Engage In Peru

Table of Contents

About Peru

Capital City

Lima

Population

As of March 2024, the estimated population of Peru is 34,352,719.

Currency

The currency in Peru is the Peruvian Sol (PEN). The currency symbol is S/‎.

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Overview

 Peru, located in western South America, is a captivating country with a rich and diverse cultural heritage, breathtaking landscapes, and a fascinating history. From the mighty Incas, who once ruled over its ancient lands, to the bustling city of Lima, known as the “City of the Kings,” Peru offers a scintillating blend of history, culture, landscape, and wildlife. The country’s three distinct climatic regions add to its allure, starting with the desert coast where the mysterious Nazca Lines and the Paracas wildlife reserve can be found. Moving east, the landscape transforms into the majestic Andes, with snow-capped peaks reaching staggering heights and picturesque valleys sheltering captivating cities like Cusco and Arequipa. Lake Titicaca, the birthplace of the legendary Incas, straddles Peru’s southern border with Bolivia, while further east lies the captivating Amazon rainforest, teeming with diverse wildlife. Peru’s intriguing past can be seen in its remarkable ancient ruins like Machu Picchu. At the same time, its vibrant present is reflected in its bustling cities, diverse ethnic groups, and deep cultural traditions. With a compelling mix of history, natural beauty, and rich culture, Peru offers an enticing destination for experienced adventurers and novice travelers seeking a truly enriching experience.

Employment Relationship

Permanent Employment

According to Peru's labor law, employment contracts made for an indefinite period grant an employee all the statutory rights and benefits of a permanent employee. Unless an employment contract specifically states otherwise, it is presumed to be for an indefinite term.

Fixed-Term or Specific-Purpose Contracts

Peru's labor law permits the use of employment contracts concluded for a specific duration or a specific job in the following circumstances: During the launch of a new company or the start of new business activity (maximum duration of three years) During a time of increased production or market need During a time of business restructuring During an emergency. Peru also allows the use of fixed-term contracts for the substitution of an absent worker as well as for intermittent or seasonal work. Fixed-term contracts must be in writing and must generally have a maximum duration of five years.

Temporary Employment Contratcs

Peru's labor law permits the use of temporary work contracts for the fulfillment of urgent market needs, business reorganization, or for seasonal work. The employment contract must be in writing and clearly state that its purpose is for temporary hiring. Temporary contracts made for meeting urgent market needs can be concluded for a maximum duration of five years. Temporary employment agreements concluded for business reorganization may be concluded for a maximum duration of two years. Seasonal contracts must be made for transitory needs, and their maximum duration is for six months in any year. Employers must register temporary contracts with Peru's Labor Ministry.

Probationary Period

According to Peru's labor law, the default probationary period lasts 3 months, after which time the employee gains the right to protection against arbitrary dismissal. The parties may agree to a longer probationary period if justified by the nature or degree of responsibility, training, or adaptation necessary for the role. The extension of the probationary period must be in writing and may not exceed (together with the initial period of 3 months) 6 months for positions requiring qualifications or trust and 1 year for business directors and officers.

Working Hours

Peru's labor law stipulates that the standard workweek is 48 hours and that daily working hours cannot exceed eight hours. Employers are authorized to establish ordinary working days in agreement with the trade union. Employees can work more hours in a week to make up for missed work during holidays by agreement. The work of adolescents between the ages of 12 and 14 shall not exceed four hours daily or 24 hours a week. Work by adolescents between the ages of 15 and 17 cannot exceed six hours a day or 36 hours a week. Adolescents under 18 are prohibited from working between the hours of 7:00 p.m. and 7:00 a.m.

Holidays / PTO

Statutory Holidays

New Year’s Day - January 1; Holy Thursday and Good Friday - Dates variable; Labor Day - May 1; San Pedro and San Pablo - June 29; Independence Day - July 28 and 29; Santa Rosa de Lima - August 30; Combat of Angamos - October 8; All Saints - November 1; Immaculate Conception - December 8; Christmas - December 25.

