Economic gains attractive in Peru, reports Country Profile
The center coat of arms features a shield bearing a vicuna (representing fauna), a cinchona tree (the source of quinine, signifying flora), and a yellow cornucopia spilling out coins (denoting mineral wealth). The red color recalls blood shed for independence, while the white color symbolizes peace.
Location: In western South America, between Chile and Ecuador and bordering the South Pacific Ocean, Peru is almost twice the size of Texas.
Language: Spanish (82.9%), Quechua (13.3%) and Aymara (1.6%) are all official languages
Total Population: 31.3 million
Government: Presidential republic
Religion: Roman Catholic and other Christian religions, including evangelical
Economy: One of the fastest-growing economies in Latin America, Peru relies on its mining and agricultural sectors to fuel an export-oriented model, one that at times has made it vulnerable to fluctuations in world prices. The country’s free trade policy has brought numerous trade deals, including the U.S.-Peru Trade Promotion Agreement, which has nearly doubled total trade between the two since 2009, to $16 billion in 2017. President Martín Vizcarra is continuing Peru’s pro-market policies, and in 2017 the country’s 2.5 percent GDP growth was among the highest in the region. This is despite ongoing challenges in reducing corruption, increasing productivity and improving infrastructure. The central government recently initiated plans for public-private partnership infrastructure projects valued at $10 billion.
Cultural note: Like many Latin American countries, business in Peru is based on having a personal relationship first. And Peruvians tend to be more comfortable dealing with individuals rather than corporations, so don’t switch up your company’s players during negotiations or you may find the Peruvian business people will call a halt to the process.
GDP (official exchange rate): $214.2 billion
Currency: Peruvian Sol (conversion rate at press time: 1 PEN equals $0.30 USD).
Franchising in Peru: The past 10 years brought rapid growth to Peru’s franchising sector and it continues to grow approximately 20 percent per year, with close to 90 U.S. brands now operating there, primarily in foodservice. Franchisors should note there’s a 30 percent income tax on royalties, 18 percent value added tax (paid by the local company), and import tariffs dependent on the type of good. The U.S. Commercial Service in Lima, along with the American Chamber of Commerce and Grupo Nexo Franquicia, founded a franchise committee to promote and market U.S. franchises in the country.
Ease of doing business ranking by World Bank: 68, no change from 2018 when it dropped from 58.