Doing Business in PERU – Analysis

Peru is a very diverse and multicultural country that offers many challenges to new business, but also many opportunities. Peru is one of the fastest-growing economies in the world. To be successful in doing business in Peru, you must understand the culture, political system, legal system, economic system, demographics, economic development, and social development. A company should be able to be familiar with this factor to adapt to Peru’s way of doing business. Peru is a democratic country, and it has three branches of the government: executive, judicial, and legislative. Also, Peru is in the top 50 easy to do business countries; it offers benefits to international investors.


Peru has one of the fastest-growing economies in the world; it has a growth rate of 6.3%. Peru is still classified as an upper-middle-income country by the World bank. Still, it can potentially be an excellent place for investments. Also, environmental factors will help us determine the best way to do business in Peru. Ecological factors include demographics, economic behavior, culture, etc.

Political System

For almost five centuries, Peru has consistently changed the political government. During Colonial time, Peru was under Spanish ruling. After 300 years of Spanish reign, Peru became independent from its colonizer. The leader of the movement, Jose De Martin, helped organize a more democratic political government system for the diverse population. Peru has many types of ethnic groups. 

The Quechuas are the natives and constitutes for more than half the population. The Mestizos are the mixed people of the native and other ethnic groups; they account for one-third of Peru’s population. Finally, the remaining population consists of European, Asian, and African descent. The variety of ethnic groups and complex social interactions were a challenge for the government in the early years of Peru as a free country.

During the 60′ and 80′ Peru had several military governments. Some military governments were lead by General Velasco and General Bermudez. The authoritarian military governments restored Peru’s economy and reform economic sectors such as agriculture.

Later, after the military governments of Peru, president Fernando Belaunde was elected, he is “The father of Peru’s modern democracy”. Several democratic governments followed Belaunde’s presidency. The economy improved slowly, terrorism and a considerable inflation rate in the 2000’s slowed down Peru’s Growth. Ollanta Humala, who is a social-democratic, is the current president of Peru.

Political Structure

Peru is a presidential representative democratic republic. The three branches of the government are the executive, the legislative, and judicial. The president is elected for five years. The executive branch is formed by 15 members of the council of ministers and the prime minister. The president appoints the members of the council, but they have to be ratified by congress.

The legislative branch of Peru consists of 120 members of the congress, elected for five years. Peru has a multiparty policy; therefore, several parties get represented in the government. The Peruvian Congress passes laws, ratifies treaties, authorizes government loans, and approves the government budget. Sixteen members of the supreme court form the judicial branch.

Voting in Peru is mandatory if you are over the age of 18. The vote is secret and direct. The law forbids gatherings, alcohol, shows, and religious liturgies during voting periods.

Economic System

The Peruvian economy primarily produces raw material and exports to wealthy countries such as the United States, China, and Russia. Some examples of its exports are gold, crude petroleum, copper, lead, tin, and other mining raw materials. With many labor industries, Peru has a low unemployment rate of 5.8%. It also has a low minimum wage of 750 Soles or $222 per month ( 

Peru is also notorious for corruption due to its unstable government. Even Though of instability, Peru’s market is a capitalistic market with few regulations. One of the essential regulations in Peru is environmental protection due to its near location to the amazon rainforest.  

Legal System

In Peru, all the laws are published in “El Peruano.” “El Peruano” is a newspaper founded by Simon Bolivar, a Peruvian hero of independence. The judicial power is the political branch of the government, which is in charge of interpreting, apply, and ensure equal justice under law. The judicial power has a hierarchic system. The Supreme Court is at the top of the Pyramid. In the next level is the superior courts, each court has jurisdiction over one of the 25 states of Peru. The third and fourth levels have authority over a province and a single district, respectively.

“Peru is governed by a general regime which promotes and ensures foreign investments. Besides, specific laws regarding mining, hydrocarbons, telecommunications, agriculture, and fishing (among other areas) further regulate foreign investment in those sectors.” (http :// Business%20in%20Peru%20-%20Ingles%20-%20Junio%202012.pdf). 

Exports and Treaties

The Peruvian government has installed several treaties with countries all around the world, including the US, to establish free trade and promote foreign investments. In some specific sectors like the ones specified in the previous quote, they require further regulations. These extra regulations usually occur because there is a significant dependence on Peru’s economy in that sector. It can also be due to environmental requirements, like, for example, in the mining case.

Exports in Peru are tax-free. There are no significant restrictions on exporting goods unless the goods fall into specific categories, for example, endangered animals, vegetable species, and archeological findings. If the products are sold in a foreign country without modification, they do not have tax regulations. If the products are modified or repaired for sale, then some tax regulations may apply.