1. Social and economic development and political stability
Traditionally, Peru is a country based on agriculture and mining. Its economic level is in the middle position in Latin American home. Peru is rich in mineral resources and is one of the 12 largest mineral countries in the world. Oil is more than self-sufficient. Drugs and dollars have an important impact on Peru's economy. After President Fujimori took office, he actively carried out the economic stability plan, comprehensively adjusted the economic structure, controlled hyperinflation, and achieved the goal of returning to the financial system. However, at present, the economy is still difficult, capital is short, and investment is weak. These problems are difficult to solve at the moment.
In Peru's presidential election in p>1995, Fujimori won 64% of the votes. After Fujimori came to power, the parliament occupied by traditional politicians and the corrupt judiciary seriously hindered the implementation of his reform plan. In view of this situation, he took decisive measures, ordered the dissolution of parliament, reorganized the political and legal departments and the state power institutions, established a unicameral constitutional assembly, and adopted a new constitution. During his first term, Fujimori made two major achievements: curbing inflation and reviving Peru's economy; Calm domestic violence, combat terrorism and achieve social stability. The government has the unanimous support of the whole country, and the social and political stability are favorable conditions for foreign investment to enter Peru. In November 2, Fujimori was dismissed from the presidency by the National Assembly because of a corruption scandal involving the cronies of senior officials in the government. Fujimori also stayed in Japan, but it is expected that social and political stability will continue.
2. Economic and trade relations with China
On November 2, 1971, China and Peru established diplomatic relations. Relations between the two countries have developed smoothly since the establishment of diplomatic relations. The cooperation and exchanges between the two countries in political, economic and other fields are proceeding normally. In November of the same year, Peruvian Minister of Power and Mining visited China, and the two countries signed an economic and technological cooperation agreement; In August 1972, a trade agreement was signed. During Fujimori's first presidency, senior officials of the two governments kept close contacts. Since 199, Vice Premier Qian Qichen, Vice Chairman of the Standing Committee of the National People's Congress Wang Hanbin, Minister of Geology and Minerals Zhu Xun, Vice Director of the State Science and Technology Commission Zhu Lilan, Vice Governor of Guangdong Province Lu Ruihua and Vice Minister of the International Liaison Department Zhu Shanqing have visited Peru. Since 1991, Peruvian President Fujimori, Air Force Commander Velarde, First Vice President and Senate President San Roman and Defense Minister Torres have visited China successively.
China and Peru enjoy good economic and trade development. The two countries established an inter-governmental "Mixed Economic and Trade Committee", and held the first meeting of the Mixed Economic and Trade Committee between China and Peru in Lima, Peru, in April 1992. In November 1992, Capital Iron and Steel Company participated in the auction of Peruvian iron ore company and won the bid with 12 million US dollars. However, in recent years, its operating conditions have been poor, especially the labor relations are difficult to handle.
3. Policies to encourage foreign investment
Peru has implemented policies to encourage foreign investment, and attracting foreign investment is an important part of the economic policy of the current Peruvian government. In improving the investment environment, the Peruvian government first formulated a foreign investment law. Peru's Foreign Investment and Technology Commission approved the Detailed Rules for the Implementation of Foreign Investment, Technology Transfer and Licensing of Patents and Trademarks, which came into effect immediately. The main provisions on foreign investment are as follows: ① Intangible property can be used for investment. (2) There are no restrictions on the amount of foreign investment, its proportion in the company's capital composition and business scope unless there are specific restrictions by special laws. (3) Shares owned by legal persons or natural persons in Peru can be freely transferred to foreign investors without restriction and without prior approval from the Foreign Investment and Technology Commission. However, it shall be registered after the transfer. (4) If the restrictions on the remittance of dividends and profits from Peru are lifted, it is not necessary to require the prior consent of the Foreign Investment and Technology Commission. ⑤ It is no longer required that investment must be approved in advance, but registration is still required after investment. Give foreign investors the same rights as domestic companies and open all economic fields to foreign capital. ⑦ Foreign investors can remit all their capital and dividends abroad without the approval of any government department. When dividends are remitted, the tax rate is 1%, and the royalty rate is 28%.
Peru's foreign investment laws and regulations are one of the most liberal in Latin American countries, which broke through the scope of Resolution No.291 of the Andean Group and recognized not only foreign direct investment, but also indirect investment.
In order to encourage foreign investment, Peru is carrying out several reforms: ① Reform of foreign trade institutions. In order to highlight the position of foreign trade in Peru's national economy, the government has adjusted its foreign trade institutions, stopped the business activities of foreign trade associations, and transferred its functions to the Ministry of Industry, Commerce and Tourism Integration. The purpose of this adjustment is to strengthen the functions of the government's foreign trade agencies, improve work efficiency, overcome bureaucracy and reduce intermediate links to meet the needs of international competition. (2) relax restrictions on foreign investment and absorb foreign capital to the maximum extent. For example, from the previous strict restrictions on foreign banks opening in China or investing in certain industries (such as oil and computers), the restrictions on the remittance of foreign profits have now been basically lifted. (3) Cancel foreign exchange control, implement free convertibility and freely float the exchange rate. This measure has reduced people's worries and promoted the return of funds. (4) implement a free market economy and reduce state intervention in the economy. Specific measures include liberalizing prices, canceling subsidies, privatizing state-owned enterprises, reducing the burden on the state, and implementing equal competition.
