Agency (MIGA). Additionally, Peru has joined the International Convention for Settlement of International Disputes (ICSID) as an alternative to settle disputes between investors and the government. Finally, to date Peru has already signed 33 international investment agreements. 20 Ernst & Young 1. Background information Investment agreements Germany Belgium and Luxemburg Canada Denmark United States Spain Australia Finland China Cuba France Korea El Salvador The Netherlands Malaysia Argentina Italy Singapore Bolivia Norway Thailand Chile Portugal Japan Colombia United Kingdom Ecuador Czech Republic Paraguay Romania Venezuela Sweden Switzerland Source: ProInversion Foreign investment by industry (2008) Transport Construction Petroleum 1.6% 1.0% Fisheries 1.9% 0.9% Tourism 0.3% Services Real Estate 2.6% Agriculture 2.8% 0.2% Trade Mining 4.0% 21.0% Energy 13.8% Communications 19.5% Industry 15.1% Finance 15.3% Source: ProInversion Peru's Business & Investment Guide 21 Foreign investment (in US$ million) 20,000 18,840 18,068 18,000 16,000 14,243 15,509 15,830 14,185 14,125 14,061 14,000 13,173 12,388 12,000 10,000 8,000 6,000 4,000 2,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009* *As of June of 2009 Source: ProInversion Private investment (in US$ million) 30,000 27,296 26,731 25,000 22,385 20,000 19,478 15,117 15,000 12,285 10,545 10,000 8,668 8,356 8,395 9,221 5,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010* *Estimate Source: BCRP / Apoyo Consultoría 22 Ernst & Young 1. Background information e. Free trade agreements signed by Peru The good performance of international relations is fundamental to a nation's sustainable development. For that reason, the opening of new international markets in the past decade has allowed Peru to obtain a greater dynamism in its economy. This has been reflected in the signing of Free Trade Agreements (FTAs) with many industrialized countries, which has resulted in an increase of port facilities and a strong growth in national exports. To date, Peru participates in several bilateral, regional and multilateral trade agreements. The following list includes all the trade agreements already signed or to be signed by Peru, and a brief summary of the most important2. Trade agreements signed or in current negotiation by Peru: • Multilateral agreements: − World Trade Organization (WTO) • Regional agreements: − Asia-Pacific Economic Cooperation (APEC) − Latin American Integration Association (ALADI) − Andean Community of Nations (CAN)– Bolivia, Colombia, Ecuador and Peru • Bilateral agreements (Free Trade Agreements): − European Free Trade Agreement (EFTA)– Switzerland, Iceland, Liechtenstein and Norway − Canada − China − Korea − United States − Singapore − Thailand • Agreements in current negotiation: − Free Trade Area of the Americas (ALCA) − Japan − European Union Free Trade Agreement Peru - China China has shown the highest economic growth rate worldwide in the last two decades (around 10% per year, on a sustained basis). The signing of this agreement in April 2009 has given to Peru access to a market of 1,300 million habitants, of which 350 million are high purchasing power consumers. From 2002 to 2008, Peruvian exports to China registered an average annual growth of 38%. After the United States, China is the second largest Peruvian trading partner. The bilateral trade (without FTA) reached US$7.3 billion in 2008 and is expected to increase to US$10 billion in the next two or three years with the signing of this agreement. Peru's main exports to China include copper, iron ore and zinc. In turn, China's main exports to Peru include machinery, cell phones and high-tech products. 2 Peruvian Ministry of Foreign Affairs (MRE) and ProInversion. Peru's Business & Investment Guide 23 In addition to increasing the bilateral trade, this FTA has the objective of promoting China's investment in Peru in sectors such as mining, electricity, wind, oil and gas power, and industrial fisheries; where infrastructure investment is required. The agreement covers a number of aspects that could stimulate almost all sectors of the Peruvian economy. Agriculture is expected to be one of the most benefited sectors as more than 300 Peruvian agricultural products such as paprika, asparagus or cowpea will enter China without paying tariffs. Free Trade Agreement Peru – United States The Andean Trade Promotion and Drug Eradication Act (ATPDEA), formerly known as the Andean Trade Preference Act, was enacted in 2002 and constituted a tariff exception regime unilaterally granted by United States to Bolivia, Colombia, Ecuador and Peru. The Trade Promotion Agreement (TPA) was signed with the United States in December 2005, ratified by the American Congress in December 2007 and entered into force in February 2009. It consolidates a temporary preference tariff granted by the ATPDEA. The TPA explains the exports' dynamism in the recent years and consolidates the trade policy reforms enacted by Peru during the nineties. The continued application of this law, complemented by the inclusion of certain items in the tariff exemptions, culminated with the signing of this Free Trade Agreement. Free Trade Agreement Peru – European Union (EU) The trade agreement with the EU is part of a commercial business strategy that seeks to turn Peru into an exporting economy, developing a competitive export supply and promoting investment. The EU is the second destination of our exports (as a group of countries) with a share of 15.7%. In 2009, Peruvian exports to the EU reached US$4.19 billion. This region represents a market of great opportunities, with more than 490 million people with the highest income per capita levels in the world. Peru's preferential access to the EU market through the SGP Plus system has had a significant impact on exports and job creation. However, this system has limitations due to its unilaterality and temporary nature (expires December 31, 2011). Among its benefits in market access terms, it has represented an immediate tariff relief of 99.3% on Peruvian exports to the EU. This tariff relief represents 95% of agricultural tariff lines. As a result, Peru's main exporting products such as asparagus, avocado, coffee, capsicum fruits and artichokes will enter the European market duty-free. The trade agreement does not only contemplate tariff reductions but it also includes topics such as: rules of origin, intellectual property, services and 24 Ernst & Young 1. Background information incorporation of companies, government procurement and others. This helps to improve the country risk rating, lower the cost of credit and consolidate the capital market. The policy of opening up economic activities is consolidated and the development of private investment is promoted. Finally, another important benefit is the exemption of customs duties (drawback). For the first time in a trade agreement, the EU has accepted that the goods included in this mechanism continue to be considered as originary, and as such, also enjoy the benefits of this agreement. Economic Complementation Agreement (ACE) Peru – MERCOSUR This agreement aims to form a free trade area between Peru and the MERCOSUR members (Brazil, Argentina, Paraguay and Uruguay) through the expansion and diversification of commercial exchange, and the elimination of tariff and non tariff restrictions that affect the reciprocal exchange of goods and services. Andean Community of Nations (CAN) Peru is a member of the CAN in agreements related to trading goods tariff exemptions; the liberalization of sub-regional service markets; community rules concerning intellectual property; land, air and water transport; telecommunications and other trade topics. Economic Complementation Agreement This agreement was signed under the membership framework of the Latin- American Integration Association (ALADI) and gives special tariffs between its members. This consists of tax reductions as well as free access for certain products. New tariffs were included in June 2003. In December of the same year, the agreement was renewed and added new items to the free access list. Free Trade Agreement Peru - Chile This commercial agreement was signed in 2006 and entered in force in March 2009. It restates and replaces the previous economic complementation agreement signed between Chile and Peru in 1998 including its annexes, protocols and other tools. The agreement includes a timetable for gradual tariff reductions on goods produced by both countries with final exemption in 2016. To date, most