Doing business

(Last updated: 07 May 2008)
 

Business opportunities

Austrade’s business development specialists have prepared a range of market profiles that offer potential to assist in your exporting investigations. Austrade’s in-market teams have identified opportunities for Australian exporters in various industries (see 'Profiled industries in this market' on the left side of this page).

In conjunction with the market profiles, the Opportunities Online portal may be a useful addition to your information sources. The database established by Austrade aims to deliver international sales leads ('export opportunities'), including tenders, identified by our overseas network to Australian businesses.

Registering is simple and once this is done you will have the option of accessing a weekly newsletter featuring the most recent opportunities uploaded onto the system in industry sectors of interest to you. Another feature is the ability to view, and also print, the complete page of opportunity details.

For general inquiries concerning Austrade’s services, please contact Austrade Direct on 13 28 78.

Business etiquette

Business tips

Initial correspondence with potential business partners should be in Spanish, as letters in English are more likely to be given lower priority.

The level of proficiency in English varies widely among Peruvian business executives - many understand and read more fluently than they are willing or able to speak, and therefore an interpreter may be useful.

Personal contacts do play a special role in Peru and can make the difference between finding an open or a closed door.

Peruvians are formal and generally conservative when it comes to dress. Business attire for men is a suit/jacket and tie except for certain sectors such as design, mining engineers or those working in ITC. For women, business dress is usually a suit or jacket and skirt. Many corporations expect their staff to wear uniforms. Evening functions are similarly dressy unless advised otherwise. Business or social clubs often enforce very conservative dress codes not allowing men to remove jackets, wear jeans or insisting on ‘whites’ for the tennis courts.

Corruption is on the decline, and is now being actively combated by the government.

Please also note:

Bribery of foreign public officials is a crime. Australian individuals and companies can be prosecuted in Australia for bribing foreign officials when overseas. For more information, go to the Attorney General's Department on foreign bribery.

Tariffs and non-tariff barriers

Tariff

Peru has a single-column tariff based on the Harmonised System. Duties are all ad valorem assessed on the CIF value (Incoterms 1990). Preference is granted on specified items to other member countries of the Andean Group Pact (eg. Bolivia, Colombia, Ecuador and Venezuela). Preferences are also granted on certain products to members of the Latin American Integration Association (ALADI).

Tariffs on 90 per cent of imports into Peru are 12 per cent with the remainder being charged at 20 per cent. These duties are based on the cost, insurance and freight (CIF) value. Software imports are charged 30 per cent duty unless provided as part of services provided outside Peru, in which case the rate is 12 per cent. Peruvian Certificates of Withholding Tax can be applied against taxes owing in the USA. You should consult with Australian tax officials to determine whether these may be accepted in Australia.

Although there is no exemption available on custom duties, there is some assistance for exporters of raw materials and supplies to Peru that will be used to manufacture goods that will subsequently be exported within one year. The government allows new projects to defer the payment of duties payable on imported capital items, notably for mining. The net benefit for the importer is that companies can elect to spread the payments out over a period of four-and-a-half to seven years in equal six monthly instalments rather than having to pay the total amount immediately.

Customs authority contact details:

Superintendencia Nacional de Aduanas (SUNAD)
Avenida Gamarra 680, Chucuito
Callao
Tel: +511 465 5885
Fax: +511 465 3221

Non-tariff barriers

Import restrictions

Importers must be listed in the National Register.

A small range of goods are prohibited (mainly for health or security reasons), although the number has declined dramatically in recent years.

Most imports are subject to pre-shipment inspection by SGS (Australia) Pty Ltd (see 'Preshipment inspection' below).

For foreign exchange payments traders may conduct their transactions freely on the open market.

Product certification, labelling and packaging

Labelling and marking

Outer containers should bear consignee's mark and port mark, must show gross and net weights (in kilograms), external dimensions and should also be numbered. Details must correspond with bill of lading and packing list.

Serial numbers, weights and other markings must be shown on tags attached to materials such as piping, rods and wire shipped in bundles.

All manufactured products must be labelled to indicate brand name, name of manufacturer, country of manufacture, and expiry date (if warranted).

Evaporated, condensed and other processed milk must show on the container or label, the description and quantity of the principal raw materials used and the month and year of production.

Labels of certain goods including matches, cigarettes and all pharmaceuticals for human or veterinary use must meet the requirements of special regulations.

All gold and silver articles of foreign origin must be stamped with a quality mark and an indication of origin. 

Special certificates

Butter, cheese and powdered milk require certificates of quality and chemical analysis issued by the Department of Primary Industries and Energy. Butter, milk, lard and flour require certificates of purity.

Livestock, animal products, plants and plant products require sanitary or phytosanitary certificates, issued by the approved authority in the country of origin. In Australia this is usually the Australian Quarantine and Inspection Service, (AQIS)Commonwealth Department of Agriculture, Fisheries and Forestry-Australia or the relevant state department of agriculture.

Documents covering all farm and fisheries produce must also be accompanied by a import permit by the Peruvian Ministry of Agriculture (see 'Public health requirements' above).

Liquor imports require one commercial invoice, one certificate of purity, and certificate of origin.

Glass containers for medical purposes must be accompanied by a certificate of quality from the health authorities in the country of origin.

Medicinal products for veterinary use must have a certificate in Spanish, issued by the competent authorities specifying that the manufacturing laboratories are under due control of the veterinary sanitary authorities.

Most imports require a pre-shipment inspection certificate issued by an approved inspection company.

Packaging

There are no restrictions on the type of packing material. Goods should be packed securely, having due regard to the nature of the goods, means of transport and likely climatic conditions during transit and delivery.

Methods of quoting and payment

Quotations should be in US dollars, C&F or FOB (Incoterms 1990) port of entry.

Documentary requirements

Commercial invoice

A minimum of five copies (one must be an original) is required. Commercial invoices covering imports of pharmaceutical specialities must bear the number and date of authorisation of the Peruvian Public Health Department.

Invoices must contain the following details:

• name and address of both consignor and importer
• number of the invoice and place and date of issue
• number and date or order involved and the irrevocable letter of credit (if applicable)
• marks and numbers
• quantity and class plus gross weight of packages
• complete description of the merchandise indicating serial numbers if applicable
• the value of each item if they fall under different customs items
• country where the merchandise was manufactured or produced
• unit and total value of merchandise
• FAS, FOB and CIF value (Incoterms 1990), indicating all expenses and showing freight separately
• discounts if given indicating reasons
• harmonised system number and description of each item

Bill of lading/airway bill

A minimum of six copies is required (one must be an original).

Consular legislation may be requested.

Bill of lading and airways bills in English should be accompanied by a Spanish translation.

To Order bills are permitted.

Packing list

Not compulsory, but facilitates clearance.

Pre-shipment inspection

All permitted imports valued in US$5000 FOB or more are subject to inspection by an approved inspection company: SGS, COTECNA, Bureauveritas. Survey and certification occur prior to consignment in the country of origin and survey costs are paid by the Peruvian authorities.

A verification report will be issued which covers the following prescribed details:

• quality and type
• volume
• agreed price
• tariff classification

Exemptions from the inspection requirements include:

• consignments valued at less than US$5000 FOB (Incoterms 1990)
• goods for display in exhibitions
• personal belongings

Any consignment of goods requiring inspection that does not have the appropriate verification report issued by SGS (Australia) will not be permitted customs clearance

Public health requirements

Imports of all farm and fisheries products in all their forms and types, eg. plants, seeds, cuttings, fresh fruits, vegetables and fish as well as preserved fruits, vegetables and fish and live farm animals, require import permits, as issued by the Peruvian Ministry of Agriculture.

Livestock, animal products, plants and plant materials are also subject to health controls (see 'Special certificates' above).

Toiletries, cosmetics and perfume preparations are subject to prior analysis, approval and registration by the Ministry of Public Health.

All types of processed milk are subject to analysis in Peru before they can be cleared by customs.

Alcoholic beverages, colouring materials and essences, pharmaceuticals, medical and veterinary products, require prior analysis of samples and approval and registration by the Ministry of Health and Welfare.

All shipping documentation should show the product's registration number.

Insurance

It is no longer necessary to arrange insurance with a Peruvian insurance company. Exporters may now make the necessary insurance arrangements with the insurance company of their choosing.

Weights and measures

The metric system.

Setting up in Peru

Finding the right partner

Partnerships and agreements such as joint venture partners offer advantages for Australians wishing to operate in Peru.

Austrade Lima can assist with partner searches reducing the time taken to locate potential business contacts.

In market representation

Local distributors, agents or representatives can facilitate business however finding the appropriate person or company to represent your company’s goods and services requires market insight and knowledge.

Austrade Lima can assist with market representation via services which include due diligence, access to credit checking agencies and reference checks.

Taxation

Value added tax (VAT) of 19 per cent comprising A two per cent of municipal promotion tax is levied on the duty paid value of most imports. Goods exempt from VAT include agricultural products, certain minerals and fuels, medicines and items for personal use.

Other taxes:

• Compensatory import surtax is levied on certain imports at varying rates.
  
• Luxury taxes apply to certain goods such as alcoholic beverages etc.
  
• Selective consumption tax, at rates varying between 10 per cent and 30 per cent, is assessed on the CIF value plus the ad-valorem (Incoterms 1990) of luxury and other specified goods.

Banking and finance

Peru’s banking system is relatively modern and Lima is home to several multi-national banks including Scotia Bank, HSBC, Citibank, Standard Charted, USB and BBVA. Several sites include: www.standardchartered.com/pe and www.citibank.com.pe/peru/homepage/spanish/index.htm

The major Peruvian bank is BCP or Banco de Credito, with at least one branch in Miami.

Opening accounts without the correct documentation and resident papers may be difficult.

Peru works on a double currency system $US or PEN (Peruvian New Soles) and accounts can be opened in either currency with out any restriction on foreign currency.

Global financial services are also available in Lima with KPMG amongst the better known financial institutions.

The Lima Stock market (Bolsa de Valores de Lima) has also experienced rapid growth over 2007.