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ESTUDIO YATACO ARIAS ABOGADOS AV. SAN BORJA SUR 1184 OF. 201 SAN BORJA LIMA – PERÚ
Dr. JOSÉ DOMINGO YATACO ARIAS
email@example.com TELEPHONES: (511) 719-9210 FAX: (511) 226-3860
ELIZABETH CASTILLO QUISPE
firstname.lastname@example.org TELEPHONES: (511) 719-9210 FAX: (511) 226-3860
Dr. VICTOR CALDERON PROAÑO
TELEPHONES: (511) 719-9210 FAX: (511) 226-3860
Dr. RONALD VARGAS SALDAÑA
TELEPHONES: (511) 719-9210 FAX: (511) 226-3860
PART I FOREIGN INVESTMENT IN PERU Foreign investment in Perú is largely covered by the Foreign Investment Promotion Law (Decree Law Nº 662). Under this law, the Peruvian state recognizes foreign investment as a vital element for economic development and provides guardantees and assurances to foreign investment in all areas of economic activity. The legal norm seeks to remove all kinds of obstacles and guarantee equal rights and obligations to foreign and local investors. It also create a framework of legal stability which allows the application of the laws standing at the time that legal stability agreement is signed. This norm establishes that all investors are protected by guarantees of nondiscrimination between investors and companies according to their nationality, sector or type of economic activity, geographic locations, prices, tariffs, non-custom duties, form of corporation, or legal status. It also establishes the right to nondiscrimination against state capital, the right to private property, the freedom for business, the freedom to internal and foreign trade and to agree freely how to distribute profits and dividends they generate and use the most favorable exchange rate in the currency market. Peruvian legislation allows investors to signed legal stability agreements with the state which granted in an exclusive manner regardless of the standing legal regime at the time the agreement is signed. This means those who protected by legal stability agreements will be able to continue to apply the same legislation in force when the agreement was signed and will not be affected modifications made later to the legislation, including when legislation is eliminated. These agreements are signed for ten year period and granted to investors and companies receiving investment in which they participate the rights to a stable tax regime, a stable regime exchange regime, stability into the right to expatriate profits, dividends, capitals and other incomes they may receive. The legal stability agreements grant foreign investors and companies other advantage that are not available in other countries such as the rights to use the most favorable exchange rate in the currency market, the same rights and duties as local investors and companies without exceptions apart from those outlined in Peru´s political constitution.
PART II PERUVIAN LABOR LAWS Labor costs in Peru amount to 50 centimes for each Nuevo Sol paid in wages. These include basically two additional salaries paid in July and in December each year (to compensate for service time), contributions to pension funds, public health insurance and other smaller insurance. Each year, employers with more than 20 employees must distribute a share in the pre-profit net income of between 5% and 10%. This share in the profits is distributed equitably among the days worked and wages received by each worker. Managers and employees of trust have relative stability (following and arbitrary sacking and after the test period, they have the right to receive compensation the equivalent to 1.5 salaries for each year of service, up to a maximum of 12). Other workers have absolute stability (following and arbitrary sacking and after the test period, they can opt between being rehired or receiving compensation). Temporary workers have different rights. Contracts can last up a maximum of five years. Employees have the right to thirty days of holiday a year, which can be broken down into periods of no less than seven days. Up to fifteen days may be sold to the employer in exchange for additional pay. Employees can work up to eight hours a day or forty eight hours a week with at least one day of rest a week. Accumulative or atypical schemes are allowed where employees work consecutive days in exchange for several days of consecutive rest. Overtime is calculated daily, with overtime rate of 25% for each of first two hours and 35% from the third hour onwards. Foreigners can be hired under temporary contract for up to three years which can then be renewed successively. Their wages cannot exceed 30% of the company´s global payroll and they cannot represent more than 20% of the total workforce. Exemptions to both limits can be requested. Subcontracting is allowed for all kinds of employment. The provider and the client company have social responsibility for the subcontracted employees. There is no limit to the number of workers that can be contracted through temporary employment companies to cover activities auxiliary to the client company´s core business. No more than 20% of the total number of workers involved in the client company´s core business can come from temporary labor and must be restricted to occasional and support roles.
PART III LIMITED COMPANIES IN PERU The limited company is the most common type of associative vehicle for undertaking business activities in Peru through one of the following forms: a. Regular limited company (S.A.): has a board, a shareholders´council and management b. Closed limited company: unlike other public companies, this company does not need a board of directors, maintaining in its place management and a shareholders´council. c. Open limited company (S.A.A.): it has a board of directors, a shareholders´council and management and has at least 750 shareholders ore more than 35% of its social capital is in hands of 175 or more shareholders, without considering shareholders whose shares, considered individually, represent no more than 2 out of 1,000 of the company´s capital or exceed 5% of its social capital. Requisites to form a limited company: names and identification information (passport for individuals or data on companies) of shareholders that will form the limited company. Non-resident companies must name and authorized representative to form the company in Peru. The exact name of the company to be constituted to carry out legal reserve on public registers. Amount of social capital to constitute company. This is no minimum except for some extraordinary sectors. Name of CEO and other managers and powers conferred on them. Social aim, which can be wide and general allowing the company to undertake various activities.
3.1. PROCEDURES TO FORM COMPANY Draw up draft of social constitution (once the statute has been defined) and present draft to public notary of lima. Make bank deposit for the amount of the social capital with the Peruvian financial entity designated for this purpose. Convert the draft constitution into a public document and corresponding payment and present it to the public registry of lima.