of the goods included in the agreement are already 100% free of tariffs. This agreement also includes procedures for settlement of disputes between the investor and the state. Asia Pacific Economic Cooperation (APEC) Peru is a member of APEC since 1998. Its admission to this forum originated in its desire to strengthen existing economic links and increase economic relations with a region that has shown the most dynamic economic growth in recent years. The APEC market represents nearly 50% of the world population and is expected Peru's Business & Investment Guide 25 to become a natural bridge between the industrialized Asian economies and the emerging Latin American economies. World Trade Organization (WTO) The WTO is a negotiating forum in which the rules about world trade governance are discussed. Peru is a member of the WTO since its establishment in 1995. Other trade agreements Peru has also entered into other bilateral trade agreements with Germany, Argentina, Australia, Bolivia, Brazil, Canada, Chile, Colombia, Cuba, Denmark, Ecuador, El Salvador, Spain, United States, Finland, France, Italy, Japan, Malaysia, Norway, The Netherlands, Paraguay, United Kingdom, Czech Republic, China, Romania, Singapore, Sweden, Switzerland, Thailand, Belgium, Luxembourg and Venezuela. 26 Ernst & Young Chulucans Pottery. Photograph: Joaquín Rubio l Intellectual Property: PromPeru Peru 2. Setting up a business in 2. Setting up a business presence in Peru There are different types of legal entities which investors can resort to in order to establish businesses in Peru. The most commonly used by foreign investors are: 1. Business corporations A minimum of two shareholders is required. Non-domiciled shareholders should appoint a proxy to sign off the by-laws on their behalf. Funds in local and foreign currency for the initial capital contribution should be deposited in a local bank. Features: • Limited liability Stockholders' liability is limited to the par value of the shares they hold. • Centralized management Shareholders' meetings, board of directors and chief executive officer (general manager). • Transfer of interest The transfer of shares is free; nevertheless, in the case of close corporations the by- laws may provide the right of first refusal for the existing shareholders. Shareholders may also agree to the transfer or the encumbrance of shares for a term no longer than ten years, extendable. • Continuity Death, illness, bankruptcy, retirement or resignation of any shareholder does not cause the dissolution of the corporation. 2. Close corporations Close corporations resemble limited-liability companies and must have a minimum of two and a maximum of twenty shareholders. Shares cannot be registered in the Public Registry of the Stock Market. Features: • Limited liability Stockholders' liability is limited to the par value of the shares they hold. • Management Shareholders' meeting (resolutions may be adopted in lieu of a meeting) and chief executive officer (general manager). The board of directors is optional. • Transfer of interest The Law establishes a right of first refusal for the existing shareholders in case of transfer of shares; however, this right may be waived if agreed by the stockholders. Peru's Business & Investment Guide 29 3. Public limited corporations Public corporations are intended basically for companies with a large number of shareholders (more than 750 shareholders) or which have made a Public Offering (Oferta Pública de Venta). They have to be registered in the Public Registry of the Stock Market. Features: • Limited liability Partners are not personally liable for the company's liabilities. Their liability is limited to the value of their stock. • Centralized management Shareholders' meetings, board of directors and chief executive officer (general manager). • Supervision Public limited corporations are subject to the supervision of the Peruvian Securities and Exchange Commission (CONASEV). • Transfer of interest Transfer of shares is totally free. No restrictions or limitations are permitted. 4. Limited-liability companies A minimum of two and a maximum of twenty partners is required. Capital stock is represented by participations, and a board of directors is not required. The setting-up procedures are the same as those for corporations. Features: • Limited liability Partners are not personally liable for the company's liabilities. Their liability is limited to the value of its participation. • Centralized management Partners' meeting (resolutions may be adopted in lieu of a meeting) and chief executive officer (general manager). • Transfer of interest Transfer of partners' interest to third parties is subject to approval by the existing partners (right of first refusal is mandatory) and must be registered in the Public Records Office. • Continuity Death, illness, bankruptcy, retirement or resignation of any partner does not cause the dissolution of the legal entity. 30 Ernst & Young 2. Setting up a business presence in Peru 5. Branches A parent company agreement is required to set up a branch in Peru, and it must be certified by the Peruvian Consulate in the country of the home office and authenticated by the Peruvian Ministry of Foreign Affairs (MRE), before it is put into the form of a notarially recorded instrument and registered in Peru's Public Records Office. An official Certificate of Good Standing of the parent company is also required. Peru's Business & Investment Guide 31 32 Ernst & Young Chan Chan Citadel. Photograph: Walter Silvera l Intellectual Property: PromPeru 3. Taxes 3. Taxes The following shows the list of taxes according to their nature (direct, indirect and municipal). Each is described in detail below. Direct taxes Excise taxes Municipal taxes Income Tax Value Added Tax Real estate Tax Temporary Net Assets Tax Selective Consumption Tax Real estate transfer Tax Tax on Financial Vehicle Property Tax Transactions 1. Direct taxes a. Income Tax • Legal entities ► Corporations incorporated in the country are subject to taxation in Peru on a worldwide income basis. Non domiciled corporations, branches and permanent establishments of foreign companies that are located in Peru are only taxed on Peruvian source income. The tax year ends on December 31, with no exceptions. Income tax returns for corporations, branches and individuals should be generally filed by March 31 of the following year. The corporate income tax rate is 30% and applied over the net income (after the deduction of expenses incurred in the generation of revenues or maintenance of the source). Taxpayers can select between the following two systems to obtain relief for their losses: − Losses can be carried forward for four consecutive years, beginning with the first subsequent year in which the losses arise; or, − Losses can be carried forward indefinitely, but with an annual limit equivalent to 50% of the taxpayer's taxable income of each subsequent year. Loss carrybacks are not permitted. Peru's Business & Investment Guide 35 Income obtained by non-domiciled entities are subject to a withholding income tax, according to the following: Withholding tax rate on income of non-domiciled Income Rate Dividends and profit distribution to non-domiciled by domiciled companies and branches, permanent establishments and agencies 4.10% of foreign companies Interest paid to non-domiciled, if certain requirements are met 4.99% Interest paid to related parties or affiliated foreign lenders 30.00% Technical assistance services used financially in Peru 15.00% Royalties 30.00% Capital gains deriving from the sale of securities (shares, bonds and other securities issued by Peruvian entities) through the Lima 5.00% Stock Exchange Capital gains deriving from the sale of securities (shares, bonds and other securities issued by Peruvian entities) outside the Lima 30.00% Stock Exchange (over the counter) Revenues from activities performed partially in Peru and partially abroad by non-domiciled companies, including those obtained by their branches or permanent establishments, are subject to the following effective tax rates: Activities Percent of gross Effective tax revenue (%) rate (%) Air transport 1 0.3 Maritime transport 2 0.6 Aircraft lease 80 8.03 Vessel lease 60 6.04 Supply of transport containers 15 4.5 Layoff of transport 80 24.0 containers (it continues) 3 The withholding rate for these activities is 10% 4 The withholding rate for these activities is 10% 36 Ernst & Young 3. Taxes (continuation) Activities Percent of gross Effective