Forming an LLC in Peru presents an excellent opportunity to enter the market. Market observers have given the country the lowest risk level in the region. This designation means that Peru is considered a safe investment destination due to its current economic and political stability. If you want to incorporate a company in Peru, there’s never been a better time to do so.
The medium to long term future looks bright, with solid growth expected. In general, there are plenty of markets ripe for development and others are in need of established knowhow and expertise. The country is internationally minded and happy with foreigners forming an LLC in Peru.
For investors considering entering the Peruvian economy, the choice of legal entity is a crucial consideration. In this article, we provide guidance on forming an LLC in Peru. Other options do exist and we can also provide advice on which may be the best for your particular situation.
Why form an LLC in Peru?
According to recent reports, the Peruvian economy is expected to grow by 2.7% in 2024. This growth is driven by a recovery in non-primary sectors. The World Bank forecasts that the Peruvian economy will accelerate this year and reach 2.3%, which is higher than the 2023 growth of 0.8%
Forming an LLC in Peru remains an attractive option for foreign investment due to its strong macroeconomic policy track record, ample international reserves, and a credible central bank. With political stability also on the table, there is little risk.
Peru’s wealth of trade deals give businesses the opportunity to expand abroad. The country’s efforts to open its economy are displayed in its 21 Free Trade Agreements (FTA) which include strategic players such as the US, China, the European Union, Japan amongst others.
What is an LLC in Peru?
An LLC in Peru is called a Sociedad Comercial de Responsabilidad Limitada (SRL). The SRL entity limits the liability of its owners in regards to the owners’ assets that can be utilized to cover any financial issue the company may encounter.
Characteristics of an LLC in Peru
The LLC in Peru is constituted by a minimum of two members and has a limit of 20 members. It is constituted at the time the public deed is registered in National Superintendence of Public Registries (SUNARP).
Forming an LLC in Peru protects the company’s members’ assets. Under this type of entity, the liability of owners is limited and the company is a separate legal person. In addition, the ownership of the entity isn’t divided by shares but by equal participation, which is cumulative and indivisible.
7 Steps to forming an LLC in Peru
Forming an LLC in Peru involves following these 7 steps:
- Step 1 – Appoint a legal representative and grant them Power of Attorney.
- Step 2 – Search for and reserve your company name.
- Step 3 – Capital contribution.
- Step 4 – Preparation of the minute of company constitution.
- Step 5 – Preparation of public deed.
- Step 6 – Registration in public registries.
- Step 7 – Register a RUC for your limited liability company (LLC) in Peru.
1. Appoint a legal representative and grant them Power of Attorney
You must partner with a legal representative in Peru. The legal representative will act on behalf of the LLC on legal aspects. To grant powers to your chosen legal representative you must draft and sign a Power of Attorney document in your country. You’ll then need to submit this document to your home country’s public registries and should be apostilled before it is sent to Peru.
If the document is in a different language than Spanish, the document should have an official translation before it is submitted to the public registries in Peru. Once everything is approved, your legal representative will have the powers to represent you in Peru.
2. Search for and reserve your company name
Before you register your company, make sure to reserve your name as this will ease the process of registration. This step isn’t compulsory, but it will help you check if there are other companies already registered with your same name. We recommend having three options, in case your preferred name has already been registered.
Interested individuals can register their chosen name on the SUNARP website, and pay the respective fee in person at an authorized Registry of Legal Entities office. Similarly, the whole process can be done in person at an authorized office.
3. Capital Contribution
The capital contribution of members should be accredited with a document issued by an entity of the national financial system. This document should be attached in the minute of the company constitution to accredit members’ capital contributions.
4. Preparation of the company constitution
Through the minutes of the company constitution, owners or members of the LLC formally constitute the legal entity.
The constitutive act consists of the social pact and the statutes. Similarly, the administrators are appointed in this document. The required documentation includes:
- 2 copies of identification of the member and their spouses (if applicable)
- Original and 2 copies of the search and name reservation document
- A file with the transactions of the business and a list of assets
- A form of affidavit and date of application.
- Document issued by an entity of the national system to accredit capital contribution of members
Present the documentation at your chosen public notary in Peru to draft the minute of company constitution.
5. Preparation of Public Deed
When the constitutive act is drafted your designated public notary in Peru has to prepare the public deed. This document attests that your constitution is legal and should be signed and stamped by the notary and the company members, including spouses, if applicable.
6. Registration in Public Registries
Register your public deed in SUNARP. This process is usually performed by your public notary.
The assessment period takes 24 hours from the presentation. It is important to note that the legal person will exist as of its registration in the Public Registries.
7. Register a RUC for your limited liability company (LLC) in Peru
To finalize the process of forming an LLC in Peru, you must then obtain a tax identification, known as Registro Unico de Contribuyentes (RUC) number. This is an 11 digit number that identifies a legal entity or natural person for tax contribution purposes.
To get a RUC number, visit a National Superintendence of Customs and Tax Administration (SUNAT) office or a Better Citizen Service (MAC) center.
You must submit the following documents to obtain your RUC number:
- Water and electricity bill not older than 2 months, which will be used to accredit the address
- Company’s public deed
- Identification
- Fill out the respective forms.
Forming an LLC in Peru: Required documentation
To submit an application for an SRL before SUNARP, you must provide the following documentation:
- Registration application form completed and signed
- Payment of registration fees
- Simple copy of the identity document of the presenter, with proof of having voted in the last elections, or having requested the respective dispensation in case of the contrary.
- Public deed containing the social pact and the statute.
FAQs when forming an LLC in Peru:
In our experience, these are the most common queries we field from potential clients interested in forming an LLC in Peru.
1. Do I need a physical address in Peru to form an LLC?
Yes, having a physical address in Peru is a requirement for forming an LLC. This address will serve as the official location of your business and is necessary for various legal and administrative purposes.
2. What are the advantages of choosing an LLC over other business structures?
Forming an LLC in Peru offers several benefits, including limited liability protection, flexibility in management and ownership, pass-through taxation, and ease of formation and maintenance compared to other business structures like corporations.
3. Can foreigners own an LLC in Peru?
Yes, foreigners can own and operate an LLC in Peru. Peruvian law allows both residents and non-residents to establish and manage LLCs, making it an attractive option for foreign entrepreneurs seeking to conduct business in the country.
4. How long does forming an LLC in Peru take?
The timeline for forming an LLC in Peru can vary depending on various factors, including the efficiency of the registration process and the completeness of the required documentation. On average, it may take several weeks to a few months to complete all necessary steps and obtain official approval.
5. What does LLC in Peru mean?
LLC stands for Limited Liability Company. In Peru, an LLC is a type of legal business structure that combines the limited liability protection of a corporation with the flexibility and tax benefits of a partnership or sole proprietorship.
Interested in forming an LLC in Peru?
Peru’s stability offers investors assurance in their investments. In addition, there are business opportunities in industries such as mining, agribusiness, infrastructure, fintech, cannabis, amongst others, are continuously expanding opening doors for new entrants.
Take advantage of the country’s strong local demand and business opportunity by forming an LLC in Peru with the help of a professional. At Biz Latin Hub, we have vast experience helping entrepreneurs from all over the world enter the Peruvian market. Our team of experienced corporate and commercial lawyers can help you with company incorporation, commercial representation, and visa services.
Reach out to us and get started with your venture today. Learn more about our team and expert authors.
Check our video with the general steps to forming a company in Peru!