Request for unique taxpayer registration (RUC), which is the company´s tax identification document. Authorization to print invoices, so the company can carry out commercial transactions. Legalization of book of shareholders and board of directors (if this exists) and the matrix of the campany´s shares. An operating license must be obtained under the name of the new company.
Period The whole process, apart from time needed to obtain a municipal operating license and sector-specific authorizations, should not exceed fifteen days.
PART IV THE TAX REGIME IN PERU 4.1 MAIN TAXES
1. Tax On profits 1.1 Rate Tax rate on corporate profits is 30% while dividends and profits distributed to individuals and nonresident legal entities are subject to a tax of 4.1%. The profits of subsidiaries are taxed at a rate of 4.1% when they present their annual statement. Taxable Base The net profit obtained by the companies, independently of the place it was obtained, including capital gains and any income from operations with third parties. They are allowed to deduct costs and expensive related to obtaining the profits, with some limitations. Statements and payment The annual statement must be presented during the first three months of the following year to which the tax corresponds. Monthly payment must be based on net income.
2. GENERAL SALES TAX (IGV) 2.1 Rate The general sales tax is a charged at a rate of 19%. Some goods and services are exempt. Exported goods and some services are not subject to IGV.
Taxable Transactions Goods sold in the country, services provided in the county, construction contracts, the first sale of property by the builder and imported goods. Taxable Base The price or value of the amount paid for the goods or service, which must correspond to its market value. Tax Credit IGV paid on goods and services related with taxed transaction constitute a credit for determining this tax. Statements and Payment IGV must be calculated and paid monthly.
3. TEMPORARY TAX ON NET ASSETS Taxes the value of the net assets on December 31st of the previous year at the rate of 0.5% and serves as credit against the Tax on Profits. The first 1 millon soles are not liable. Selective tax on consumption. Taxes luxury goods and fuels. Tax on financial transfers. Applies to debts and payments to open accounts in the National Financial System as well as to other specific operations. The rate is 0.07%.
PART V INTELLECTUAL PROPERTY IN PERU
1. Legal Framework Paris agreement on IP protection. Decision 486, Council of the Cartagena agreement. Legislative Decree 823 Law on Industrial Property. Decision 351, Council of the Cartagena agreement. Legislative decree 822, law on the rights of the author.
2. Competent Authority. INDECOPI – National Institute for the Defense of Competition and IP Protection. 3. Distinctive Marks. The Distinctive Marks office (DSD) is the entity charges with matters related with the registration of brands, commercial names, commercial slogans and denominations of origin in Peru. Ownership over brands is obtained once it has
been registered. The period of brand protection in Peru is ten years, indefinitely renewable for equal periods. The registers are conceded for products or services, following the Nice Classification. According to this classification, brands are divided into product brands (classes 1 to 34) and services brands (clases 35-45). The process for registering brands take four months if no claims are presented. The owner of a brand can take legal action against those infringe their rights. They can also take legal action when there is an imminent danger that the holder´s rights could be breached. 4. Patents on Inventions, Useful Models and Designs When presenting a request to register a patent, the party must include the complete text of the description of the element to be registered. The complete procedure to obtain a patent take two years. 5. Authors´rights Artistic and literary works are protected in Peru. Protection is afforded to any work of ingenuity whatever its category, form of expression, merits or end. Authors rights and their protection begin at the very moment of creation of the work. Requests to register works are represented to INDECOPI´s Office of Authors´rights which will examine if it meets the requirements on form and a minimum of originality to be included.
PART VI FOREIGN TRADE AND ASPECTS OF PROCEDURES 1. Regulation of Definite Imports Any good can be imported into the country with the exception of those expressly prohibited by a legal norm, goods qualified as restricted require authorization from the official authority. Custom procedures are effected directly by the importer if the FOB value does not exceed US$ 2,000. If not, a custom agent carries out this task. Maximum period to request a definite import: 30 working day from the day following unloading. There are two mechanisms which the importer can use to begin import procedures before the date the goods are due to arrive in Peru so that they may be transferred directly from the customs area to the importer´s warehouses. The two mechanisms are: Anticipated customs Dispatch System: Under the anticipated customs dispatch system, the importer can begin the procedure to import goods in Peru up to a maximum of thirty days before the date of the goods are due to arrive in the country.
Urgent dispatch: The urgent dispatch System is applicable to a list of products included in the regulations of the General Law on Customs procedures which are permitted to adhere to a simplified set of procedures. The importer may begin these procedures before the date on which the goods are due to arrive in Peru.
The import statemend must be accompanied by the transport document, a commercial invoice, the certificate of origin, the transport insurance policy or letter from the importer indicating that the goods are not insured. 2. Regulation of Definitive Exports Any goods can be exported except those whose export is expressly prohibited by a legal norm or those whose export is restricted by law. In this latter case, official authorization from the relevant authority is required to effect their export. This is the case, for example, of goods that are considered part of Peru´s cultural heritage, such as archaeological remains. Export procedure: The export of goods is subject to minimum requisites which are overseen by the national tax administration authority SUNAT. To be able to begin the procedure, exporters must present a simplified statement (when the FOB value is less than US$ 2,000) or a Complete Customs Statement (When the Value is higher than US$ 2,000). The simplified statement can be presented directly to the customs authority by the exporter. The goods for export must be loaded for export within a maximum period of ten days counted from the date of the provisional export statement. Once this period has passed, the exporter them has a maximum period of fifeen days from the date of the last shipment to regularize the export with the relevant authorities. It is important to note that goods for export are subject to physical inspection by customs officials. The export statement must be accompanied by a transport statement, a commercial invoice and other documents that are required according to the norms specific to the type or classification of goods being exported, like, for example, special authorizations in the case of restricted export goods.
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