Opening A Business In Peru

• Law Firm: L&E Global
• Subject Matter: Corporate/Commercial Law, Employment and HR, Corporate and Company Law, Contracts and Commercial Law, Contract of Employment, Employee Benefits & Compensation, Outsourcing
• Author: Estudio Mu'iz and César Puntriano (Estudio Mu'iz)
• Published date: 26 June 2023

1. INTRODUCTION

Peru is a democratic republic. Its government is structured following the principle of the separation of the three autonomous and independent branches of government: the Executive, whose primary representative is the President of the Republic; the Legislative or National Congress (unicameral); and the Judicial. The President of the Republic and the 130 members of Peru's Congress are elected every five years by a universal, secret and direct vote.

Peru's macroeconomic fundamentals remain solid, including a relatively low public debt to Gross domestic product (GDP) ratio, considerable international reserves, and a credible central bank. Peru's economy is expected to grow somewhat below its 3 percent pre-pandemic pace in the medium term, supported by higher exports. Peru's economic performance is one of the best in Latin America.

Mu'iz, Olaya, Meléndez, Castro, Ono & Herrera Abogados is a full-service firm founded on August 15, 1981, and is currently one of the most important and prestigious law firms in Peru. It has offices in Peru's largest cities, like Lima, Trujillo, Chiclayo, Arequipa, Ilo, Tacna, Ica, Chincha, Piura, Puno, Juliaca and Cusco.

Our labour practice is big (40 lawyers) but consolidated. Our team has a solid theoretical base that allows it to carry out analyses with practical, efficient, creative, and effective results to labour and legal matters. Our advice is characterised not only by accompanying our clients to face contingencies, but also by advising them on the design and implementation of preventive structures threw legal opinions, planning strategies to restructure and audit our regular or one-time clients.

2. LABOUR AND EMPLOYMENT LAW REQUIREMENTS

A) Employer Policy Requirements

Peruvian regulation does not require employers to create and implement employment policies except from salary or remuneration policy which should be communicated to employees. Such policy should include criteria to determine salaries, performance evaluation or any other type that affect their remuneration. To do this, employers may hold individual or collective informative meetings or send written communications detailing the applicable policy. This information must be provided at the time of the worker's entry, when there is a change in the occupational category to which the worker belongs and when there is a change in the remuneration regime that applies to him in accordance with the remuneration policy.

B) Employee Training Requirements

Employers are required to train employees regarding safety and health at workplace or employees' specific functions at the time of hiring, during the execution of labour relationship, as well as when there are changes in the employee's duties. Such training should not be less than 4 in a year. Also, the employer must train its personnel on the prevention of sexual harassment at work.

C) Employment Agreements

The general rule within the Labour Regime of private activity is the hiring of personnel for an indefinite period, however, due to the nature of the service to be provided, the law has exceptionally provided for fixed-term hiring, that is, temporary contracts, or subject to modality.

The law allows hiring fixed-term workers if justified by the temporary nature of the service to be provided. To celebrate a fixed-term contract, it is necessary to prove that the service to be provided by the worker is, by its nature, of a temporary nature, whether it is ordinary or complementary work. This must be specified in the contract, specifying the facts that support the temporary contract and be able to document them.

If the employee decides to dispense with the services of a worker hired for a fixed term before the expiration date agreed in the contract without there being "just cause" for it, he must pay as compensation one and a half ordinary monthly remuneration for each month stopped working until the contract expiration. The maximum limit is twelve monthly remunerations in accordance with current legislation.

On the other hand, fixed-term employment contracts will be considered indefinite, with the consequent modification of the rapid regime, in the following cases: i) if the worker continues to work after the expiration date of the stipulated term, or of their extensions if they exceed the maximum limit; and, ii) when the worker demonstrates the existence of simulation or fraud of the rules that regulate fixed-term contracts.

The fixed term...