tax revenue (%) rate (%) Insurance 7 2.1 International news agencies 10 3.0 Motion picture distribution 20 6.0 Television broadcasting 20 6.0 rights assignment Telecommunication services 5 1.5 • Thin capitalization rules Under these rules, interest paid by domiciled taxpayers to financially related or associated companies is not deductible in the portion that exceeds the result of applying a coefficient (debt/equity ratio) equivalent to three times the taxpayers' net equity at the end of the preceding year. • Transfer pricing rules Transfer pricing rules are based on the arm's length principle as interpreted by the OECD. In Peru, however, these rules do not only apply to transactions between related parties (both domestic and cross-border) but also to transactions with companies resident in tax havens. Moreover, these rules must be considered not only for Income Tax purposes but also for Value Added Tax and Excise Tax purposes. • Individuals Under the Peruvian income tax system, Peruvian citizens domiciled in Peru are subject to taxation on their worldwide income, regardless of the country from which it derives, from which payments are made, or the currency in which income is received. By contrast, non domiciled individuals are only taxed in Peru on their Peruvian source income. However, after residing in Peru for a period in excess of 183 days within any twelve/month period, foreign nationals will be considered residents and therefore taxed on a worldwide income basis. An individual's status as domiciled or non-domiciled must be verified based on the individual's condition at the beginning of the tax year. Any change during the tax year will affect the residence status as from the following year. Tax rates for domiciled individuals in case of fourth and fifth bracket income, deriving from independent and dependent personal services, are determined using a three-bracket cumulative scale, as shown below: Peru's Business & Investment Guide 37 Income tax rates for individuals Scale Accumulated progressive rate Up to 27 tax units (tax unit is currently equivalent 15% to S/. 3,600) In excess of 27 and up to 54 tax units 21% Any excess 30% No deductions are allowed in arriving at the taxable income for salaries, wages and other remuneration derived from independent and dependent personal services with the exception of a deduction equivalent to 7 tax units (currently S/.25,200 to December 2010). Since January 1, 2009, income obtained by domiciled individuals from the lease, sublease and assignment of goods (first bracket income), and also other capital income deriving from the disposal of securities (shares, bonds, etc.) and movable property (second bracket) are levied with a rate of 5% and 6.25%, respectively. b. Temporary Net Assets Tax (ITAN) A so called Temporary Net Assets Tax (ITAN) equivalent to 0.4% is levied over the value of total assets over S/.1,000,000, determined as of December 31 of the previous year. Companies in a pre-operational stage are excluded. The ITAN payments can be used as a tax credit to offset income tax liabilities (i.e. monthly prepayments and the final income tax payment due when the annual tax return is filed). A refund may be requested for any balance not used in the current year. To avoid double taxation issues, subsidiaries and branches of foreign companies may elect to reverse the order of the tax credit so the Peruvian income tax is creditable against the ITAN and not vice versa. In such a way, taxpayers might be able to claim as foreign tax credit the Income Tax and not the ITAN. c. Tax on financial transactions and means of payments A 0.05% tax is generally imposed on debits and credits in Peruvian bank accounts. Any payment in excess of S/. 3,000 or US$1,000 must be made through the Peruvian banking system using the so-called Means of Payment, which include bank deposits, wire transfers, pay orders, credit and debit cards and non- negotiable checks. Not using these methods of payment would mean that the corresponding cost or expense of the payment cannot be recognized for income tax purposes. In addition, any Value Added Tax (VAT) related to the acquisition of goods and services cannot be used for tax credit. 38 Ernst & Young 3. Taxes 2. Excise taxes a. Value Added Tax (VAT) • Taxable Base and application Value Added Tax (VAT) is levied over the consumption of goods and services in Peru with a 19% tax rate. The Value Added Tax follows the debit/credit system, under which the VAT paid upon acquisitions is offset against the VAT. The VAT that is not applied as credit in a particular month should be applied in the following months until it is exhausted. • Early Recovery Regime The companies that develop projects in which the preoperational stage is more than two years, can request the early recovery of the VAT before starting the production stage. To do this, the company must entered into an investment contract with the Peruvian government through the pertinent ministry of the sector. • Definitive Recovery Regime This regime applies to: (i) investors who owns mining concessions, and (ii) investors who have entered into agreements or service contracts according to the Hydrocarbons Act. In the first case, the beneficiary of the regime must not be in the production stage and should have entered into an Exploration Investment Agreement. In the second case, the investor must be in the exploration stage of such agreements. b. Selective Consumption Tax The tax applies to the consumption of specific goods, such as fuels, cigarettes, beers, liquors, soft drinks, among others. It is applied under 3 systems: (i) specific, which involves a fixed amount in local currency for each measurement unit; (ii) at the value, a percentage over the sale price; and (iii) sale price, a percentage over the suggested retail price. 3. Municipal taxes a. Real Estate Tax Real Estate tax is a municipal annual tax that is levied over the value of real property, on both, urban or rustic land. The tax considers the land, buildings, and fixed or permanent facilities. The tax rate is a cumulative scale varying between 0.2% and 1.0%, depending on the appraisal value of the property. b. Real Estate Transfer Tax Real Estate Transfer Tax is levied on the transfer of real property, including free transfers, in any form or manner, including sales in which the ownership rights are not transferred to the buyer until the total price is paid. Peru's Business & Investment Guide 39 The tax base is the agreed price, which cannot be lower than the value of the property for Real Estate Tax purposes. The tax rate is 3%. c. Vehicle Property Tax The Vehicle Property Tax is an annual tax, levied on the property of three year- old vehicles, cars, trucks and station wagons, manufactured within the country or import. The 3 years are calculated from the first filing of the vehicle in the Real Estate Registry. The tax base is determined by the original acquisition value, import or property entry. The applicable tax rate is 1%. 4. Customs duties The importation of goods is subject to customs duties. The tariffs in force Ad Valorem are 0%, 9% and 17%. Additionally, the importation of goods is levied with the Value Added Tax, as well as other taxes, such as Selective Consumption Tax, Antidumping Rights, Compensatory Rights, among others, depending on the type of goods imported. For security and public health reasons, the importation of certain goods is restricted. The application of taxes and custom duties is summarized as follows: Tax Rate Taxable Base Customs duties (a) 0%, 9% and 17% CIF value Value Added Tax (b) (c) 19.0% CIF + customs duties (a) The customs duties rate depends on the imported good (b) The Value Added Tax can be used as tax credit by the importer (c) Certain goods are also subject to the Consumption Selective Tax a. Drawback The recovery of customs duties or drawback allows the production or export companies to recover in whole or in part the customs duties that affected the importation of raw materials, inputs, intermediate products and parts or components incorporated or consumed in the production of goods for export, provided that the CIF values of the imported good does not exceed 50% of the FOB value of exports. The recovery rate applicable until June 2010 is equivalent to 8% of the FOB value of the exported goods, with a maximum of the 50% of the production cost. As from July 2010 the recovery rate applicable is equivalent to 6.5% of the FOB value of the exported goods, and as of 2011 will be equivalent to 5%. b. Free