THE

INFORMALITY
OF BUSINESS IN
PERU REMAINS
A CHALLENGE
INTEGRANTES:
KAROL PAOLA GIHUA SANCHEZ
DILCIA ROJAS CALLE
YANETH SALOME QUILLCA
 THE INFORMALITY OF
BUSINESS IN PERU REMAINS A
CHALLENGE
Business informality is and will be one of Peru's biggest problems.
According to figures from the Lima Chamber of Commerce, in 2017 there
were three informal companies for every formal company. However, it is
with the Covid-19 pandemic and the strict quarantines in Peru that a series
of consequences could be generated, which contributed to an increase in
business informality in Peru. Therefore, it is estimated that the above-
mentioned figures are going to increase for approximately two years.
It should be known that approximately 17.7% of Peru's GDP will be made
up of informal productive units, socio-political problems will influence the
political crisis and international events will not favour this problem.
However, institutions such as the Superintendencia Nacional de los
Registros Públicos (Sunarp) have implemented mechanisms that will
seek to increase the incorporation of companies as a measure to
encourage formalization.
During 2021, around 430 companies were incorporated in Peru through
the Sociedades por Acciones Cerradas Simplificadas (SACS) modality.
This modality, promoted by the government as a result of the pandemic,
will be created with the purpose of being an alternative that should
encourage the formalization of micro, small and medium-sized companies
with greater speed and the use of 100% digital mechanisms. This is an
important step forward that could lead to a reduction of informality in Peru;
however, it would be necessary to implement more mechanisms that
favour this modality.
On the other hand, formalization will involve very high costs, which
discourages entrepreneurs. A World Bank study reported that it may be
necessary to reduce tax burdens, strengthen labour law enforcement,
entrepreneur education, and remove disincentives to formal employment.
In Peru, distrust in the state, especially as a tax administrator, will lead to
a resistance to formalization on the part of the entrepreneur, which results
in a vicious circle of a country with weaker economic performance, fewer
resources to combat crises and, ultimately, greater poverty.