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[null,"Prepared By:","Contributors:"]
[null,"Estudio Olaechea","María Luisa Gubbins"]
[null,null,"Jose Antonio Olaechea"]
[null,null,"Maria Eugenia Yabar"]
[]
["Doing Business Latin America"]
[]
["Report Generated: 5/2/2025"]
[]
["View your report results on next tab"]

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["Question","Peru"]
["Country Overview"]
["Country Overview"," Geography Peru is the third largest country in South America after Brazil and Argentina with 1.28 million square kilometers. Situated in the north-west of South America, Peru is bordered by Ecuador and Colombia to the north; Brazil and Bolivia to the east, Chile to the south, and the Pacific Ocean to the west with a coastline 2,500 kilometers long. \n The country is divided into three distinct regions separated by the Andes mountains. The coastal region is a strip of land 60 - 100 kilometers wide and cut occasionally by rivers creating fertile valleys from deserts. The Andes separate the coastal desert to the west from the jungle or Amazon basin to the east. The jungle or Amazon basin is the largest region in Peru covering over 550,000 square kilometers of low-lying rain forest. \n Demography Peru has a population of approximately 34 million. Almost 76% of the population lives in urban areas and the rest in rural areas. Most of Peru's population (about 55.9%) lives in the coastal area, while 29.6% lives in the Andes and only 14.5% in the Amazon basin. The population growth rate is 1.1% per year. 26.4% of the inhabitants are under 14 years, 61.7% are between 15 and 59 years and 11.9% are 60 years and over. \n Climate Peru is one of the most botanically and zoologically diverse countries in the world. Within its borders, it can count 84 of the 103 different micro-climates classified by the World Bank. Its three distinct zones (coast, mountains, and jungle) favor particular products and methods of cultivation. The coast is especially productive. Its rare climatic combination of relative aridity, sunshine, and stable temperature allows for year-round cultivation of many different products (i.e., asparagus, and blueberries). The proximity of the agricultural lands to the transport infrastructure of the coast makes exporting relatively easy and cheap to the seasonal markets of the northern hemisphere. The nature of the mountains is not conducive to intensive production because irrigation is more difficult, and the land is further from the infrastructure needed for distribution. The jungle has at least two million hectares ready that are suitable for cultivation, but the infrastructure is not yet available. \n Type of Government The Republic of Peru is democratic, social, independent, and sovereign. The State is not divisible, and its government is unitary, representative, and decentralized. The government of Peru is organized according to the principle of separation of powers. The Peruvian government is divided into three separate and independent branches: the Executive, the Legislative, and the Judiciary. The Constitution defines the jurisdiction of each branch, its members, and the criteria for the selection of such members. \n Economic Environment Peru is an attractive country to invest in. The Peruvian economy is expected to grow by more than 2.8% in 2024 and inflation by 2.49% in 2024. This growth pattern had its peak in 2008 when the economy grew 9.1%, the highest growth rate in 14 years and also the highest in the Latin American Regions. Peru’s economic success is owed to major legal reforms made in the 1990s, whereby a free social market economy was implanted to replace the State intervention in the economy. Private property is fully guaranteed and expropriations are only allowed after compensation, in cases of national security or public interest. \n Infrastructure and Public Utilities Private companies can build and operate public infrastructure and utilities under concession contracts granted by the Government (at its different levels: central, regional or municipal) under a public-private partnership regime, regulated by Legislative Decree 1362 and Supreme Decree 240-2018-EF. Concession contracts can be granted either by Government initiative or by private initiative. Infrastructure and public utility projects can be based on existing Government infrastructure or involve the construction of new infrastructure. Depending on the area of influence of the concession, and the size of the project the corresponding selection process can be conducted by a specialized agency ProInversion or the corresponding regional or local government.  \n In case a project is awarded through a government initiative, the corresponding entity conducts a public bid process, while projects awarded through private initiative are previously analyzed by the Government, and, if considered relevant and feasible, are declared of interest, then a term for expression of interest from other potential bidders is opened. If no other bidders express interest, the concession contract is awarded directly to the proponent. If third-party bidders express interest, a public bid process is opened, with the proponent having the right to improve the proposal if a third-party bidder submits a better proposal.  \n Infrastructure and public utility projects can be self-sustained, which means that the investment is paid through the collection of tolls or fares (such as in the case of the “ Metropolitano ” BRT project) or co-financed, in which case the Government pays part of the costs of the project (such as Line 1 of the Lima Metro) or pays for the construction of infrastructure by issuing a document called Certificate of Performed Works (\" Certificado de Avance de Obra - \" CAO \"), which represents the obligation of the Government or of a Government-owned-company to pay for certain investment in infrastructure made by the concessionaire. The CAO can be transferred to a financing third party. \n Most projects prioritized by the government are related to road infrastructure, port infrastructure, healthcare and power grid infrastructure. \n Ports In Peru, port activity is mainly governed by Law No. 29743 (\" National Port System Law \") of 2003 and its Regulations . This law seeks to promote the development and competitiveness of ports, as well as to facilitate multimodal transportation, the modernization of port infrastructure and the development of logistics chains in which ports participate. It sets forth the provisions applicable to ports for public use (ports with facilities owned by the State) and private use (ports whose facilities are privately owned). In our country, there are currently 8 port terminals that have been granted concession through the public-private partnership regime. 4 port terminals are in the hands of the State and another port facility has been granted under the regime established by the National Port System Law, as is the case of the Chancay port terminal, which will be the first private port for public use on the coast of Peru. \n Airports There are approximately 30 airports in Peru, 11 of which are international, with most traffic coming from Lima, Cusco, Arequipa, Piura, and Tarapoto. Currently, 19 of these airports are under concession granted by the government to private companies, such as Lima Airport Partners, which holds the concession for the Jorge Chavez International Airport (\" AIJCH \") in Lima.  \n The AIJCH is the main hub for international and domestic passenger traffic and its expansion, the “NewLima”, is set to start operations in the following six months. This new terminal will be the first Airport City in South America, aiming to position Peru not only as a hub or connection center but also as an international business platform. The new terminal will have the capacity to serve 30 million passengers once inaugurated and is projected to achieve an estimated total capacity of 40 million passengers in 2025, meeting IATA 's Optimum service level, once LAP is able to open additional areas. Also, two runways, a new control tower, a fuel plant that will triple its current capacity and a parking area, among other things, are being built for the new infrastructure. \n Water Water as a natural resource is considered a national patrimony. Water utility companies, and other types of companies or persons, can only use water for productive purposes if they are granted the corresponding water right approval by the State. Water that is taken directly from natural sources by the population for its own consumption does not require any special approval. \n The water uses that require the approval of the State are divided into (i) Population Use and (ii) Productive Use. \n Population use has priority over productive use. \n The State's consent can be via a License, Permit or Authorization. \n Electricity As of May 2024, Peru's electricity production amounted to 5'289 GWh, 53% of which is generated by hydroelectric sources, 38% by thermal sources, 7% by wind sources, and 2% by solar sources. This represents a varied and clean energy matrix.  \n In order to promote the energy transition in the country, as well as the adaptation of energy sources used in different production sectors, various regulations have been issued, for example:  \n \n Law No. 31992, Green Hydrogen Promotion Law (published on March 23rd, 2024) It declares the use of green hydrogen as a clean and renewable energy source as a matter of public necessity and national interest. In this sense, the sectoral energy policies and plans should be formulated to enable the development of the green hydrogen value chain through the establishment of short-, medium-- and long-term goals that are aligned with the national energy policy. \n Bill No. 3203/2022-CR, General Law on Electromobility The referred bill aims to establish the general regulatory framework for the promotion, the increase, and the sustained implementation of national electric transportation.   \n \n Real Estate Peru guarantees the right to real estate property, in accordance with Article 70 of the current Constitution. The Peruvian Government may only restrict the right to property for reasons of national security or public necessity that are declared by law and upon payment of compensation for the damages generated. \n Peruvian nationals and foreigners have the same rights and guarantees over the ownership of real estate. However, exceptionally, within fifty kilometers of Peru's borders, foreigners may not acquire or possess by any title whatsoever, mines, land, forests, water, fuel or energy sources, directly or indirectly, individually or in partnership, under the penalty of losing, for the benefit of the Peruvian Government, the right of ownership acquired. An exception is made in cases of public necessity expressly declared by supreme decree approved by the Council of Ministers in accordance with the law. \n For the development of commercial projects on real estate, agreements of sale, lease, usufruct and even surface are usually entered into, which grant different types of rights to the contracting parties and are subject to different requirements, depending on the contractual structure entered into by the parties. \n According to the provisions of the Peruvian Civil Code, when it is a transfer of ownership of real estate, the sole obligation to transfer the real estate to the acquirer is sufficient, without further formality, except for certain exceptions such as donation, where a Public Deed is required for the validity of the donation. \n However, in order to have legal certainty on the transfer of ownership, it is highly recommended to formalize the transfer of ownership by Public Deed and register the act in the Public Registries of Peru. \n Before entering into any type of agreement involving real estate, it is recommended that investors carry out a “Real Estate Due Diligence” in order to verify the current owners registered at the municipality and in the Public Registries, the chain of transfer of the property, encumbrances and/or encumbrances registered and a land use analysis in which the permitted uses and activities on the real estate are reviewed. \n Tourism According to the Peruvian Ministry of Foreign Trade and Tourism, as of July 2024, a total of 1,566,373 international tourists were registered in Peru during the period January-June 2024, a rate that reflects an increase of 47.1% compared to the first six months of 2023. \n Based on information from the National Superintendence of Migration of Peru, most tourists come from Chile, the USA, Ecuador, Bolivia and Brazil. Chileans are the most recurring tourists in Peru, noting that 363,236 tourists from Chile visited Peru during the first six months of 2024. Compared to 2023, the most notable variations in the increase in the number of foreign visitors came from Taiwan (248.1%), the Republic of China (122.1%), Bolivia (102.7 %), Japan (169,7%), Polonia (118,6%) and Portugal (111,7%).  \n In 2023, overall passenger movements at Peru's airports totaled 37.1 million, an increase of 14.6% over 2022, coming close to pre-pandemic numbers (representing a 92.7% improvement). Among international arrivals and departures Lima's Jorge Chávez airport concentrates 61.6% of the total general passenger movement at Peru's airports, followed by the airports of Cusco (8.1%), Arequipa (5.3%), Piura (2.9%) and Tarapoto (2.9%).  "]
["Establishing a Business: Cross-Cutting Matters"]
["Companies"," Closely Held Corporation The closely held corporation (“ Sociedad Anónima Cerrada ” or “ S.A.C. ”) must be composed of no more than 20 shareholders. Their shares of stock cannot be registered in the Securities Market Public Registry, and thus cannot be listed on the stock exchange. The establishment of a board of directors is optional, and the shareholders have the right of first refusal to acquire shares of stockholders who wish to transfer their shares. This right of first refusal may be eliminated if it is expressly agreed to in the bylaws. Moreover, specific causes for the exclusion of stockholders can be established. \n Openly Held Corporation A corporation is considered an openly held corporation (“ Sociedad Anónima Abierta ” or “ S.A.A. ”) when the corporation meets at least one of the following requirements: \n \n Has more than 750 stockholders. \n Has made an initial public offering of equity or convertible debt securities. \n More than 35% of its capital stock belongs to 175 or more stockholders, without considering in this number those shareholders whose personal tenancy of shares does not reach two by one thousand of the capital or exceed five percent of the capital. \n \n The transfer of shares cannot be restricted or limited; hence they do not have first refusal rights. \n The openly held corporation should have all its shares registered in the Stock Market Public Registry. The Superintendence of Securities Market (\" SMV \") is the government agency in charge of supervising and controlling publicly held corporations.  \n The minority shareholders' rights in an openly held corporation are the right to information; the right to request meeting calls by shareholders; the right to postpone shareholders´ meetings; the right to challenge resolutions; the right to suspend resolutions; the right to withdraw; among others.   \n Standard Corporation Corporations that do not comply with the requirements for publicly held or privately held corporations are considered to be standard corporations, regulated by the general clauses established for all corporations in the Corporate Law. \n Limited Liability Company The limited liability company has its capital divided into ownership rights of equal value, which are cumulative and indivisible and cannot be represented by shares of stocks. The total number of partners cannot be more than 20. Partners are not personally liable for the company's obligations. \n Similar to corporations, there is no minimum capital required. However, 25% of each participation must be paid in before registering the incorporation at the commercial registry. \n A general meeting is mandatory when requested by partners representing at least 20% of the paid-in capital. \n Management of the company is performed by one or more managers, elected by the partners, who may or may not be partners. Managers are prohibited from being involved on their own behalf or on behalf of third parties in the same type of business as the company. No board of directors is required. \n Transferability of ownership rights to heirs in case of the death of a partner may be restricted by the bylaws in favor of the other partners. Partners' ownership rights are not freely transferable to third parties. The partner must first offer its interests to the other partners who have preemptive rights to purchase the ownership rights. In case none of the partners exercise this right, the company may purchase and amortize them, resulting in a reduction of capital. If none of this occurs, the partner may freely transfer its interests to third parties. \n Foreign Branch A foreign branch of a corporation incorporated and domiciled abroad can be established in Peru by public deed which must be registered at the commercial registry. The public deed must contain at least the following: \n \n a document certifying that the main office in its country of origin is currently in force and that neither the bylaws nor the articles of incorporation contain any restriction on establishing a foreign branch; \n a copy of the bylaws or the partnership agreement in its country of origin; and \n the agreement by the competent corporate body to establish a foreign branch, among other documents needed. This agreement must state the capital assigned to the foreign branch, the declaration that its activities in the foreign country are included within its corporate purposes, the domicile of the foreign branch, the designation of at least one permanent legal representative in the country, the proxy conferred, and its submission to Peruvian laws. \n \n Association in Participation The association in participation type of business consists of a written contractual agreement between a managing partner ( asociante ) and a contributing partner ( asociado ). This agreement can be executed by two or more natural and/or juridical persons for the purpose of executing a particular business or project. The agreement is not subject to registration before the commercial registry. \n The managing partner of an association in participation agrees to grant the contributing partner a participation in the results or profits of one or more businesses of the managing partner in exchange for a determinate contribution such as money, property, or services, to the enterprise or project by the contributing partner. The managing partner acts in his or her own name and the association in participation has no legal name. Management of the business enterprise is solely performed by the managing partner who is the only person responsible to third parties. \n These types of agreements present various undeniable advantages and are an excellent mechanism used to satisfy the interests of the parties in initiating new business endeavors,  \n Consortium A consortium is an agreement by which two or more persons actively and directly participate in a specific Project or enterprise to obtain economic benefits. Each party maintains its own autonomy. Each member performs the activities entrusted to them by the consortium or assumed by them.  \n The assets contributed to the consortium remain the property of each member contributor. The joint acquisition of assets will be ruled under the joint ownership regime. \n Each member of the consortium is individually responsible to third parties for its activities within the consortium. Any rights or liabilities and responsibilities assumed are taken at the member's own risk. \n In case the consortium enters into an agreement with third parties, the responsibility is shared among the consortium members, unless stated otherwise in the agreement or by law. \n The consortium agreement must establish the participation of each member in the profits and losses. Otherwise, participation will be understood to be in equal parts for each member. "]
["Taxes"," Income Tax Income tax is levied on incomes derived from capital, work, or a combination of both; capital gains generated on the transfer of shares and immovable property, and patrimonial increases expressly established by the Income Tax Law. \n For income tax purposes, legal entities (as defined by law) and individuals are deemed to be taxpayers. \n In that regard, the domicile is a basic criterion to determine the tax treatment applicable. Domiciled taxpayers are taxed on their worldwide income, as opposed to non-domiciled taxpayers, who are subject to taxation only on their Peruvian source income. \n The net income obtained by domiciled corporations is considered as third-category income and it will be subject to a 29.5% tax rate. \n Income obtained by individuals is classified into two categories: (i) capital net income, and (ii) work net income. Tax rates apply from 5% to 30% depending on the type of income.  \n Lastly, as a general rule, Peruvian source income obtained by non-domiciled taxpayers is subject to a withholding tax rate of 30%. \n Nevertheless, special rates may be applicable in certain cases, for instance: \n \n Royalties A 30% withholding tax rate is applicable on royalties. For this purpose, the Income Tax Law has defined royalties as the payment in consideration of use, or the privilege of using, brands, designs, or models; plans, secret processes, or formulas; author rights on literary, artistic, or scientific work; as well as any payment for the assignment of software or any information related to industrial, commercial, or scientific experience. \n Interest Interest from credit operations will be subject to a withholding tax rate of 4.99%, provided:\n \n Foreign currency must be paid in through the Peruvian Financial System. \n The purpose of the foreign loan must have a relation with the corporate business. \n The foreign creditor and the domiciled debtor are not related parties. \n Credit must not accrue an annual interest of 30-day average SOFR plus 7. If the said condition is not fulfilled, only the surplus of the said rate will be subject to a 30% tax rate. Otherwise, a withholding tax rate of 30% will apply. \n \n \n \n Treatment of Dividends Domiciled corporations are not subject to the income tax on dividends received from other domiciled corporations. Different treatment applies to dividends payable to non-domiciled legal entities and to domiciled or non-domiciled individuals, to which withholding income tax at a rate of 5% is applicable.  \n Value Added Tax (\"VAT\") This tax is applied to the consumption of goods and services effected in Peru as follows: \n \n Local sale of goods. \n The rendering or use of services within the country. \n Construction contracts. \n The first sale of real estate was carried out by the constructor. \n The import of goods. \n \n The current VAT rate is 18%. Transfer of shares is not levied with VAT . \n Customs Duties and Import Taxes The importation of goods into Peruvian territory is subject to customs duties and import taxes (such as VAT , Municipal Promotion Tax, and Excise Tax, among others). \n Currently, customs duty rates are set at 0%, 4%, 6%, and 11%. The specific applicable rate depends on the 10-digit tariff subheading under which each good is classified according to the Peruvian Tariff Code . It must be noted that the tax base for customs duties is the customs value of the imported goods, determined in accordance with the World Trade Organization - WTO Valuation Agreement , as well as the national and Andean Community legislation. \n It is worth mentioning that tariff preferences may apply since Peru has signed 22 trade agreements with 58 countries. Among these are the United States of America, China, Canada, Chile, Costa Rica, Cuba, Japan, South Korea, Panama, Australia, Singapore, Thailand, United Kingdom and Venezuela. Furthermore, these agreements extend to the European Union, the European Free Trade Association, the Pacific Alliance, the Andean Community, MERCOSUR and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (\" CPTPP \"). \n Excise Tax The excise tax is levied on the local sale at the manufacturer level and the import of goods such as fuels, alcoholic beverages, vehicles, soft drinks, mineral water, cigarettes and tobacco, luxury items, casinos and games of chance.  \n Tax rates are variable (percentage system) and for some items, this tax is applied by charging a fixed amount per unit sold (specific system). \n Financial Transactions Tax (\"ITF\") The ITF is levied upon a series of financial transactions made through the Peruvian banking system, irrespective of the amount. This tax is applied to debits and credits in current accounts, saving accounts, deposits, liquid asset funds, trust funds and other financial funds.\\ \n The current rate for the ITF is 0.005%. \n Immovable Property tax transfer (“ Alcabala ”) Transfers of immovable property, whether for consideration or not, are subject to a tax levied by municipalities. The acquirer will be the taxpayer. \n The rate of this tax is 3% over the transaction value. A non-levied amount equivalent to 10 UIT (USD 13,900 approximately) is considered in order to determine the base. \n Temporary Tax on Net Transfers (\"ITAN\") This tax applies to taxpayers generating corporate income (third-category income) that are subject to the General Income Tax Regime. ITAN is applied over the value of a company's net assets as of December 31st of the foregoing year. Certain assets may be deducted in order to determine the taxable base, including assets granted in concession, and shares, among others. \n The rate of ITAN is 0.4% on the net asset value exceeding PEN 1 million (approximately USD 270,270). For net asset values below this threshold, the rate is 0%. \n Real Estate Property Tax \n The Real Estate Property Tax is an annual local tax imposed by the municipalities on the total value of rural or urban immovable property owned by an individual or a corporation within a local jurisdiction. \n The tax is applied at progressive rates as follows: \n • Up to 15 UIT (USD 20,800): 0.2% • Between 15 UIT and 60 UIT (USD 20,800 and USD 83,500): 0.6% • More than 60 UIT (USD 83,500): 1.0% \n Tax Treaties Peru has entered into Double Taxation Avoidance Agreements with Chile and Canada (both in force since 2004), Brazil (in force since 2010), as well as with Mexico, Portugal, South Korea and Switzerland (all of them in force since 2015), and Japan (in force since 2022). \n In the region, the Community of Andean Nations (Bolivia, Ecuador, Colombia, and Peru) has established a regime to avoid double taxation ( Decision No. 578 ). "]
["Labor"," Labor Laws Peruvian labor law classifies labor relations as falling into two regimes:  \n \n The individual labor regime, which regulates the relationship between employers and employees, is regulated by the Employment Law approved by Legislative Decree No. 728. \n The labor union regime, which regulates collective labor relations and collective bargaining, is regulated by the Labor Relations Law promulgated by Supreme Decree No. 010-2003-TR. \n \n Employee/Employer Labor Relations According to labor legislation, employers could sign with employees nonfixed-term or fixed-term agreements. As a general rule, labor agreements are under nonfixed-term agreements and have no formalities. Also, if the labor agreements have a fixed term, they must be held in writing, and their duration must be expressly stated, including the determining objective causes of the hiring, as well as the other conditions of the employment relationship.  \n Protection Against Arbitrary Dismissal The Peruvian Constitution recognizes the protection of the employee against arbitrary dismissal. This protection applies once the trial period is finished, and if the employee worked at least four hours per day.  \n The employee who is unfairly dismissed has the right to receive a special indemnity. An employee under a non-fixed term agreement has a special indemnity of an equivalent to 1.5 monthly salaries per year of service with a maximum of 12 monthly salaries. Periods of time less than one year are paid proportionally. If the employee is hired under a fixed-term agreement, the indemnity is equivalent to 1.5 monthly salaries per month remaining until the end of the agreement. Such indemnity may not be higher than 12 monthly salaries.  \n Equal Pay In Peru, there are regulations that prohibit pay discrimination between men and women. They indicate the need to determine categories, functions and remuneration that allow the execution of the principle of equal pay for work of equal value.  \n Sexual Harassment In the event that an employee has been harassed, the employer must amend the damage caused to those employees and take the necessary measures to stop the abuse.  \n Labor Benefits Peruvian legislation establishes certain benefits in favor of the employees, with which the employers must comply: \n \n Severance Payments and/or Compensation for Time Served (\"CTS\") Granted to employees who work a minimum of four hours per day. The CTS is granted twice a year (in May and November). \n Bonuses Employees have the right to receive two bonuses per year, one for Independence Day and the other for Christmas. The amount of the bonus consists of the basic remuneration amount plus any other amount fixed and permanently earned by the employee and which is freely available. \n Annual Vacation For each full year of service, an employee working a minimum of four hours per day is entitled to 30 calendar days of vacation. The payment for the vacation period is equal to the monthly remuneration the employee would receive if he/she were working. If the earned vacation is not taken within a year, the employee will be entitled to the following: (i) remuneration for work performed; (ii) remuneration for the earned but untaken vacation; and (iii) an indemnity for not having taken the vacation, equal to one month’s remuneration. \n Profit Sharing Companies with more than 20 employees that earn income and are subject to the private activity regime (i.e., private sector companies) must share their profits with their employees according to the percentages set forth by law. In this sense, employees of mining companies are entitled to 8%; employees of fishing companies, 10%; employees of industrial companies, 10%; employees of telecommunications companies, 10%; employees of wholesalers, retailers and restaurants, 8%; and employees of other activities, 5%. \n Weekly Rest Employees have the right at least to rest 24 consecutive hours per week, preferably on Sunday. Those employees who work on their rest day without replacing it with another day in the same week will have the right to compensation corresponding to the work performed plus an overtime rate of 100%. \n Holidays Employees are entitled to paid leave during legally approved holidays, in an amount equal to one day’s work. All work performed on holidays without being replaced by another day is subject to regular payment plus an overtime rate of 100%. \n Workday and Overtime The usual working day for women and men is eight hours per day and 48 hours per week as a maximum. The employer may establish atypical working days or alternative working regimes due to production requirements that may not exceed 48 hours per week. In case of overtime, the company must pay a surcharge to be agreed upon. This must be an additional 25% of the hourly rate for the first two overtime hours and an additional 35% of the hourly rate from the third additional hour onwards. \n Family Allowance Employees, whose remuneration is not regulated by collective bargaining, and who have at least one son or daughter under 18 years enjoy the equivalent of 10% of the Minimum Remuneration in force at the time when this benefit is enjoyed. Currently, the Minimum Remuneration is S/.1,025.00, equivalent to USD 277.02, approximately. \n Life Insurance Employees and workers are entitled to life insurance, for which the employer is responsible from the beginning of the labor relationship. In the event that the employer does not comply with this obligation, and the employee or worker dies or suffers an accident causing his or her temporal or permanent disability, the employer must pay his or her beneficiaries the value of the insurance established by law. \n \n Employees’ and Employers’ Contributions \n \n Pension Fund If an employee is in the pension system (in an AFP ), the employer must deduct from the employee's monthly remuneration an amount equal to the rate of approximately 12.83%. If the employee works for the public system, the rate is 13%. At the end of his or her stay in Peru, a foreigner can transfer abroad the funds accumulated in the private pension system. \n Income Tax Income tax is deducted from an employee's pay. The retention will be done during the year. For a person domiciled in Peru for tax reasons, the calculation should be made as a projection of the annual remuneration that the employee will receive. \n Social Security (\"ESSalud\") Employers are obligated to register their employees in the national health system and must pay an equivalent of 9% of the monthly remuneration of each employee. \n Private Health System (\"EPS\") It is possible for employees to be affiliated with a private health company that is complimentary to the service provided by ESSalud . In this case, the employer must pay the cost of the service to the EPS of 2.25% and should pay 6.75% of the monthly salary to ESSalud . \n "]