Trade Zones • Free Trade Zone of Tacna - Zofratacna The Free Trade Zone of Tacna – Zofratacna was created by Law 27688 in 40 Ernst & Young 3. Taxes 2002, with the purpose of promoting investments in the south of the country through the establishment of companies which performs the following activities: industry, agro-industry, manufacturing, assembly and storage services, distribution, unpacking, packing, among others. For this purpose, a tax exemption regime was enacted which includes Income Tax, Value Added Tax, the Selective Consumption Tax, the Municipal Promotion Tax, as well as other taxes, either from the central, regional or municipal government, created or to be created, including those that require a specific exemption, provided that the activities are performed within such zone; notwithstanding that such transactions in other parts of the country will be subject to all taxes. With respect to foreign goods imported to the zone, they may not be subject to the payment of customs duties because Zofratacna is a special customs zone. In the case that such goods are transferred to the Commercial Zone of Tacna, a unique special tariff will be paid; notwithstanding, if such goods are sent anywhere else within Peruvian territory, all the taxes that are levied on imported goods must be paid. This regime will be in force until 2022, with the exception of the Income Tax regime which will conclude on December 31, 2023. • Free Trade Zone of Puno - Zeedepuno The free zone known as Zeedepuno was created by Law 28864. As well as Zofratacna, Zeedepuno was established not only to provide tax benefits to foreign goods imported to the zone, but also includes a tax exemption regime that includes Income Tax, Value Added Tax, the Selective Consumption Tax, as well as other taxes, either from the central, regional or municipal government, created or to be created, including those that require a specific exemption, provided that the activities of industry, agro-industry, manufacturing, assembly and storage services, distribution, unpacking, packing, among others, are performed within said zone. This regime will be in force until 2027, with the exception of the Income Tax regime, which will conclude on December 31, 2028. • Ceticos In addition to the free trade zones, there are certain Exportation, Transformation, Industrial, Commercialization and Services Centers, known as Ceticos, which are located at the ports of Ilo, Matarani and Paita, and in Loreto. The Ceticos are geographical areas designed by law that are treated as special primary customs zones. In the Ceticos areas it is possible to provide repair and manufacturing services, as well as to modify, combine, transform, actively enhance, distribute, store, manufacture, and produce goods, among other activities. The entry into the country of goods consigned to Ceticos is not subject to payment of import duties and taxes. However, the entry of goods from the Ceticos to the rest of the country is subject to payment of import duties and taxes. With respect to other taxes, companies incorporated until 2012 in Ceticos in Ilo, Matarani and Paita (located near the ports of the same name) with no less than 92% of their annual transactions from the export of the goods produced, Peru's Business & Investment Guide 41 will be exempt from Income Tax, Value Added Tax, Selective Consumption Tax, Municipal Promotion Tax, as well as all other taxes, until December 31, 2012. Finally, regarding the Ceticos Loreto, it is important to mention that the term for incorporation in this zone, as well as the tax exemption regime, is for 50 years, as of May 24, 1998. 5. Tax stability agreements The Private Investment Promotion Agency (ProInversion), on behalf of the Peruvian government, guarantees foreign investors legal and tax stability. To be eligible, a minimum of US$10 million must be invested in the mining and hydrocarbon sectors, or US$5 million in any other economic activity, or one must acquire 50% of shares of a company participating in the privatization process. 42 Ernst & Young Llachon Peninsula. Photograph: Domingo Giribaldi l Intellectual Property: PromPeru 4. Labor legislation 4. Labor legislation 1. Job stability In accordance with the Peruvian Constitution, employees are protected against arbitrary dismissal. This right, called “job stability”, is granted to employees who work for the same employer for more than four hours per day, after a three month trial period. Once this period is completed, employees are regarded as permanent and can only be dismissed under circumstances concerned with their behavior at work or ability to carry out their duties. Employers may enter into employment contracts for an undetermined period of time or for fixed terms. Fixed term contracts are expressly foreseen by law and are basically allowed for cases such as business expansion, production increments, temporary labors, extraordinary circumstances and seasonal activities. These contracts must be entered into in writing and notified to the labor authority. In the event of unjustified dismissal, employees may demand a severance payment equivalent to one and a half monthly salaries per year of service (under a non-term working agreement); and, one monthly salary per pending month (under a fixed term working agreement). The maximum severance payment is twelve salaries. Alternatively, employees can demand the restitution of their previous job. The law allows collective dismissals under certain circumstances such as acts of God or force majeure, financial or technical streamlining, dissolution, bankruptcy or operating downsizing without having to grant severance payments. 2. Fringe benefits Employers are required to provide the following benefits to employees: • Family allowance equivalent to US$19 (approximately)per month. • One month paid vacation per year. • One month salary bonus in July and in December. • One month salary per year (approximately) as severance indemnity, which should be deposited in advance with a bank elected by the employee. Deposits are regarded as final payments of the accrued liability. • Profit sharing in cash, which is calculated on the employer's taxable income and distributed among the employees. The rates are 5%, 8% and 10% depending on the employer's activity. This benefit does not apply to companies with less than 20 employees. • All these benefits are deductible for income tax purposes. Employers can negotiate with employees earning a monthly salary higher than US$2,500 a total annual compensation, including all the benefits described above, except for profit sharing. Peru's Business & Investment Guide 45 3. Expatriates Expatriates working in Peru and foreign corporations carrying out activities in Peru are subject to Peruvian labor laws. As a general rule, foreign employees should not exceed 20% of total personnel. Additionally, salaries paid to foreign employees should not exceed 30% of total payroll cost. Such limits can be waived for professionals and specialized technicians or management personnel of a new entrepreneurial activity or in the case of a business reconversion. No restrictions apply to foreign individuals working in Peru with a Peruvian immigrant visa, individuals married to Peruvians or who have Peruvian children, parents or siblings, and foreign investors with a permanent investment in Peru of at least 5 tax units (approximately US$6,250). Expatriates should register their employment contract with the labor authorities and obtain a special non-immigrant resident visa. No additional work permit is needed. 