Peru is known for its resilient economy in the Latam region. The continuous macroeconomic policies over the last three decades have allowed the country to withstand political noise and obtain stable scores by economic indexes such asS&P.
Peru’s Finance and Economy Minister stated that the country’s GDP is expected to expand by 10% in 2021, one of the highest estimated growths in the region. Peru’s stability has allowed foreign businesses to successfully enter the country. If you are seeking to open a business in Peru, it’s important that you know the most common types of companies in Peru that other businesses are already using.
Two Ways to Open a Business in Peru
In Peru, there are two ways of establishing a company: as an individual entity (‘natural’ person) or as a legal entity (legal person).
An individual entity has only one owner who assumes all obligations of the company; in other words, its liability is not limited, so the owner must answer for debts, not only with the company assets but also with his/her personal assets.
On the other hand, a legal entity has limited responsibility. Debts and obligations are assumed by the assets of the company. This means that no personal assets of the owners or shareholders are compromised.
Most common types of companies or legal entities in Peru:
Joint Stock Company
Known in Spanish as “Sociedad Anónima” (S.A). This type of company is constituted by a minimum of 2 shareholders and has no limit on the maximum number of shareholders.
To establish a Joint Stock Company, you will need to register a Public Deed at the Peruvian Superintendency of Public Records ( ‘Superintendencia Nacional de los Registros Públicos’, SUNARP). This Public Deed must contain the articles of business incorporation and the statutes of the company.
About capital contribution
The company’s capital is constituted by the assets contributed by each partner or shareholder. This must be proven by submitting a sworn declaration detailing the list of assets contributed by each shareholder. In addition, you must register the shares in the Shares Register in Peru.
As the Joint Stock Company is a ‘legal entity’ type of company, the shareholders do not hold any liability with their personal assets, only the company’s assets are liable.
The entity must have a general shareholder meeting, a manager, and a directory.
This type of company is also known as Closely Held Anonymous Company and known in Spanish as “Sociedad Anónima Cerrada” (S.A.C).
The main characteristic of this type of legal entity is that the number of shareholders is limited. A Private Closed Corporation allows for a minimum of 2 and a maximum of 20 shareholders, and the constitution of the company must be registered at SUNARP with all required documentation such as Public Deed and the company’s statutes.
We recommend this type of legal entity to those who are ready to start a business in Peru due to its swift proceedings.
About Capital Contribution
Similar to the Joint Stock Company, the capital of the company is defined by each shareholder’s contribution and shares must be registered in the Shares Register of Peru.
An advantage of this type of legal entity is that since it does not require a board of directors, the powers of legal representation and management fall merely on the general management or the legal representative.
The SAC entity in Peru must have a general shareholder meeting, a manager, a vice manager, and has the option to establish, or not, a board of directors.
Minimum of two and maximum of twenty shareholders
Must have a general shareholders’ meeting and management (legal representative)
Board of directors (optional)
Limited Liability Company (LLC)
Known in Spanish as “Sociedad Comercial de Responsabilidad Limitada” (S.R.L). This legal entity is constituted by a minimum of 2 and a maximum of 20 partners.
To register this type of entity, you must register a Public Deed at SUNARP which must contain articles of company incorporation and its statutes.
About Capital Contribution
The capital contribution to the company must be subscribed at the time of constitution and it’s identified as “participations” ( ‘participaciones’ in Spanish) rather than shares.
Since this type of legal entity is limited, the partners hold no personal liability and the company bears all responsibility.
If a partner decides to leave, he must carry out the process of transferring his “participation” before a notary. This type of company is usually formed by family members.
Minimum of two and maximum of twenty partners
Transfer of “participations” before a notary.
Private Limited Company (PLC)
Known in Spanish as “Empresa Individual de Responsabilidad Limitada” (EIRL). This is the most common type of company in Peru constituted by a single owner. The equity of the company is different from the owner’s equity or assets. A PLC is fit for those who seek to start a business without associates or partners.
The liability of the company is limited to the company’s assets. The owner bears no responsibility for any obligations of the company.
About Capital Contribution
All capital contributed to the company must be backed by a sworn declaration of the list of assets or cash allocated. The capital of this company must be fully subscribed at the time of the constitution.
A single person is registered as General Manager and partner.
Are you interested in registering your company in Peru?
You can watch the video below to learn more about the process!
Get in touch with Easyco and begin your business incorporation in Peru
Now that you know the most common types of companies in Peru, you are one step closer to your business expansion.
Easyco makes the process of registering a legal entity in Peru digitalized, swift and easy for you. Thanks to our streamlined proceeding, we are able to provide our expert legal services accessible to small to mid-size businesses.
Easyco understands the difficulty of handling the paperwork required for doing business abroad. Our team of legal experts will support you with a Peruvian legal representative to be the face of your company, a legal address, and make sure you comply with all Peruvian regulations.
Easyco also provides additional services to guarantee your company’s compliance, which include: