How to open a foreign company branch in Peru

Legal requirements to open a branch in Peru

• Agreement of the competent corporate body

The parent company - whenever its corporate statute allows it - must approve the opening of a branch in Peru by means of an agreement adopted by the competent body of the company.

• Appointment of the legal representative in Peru

In the agreement to establish a branch, powers must be granted to those who will act as their representative, including administrative, commercial, banking and tax powers, among others.

• Determination of allocated capital

There is no minimum amount required, but sufficient capital must be allocated for your operations. It is important to specify that in the case of a branch, the capital of incorporation must only be declared, and its contribution to a bank account is not necessary.

• Legalization of foreign documents
  Any document issued outside of Peru must be Apostilled or legalized via Peruvian consulate.

Foreign company documentation: legalization and apostille

The key documents that the foreign company must submit are:

• Certified copy of current statute of the parent company.
• Certified copy of Board of Directors Minutes or equivalent body that agrees to the opening, appoints a representative and establishes share capital.
• Certificate issued by the competent authority in the country of origin certifying the existence and validity of the parent company at the time of the agreement.
• Statement by the legal representative or whoever performs their functions stating which body of the company is authorized to take the agreement.

All these documents must be already apostilled or legalized before a Peruvian consulate. If they are in a language other than Spanish, they will later be translated for registration.

SUNARP branch registration and processing before SUNAT

1. Drafting of public deeds

With the documents in Peru, a public deeds are drawn up that includes the decision to open the branch, the representative's details and the capital allocated.

2. Registration in SUNARP

The public deed must be registered in the Public Records of Peru for the branch to have legal existence.

3. Obtaining the RUC at SUNAT

With the registration certificate, the representative must obtain the RUC (Single Taxpayer Registry) from the branch. This record identifies her before the national tax authority (SUNAT).

4. Operational qualification

• Declaration of commencement of activities.
• Registration of accounting books.
• Issuance of electronic receipts.
• Obtaining municipal licenses (depending on the line of business).

Tax Regime for Foreign Branches in Peru

The branch is taxed in Peru like any company domiciled with respect to its income from a Peruvian source, and as general rules apply:

• Income Tax: 29.5% of net profits.
• IGV (General Sales Tax): 18% in taxed transactions.
• Withholding: applies to foreign payments when the branch remits dividends or services.

Take into account that the dividend payment to the parent company is presumed to have been made (even if no dividends have been applied), and capital tax withholding must be applied annually.

Legal representation of foreign branches

The designated legal representative:

• It must have sufficient power enrolled in SUNARP.
• He is responsible to SUNAT, SUNAFIL and other entities.
• You must be domiciled in Peru: you can be Peruvian or a foreigner with an immigration card.

Advantages and disadvantages of operating as a branch of a foreign company

Advantages:

• It does not require setting up a new company.
• It allows you to operate directly with the identity of the matrix.
• It is useful for public contracts or large specific projects, since it draws on the parent company's experience.

Disadvantages:

• Increased legal and financial exposure for the parent company.
• Less flexibility to handle complex local operations.
• Limited capacity to attract local investment or to contract as an independent entity.