["Foreign Exchange and International Investment Regime"," Peruvian Foreign Investment Laws Peruvian foreign investment regime (“ FIR ”)  ensures foreign investors with tax and legal stability; availability of foreign currency; and nondiscriminatory treatment between national and foreign investors, to stimulate flows of foreign capital, and to enhance the growth of private investment in all economic sectors, including provisions regarding taxes, protecting investors from arbitrary changes, among others. \n What is Foreign Investment It is an investment coming from abroad and may be carried out in any economic activity that generates income, which may take several forms, including contributions made by foreign individuals or entities to the capital of a new or already existing company, conversion of private foreign debt into equity, reinvestment of profits made in accordance with current laws, acquisition of assets located in Peru, and any other type of foreign investment that contributes to the country's development, among others. \n Rights of Foreign Investors FIR establishes that all economic activities are open to foreign investment with no restriction on the participation of foreign investors, except the ones established in the Peruvian Constitution. Foreign investors are granted the same rights as national investors. \n Registration of Foreign Investment All capital contributions must be channeled through the Peruvian banking system. Foreign investments to be made in the country are automatically authorized. Once made, they must be registered with the Private Investment Promotion Agency (\" ProInversion \"), which will issue a certificate of registration evidencing the amount invested. \n ProInversion is also the agency in charge of matters relating to the signing of stability agreements. \n Restrictions  to Foreign Investment Participation in foreign investment in any sector has no prohibitions, except for some specific activities and for the restriction established in the Peruvian Constitution, including the ones provided in article 71 of the Peruvian Constitution, which states that foreign investors cannot acquire or possess, by any means, mines, land, water, forests, fuel, or energy sources, directly or indirectly, within 50 kilometers of the national border. \n Currency Investments and Remittance of Capital, Dividends and Royalties  Investment in foreign currency does not require any previous official authorization. Foreign investors do not need any type of authorization to transfer funds abroad from capital, profits, dividends, and royalties. These funds can be transferred in freely convertible currency after taxes are paid. \n Legal Stability Agreements for Private Investments Legal stability agreements are entered into with the Peruvian government through ProInversion, to maintain in effect certain legal provisions in force at the time the investment is made. The legal stability is granted for 10 years and the legal provisions that could be frozen include tax laws, free access to foreign exchange, and the right to nondiscriminatory treatment between investors based on national or foreign participation. \n To enjoy the benefits mentioned above, investors should comply with the investment requirements established in the corresponding regulations, which must be made by the same investor who enters into the agreement and can be in cash, contributions to the capital stock of a company already incorporated or to be incorporated in Peru, capitalization of debt, or capitalization of resources with remittance rights.  \n Tax Stability Agreements Local companies receiving foreign investment can also enjoy tax stability but only with respect to income tax, provided the amount of foreign investment meets the thresholds established in the applicable regulations. \n Guarantees to Foreign Investment Investors are authorized to acquire insurance within Peru and abroad, in order to protect their investments from commercial and noncommercial risks. Consequently, the government offers investors coverage to protect their investments through the World Bank Multilateral Investment Guarantee Agency (\" MIGA \"). \n MIGA secures investments against noncommercial risks related to issues such as currency inconvertibility and transfer restriction, expropriation, war and civil disturbances, or in case of violation of agreements signed with the investors. MIGA also offers advice services to improve the image of signatory countries to attract investments. \n On the other hand, Peru has signed a financing agreement with the United States of America over the incentives for investments that permit the “Overseas Private Investment Corporation” (\" OPIC \"), which has been transformed into the U.S. International Development Finance Corporation (\" DFC \") in December 2019, to issue insurance, coinsurances, or guaranties to open investments of the United States of America in Peru. DFC promotes development through financial arrangements totally or partially supported by the government of the United States of America. \n Investment Agreements Peru has signed the following agreements: Bilateral investment agreements with Australia, China, Korea, Malaysia, Singapore, Thailand, Japan, Canada, United States, Cuba, El Salvador, Argentina, Bolivia, Chile, Colombia, Ecuador, Paraguay, Venezuela, Germany, Belgium, Luxembourg, Denmark, Spain, Finland, France, Netherlands, Italy, Norway, Portugal, United Kingdom, Czech Republic, Romania, Sweden and Switzerland. Free Trade Agreements (\" FTA \") with China, Singapore, Canada, United States and Chile, and is currently negotiating FTA with Mexico, Japan, Corea and EFTA . \n Loans The Peruvian foreign investment regime has included some guidelines with respect to the establishment of loans: \n \n Foreign exchange transactions are free, and there are no restrictions for entering into loans in foreign currencies. \n The disbursement is made in the currency agreed upon, and the borrower is not obliged to convert the foreign loan into local currency.  \n Payment of interest and repayment of the loan's principal may be made without restrictions (different than those agreed to by the parties to the loan agreement) and does not require any authorization. \n There are no differences between local banks making loans to Peruvian or to foreign resident investors. \n "]
["Establishing a Business: Specific Matters"]
["Customs","Not applicable.\n"]
["Migration"," Immigration Foreign people who enter Peru to carry out various activities are subject to different immigration classifications. \n Temporary Immigration Status Among these we have the following: \n \n International Agreements Application, period of stay, possibility of extension and other characteristics will be those stipulated in international treaties or conventions to which Peru is a party. \n Artistic or Sports The period of stay is 90 days, which cannot be extended. \n Business It allows the foreigner without the intention of residence to carry out activities of a business, legal, contractual, specialized technical assistance or similar nature. The period of stay is 183 days, cumulative for a period of 365 days, which is not extendable. \n Worker/Assigned It allows the entry and stay of foreigners who wish to carry out the same activities referred to as resident, employee and designated resident migratory qualities, but with no intention of residence. The period of stay is 183 days, cumulative for a period of 365 days, extendable for the same period. \n Tourism The period of stay is 183 days, which may be accumulated over a period of 365 days, which may not be extended. \n \n Resident Immigration Status Authorizes entry and/or residence in the territory of the Republic, which is renewable and allows multiple entries. These are, among others, the following: \n \n Designated Allows the foreigner to carry out work