Paid Annual Leave

According to Peru's labor laws, to be eligible for annual leave, employees must complete one year of service with the employer. Employees who work for six days a week must have worked for at least 260 days in a year, and employees who work for five days in a week must have worked for at least 210 days in a year. Employees are entitled to at least 30 calendar days of paid annual leave. Employers should note that the 30 calendar days include weekly rest days, public holidays, and other non-working days. The annual leave can be reduced from 30 to 15 days by providing compensation for the 15 days. The employee is to be paid their regular compensation for the leave period. Annual leave compensation is to be paid before the start of the employee's annual leave.

Sick Leave

According to Peru's labor code, employees are entitled to 20 days of sick leave paid by their employer. After these 20 days, qualified employees are eligible to receive, after a one-day waiting period, 100% of their average daily earnings over the last four months for up to 11 months and ten days. Alternatively, they may receive these wages for up to 540 nonconsecutive days within a three-year period. The National Social Security Fund pays benefits from the 21st day. To qualify for the social insurance sick leave benefit, most insured persons must have three consecutive months of contributions or four non-consecutive months within the six months before the month in which the disability began. Agricultural workers must have three consecutive months of contribution or four non-consecutive months in the last 12 months before the month in which the disability began. Fishing workers must have two consecutive or nonconsecutive contributions paid in the six calendar months before the month in which the disability began. Insured independent artisanal fishermen and fish processors must have three consecutive monthly contributions paid.

Maternity Leave

Pregnant employees are entitled to 49 days of paid leave before delivery and 49 days after delivery. In the case of multiple births or birth with a disability, the maternity leave is extended by 30 days. If the delivery occurs before the expected date, the remaining days are added to the postnatal rest. Qualified insured employees receive 100% of their average daily earnings over the last four months from the social insurance fund, up to a maximum earnings level, for all 98 days. The benefit is extended for multiple births or the birth of a child with a disability. To qualify for maternity benefits from the state social insurance fund, mothers must have at least three consecutive months of contributions or at least four months of contributions in the six months before becoming pregnant. Dock and agricultural workers must have at least three consecutive months of contributions or at least four months of contributions in the 12 months before becoming pregnant. Also, they must have contributed during the month in which the child is born.

Paternity Leave

According to Peru's law, employees have the right to ten calendar days of paternity leave in instances of natural birth or cesarean section. For premature and multiple births, the leave is increased to 20 calendar days. For births resulting in terminal congenital disease, severe disability, or serious complications to the mother's health, paternity leave is 30 calendar days. Paternity leave starts from the day of birth or 3 days before the date of birth. Employees must inform their employers of this leave at least 15 days before the expected date of delivery. Paternity leave cannot be substituted with compensation.

Termination of Employment

Notice Period

Peru's labor law requires employers to give employees written notice of at least six calendar days in cases of dismissal due to conduct and a notice period of 30 calendar days for cases of dismissal due to lack of employee capacity. The employer notification letter must specify the cause of dismissal and the date of the effective termination. Employees need to provide 30 days' notice if they terminate their contract.

Severance Benefits

According to Peru's labor law, employees who are justifiably dismissed for their conduct or capacity are not eligible to receive severance compensation. In cases of arbitrary dismissal, employees are eligible for a severance payment equal to 1.5 months' salary for every year of service, up to a maximum of 12 months' payment. Parts of years are paid proportionally to the months (1/12) and days (1/30) worked. There is no provision for severance pay in the case of termination due to collective dismissal. In addition, a special payment must be made to the employee upon the termination of the employment contract, regardless of the cause for termination. This payment, called "Compensación por Tiempo de Servicio," is equivalent to one monthly average salary per year of service.

Social Security

Pension

Peru has two types of social security systems that the employees may choose from: the National Pension System (SNP), in which all the contributions are pooled together, and the Private Pension System (SPP), in which Individual Savings Accounts are maintained. The retirement age is 65 years. Employees become eligible to receive a pension under SNP if they have paid contributions for at least 20 years. The pension amount is equal to 50% of the average monthly remuneration of the employees, plus 4% for each year of contribution beyond 20 years. The pension amount is increased by 2% to 10% for dependent spouses and by 2% to 5% for every dependent child. The amount of pension through SPP depends on the balance in the individual savings account.  Employees contribute 13% of gross monthly earnings if they are enrolled in the SNP and 10% of gross monthly earnings if they are enrolled in the SPP. Employers are not required to contribute to the SNP and are only required to make contributions to the SPP for fishermen, construction workers, and miners.