Peru's privatization in the mining sector, from May 26th, 1992 to January 25th, 1994, * * * auctioned seven large mining companies at market prices (among them, the Peruvian iron and steel company was acquired by Shougang Company in China). Now, foreign companies can directly purchase existing mines (including facilities) and participate in new projects through equity participation. The recently privatized state-owned mining companies in Peru mainly include: Condestable (copper, 1992), Hierro Peru (iron ore, 1992), Cerro Verde (copper, 1993), Yintaya (copper, 1994) and Centromin (lead and zinc, 1995). So far, Minero Peru's stock sales revenue has exceeded $1 billion.
Only 5% of Peru's mineral reserves have been confirmed. The government made up its mind to completely revise the laws related to mining to improve the investment environment of mining, and promulgated a new mining law in 1992. In May 1996, the new regulations on the management of mining cadastre were promulgated. The new law promulgated by the Peruvian government is considered to be the most encouraging law in South America, which guarantees that mineral rights can be obtained quickly. As long as the holder of the mining right pays the rental fee of $1 to $4 per hectare per year (called the mining right concession fee), this right is permanent and cannot be revoked. It is clear that mineral rights are a kind of transferable property rights. Mineral owners have extensive freedom to arrange the amount and time of investment, and can make their own decisions on whether to put into production. At the same time, there is no restriction on operating its products abroad or at home, and it is free to deal with any foreign currency obtained in the sales process. Only the distribution of profits from business activities is taxed. The tax rates payable together do not exceed 37% of the distributable income. When the investment is not less than $2 million, the tax, exchange and commercial terms will remain unchanged for 1 years, while when the investment is not less than $2 million, it will remain unchanged for 15 years.
industries with restricted investment
for foreign investors to apply for mineral exploration and development activities such as oil and natural gas, the law allows them to invest by way of concession for a period of 2 years. However, foreign investors are prohibited from investing in mines, land, forests, waters, oil and energy within 5 kilometers of the border.
About the proportion of investment
Peru has clear regulations on the proportion of domestic and foreign investment in enterprises. Its provisions are mainly manifested in two aspects: increasing the proportion of domestic capital and limiting the proportion of foreign investment. According to the law, if foreign-funded enterprises want to enjoy the preferential treatment stipulated in the Andean Plan of Market Liberalization, they must gradually transform foreign-funded enterprises into domestic-funded enterprises or joint ventures within 15 years, that is to say, the proportion of domestic investment should be gradually increased. The law also stipulates that the proportion of domestic capital in newly established enterprises must gradually exceed 5%. The proportion of domestic capital of the old enterprises that have been operating must reach more than 15% after 3 years, 3% after 5 years, 45% after 1 years and 51% after 15 years. However, the above provisions do not apply to basic industries and financial, transportation and communication enterprises, as well as enterprises and tourism enterprises with an export rate of over 8%.
when foreign investors invest in commercial banks, the maximum investment ratio is allowed to be 1/3.
in addition, according to the provisions of presidential decree No.193-88-ef of October 22, 1988, foreign debts can be converted into shares. Applicable to medium and long-term public debt and short-term working capital. The purpose of this is to expand new projects and existing export projects.
raising local funds
Peru does not allow foreign-funded enterprises to raise long-term funds at home, but they can raise short-term funds and medium-term funds not exceeding three years.
Remittance and reinvestment
The provisions of Peruvian law in this regard are formulated according to different situations.
regulations on profit and bonus remittance.
According to the law, the amount of profits and dividends remitted by foreign investors to their home countries in one year is limited to 2% of their registered capital with the Foreign Investment Committee.
Provisions on remittance of foreign-funded enterprises using domestic raw materials.
according to the law, foreign-funded enterprises that use domestic raw materials and contribute to the local economic development can increase the remittance amount according to the export ratio, which can exceed the limit of 2%. There are three provisions on the conditions for increasing remittance and the amount of remittance that can be increased: ① Determine the growth rate of remittance according to the growth of exports. According to the law, for every 1% increase in the export rate of export enterprises, the remittance rate can be increased by 1%, up to 7%. ② Determine the remittance growth rate according to the proportion of domestic raw materials used by foreign-funded enterprises. If the proportion of domestic raw materials is 5% ~ 65%, the remittance rate can be increased by 1%; If it is 65% ~ 8%, the remittance rate can be increased by 3%; If it exceeds 8%, it can be increased by 5%. ③ Determine the remittance growth rate according to the regional development. According to the development of each region, Peru divides the whole country into six types, and determines the remittance rate according to the regional type. At present, the growth rate of remittances from Lima-callao area to poor areas is ~ .8% respectively.
regulations on remittance of basic industries.
in order to encourage foreign investors to invest in basic industries, the law stipulates that if the export rate of basic industries such as oil and minerals reaches 8%, all the profits can be remitted. The profits of tourism enterprises can also be remitted in full.