activities in the national territory consisting of the performance of a specific task or function or work requiring professional, commercial, technical or specialized knowledge sent by a foreign employer. The period of stay is 365 days. \n Training and Education Allows the foreigner to carry out work activities in the national territory consisting of the performance of a specific task or function or work requiring professional, commercial, technical or specialized knowledge sent by a foreign employer. The period of stay is 365 days. \n Investor Allows the foreigner to establish, develop or manage one or more lawful investments. The period of stay is 365 days. \n Employee Allows the foreigner to carry out gainful activities in a subordinate or independent manner for the public or private sectors, by virtue of an employment contract, administrative relationship or contract for the provision of services. The period of stay is 365 days. \n Resident Family Member It allows residence to the foreigner who is a member of the family immigration unit of a Peruvian or resident foreigner. It allows the carrying out of subordinate or independent gainful activities. The period of stay is up to 2 years. \n Rentier It allows the residence to the foreigner who enjoys a retirement pension or permanent income from a Peruvian or foreign source. The period of stay is indefinite. \n Permanent It allows the foreigner to reside indefinitely after 3 years as a legal resident. The period of stay is indefinite. \n "]
["Environmental","Under the \nEnvironmental General Law, Law 28611, any productive or commercial activity that is susceptible to causing environmental damage requires an environmental assessment approved by the authority before the activity is started. This assessment must contain a description of all the possible consequences of the activity on the environment and the ways in which the applicant plans to avoid or reduce these damages to tolerable levels.\nThese levels vary according to the productive or commercial sector concerned. Additionally, these limits can vary depending on certain factors such as the place; thus, it is always necessary to do the appropriate investigations at the local level.\nThe level of detail of the environmental assessment depends on the level of impact that can be caused by the activity in question. For certain activities considered by law as having a high impact will have to be a \nDetailed Environmental Impact Study (\"\nEIA-d\"). The\n Semi-detailed EIA (\"\nEIA-sd\") for moderate negative environmental impacts and the \nEnvironmental Impact Declaration (\"\nDIA\") for minor negative environmental impacts.\nSome companies have had to file an Environmental Adaptation Management Program (\"\nPAMA\") instead of an \nEIA, \nEIA-sd, or \nDIAbecause they were already operating when the environmental obligation was enacted. They were granted time and a program to adapt to the new standards.\nAlso, every 5 years, the environmental assessment must be updated in the components that require it and presented to the authority, according to the sector. However, investment projects must be considered dynamic and might require modifications or adjustments in time to optimize their operations. In some cases, those changes may require a modification of the environmental assessment. If the modifications generate significant negative environmental impacts, a modification to the environmental study must be processed through the regular procedure. Otherwise, in case the impact is not significant, a modification to the environmental study must be processed through the \nSubstantive Technical Report (\"\nITS\").\nSome activities (such as mining, oil, energy, manufacturing industry, etc.) might have special environmental obligations, but all of these regulations are framed in the general regime of the \nEnvironmental General Law."]
["Real Estate","Not applicable.\n"]
["Intellectual Property","In Peru, trademarks, distinctive signs, trade names, slogans, patents, utility models, industrial designs, and trade secrets are governed by \nDecision 486 of the Andean Community (hereinafter “\nDecision 486”), which rules the main aspects of the Industrial Property regulation, applicable to all countries that are members of the Andean Community (Bolivia, Colombia, Ecuador, and Peru).\nAdditionally, the complementary rules for \nDecision 486, are governed by Legislative Decree 1075, which includes the special regulations the local authority has ruled on Intellectual Property.\nThe National Institute for the Defense of Competition and the Protection of Intellectual Property (hereinafter “Indecopi”) is the governmental agency in charge of the enforcement of industrial property dispositions.\nTrademarks\nTrademarks are protected through their registration before the corresponding Trademark Office, Indecopi. The trademark registry procedure takes nearly 4 months until the registry is granted if no oppositions are filed. The transfer of trademarks or any act of disposition of the same should be recorded before the corresponding trademark authority. Any enforcement of the trademarks in the territory is subject to the territory, and their corresponding use in commerce. The lack of use of the trademark within a 3-year term could lead to be subject of a cancelation action if no evidence of use is provided. Trademark registrations are protected for 10-year terms, which may be renewed consequently for equal terms.\nPatents\nPatents are protected through their registration before the corresponding Patent Office, Indecopi. The registration process for patents takes at least two years. Patents for inventions can be granted in Peru, for goods or processes in all areas of technology that are new, have an inventive level, and are industrially applicable. The government grants the patent holder the exclusive right to exploit the invention within its territory. An invention may be considered new when it is not included in the state of the art. The state of the art includes everything that has been made available to the public by a written or oral description, use, marketing, or any other means prior to the filing date of the patent or, where appropriate, of the priority claimed.\n\n\nThe protection of the right that is granted by the patent registration lasts 20 years. After this period, it is not possible to renew the patent. Once the term is over, the patent will be in the public domain.\n\n\nIn Peru, it is possible to apply for the registry of patents that are filed outside the territory within a State member of the \nParis Convention, or by filing the Patent Prosecution Highway system or a Patent Cooperation Treaty or the \nPCT application as Peru is a State member of the \nPCT.\nCopyrights\nCopyrights are governed by \nDecision 351 of the Andean Community applicable to all countries that are members of the Andean Community (hereinafter \"\nDecision 351\"), and \nCopyright Law 822, which is the law that governs the main aspects of the copyrighted works (hereinafter \"\nCopyright Law\"). In Peru copyrights are protected even if they are not registered; they are declarative, according to the Bern Convention, but the registration makes the copyrights opposable to third parties. \n\n\nThe rights of the author last all of the author's life and 70 years after the author's death, no matter the country of origin of the work. Once this time elapses, the work belongs to the public domain.\nTechnology Transfer Agreements\nThere is no need for authorization by a government agency before one can enter into technology transfer agreements, licenses for the use of patents, trademarks, and other foreign copyrights, technical assistance, basic and detailed engineering, and franchises. However, this sort of agreement which includes payment of royalties has to be submitted to registration by the Inventions and New Technologies Direction in Indecopi.\n\n\nThese agreements give the right to remit royalties or stipulated payments abroad in strong currency and through the banking system, after tax deduction.\n"]