4. Immigration Expatriates can enter Peru under the following migratory qualifications: Visa Types of Visa Activities permitted This visa does not allow the Tourist visa Temporary employee to perform paid activities. This visa does not allow the employee to perform activities Business visa Temporary that can be considered a Peruvian source income. This visa allows expatriates to sign contracts. This visa allows the employee to Work visa Resident work in Peru. This visa is granted to employees of a foreign company. They are required to submit to the Migrations authority their service Temporary work visa Temporary contract and work assignment letter, both legalized by the Peruvian Consulate and approved by the Ministry of Foreign Affairs. Work visa for service Resident Investment or independent work providers Immigrant Resident No restrictions As a general rule, income obtained for personal work or civil, commercial or any other type of business carried out within Peruvian territory is considered to be a Peruvian 46 Ernst & Young 4. Labor legislation source income. However, non-domiciled individuals entering the country temporarily to perform the following activities are not taxed for revenues obtained in their home country, since they are not considered a Peruvian source income: • Activities that precede a foreign investment or any other business • Supervision or control of an investment or business, (i.e. gathering data or information, meeting public or private sector personnel, etc.) • Hiring local personnel; and • Signing agreements or similar documents Any other remuneration an expatriate receives in cash or in kind, as a compensation for work carried out within Peru, is considered to be a Peruvian source of income and, consequently, will be taxable. Peru's Business & Investment Guide 47 48 Ernst & Young Otuzco Windows. Photograph: Luis Gamero l Intellectual Property: PromPeru 5. Accounting standards 5. Accounting standards The Peruvian Business Corporation Act establishes that the financial statements of companies incorporated in Peru must follow the Peruvian Generally Accepted Accounting Principles (GAAPs) and other legal provisions on the matter. The National Accounting Standards Board has established that Peruvian GAAPs are basically referred to the accounting standards issued by the International Accounting Standards Board-IASB and the specific provisions approved for particular businesses (banks, insurance companies, etc.). Likewise, on a complementary basis, the US GAAPs are applicable. The National Accounting Standards Board, appointed by the Government, is responsible for issuing accounting standards and methodologies that apply both to private business and government entities. The Board generally adheres to the standards approved by the accounting profession. The accounting profession in Peru follows the accounting standards set forth by the International Accounting Standards Board-IASB. The Certified Public Accountants Association of Lima has the responsibility of studying and introducing these standards into Peru. The National Accounting Standards Board approves these standards for their application. The preparation of financial information is subject to ruling issued by CONASEV. Such ruling is closely related to the International Financial Reporting Standards (IFRS) and to the International Auditing Guidelines issued by the International Federation of Accountants-IFAC. CONASEV requires financial information of companies that are registered before the Public Registry of the Stock Market or the ones that quote their shares in the stock exchange. There are some differences between Peruvian and US GAAPs. The differences usually found in Peruvian companies are basically the same differences existing between the IFRS and US GAAP. Peru's Business & Investment Guide 51 52 Ernst & Young Sunset in Huanchaco. Photograph: Carlos Sala l Intellectual Property: PromPeru Appendixes Nasca Lines. Photograph: Heinz Plenge Intellectual l Property: PromPeru Stakeholders Appendixes 1. Executive Office for Economic Promotion The Executive Office for Economic Promotion is the Peruvian Ministry of Foreign Affairs (MRE) organ in charge of encouraging and coordinating the promotion of trade, tourism and investment. It is also in charge of relations with the domestic business sector. It arranges policies and coordinates tasks with business unions and public and private institutions engaged to international trade, investments and tourism. Services offered by OPE • Commercial opportunities promotion • Exportable supply promotion • Support in the solution of commercial disputes • Information requirements to our foreign commercial offices – OCEX Trade promotion services • Commercial intelligence studies (“PCO”) • Support to commercial missions and to their participation in foreign fairs • Support in the settlement of exporters' commercial disputes • Execution of commercial events • Preparation of entrepreneurial agendas • Support to investor missions • Videoconferences Investment promotion services • Investment information material diffusion (“PIN”) • Participation in investment agreement negotiations • Promotion of investment opportunities • Promotion of tourism offer • Support to gastronomic events • Promotion of tourism material • Support to foreign tourism promotion fairs Tourism promotion services • Support to agents involved in tourism (“PTU”) promotion • Negotiation and promotion of tourism agreements • Promotion of tourism information obtained through our missions Peru's Business & Investment Guide 57 • Contacts: − Jaime Pomareda Ambassador Executive Director of the Executive Office for Economic Promotion Peruvian Ministry of Foreign Affairs Tel: +51 1 204 3361 Fax: +51 1 204 3362 E-mail: firstname.lastname@example.org − Arturo Jarama Minister Director of Investment Promotion and Development Projects Peruvian Ministry of Foreign Affairs Executive Office for Economic Promotion Tel: +51 1 204 3384 Fax: +51 1 204 3387 E-mail: email@example.com − Cecilia Galarreta Minister Counselor Director of Trade Promotion Peruvian Ministry of Foreign Affairs Executive Office for Economic Promotion Tel: +51 1 204 3368 Fax: +51 1 204 3370 E-mail: firstname.lastname@example.org − Ricardo Morote Canales Minister Counselor Commerce Promotion Director Peruvian Ministry of Foreign Affairs Executive Office for Economic Promotion Tel: +51 1 204 3391 Fax: +51 1 204 3393 E-mail: rmorote♠@rree.gob.pe − Web page: www.rree.gob.pe − Address: Jr. Lampa 545, Piso 10 – Lima 1 − Tel: +51 1 204 3361 / +51 1 204 3365 (OPE) +51 1 204 3369 (PCO) +51 1 204 3385 (PIN) +51 1 204 3392 (PTU) − Fax: +511 204 3362 − E-mail: email@example.com 58 Ernst & Young Appendixes 2. ProInversion ProInversion is the Peruvian investment agency in charge of the promotion of business opportunities with high growth and profitability prospects in Peru. Its purpose is to promote investment unrelated to the Peruvian government by private parties in order to boost Peru's competitiveness and development and to improve the well being of the population. Likewise, its vision is to be considered by investors and by the population as an efficient and strategically for the development of Peru's investments. ProInversion provides information to potential investors regarding the incorporation of a legal entity, identifying investment by industries, investment projects (granted and pending), and other categories. • Objectives and guidelines: ► − Promote investment, preferably in the regions and locations outside Lima − Prioritize the promotion of investment related to employment increase, national competitiveness and exports, conciling national, regional and local interests − Improve the quality and increase the coverage of public services and of infrastructure by means that encourage the participation of investment that is not dependent on the Peruvian State − Promote a culture favorable to investment that is non-dependent on the Peruvian state as a mean of growth and economic and social development − Develop mechanisms to attract investors and to attend to their needs − Promote the image of the country as a favorable place for domestic and foreign investment • Contacts: − Web page: www.proinversion.gob.pe − Address: Sede Principal (Lima): Paseo de la República N° 3361, piso 9, San Isidro – Lima 27, Peru − Tel: +51 1 612 1200 − Fax: +51 1 221 2941 − E-mail: firstname.lastname@example.org • Offices: − Arequipa: Pasaje Belén N° 113 – Vallecito, Arequipa, Peru Tel: +51 54 608 114 / Tel / Fax: +51 54 608 115 − Piura: Av. Chirichigno Mz. A – Lote 2, Urb. San Eduardo, Piura, Peru Tel / Fax: +51 73 310 081 / +51 73 309 148 / +51 73 305 082 Peru's Business & Investment Guide 59 3. PromPeru PromPeru is a dependent entity of the Peruvian Ministry of Foreign Trade and Tourism that is in charge of developing strategies to achieve an integrated and attractive image of Peru. This image will allow the development of Peru as a privileged destiny for tourism and investment. It is also in charge of the promotion of Peruvian exports. • Objectives and guidelines: − Design, coordinate, arrange and execute policies and actions with the objective of promoting Peru's image internationally and to promote its exports − Manage and channel international technical and finance cooperation − Participate in the strategic planning of exports promotion, according to Executive order # 805 − Participate in the design, coordination and execution of the strategic planning of promoting investment − Design, coordinate, arrange and execute policies and actions with the objective of promoting tourism to Peru and promoting domestic tourism to Peruvians − Manage and channel international financial and technical cooperation for the promotion of tourism to Peru • Contacts: − Web page: www.promperu.gob.pe − Address: ª Sede Exportaciones y Secretaría General: Av. República de Panamá 3647, San Isidro - Lima, Peru ª Sede Turismo: Calle Uno Oeste 50, Edificio Mincetur, Pisos 13 y 14, San Isidro - Lima, Peru − Tel: +51 1 616 7400 (Sede Exportaciones y Secretaría General) +51 1 616 7300 (Sede Turismo) − E-mail: email@example.com • Offices: − Amazonas: Jr. Ortiz Arrieta 590 - Amazonas, Peru Tel: +51 41 47 7292 E-mail: firstname.lastname@example.org − Ancash: Pasaje Atusparia, Of. 1 - Ancash, Peru Tel: +51 43 42 8812 E-mail: email@example.com 60 Ernst & Young Appendixes − Macro Región Suroeste - Arequipa, Moquegua y Tacna: Calle Palacio Viejo 302 - Arequipa, Peru Tel: +51 54 281 535 / +51 54 288 447 E-mail: firstname.lastname@example.org − Ayacucho: Jirón 28 de julio N° 178, Of. 205, Huamanga - Ayacucho, Peru Tel: +51 66 311 422 / +51 66 326 375 E-mail: email@example.comfirstname.lastname@example.org − Cajamarca: Jr. Belén S/N, Conjunto Monumental Belén - Cajamarca, Peru Tel: +51 76 362 903 E-mail: email@example.com − Callao: Aeropuerto Internacional Jorge Chávez (Sala de Embarque Nacional, Llegadas Nacionales e Internacionales y Zona Pública)- Callao, Peru Tel: +51 1 574 8000 E-mail: firstname.lastname@example.org − Macro Región Sureste - Cusco, Puno, Madre de Dios y Apurimac: Jirón Julio C.Tello C-11, Urb. Santa Mónica - Cusco, Peru Tel: +51 84 223 592 / +51 84 223 661 E-mail: email@example.com − Huánuco: General Prado N° 873 - Huánuco, Peru Tel: +51 62 513 532 E-mail: firstname.lastname@example.orgemail@example.com − Ica: Av. Grau N° 148 - Ica, Peru Tel: +51 56 214 327 E-mail: firstname.lastname@example.org − Macro Región Centro - Junín, Ayacucho, Huánuco, Huancavelica y Pasco: Av. Giraldez N° 634 - Huancayo, Peru Tel: +51 64 203 400 E-mail: email@example.com − La Libertad: Jr. Junín N° 444 - Trujillo, Peru Tel: +51 44 231 114 E-mail: firstname.lastname@example.orgemail@example.com − Macro Región Noroeste - Lambayeque, La Libertad y Cajamarca: Calle 7 de Enero N° 579 - Chiclayo, Peru Tel: +51 74 274 330 /+51 74 228 881 E-mail: firstname.lastname@example.org − Lima - Larcomar - Lima, Peru Tel: +51 1 445 9400 E-mail: email@example.com − Lima - San isidro: Jorge Basadre 610 - Lima, Peru Tel: +51 1 421 1627 / +51 1 421 1227 E-mail: firstname.lastname@example.org Peru's Business & Investment Guide 61 − Región Oriente - Loreto, San Martín, Ucayali y Amazonas: Av. Yavarí N° 363, Of. 45 - Iquitos, Peru Tel: +51 65 221 703 / +51 65 232 833 E-mail: email@example.com − Madre de Dios: Jr. Ica N° 1662 - Puerto Maldonado, Peru Tel: +51 82 571 897 E-mail: firstname.lastname@example.org / email@example.com − Región Norte - Piura y Tumbes: Jirón Ayacucho 377 - Plaza de Armas - Piura, Peru Tel: +51 73 320 249 − Puno: Jirón Ayacucho 682 - Puno, Peru Tel: +51 51 351 261 E-mail: firstname.lastname@example.org − San Martín: Jr. Manco Cápac N° 196 - Tarapoto, Peru Tel: +51 42 522 872 E-mail: email@example.com − Tacna : Av. Alfonso Ugarte N° 56 - Tacna, Peru Tel: +51 52 424 961 E-mail: firstname.lastname@example.org / email@example.com 62 Ernst & Young Canoeing in Luanahuana. Photograph: Aníbal Solimano l Intellectual Property: PromPeru in Peru business and investments Ernst & Young services for Appendixes The global net of Ernst & Young professionals will help find financial, strategic and operational alternatives to improve your liquidity, financial standing and performance. We help you in the development of sustainable business in the short and long-term. Main services Assurance • ► Financial statements audit • ► Standards compliance assessments • ► IFRS implementations in the companies and country in which they operate • ► Debt emissions and circular offerings under the 144 A – IPO rule • ► Actuarial calculations Business advisory • ► New businesses implementation • ► Strategic planning • ► Project management • ► Profit Improvement • ► Revenue assurance • ► Improvement and redesign of processes and organizations • ► Cost reduction • ► Risk management • ► Performance management • ► Internal control and functions segregations • ► Internal audit • ► Fraud prevention and investigation • ► Disputes settlement • ► Information technology internal audit • ► Information technology areas and projects management • ► Information technology security management • ► Internal and external regulations compliance advisory • ► Climate change & sustainability Peru's Business & Investment Guide 65 Tax advisory • ► Businesses establishment • ► Tax advisory • ► Customs and foreign trade • ► Transfer prices • ► Tax compliance, including expatriates Transactions • ► Financial, commercial, tax/legal, process and systems due diligence • ► Transactions structure • ► Mergers and acquisitions • ► Capital markets • ► Financial planning • ► Valuations 66 Ernst & Young Madre de Dios River in the Manu. Photograph: Walter Silvera l Intellectual Property: PromPeru abroad Directory of Peruvian Embassies and Consulates Appendixes Directory of Peruvian Embassies and Consulates abroad Algeria • Algiers Embassy 2 Et 4 Capitaine Salah Moghni-El Biar 16406, Algiers, Algeria. T: +213 0 2192 3854 F: +213 0 2192 3856 E: firstname.lastname@example.org email@example.com (Consular Section) Argentina • Buenos Aires • Cordoba Embassy Consulate Av. Del Libertador 1720, 1425 Buenos Aires, Calle José Roque Funes Nº2262, Bº Villa Argentina. Centenario. Córdoba Capital CP. 5009, T: +54 11 48022000 Argentina. +54 11 48022438 T: +54 351 482 3577 F: +54 11 48025887 F: +54 351 481 9912 E: firstname.lastname@example.org E: email@example.com W:www.embajadadelperu.int.ar • La Plata • Mendoza Consulate Consulate Calle 8 Nº. 862, 1er. Piso Entre 49 y 50 Huarpes 629, 5ta. Sección, CP (5500), La Plata C.P. 1900, Argentina. Mendoza, Argentina. T: +54 221 425 1862 T: +54 261 429 9831 F: +54 221 423 2812 +54 261 429 4926 E: firstname.lastname@example.org F: +54 261 429 9831 email@example.com +54 261 429 4926 W:www.conperlaplata.org.ar E: firstname.lastname@example.org email@example.com Australia • Canberra • Sydney Embassy Consulate 40 Brisbane Avenue. Piso 2 Barton 2606 Suite 1001, 84 Pitt Street Sydney-NSW ACT, Canberra, Australia. 2000, Australia. T: +61 2 6273 7351 T: +61 2 9235 0355 +61 2 6273 7352 +61 2 9235 0366 E: firstname.lastname@example.org +61 2 9235 0300 W:www.embaperu.org.au F: +61 2 9235 0311 E: email@example.com W:www.consuladoperusydney.org Peru's Business & Investment Guide 69 Austria Belgium • Vienna • Brussels Embassy Embassy Mahlerstrasse 7/22, A-1010 Vienna, Austria. Avenue de Tervueren 179, 1150 Brussels, T: +43 1 713 7054 Belgium. F: +43 1 712 7704 T: +322 733 3319 E: firstname.lastname@example.org F: +322 733 4819 W:www.embaperuaustria.at E: email@example.com W:www.consuladodelperu.be Bolivia • La Paz • Cochabamba Embassy Consulate Calle Fernando Guachalla Nº 300, Sopocachi, Av. Oquendo. 0654, piso 6, oficina 606 / 7 La Paz, Bolivia. Torres Sofer, Cochabamba, Bolivia. T: +591 2 244 1250 T: +5914 466 4154 F: +591 2 244 1240 F: +5914 466 4153 E: firstname.lastname@example.org E: email@example.com firstname.lastname@example.org W:www.conpercbba.web.bo W:www.conperlapaz.org • El Alto • Santa Cruz Consulate Consulate Av. Cívica Nº 33 casi esqui. Satélite-Villa Calle Viador Pinto Nº 84, esq. con calle Tejada Triangular, El Alto, Bolivia. Alejandro Ramírez, Equipetrol (a una cdra. T: +591 2 281 5754 del Hotel Casablanca), Santa Cruz, Bolivia. +591 2 281 5755 T: +591 3 341 9091 F: +591 2 281 5754 F: +591 3 332 4197 E: email@example.com E: firstname.lastname@example.org Brazil • Brasilia • Manaos Embassy Consulate S.E.S. Av. Das Nações Lote 43 Quadra 811 Rua Constelação Nº 16-A. Modada do Sol, Barrio CEP: 70428-900 Brasilia DF, Brazil. Aleixo, Manaus-AM, Brazil. CEP 69060-081. T: +55 61 3242 9933 T: +55 92 3236 9607 +55 61 3242 9835 +55 92 3632 0585 +55 61 3242 9435 F: +55 92 3632 0585 F: +55 61 3244 9344 E: email@example.com E: firstname.lastname@example.org email@example.com W:www.embperu.org.br 70 Ernst & Young Appendixes Brazil • Rio de Janeiro • Rio Branco Consulate Consulate Av. Rui Barbosa 314-2º. Andar Flamengo Rua Maranhão 280, Bosque, centro CEP 22250-020 Rio de Janeiro, Brazil. Rio Branco-AC CEP 69908-240, Brazil. T: +55 21 2551 4496 T: +55 68 3224 0303 F: +55 21 2551 9796 +55 