4. Business administration policy
To start a company in Peru, the procedures are relatively simple, but the following conditions are required: ① a fixed office address; ② Personal identification documents (temporary residence permit is also acceptable); ③ A joint-stock company (S.A.) should have at least 3 shareholders, and a limited company (LTD)2) should have 2 shareholders. The registered capital is unlimited. Applicants with the above three items can submit a written application to different industrial and commercial administrative departments and get a tax payment certificate, which will be approved soon.
The procedures for foreign investors to invest in Peru are also very simple. As long as foreign investors submit a written application to the Foreign Investment and Technology Commission, get a tax payment certificate and register, they will soon be approved and get an investment certificate. This proves that investors can remit profits abroad.
To attract foreign investment, Peru first invests in developing natural resources, such as oil, minerals, fisheries and agriculture.
regarding the financing of foreign-funded enterprises, Peruvian law stipulates that foreign-funded enterprises are not allowed to raise long-term funds in Peru, but they can raise short-term funds and medium-term funds not exceeding three years.
5. Tax system
Peru's Industrial Law No.2347 abolished the classification of industries in Law No.1835 and the policy of giving fiscal and tax incentives according to different types of industries, that is, the basis for giving tax incentives in Peru's Industrial Law is no longer the nature of industries, but the geographical location of enterprises, with the aim of encouraging investors to develop poor areas outside Lima-callao. There are several types of taxes in Peru:
(1) Income tax
The scope of income tax in Peru is the net income from real estate in Peru, the income from providing personal services in Peru, and the dividends obtained by natural persons and legal persons who have settled in Peru. In order to determine the net income of foreign companies, the tax law stipulates that all expenses paid in Peru and expenses necessary for creating income and protecting resources should be deducted from gross income. Patent fees, technical consulting fees, interest and salaries paid to non-residents can be regarded as deductible expenses as long as the payee has paid taxes in Peru.
the income tax is paid on a monthly basis, and the tax rate is 32% ~ 57%, with a final adjustment every year. The profits of a branch company are taxed at the same rate as the corporate tax. The tax rate of the revalued added value of fixed assets is generally 6%, but it should be adjusted according to the current price index. The remuneration for services received by companies registered in Peru abroad shall be taxed at the rate of 4%. Dividends paid to foreign companies must be deducted from their income by 4%, but if the domestic tax rate of the company receiving this income exceeds 3%, the deduction rate can be reduced to 3%. Dividends paid to domestic companies or individuals are taxed at the basic income tax rate. Interest paid to foreign creditors, corporate bond interest and other bearer securities interest shall be deducted from income by 12%; Interest payment on loans for development purposes and interest paid abroad for investment and factory construction in Peru shall be taxed at the rate of 1%; The payment of interest on foreign loans registered with the Central Reserve Bank is tax-free; After deducting 32% of the patent, trademark and technical consulting fees paid to foreign companies in advance, the remaining 68% will be subject to 4% income tax, that is, the effective tax rate is 27.2%.
(2) Business tax
The general business (sales) tax rate in Peru is 16%; Business tax is exempted for daily necessities, but an additional tax of 1% ~ 116% is levied on luxury goods. Law No.2347 stipulates that companies located outside Lima-callao are exempt from 8% business tax in the first year, 6% in the second year, 4% in the third year and 2% in the fourth year. However, products imported from third countries other than the Andean Group that can be produced by the members of the Group do not enjoy this preferential treatment.
(3) Mining tax
The new law promulgated by Peru in 1991 ensures that mine owners can obtain the mining right as soon as possible. If the owners pay taxes and fees according to the regulations (1-4 dollars per hectare per year), the mining right can remain unchanged forever. When the output and investment are verified, this tax can be reduced or exempted as appropriate. The new law also stipulates that only the profit distribution of mining companies from business activities shall be taxed, and the tax rate shall not exceed 37.5%, and the value-added tax of raw materials used in the production process shall be refunded. For companies with an investment of not less than US$ 2 million, tax and other business rules are guaranteed to remain unchanged for 1 years.
Peru implements preferential tax policies for foreign investment. Peru's tax preference for foreign investment is mainly manifested in the following aspects:
(1) Preference for enterprises held in Lima-callao area
According to the law, enterprises held in Lima-callao area can enjoy preferential tax reduction and exemption, of which income tax can be reduced by up to 6%.
(2) preferential treatment for enterprises held in other areas (except remote and dense forest areas)
The income tax can be reduced to 9% at most. In addition, enterprises newly established to expand exports and enterprises adopting advanced technology and equipment to expand the scale of existing enterprises, if established in lima province, can enjoy income tax reduction for 1 consecutive years.