["Consumer"," The Consumer Protection Law, Law Nº 29571 (hereinafter the \" Consumer Code \"), is the regulation that governs the relations between natural persons and companies within the market. The main condition that should apply is that to qualify as a consumer, the individual should enjoy and use the services as a final destination, and not carry on their activity as a supplier or their profession. Additionally, the service or product to be acquired should be held within the Peruvian territory, or their effects be produced therein. \n The Consumer Code was created to compile all the norms related to Consumer Protection Regulations , and to establish the main rights consumers hold, and the obligations suppliers have. The mentioned Consumers Code protects consumers to an even greater degree, by introducing a free system of claims management known as the “Book of Claims”, which all businesses must own in their establishment or even make available in the virtual means these businesses use to provide their services, example their webpage. Consumers can register in this format their claims, in a determined format established and suppliers must provide an answer within 15 business days term. Suppliers are responsible, among other things, for the following: \n \n To give safe goods and services that must correspond with the description and advertising labels and have reasonably expected conditions of use and durability. Goods must be fit and of satisfactory quality. In summary, the Consumer Code states that certain terms are implied in every transaction for the transfer of goods. \n The sale price of goods and services must be offered in national currency (Soles) and will include the value-added tax (\" VAT \"). If the price tag is in a foreign currency, the national currency must also be included, in equal lettering and condition. \n To provide consumers with relevant, clear, and comprehensive information. In this sense, all information on national goods must be offered in Spanish. In the case of foreign goods, the information related to warranty conditions, instructions, warnings and risks, and safety procedures in case of injury must be also in Spanish. \n \n All consumers have the right to: \n \n Be informed of all the relevant information, in order to make an informed decision about the choice of the product or services, as well as for using them correctly. \n A suitable product or service. A product or service is suitable when there is a confluence between the quality offered and the quality received. \n Not be discriminated against. For example, when a public establishment restricts a person who fulfills the requirements for entry from entering the establishment. \n "]
["Compliance","In recent years, Peru has been committed to preventing money laundering and terrorism financing. As part of this commitment, in 2022, it was issued \nLaw No. 27693 – Law that created Peru´s Finance Intelligence Unit (\"\nUIF-Perú\"). This \nLaw -with its different modifications- regulates the functions of the \nUIF-Perú to prevent the commission of money laundering and terrorism financing, as well as establishes a list of obligated parties to report any suspicious transactions.\nThese obligated parties (\nSection 8°) must implement a prevention system to register any transaction according to certain conditions and to report transactions suspected to be linked to money laundering or terrorism financing. The failure to implement the prevention system can imply the imposition of sanctions by the Banking and Insurance Superintendency.\nAdditionally, \nLaw No. 30424 – Law that Regulates the Administrative Liability of Legal Entities in a Criminal Process, it was established a new system that allows the autonomous and independent criminal investigation, prosecution, and sanction of legal entities. This new system will apply only to certain crimes, including corruption, money laundering, terrorism, and customs crimes, among others (\nSection 1°). Despite the \nLaw not being mandatory, the effective implementation and execution of a \nPrevention Model, according to the \nLaw and its \nRegulation (\"\nSupreme Decree No. 002-2019-JUS\"), can imply the exemption or mitigation of the possible liability and sanction.\n"]
["Personal Data","Personal data, according to the \nPeruvian Personal Data Protection Legal Framework (Law No. 29733 of 2011 and Supreme Decree No. 003-2013-JUS of 2013, “\nPDPL”), is understood as any: numerical, alphabetical, graphic, photographic or acoustic information on personal habits, or otherwise, making individuals be identifiable or identifying them by means that can be reasonably used. Likewise, the \nPDPL defines sensitive data as any information consisting of biometric data that can identify the data subject, or data related to race, ethnicity, income; religious, political, philosophical or moral opinions, union membership, and information related to health or sex life.\nThe legal basis for personal data processing under de \nPDPL is through the obtention of the data subject’s consent. This consent must be free (without error, bad faith, violence or fraud); prior (before the processing takes place); express and unequivocal (manifested in conditions that do not admit any doubts as to its granting); and informed (data subjects must be informed through a privacy note about: (i) the identification of the data controller, (ii) which personal data will be processed, (iii) the purposes of the processing, (iv) the retention term, (v) the national and international data transfers, (vi) the means to exercise their ARCO rights, and (vii) the databank where the information will be processed).\nNevertheless, the \nPDPL also provides exemptions where consent is not required from data subjects when the personal data, however, the data controller must comply with the duty of information through a privacy note. Peru is a jurisdiction where the registration of databanks is mandatory.\nAny act or omission that contravenes or fails to comply with the provisions of the \nPDPL constitutes a punishable infraction. The Peruvian Personal Data Protection Authority (“\nPDPA”) can impose administrative fines against data controllers that may be the result of a minor, serious or very serious infraction (the amount of the fine is between USD 695.00 to USD 138,789 approximately depending on the infraction), as well as corrective measures related to the data processing.\n"]
["Antitrust"," Repression of Anti-competitive Behaviors The Peruvian Constitution (1993) established a “social market economy model” , setting rules, guiding principles, and economic fundamental rights that allow its operation. Thus, it recognizes the function of the state with respect to the economy, preventing the rising of monopolies or dominant market positions, in a way that produces alterations in the economic order. Therefore, even though the legal system itself does not prohibit dominant positions or monopoly on a market, the abuse of such position is considered as prejudicial against the competition and the market. \n Prohibitions There are two kinds of prohibitions regulated by the Law of Repression of Anticompetitive Behaviors (\" Legislative Decree 1034 \"): \n \n Absolute Bans (“ per se prohibition ”) It is enough that the competition authority proves its existence to be an administrative infringement. \n Relative Bans (“ rule of reason ”) The competition authority must prove its existence and that it has or could have generated negative effects on competition and consumers’ welfare. \n \n Abuse of Dominant Position As per Peruvian Law , an economic agent abuses its dominant position when he or she uses its position to illegally restrict competition, obtaining benefits and harming real or potential, direct or indirect competitors, which would not have been possible if it did not have that position. Abuse of a dominant position may include conducts of exclusory effect (absolute bans) as well as conducts that are considered relative bans. \n Horizontal Collusive Practices Horizontal collusive practices are those agreements or practices performed by economic agents who compete with each other (since their businesses undertake the same economic activity and the same value chain), and whose purposes or effects are to restrict, impede, and distort free competition. Most of the horizontal collusive practices are analyzed by the “rule of reason” (the mere existence of a horizontal practice is not illegal itself as it should be shown that this practice could have had detrimental effects on the market). On the other side, there is a group