68 3224 0777 E: firstname.lastname@example.org +55 68 3224 2727 F: +55 68 3224 1122 E: email@example.com • São Paulo Consulate Alameda Campinas 646 4to Piso Cerqueira César CEP 01404-001, São Paulo, Brazil. T: +55 11 30 506011 F: +55 11 3142 9595 E: firstname.lastname@example.org W:www.consuladoperusp.com.br Canada • Ottawa • Montreal Embassy Consulate 130 Albert Street Suite 1901, Otawa, 970-550 Sherbrooke Ouest, La Tour Ouest, Ontario, KIP5G4, Canada. Montreal, Québec, H3A 1B9, Canada. T: +16 13 238 1777 T: +15 14 844 5123 F: +16 13 232 3062 F: +15 14 843 8425 E: email@example.com E: firstname.lastname@example.org W:www.embassyofperu.ca W:www.consuladoperumontreal.com • Toronto • Vancouver Consulate Consulate 301-10 Saint Mary Street, Toronto, Ontario, 260-505 Burrard Street Vancouver B.C. V7X 1M3, M4Y1P9, Canada. Canada. T: 4 16 963 9696 T: +16 04 662 8880 F: 4 16 963 9074 F: +16 04 662 3564 E: email@example.com E: firstname.lastname@example.org W:www.conperutoronto.com W:www.consuladoperu.ca Chile • Santiago • Arica Embassy Consulate Av. Andrés Bello 1751, Providencia, Av. 18 de Setiembre N° 1554, Arica, Chile. Santiago, Chile. Casilla Postal: 16277. T: +56 58 231 020 T: +56 2 339 2601 +56 58 255 048 F: +56 2 235 2053 F: +56 58 254 656 E: email@example.com E: firstname.lastname@example.org email@example.com W:www.conpersantiago.cl Peru's Business & Investment Guide 71 Chile • Iquique • Valparaiso Consulate Consulate Segundo Piso, Casa Billinghurst, Zegers Nº 570, Calle Errázuriz Nº 1178, Of. 71, Edificio Iquique. Casilla Postal 248, Chile. “Olivari”–Valparaiso, Chile. T: +56 57 411 466 T: +56 32 225 3403 +56 57 413 351 +56 32 221 5621 F: +56 57 414 506 F: +56 32 221 7289 E: firstname.lastname@example.org E: email@example.com W:www.conpervalparaiso.cl China • Beijing • Hong Kong - Special Administration of the Republic of China. Embassy Sanlitun Bangong Lou 1- 9, Beijing 100600, Consulate China. Unit 1401,14th Floor, China Merchants T: +86 10 6532 3719 Tower 168-200 Connaught Road Central F: +86 10 6532 2178 Hong Kong. E: firstname.lastname@example.org T: +852 2868 2622 W:www.embperu.net.cn +852 2868 9962 F: +852 2840 0733 E: email@example.com • Shanghai Consulate Shanghai Kerry Centre, 1515 Nanjing XI road, Floor 27, Suite 270, Shanghai, 200040, China. T: +86 21 5298 5900 F: +86 21 5298 5905 E: firstname.lastname@example.org W:www.conpersh.com Colombia • Bogota • Leticia Embassy Consulate Calle 80 A, N° 6-50, Bogota D.C., Colombia. Calle 11, 5-32, Leticia, Amazonas, Colombia. T: +57 1 2570505 T: +57 8 592 3947 F: +57 1 249 8581 F: +57 8 592 7755 E: email@example.com E: firstname.lastname@example.org W:www.embajadadelperu.org.co 72 Ernst & Young Appendixes Costa Rica Cuba • San Jose • Havana Embassy Embassy Del Colegio de Ingenieros y Arquitectos 325 Calle 30 Pt.107 entre 1ra y 3ra, Miramar, Playa Mts,Norte, Casa Crema Urbanización Freses La Habana, Cuba. Curridabat, San Jose, Costa Rica A.P. 4248-1000. T: +53 7 204 2632 T: +506 2225 9145 F: +53 7 204 2636 +506 2225 1575 E: email@example.com F: +506 2530 457 E: firstname.lastname@example.org Czech Republic Dominican Republic • Prague • Santo Domingo Embassy Embassy Muchova 9, Prague 6, 160 00, Dejvice, Calle Mayreni N° 31 Urbanización los Czech Republic. Cacicazgos Santo Domingo, Dominican T: +420 2 2431 6210 Republic. F: +420 2 2431 4749 T: +1809 482 8374 E: email@example.com +1809 482 3300 +1809 482 3344 F: +1809 482 3334 E: firstname.lastname@example.org Ecuador • Quito • Guayaquil Embassy Consulate Av. República de El Salvador 495 Irlanda, Av. Francisco de Orellana Kennedy Norte, Piso Quito-Ecuador. 14 Oficina Nº 02 Edificio “Centrum” Guayaquil, T: +593 22 468 410 Ecuador. +593 22 468 411 T: +593 42 280 114 +593 22 468 404 +593 42 280 135 +593 22 468 389 +593 42 280 142 F: +593 22 439 611 F: +593 42 280 171 W:www.embajadadelperú.org.ec E: email@example.com W:www.consuladoperuguayaquil.org.ec • Loja • Macara Consulate Consulate Av. Zoilo Rodríguez 03-05 Ciudadela Av. Simón Bolivar 48-33 y 10 de Agosto, Zamora, Loja, Ecuador. Barrio Juan Montalvo, Macara, Ecuador. T: +593 72 579 068 T: +593 72 694 030 F: +593 72 571 668 +593 72 694 922 E: firstname.lastname@example.org F: +593 72 694 922 E: email@example.com W:www.consuladoperumacara.com Peru's Business & Investment Guide 73 Ecuador Egypt • Machala • Cairo Consulate Embassy Urbanización Unioro Manzana 14 Villa 11, 41-AI-Nahda Street, 2nd floor, Maadi, Cairo, Machala, Provincia del Oro, Ecuador. Egypt. T: +593 72 937 040 T: +202 2359 0306 +593 72 934 535 +202 2359 0406 +593 72 930 680 F: +202 2750 9011 F: +593 72 930 680 E: firstname.lastname@example.org E: email@example.com El Salvador Finland • San Salvador • Helsinki Embassy Embassy Av. Masferrer Norte, Casa N° 17 P, Cumbres Ludviginkatu 3-5 A 21, 00130 Helsinki, de la Escalón, Colonia Escalón, San Finland. Salvador, El Salvador. T: +358 9 759 9400 T: +503 2275 5566 F: +358 9 759 94040 +503 2275 5567 E: firstname.lastname@example.org +503 2275 5568 W:www.peruembassy.fi F: +503 2275 5569 E: email@example.com France • Paris Embassy 50 Avenue Kléber 75116 Paris, France. T: +33 1 5370 4200 F: +33 1 4704 3255 E: firstname.lastname@example.org Germany • Berlin • Frankfurt Embassy Consulate Mohrenstrasse 42, 10117 Berlin, Germany. Kaiserstrasse 74, 63065, Offenbach Am T: +49 30 2064 1043 Main, Frankfurt, Germany. +49 30 2064 1044 T: +49 69 133 0926 F: +49 30 2064 1077 F: +49 69 295 740 E: email@example.com E: firstname.lastname@example.org email@example.com firstname.lastname@example.org email@example.com W:www.conperfrankfurt.de W:www.embaperu.de www.botschaft-peru.de 74 Ernst & Young Appendixes Germany • Hamburg • Mϋnich Consulate Consulate Blumenstrasse 28, 22301 Hamburg, Herzog Heinrichstrasse 23, 80336 Mϋnich, Germany. Germany. T: +49 40 460 1223 T: +49 89 1392 8880 +49 40 460 3039 F: +49 89 1392 88819 F: +49 40 481 854 E: firstname.lastname@example.org E: email@example.com W:www.conperumunich.de firstname.lastname@example.org W:www.conperham.de Greece Guatemala • Athens • Guatemala Embassy Embassy Semitelous Street 2, 11528 IIisia, Athens, 15 Avenida “A” 20-16, Zona 13, Guatemala, Greece. Guatemala. T: +30 210 779 2761 T: +502 2361 8532 F: +30 210 779 2905 +502 2331 7841 F: +502 2360 8369 E: email@example.com W:www.embajadaperu-guatemala.org Honduras India • Tegucigalpa • New Delhi Embassy Embassy Escuela Dowal Casa Nro. 3301 Calle Principal A- 9/5, Bucarest Marg Vasant Vihar, New Delhi Colonia Linda Vista Tegucigalpa.M.D.C. 110057–India. Honduras, CA. Casilla Postal 3171. T: +91 11 4616 3333 T: +504 236 7994 F: +91 11 4616 3301 E: firstname.lastname@example.org +504 236 8345 W:www.embassyperuindia.in E: email@example.com firstname.lastname@example.org Indonesia Israel • Jakarta • Tel Aviv Embassy Embassy Menara Rajawali, 12TH Floor, JL. Mega Medinat Hayehudim, 60 Herzliya Pituach Kuningan, Lot. 5,1, Kawasan Mega Kuningan 46766, Israel. Jakarta 12950, Indonesia. T: +972 9 957 8835 T: +62 21 576 1820 F: +972 9 956 8495 F: +62 21 576 1825 E: email@example.com E: firstname.lastname@example.org email@example.com firstname.lastname@example.org Peru's Business & Investment Guide 75 Italy • Rome • Genova Embassy Consulate Vía Francesco Siacci, 2B-00197 Rome, Italy. Piazza Della Vittoria, 15 AMM-E 16121 T: +39 06 8069 1510 Genova, Italy. F: +39 06 8069 1777 T: +39 010 589 952 E: email@example.com +39 010 595 5569 W:www.ambasciataperu.it F: +39 010 584 8236 E: firstname.lastname@example.org email@example.com firstname.lastname@example.org W:www.consuladoperugenova.com • Milan • Florence Consulate Consulate Vía Roberto Bracco No. 1 20159, Milan, Italy. Piazza San Firenze 3, 50122, Florence, Italy. T: +39 02 690 04577 T: +39 055 260 8803 +39 02 668 09617 F: +39 055 260 8803 F: +39 02 668 5575 E: email@example.com E: firstname.lastname@example.org W:www.consuladoperuflorencia.com W:www.conpermilan.com • Turin Consulate Vía Pastrengo 29, C.P. 10128 Turin, Italy. T: +39 11 581 9762 F: +39 11 509 8805 E: email@example.com W:www.conperturin.com Japan • Tokyo • Nagoya Embassy Consulate 4–4-27 Higashi Shibuya Ka Tokyo 150-0011, Swan Nagoya Fushimi Bldg, 3F, 2-2-23 Sakae, Japan. Naka ku, Nagoya shi, Aichi 460-0008, Japan. T: +81 3 3406 4243 T: +81 0 52 209 7851 F: +81 3 3409 7589 +81 0 52 209 7852 E: firstname.lastname@example.org F: +81 0 52 209 7856 W:www.embajadadelperuenjapon.org E: email@example.com W:www.consuladodelperuennagoya.com 76 Ernst & Young Appendixes Korea Malaysia • Seoul • Kuala Lumpur Embassy of Peru in South Korea Embassy Dae Yun Gak Tower Center Building, Unit