Peruvian business culture is outwardly similar to that of its neighbors and elsewhere in the region. However, there are some local points that you will need to be aware of. If you are looking to incorporate a company in Peru, understanding local norms will make everything run more smoothly. Even if you’re just looking at the market, these tips will help you make a good impression.
Although it’s fair to say that Peruvian business culture is similar to some nearby countries if you have never worked in Latin America before this may still present some problems. The countries are largely linked by a common language but have local differences.
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That’s where Biz Latin Hub steps in. As experts in commercial activities in the region, we understand Peruvian business culture well. That’s also true for countries across Latin America and the Caribbean. Let us help you make connections on the continent and guide you past some of the pitfalls that unwary investors might find.
Why do business in Peru?
The country is developing fast and is targeting foreign direct investment. With a GDP of USD$264bn and a predicted growth rate of 2.4% annually in the medium term, it’s a good time to be investing in the country. Add to that its free trade agreements and membership of alliances such as the CAN and Mercosur, deep-sea Pacific ports and good transport links and it’s easy to make it a hub for regional trade.
Peruvian business culture: 4 key points
There are many things to consider, especially in more isolated regions of the country or with more traditionally-minded people. Of course, we can’t cover every eventuality, but we’ve identified the four most important parts of Peruvian business culture for you to be aware of.
- Peruvian business culture is formal.
- Spanish unlocks doors.
- Be patient.
- Show respect.
1. Peruvian business culture is formal
You may have an idea of Latin culture being relaxed and friendly. That’s certainly true away from the boardroom, but within it the second remains while the first will not. Dress is likely to be dark suits, collars and ties, even in tropical climates. It’s still common to refer to people by their titles rather than names.
2. Spanish unlocks doors
While you can expect almost all high-flyers to have a good command of English, it is unlikely to be their first language. You will certainly be able to communicate in English, but showing willingness to use Spanish will break the ice and show them that you are genuinely interested in their country.
3. Be patient
You may find that there is bureaucracy to deal with and seemingly interminable processes to handle. This is a well-known issue in Peruvian business culture and frustrates even locals. Keep calm but be firm with your wants and needs. This applies mostly to governmental bodies but may come up in private dealings too.
4. Show respect
Be careful when talking about the country. Peruvians may very well get frustrated with some of the country’s idiosyncrasies, but will not appreciate the same observations from foreigners. Stay diplomatic and avoid any mention of politics or other sensitive topics – your hosts may do so, but give uncommittal responses unless you understand the situation well.
FAQs When Doing Business in Peru
In our experience, these are the most common questions our clients have about companies in Perú.
1. Can a foreigner own a business in Peru?
Yes, a business can be 100% foreign-owned by either legal persons (legal entities) or natural persons (individuals).
2. How long does it take to register a company in Peru?
Registering a company in Peru takes 6 weeks.
3. What does an S.A.C. company name mean in Peru?
In Peru, an S.A.C means Sociedad Anónima Cerrada, which is similar to a Private Closed Corporation. This is a legal entity in Perú that mandates a minimum of two and a maximum of 20 shareholders. While a Board of Directors is not obligatory, the corporation must have a General Manager.
4. What does an S.A.A company name mean in Peru?
In Peru, a S.A.A means Sociedad Anonima Abierta, which is similar to a Public Corporation. This type of legal entity is suitable for companies with a considerable number of shareholders. To establish this entity, an initial public offering is required. Specifically, the company needs to have more than 750 shareholders. This structure is designed to accommodate companies with a large and diverse shareholder base.
5. What entity types offer Limited Liability in Peru?
In Peru, both the Sociedad Anónima Abierta (S.A.A.) and the Sociedad Anónima Cerrada (S.A.C.), are limited liability companies.
Biz Latin Hub can help you understand Peruvian business culture
While this guide is an excellent introduction to Peruvian business culture, it is always better to work with a local partner who is knowledgeable about the country’s business culture and customs.
Biz Latin Hub is the trusted local partner of many individuals and companies who have expanded their operations to Peru and elsewhere in Latin America. Get in touch with our team of experts today and we will help you and your business expand in Peru.
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