of practices that are sanctioned as “per se” illegal conducts (inter-brand horizontal agreements), that is, between competitors of different brands, that have as purpose to: \n \n Fixing prices or other commercial or service conditions \n Limit production or sales \n Distribute the market (clients, suppliers, geographical zones) \n Establish abstentions or postures in tenders or other types of public contracting or acquisition under Peruvian legislation, as well as in public bids and auctions. \n \n Vertical Collusive Practices Vertical collusive practices are defined as arranged practices performed by economic agents that operate in different parts of a chain of production, distribution, or commercialization, whose purposes or effects are to restrict, impede, or distort free competition. The configuration of a vertical collusive practice requires that at least one of the parties involved have, before said offense, a dominant position in the relevant market. Vertical collusive practices constitute relative prohibitions. \n Control of Mergers and Acquisitions As per Peruvian law, since June 2021, it is mandatory for companies that undertake the same economic activity or participate in the same value chain and meet the thresholds set forth by the Law to inform Indecopi (the Competition Authority) about any transaction that implies acts of concentration that produce effects in all or part of the national territory, including acts held abroad that link, directly or indirectly, to any economic agent that develops economic activities in Peru. \n These transactions could be mergers, acquisitions, joint ventures or similar, acquisitions of direct or indirect control. \n The thresholds are determined in Tax Units: (i) individual threshold (18,000 tax units) and (ii) joint threshold (118,000 tax units). Both thresholds must be reached by the whole parties, in order to notify the transaction before the authority. If the parties of the transaction have a corporate presence in Peru through subsidiaries or affiliates, the assets and operating incomes considered for threshold calculations will be those of the parties and their economic groups in Peru. \n Unfair Competition The Repression of Unfair Competition Law (\" Legislative Decree No. 1044 \") aims to prevent and sanction any act of unlawful trade practice or deceptive act in the usual course of business. \n This regulation is pertinent to any act that is considered a dishonest commercial practice, no matter the sector or economic activity in which it is performed, including acts of publicity, whether carried out by any natural person or legal entity. It applies to any act of unfair competition that produces its effects in any given part or the entire national territory. This can also be produced abroad; therefore, if an act of unfair competition has its origin in another country it can be treated in the courts of Peru. \n Any method or practice in the conduct of usual trade or commerce contrary to honest commercial practices and good faith will be considered unfair and so an unlawful and prohibited act. The administrative authority will determine the true nature of acts under investigation, applying the principle of “primacy of reality”. "]
["Infrastructure and Public Utilities","Not applicable.\n"]
["Termination of a Business "]
["Voluntary Liquidation","Not applicable.\n"]
["Insolvency and Bankruptcy Regime"," Bankruptcy In Peru, bankruptcy proceedings are regulated by the General Insolvency System Law (referred to as the “ Law ”), issued in August 2002 and amended in July 2008. This law has the purpose of effective reclamation of the credits in order to protect the creditors' rights and the timely re-establishment of the payment chain. It provides alternatives to bankruptcy such as companies' restructuring. \n Options available for creditors or debtors: \n \n Preventive procedure over the company \n Ordinary procedure for restructuring or liquidation of the company \n \n Preventive Procedure This is a simpler proceeding that is only filed by the debtor, with the purpose of rescheduling the debtor's obligations through a global refinance agreement with the majority of its creditors. \n If such an agreement fails to be approved, the debtor may be taken into an ordinary proceeding, in case the decision to disapprove the global refinance agreement comes from more than 50% of the creditors participating at the creditors' meeting. \n Ordinary Procedure - Restructuring If the creditors' meeting decides to continue with the debtor's activities, the debtor will enter into a patrimonial restructuring regime for the term established in the corresponding restructuring plan. \n The creditors' meeting will decide which management regime is convenient, choosing among the following alternatives: \n \n The company will continue to be managed by the former administration; \n Special management will be named; or \n A combined management will be chosen with members of the former administration and new managers (natural or juridical persons) elected by the creditors' meeting. \n \n On the other side, Indecopi will opt for the dissolution and liquidation if the creditor's meeting: \n \n Does not meet; \n Does not decide on the future of the debtor; or \n Does not agree on the restructuring plan or the liquidation agreement, depending on the case. \n \n The restructuring plan has to be approved by the creditors' meeting within 60 days after the decision to restructure the company has been taken. \n The plan must include mechanisms for putting the company in economic and financial order and for paying its debts. While the plan is being executed, the company's assets are legally protected against actions that creditors may bring individually. \n The restructuring process concludes after the payment of all the claims against the debtor has been demonstrated. All liabilities must be canceled according to the payment schedule in the plan. \n At the conclusion of the process, Indecopi will lift the company's insolvency status and the functions of the creditors' meeting cease. \n Liquidation As a consequence of the creditors' meeting resolution approving the debtor's dissolution and liquidation, the debtor may not be able to continue with the activities included in its line of business unless the liquidation agreement requires it to make assets more liquid. If the debtor continues business when it should not, the company will be fined. \n The continuance of the activities, simultaneously with the liquidation process, may also be agreed to as long as they are carried out in no longer than a six-month term; in order to make assets more liquid. \n The creditor's meeting must approve by signature a liquidation agreement and appoint a liquidator registered with Indecopi. \n The effects of the resolution approving the debtor's dissolution and liquidation are: \n \n Creation of an indivisible state between the debtor and its creditors, which includes all the assets and liabilities of the first one, even though those liabilities do not have an expired term. \n Directors, managers, and other executives cease in their functions of managing the goods of the insolvent party. \n The appointed liquidator assumes management and legal representation of the debtor. \n All payment obligations of the debtor will be demandable, regardless of their expiration date. \n \n The liquidator has the following attributions and responsibilities, among others: \n \n Proceed to protect the interests of the insolvent in the assets; \n Dispose of personal property and real estate, amounts due, rights, and securities belonging to the insolvent; \n Provisionally continue running the business of the insolvent; \n Terminate the employment contracts; \n Sign all the necessary agreements, settle and carry on all the strictly necessary credit operations to cover the expenses and liabilities originated in the liquidation, always informing the creditors' meeting of these activities; and \n Request the release of all the liens and encumbrances on the assets of the debtor. \n \n The claims duly recognized by Indecopi must be canceled by the liquidator, up to an amount covered by the insolvent's net worth. \n If after paying, the net worth is not enough to cover all the claims, the liquidator will demand the judicial bankruptcy of the insolvent. "]