5 reasons why Peru is the best country to do business in 2023

Peru has been among the fastest growing economies in Latin America for the past ten years. It has low inflation, a thriving tourism sector and a government that encourages foreign investment in many different areas types of businesses in Peru. Doing business in Peru is an excellent choice for any business.

Business in Peru recovered strongly from the pandemic in 2021, with a 13.61 percent increase in its GDP. This economic growth slowed in 2022 but was still above the region's average.

Is Peru a good country to do business in?

Peru was recently ranked number 31 out of 137 countries BTI Transformation Index, ahead of Colombia, Mexico, Ecuador and Paraguay. The index analyzes and evaluates how countries steer social change towards democracy and a market economy.

Although there has been recent political turmoil, in February the government unveiled 30 new public-private projects worth nearly $9 billion, which is positive news for companies looking to do business in Peru.

The top 5 reasons to do business in Peru

• Strong mining industry
• Growing economy
• Favorable tax system
• Few rules for foreign investment
• Develop talent pool

Below is a more in-depth analysis of these five reasons why Peru is a good country to do business in 2023.

1 – Open to foreign investment

In Peru, both foreign and local investors enjoy equal rights over their investments under the principle of “national treatment” under the country's legislation.

It prohibits any authority from discriminating based on nationality, type of economic activity, geographical location in the country, in terms of prices, aspects of exchange, tariffs, non-tariff charges or business information.

Most companies in Peru have no specific restrictions or requirements on foreign investment. This favorable business environment for foreign investors makes Peru an ideal location for expansion.

2 – Beneficial tax system

The Peruvian government offers foreign tax credits for income tax paid

to the foreign income levied by the Peruvian Income Tax Law (PITL).

To attract more business in Peru, special economic zones have been created. These zones offer tax breaks and other benefits to companies operating within their borders.

These zones also provide essential infrastructure, such as high-speed internet, power and transport, making it easier for businesses to establish themselves in the country.

There is also one special deduction program for scientific research, technical development and innovation projects. This program allows taxpayers investing in such projects to deduct either 150% or 175% of the costs, depending on the nature of the project.

3 – Growing economy

The Peruvian economy is expected to grow by just below 3 percent this year which may sound low but it significantly exceeds the Latin American average of just over 1 percent for 2023.

Even with the increase in inflation worldwide, Peru's current rate of 8.6 percent (January 2023) is below neighboring Chile, Colombia, Uruguay and the LATAM average of 11.45 percent.

Add tax breaks, the foreign investment policy and the conditions for doing business in Peru are still very positive.

4 – Strong mining industry

Peru has rich deposits of copper, gold, silver, zinc, lead and natural gas. The mining sector drives Peru's economy, contributing 8.5% to its GDP. Mineral exports make up the majority of the country's total exports and amount to 63.9%.

The sector has attracted significant investment over the past two decades, leading to an increase in exploration and development activities. Peru is one of the world's leading producers of mineral commodities, with copper and gold as the most valuable mineral exports.

Due to its geological potential and low production costs, Peru's mining industry is an attractive investment opportunity.

5 – Develop skilled talents

Due to government investments in science, technology, engineering and mathematics education in recent years, Peru has a thriving technology industry.

As a result, it is among the top 10 countries per capita for tech entrepreneurship, with 25% of Peruvians starting a business in the past four years.

Peru has one large and growing technical talent poolwith around 30,000 skilled and skilled software engineers.

What are the top three industries for business in Peru?

With a population of over 34 million, Peru has an emerging, social market economy with many free trade agreements including the US and China.

Here are the top three industries for business in Peru:

• Accent – As previously mentioned, the mining and metals sector is the main industry in Peru. It has approximately 200 mines in operation employing over 235,000 workers and several major projects under development.

Peru continues to be an attractive destination for mining investment with large metal and mineral reserves. There is also no discrimination between domestic and foreign companies under Peruvian laws, regulations and customs.

• Tourism – Peru's tourism industry is famous for its world heritage Machu Picchu and continues to flourish. It is predicted increase in revenue in 2023 with 31.8 percent.

Although tourist arrivals have not reached pre-pandemic numbers, Peru is still expected to receive over 2.5 million visitors this year. Its tourism revenue reached US$2 billion in 2022.

• Agribusiness – Peruvian exports to the USA rose 23 percent between January and November 2022. This growth, driven by Peru's agriculture and livestock industry, had a cumulative growth of 367 percent.

The agricultural industry in Peru has grown from 582 companies in 2009 to over 945 exporting companies today. Blueberries, fresh asparagus, grapes and avocado led the way.

These leading industries offer exciting investment and business opportunities in Peru this year.

Biz Latin Hub can help your business grow

Biz Latin Hub can act as your exclusive partner for establishment and operations in Peru.

Our team of bilingual business support specialists in Lima can provide you with a tailored package of services. These include business formationaccounting and taxation, legal support, employment and PEO.

To discover more about how we can help you do business in Peru and the rest of Latin America, contact our expert team today.