Peru: Investing

FDI in Figures

After having attained a record level in 2007-2008, the FDI flows into Peru fell in 2009, under the effect of the global recession.  Nevertheless, they rebounded in 2010, stimulated by the region's growth.

Thanks to its attractive legislative and fiscal framework and a dynamic mining sector, Peru continued to attract FDI in 2011. It now ranks fifth among the South-American receptors of FDI, behind Argentina. The strong appetite of foreign investors continues, with a $70 billion investment expected over the next five years, including $42 billion in the mining sector alone.

Peru's FDI come primarily from Spain (the largest investor), the United States and Great Britain. The sectors that attract most of  FDI are communications (about one third of the total), industry, finances and the mining industry.

Peru's most appealing points in terms of FDI are the low cost of wages compared to the developed countries and the non-restrictive policy concerning dividends. However, the Peruvian authorities must look into reducing customs barriers, making their tax legislation more flexible,  improving the efficiency of public institutions as well as strengthening the rule of law, in order to keep the country attractive to investors.

Why You Should Choose to Invest in Peru

Strong Points

For five years Peru has experienced sustained growth, which rests on an external growth environment, on exports and domestic demand, which has benefitted from the combined rise in household consumption and public investment. Dynamic activity, sound economic policy, and the successful management of debt, have allowed Peru to show very good results in terms of a strong macro-economic balance, and to regain investor and market confidence. Peru enjoys well directed external demand and the good performance of the raw material prices, of which it is a substantial producer.

Weak Points

If the Peruvian economy's prospects are favorable in the short term, the sustainability of the present growth is conditioned by Peru's capacity to define a medium term development strategy. With growth highly concentrated on the primary sector and in the agricultural exporting regions, it has only marginally contributed to redressing a difficult social situation. The main source of vulnerability is a permanently high level of poverty and under-employment, caused by a growth that is too dependent on a strongly capitalist mining sector. 

Growth is dependent on an external environment which up to now has been favorable, as domestic demand is not yet able to take over from a possible reduction of external demand or from the prices of raw materials. Peru also suffers from a great lack of infrastructures, and the institutional capacity of the country has not improved significantly over the last few years. Moreover, the progress of employment is too concentrated in the most dynamic areas and in the informal sector. The lack of efficiency and means of public policies is manifest in the permanently high poverty rate.

Government Measures to Motivate or Restrict FDI

The Peruvian government is trying to attract foreign investors in all sectors of the economy. During the 1990s, the Peruvian government encouraged the stabilization of the economy and promoted liberalization policies by dropping customs barriers and opening the economy to foreign investors. In April 2002, the government established PROinversion, the sole representative of current and future investors, which took part in the privatization of public companies and industries based on natural resources. In addition to the 1993 Constitution, there are laws in Peru concerning foreign investment, including the 1991 Promotion of Foreign Investment Law and the Framework Law on the Growth of Private Investment 1991.

Procedures Relative to Foreign Investment

Freedom of Establishment

Peru signed the constituent agreement of the International Center for Settlement of Investment Disputes (ICSID). Foreign investment in Peru is governed by the law on the promotion of foreign investments and its decree-law n°662 of 1991, which establishes, as a basic principle, the equal treatment of national and foreign capital.

Acquisition of Holdings

A majority holding interest in the capital of a local company is legal in Peru.

Obligation to Declare

To be recognized and be able to benefit from the provisions of the legislation in force, the considered investment must, once carried out, be registered with Proinversion, but this formality is only compulsory when there is an agreement on legal stability.

Competent Organization For the Declaration

Peruvian Agency for the promotion of investment.

Requests For Specific Authorizations

Foreign capital can be invested in all sectors of economic activity without prior authorization, with the exception of a few sectors, such as the press, or implantations in border zones.

Investment Opportunities

Investment Aid Agency

Invest in Peru

Tenders, Projects and Public Procurement

Tenders Info, Tenders in Peru
Inter-American Development Bank, Tenders in South America
Globaltenders, Tenders & Projects from Peru
DgMarket, Tenders Worldwide

Other Useful Resources

Official investment agency (Inversion Peru)
Econolatin: Statistics on Peruvian investment

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