Dependents/Survivors Benefit

The National Pension System (SNP) covers survivors pensions for widow(er)s, children, and parents of the deceased insured member. The maximum pension amount for a spouse is 50% of the disability or retirement pension to which the deceased was entitled. The pension ends if the survivor remarries. The deceased's children are entitled to a pension of 50%. Parents of the deceased insured person are entitled to a pension of 20%, provided that they are disabled and of retirement age or were economically dependent on the deceased. Under the SPP system, survivors who are nominated by the deceased employees are eligible to receive a pension upon their death. Beneficiaries include widow(er)s, children, and parents of the deceased insured member. The pension amount is based on the deceased's average monthly earnings in the last 48 months before death. The maximum pension amount is 42% of the decedent's pension.  Employees enrolled in the SNP must contribute 13% of their gross monthly earnings, while those enrolled in the SPP must contribute 1.74% of their earnings to the invalidity and survivors pension system. Employers are not required to make contributions to the SNP or SPP invalidity and survivors pension system.

Invalidity Benefit

The National Pension System (SNP) covers disability pensions for those insured members who are permanently disabled, mentally or physically, and whose earning capability has been reduced by more than 66.67%. The amount of the disability pension is equal to 50% of the standard remuneration of the employee. An additional bonus is paid if constant care is required. Under the SPP system, insured employees who have lost at least 50% of their ability to work and who are not receiving an old-age pension are eligible for disability benefits. The pension for partial disability (50% to 66.67%) is 50% of the insured's average remuneration and the pension for full disability (greater than 66.67%) is 70% of the insured's average remuneration.

Taxation of Compensation and Benefits

Personal Income Tax

Peru imposes income tax on all individuals earning income from Peruvian sources, whether they are domiciled or not. Peruvian income tax rates range from 8% to 30% and are based on tax units set each year by the Tax Administration.  For 2023, a tax unit is set to PEN 4,950 (Peruvian soles). Peruvian tax residents are entitled to a deduction equivalent to seven tax units from their gross income. For non-domiciled employees, income tax is imposed at a flat rate of 30% on their gross Peruvian-sourced income. No deductions or credits apply to non-domiciled individuals.

Immigration

Types of Visas

The following visa categories are available in Peru: Artistic/sports – a non-extendable visa issued to foreign nationals to develop paid or lucrative activities linked to artistic, cultural, sporting, or other similar shows under a contract for a maximum duration of 90 days Training/short-term research – issued to foreign nationals who wish to enter Peru for short term training or scientific research and valid for 90 days (extendable for the same duration) Temporary work – issued to foreign nationals who wish to enter Peru for short-term work purposes (valid for 183 days in a year and is extendable for the same duration) Business – issued to foreign nationals to carry out activities of a business, legal, contractual, specialized technical assistance, or similar objective (valid for 183 days in a year and is non-extendable) Journalism – allows multiple entries for foreign journalists (the state decides the duration of the entry) Tourism – issued to foreign nationals who wish to enter Peru for recreational or health purposes (valid for 183 days and is non-extendable) Crew member – issued to foreign nationals who are crew members of an international means of transport (allows a 30-day stay and is non-extendable). Nationals of several countries, including the United States and most South American and European countries, do not require a visa to enter Peru.

Work Permit

Foreign nationals who wish to work in Peru under an employment contract must obtain a residence permit. The Ministry of Labor will grant a work permit after approving the employment contract. This type of permit is valid for one year and can be extended for the same duration. The following documents must be submitted to obtain the work permit: Payment receipt for the fee Copy of passport or travel document Notarized copy of the employment contract in Peru Letter from the Peruvian employer indicating the type of activity and place where the service will be performed.

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