Wisma Selangor Dredging 6th. Floor, South 2002, 25-5, Chung muro 1-KA Jung-Ku, Block 142-A, Jalan Ampang 50450 Kuala Seoul, Korea. Lumpur, Post Box 18, Malaysia. T: +82 2 757 1735 T: +60 3 2163 3034 +82 2 757 1736 +60 3 2163 3035 +82 2 757 1737 F: +60 3 2163 3039 F: +82 2 757 1738 E: firstname.lastname@example.org E: email@example.com W:www.embperu.com.my Morocco Mexico • Rabat • Mexico D.F. Embassy Embassy 16, Rue D'lfrane, Plaza Peru, Rabat, Morocco Paseo de la Reforma 2601. Colonia Lomas T: +212 0 537 723 236 Reforma Delegación Miguel Hidalgo, C.P. 11020, +212 0 537 723 284 Mexico, D.F. T: +52 55 1105 2270 Consular Section F: +52 55 1105 2279 16, Rue D'lfrane Plaza Peru, Rabat, Morocco. E: firstname.lastname@example.org T: +212 37 723 236 +212 37 723 284 F: +212 37 702 803 New Zealand Nicaragua • Wellington • Managua Embassy Embassy Level 8, 40 Mercer Street, Simp House, Hospital Militar 1 cuadra al lago, 2 c. abajo, Casa Wellington, NZ, Casilla Postal: PO BOX 2566. No. 325, Managua, Nicaragua. T: +644 499 8087 T: +505 266 6757 +644 499 8067 F: +505 226 68679 F: +644 499 8057 E: email@example.com E: firstname.lastname@example.org email@example.com W:www.embassyofperu.org.nz W:www.peruennicaragua.com.ni Panama Paraguay • Panama • Asuncion Embassy Embassy Calle 53 Marbella Condominio World Trade Center, Aca Carayá Nº 215, esquina Corrales, Barrio Oficina 1203, Panamá A.P. W.T.C. 8322474. Bernardino Caballero, Asuncion; Casilla de T: +507 269 6864 Correos 433, Paraguay. +507 223 1112 T: +595 21 607 431 +507 263 1556 +595 21 210 395 E: firstname.lastname@example.org F: +595 21 607 327 E: email@example.com W:www.embperu.org.py Peru's Business & Investment Guide 77 Poland Portugal • Warsaw • Lisboa Embassy Embassy UL. Staroscinska 1A, M.3, Varsovia, Polonia. Rua Castillo 50,4º Dto. 1250-071 Lisboa, T: +48 22 646 8806 Portugal. +48 22 646 8807 T: +351 213 827 470 F: +48 22 646 8617 F: +351 213 827 479 E: firstname.lastname@example.org E: email@example.com W:www.perupol.pl W:www.embaixadaperu.pt Romania Russian Federation • Bucarest • Moscow Consular Section / Embassy Embassy Bvd. Lacul Tei Nº 29, Etaj.2, Ap. 4, Sector2, Smolensky Boulevard 22/14, KV 15 Bucarest, Romania. Moscow, Russian Federation. T: +40 21 211 1819 T: +7499 248 2302 F: +40 21 211 1818 F: +7499 230 2000 E: firstname.lastname@example.org E: email@example.com W:www.embajadaperu.ro Singapore South Africa • Singapore • Pretoria Embassy Embassy 390, Orchard Road No. 12-03, Palais Renaissance, 200 Saint Patricks Street, Muckleneuk Hill, Singapore 238871. Pretoria 0083, South Africa. T: +65 6738 8595 T: +27 1244 01030 F: +65 6738 8601 +27 1244 01031 E: firstname.lastname@example.org F: +27 1244 01054 W:www.embassyofperu.org.sg E: email@example.com Spain • Madrid • Barcelona Embassy Consulate C/Príncipe de Vergara N°36 5° Derecha Avenida de Roma 157, 1° 08011, Barcelona, 28001 Madrid, Spain. Spain. T: +34 91 431 4242 T: +34 93 415 4999 F: +34 91 577 6861 +34 93 451 1784 E: firstname.lastname@example.org F: +34 93 237 4634 E: email@example.com W:www.consulperubarcelona.com 78 Ernst & Young Appendixes Spain • Sevilla • Valencia Consulate Consulate Pabellón de Perú, Avenida María Luisa S/N, Plaza Los Pinazos 2, piso 3, 46004, Valencia, Sevilla, 41013, Spain. Spain. T: +34 95 423 2819 T: +34 96 351 5927 F: +34 95 423 7925 +34 96 352 4463 E: firstname.lastname@example.org F: +34 96 352 3289 W:www.peruexterior.com E: email@example.com W:www.consuladoperuvalencia.org Switzerland • Bern • Geneva Embassy Consulate Thunstrasse No. 36, 3005 Bern, Switzerland. 17 Rue Des Pierres Du Niton, 1207 Geneva, T: +41 31 351 8550 Switzerland. F: +41 31 351 8570 T: +41 22 707 4917 E: firstname.lastname@example.org F: +41 22 707 4918 W:www.embajadaperu.ch E: email@example.com firstname.lastname@example.org • Zϋrich Consulate Löwenstrasse 69, 8021, Zürich, Switzerland. T: +41 44 211 8211 +41 44 211 8212 +41 44 211 8207 F: +41 44 211 8830 E: email@example.com W:www.conperzurich.ch Taiwan Thailand • Taipei • Bangkok Commercial Office of Peru in Taipei Embassy Suite 2411, International Trade Building, 333 Glas Haus Building, 16 th. Floor, 1 Sukhumvit 25 Keelung Rd., Sec. 1, Taipei 110, Taiwan. Road, Klongtoey, Bangkok 10110, Thailand. T: +8862 2757 7017 T: +66 2 260 6243 F: +8862 2757 6480 +66 2 260 6245 E: firstname.lastname@example.org +66 2 260 6248 email@example.com F: +66 2 260 6244 W:http://www.peru.org.tw E: firstname.lastname@example.org W:www.peruthai.th.com Peru's Business & Investment Guide 79 United Kingdom Uruguay • London • Montevideo Embassy Embassy 52 Sloane Street London – SW 1X 9SP, UK Obligado 1384 Montevideo, Uruguay. T: + 44 207 235 1917 T: +598 2 707 1420 + 44 207 235 8340 +598 2 707 6862 + 44 207 235 3802 +598 2 707 2834 F: + 44 207 235 4463 +598 2 707 8214 E: email@example.com F: +598 2 707 7793 W:www.peruembassy-UK.com E: firstname.lastname@example.org W:www.angelfire.com/country/embaperu U.S.A. • Washington • Atlanta Embassy Consulate 1700 Massachussetts Avenue. N.W. 4360 Chamblee Dunwoody RD. Suite 580, Washington D.C. 20036-1903, U.S.A. Atlanta, GA 30341, U.S.A. T: +1 202 833 9860 al T: +1 678 336 7010 +1 202 833 9869 F: +1 678 990 1920 W:www.peruvianembassy.us E: email@example.com W:www.consulperuatlanta.com • Boston • Chicago Consulate Consulate 20 Park Plaza, Suite 511, Boston, 180 North Michigan Avenue Suite 1830 Massachussets, U.S.A. Chicago Illinois 60601, U.S.A. T: +1 617 338 2227 T: +1 312 782 1599 F: +1 617 338 2742 +1 312 853 6173 E: firstname.lastname@example.org +1 312 853 6174 F: +1 312 704 6969 E: email@example.com • Dallas • Denver Consulate Consulate 9330 Amberton Parkway, Suite 2130, Dallas, 1001 S Monaco Parkway, suite 210 Denver, TX 75243, U.S.A. Co 80224, U.S.A. T: +1 972 234 0005 T: +1 303 355 8555 +1 972 234 0022 F: +1 303 355 8003 +1 972 234 0027 E: firstname.lastname@example.org +1 972 234 0028 +1 972 809 0101 F: +1 972 498 1086 • Hartford • Houston Consulate Consulate 250 D Main Street Hartford, Ct. 06106, 5177 Richmond Avenue. Suite 695 Houston. U.S.A. Texas 77056, U.S.A. T: +1 860 548 0266 T: +1 713 355 9517 +1 860 548 0337 +1 713 355 9438 F: +1 860 548 0094 F: +1 713 355 9377 E: email@example.com E: firstname.lastname@example.org W:www.sbc.yahoo.com 80 Ernst & Young Appendixes U.S.A. • Los Angeles • Miami Consulate Consulate 3450 Wilshire Boulevard, Suite 800 / Los 444 Brickell Avenue Suite M-135 Miami, Angeles, California 90010, U.S.A. Florida 33131, U.S.A. T: +1 213 252 5910 T: +1 786 347 2434 +1 213 252 9795 F: 305 373 5388 +1 213 252 8599 305 381 6027 +1 213 252 8498 E: email@example.com F: +1 213 252 8130 W:www.consulado-peru.com E: firstname.lastname@example.org • Nueva York • Paterson Consulate Consulate 241 East 49th Street New York, N.Y. 10017, 100 Hamilton Plaza 12th floor, Paterson U.S.A. NewJersey, 07505, U.S.A. T: +1 646 735 3828 T: +1 973 278 3324 +1 646 735 3868 F: +1 973 278 0254 F: +1 646 735 3866 E: email@example.com E: firstname.lastname@example.org W:www.consulado.peru.com W:www.consuladoperu.com • San Francisco Consulate 870 Market St. Suite 1067 San Francisco Ca. 94102. T: +1 415 362 5185 +1 415 362 7136 +1 415 332 5647 F: +1 415 362 2836 E: email@example.com Vatican City • Rome Embassy Vía Di Porta Angélica N° 63 Scala A, 3° Piano, 00193 Rome, Vatican City. T: +3906 6830 8535 E: firstname.lastname@example.org W:www.xoomer.virgilio.it/embaperuva E: email@example.com Peru's Business & Investment Guide 81 Venezuela • Caracas • Puerto Ordaz Embassy Consulate Av. San Juan Bosco con 2da Transversal. Urbanización Roraima, Calle Roraima con Edificio San Juan, Piso 5, Altamira, Caracas, esquina de calle Aguila, Mz 4; casa N° 20 Venezuela. Alta Vista Sur Puerto Ordaz, Estado Bolivar, T: +58 212 264 1420 Venezuela. +58 212 264 1483 T: +58 286 961 4945 F: +58 212 265 7592 +58 286 961 6225 E: firstname.lastname@example.org F: +58 286 962 3865 E: email@example.com W:www.consuladogeneraldelperuenpuertoordaz.com 82 Ernst & Young Notes Notes Declaration This publication contains summarized information and is therefore intended for general guidance only. It is not intended to be a substitute for detailed research or the exercise of professional judgment. Neither the local Ernst & Young entity nor any other member of the global Ernst & Young organization can accept any responsibility for loss produced to any person acting or refraining from action as a result of any material in this publication. On any specific matter, reference should be made to the appropriate advisor. 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