Return to: Index of "1996 Country Commercial Guides" || Index of "Economic and Business Issues" || Electronic Research Collections Index || ERC Homepage

U.S. Department of State
Peru Country Commercial Guide
Office of the Coordinator for Business Affairs

                           Country Commercial Guide 
                                  Fiscal Year 1996

This Country Commercial Guide (CCG) presents a comprehensive look at 
Peru's commercial environment through economic, political and market 

The CCGs were established by recommendation of the Trade Promotion 
Coordinating Committee (TPCC), a multi-agency task force, to consolidate 
various reporting documents prepared for the U.S. business community.  
Country Commercial Guides are prepared annualy at U.S. Embassies through 
the combined efforts of several U.S. governement agencies.

I.  Executive Summary

The time to look at the Peruvian market is now.  After nearly 25 years 
of negative per capita GDP growth, Peru was the fastest growing country 
in the world in 1994 and will be the fastest growing in Latin American 
in 1995.  Inflation will hover at around 10 percent, unemployment at 
around 9 percent.  Imports will exceed exports by almost $2 billion with 
the U.S. share of the market at approximately 20 percent.

The landslide reelection of President Fujimori and diminished terrorist 
activity allow Peru to continue with its disciplined economic course.  
An ambitious program of privatization will add resources to a budget for 
1995 which contains significant increases for infrastructure, energy and 
health.  This program which has privatized 90 enterprises since 1991, 
will continue to offer investment opportunities this year in petroleum, 
mining, electric power generation and distribution, water/waste water, 
ports and railroads. Peru's liberal investment laws offer "national 
treatment" to all investors. 

In addition to investment opportunities, U.S. companies looking for 
representation in Peru should act now to locate the best agents or 
distributors.  U.S. products and services are well-regarded in the 
market and Peruvian companies are interested in expanding their business 
ties with the U.S.  Sectors offering the best opportunities for U.S. 
products are: construction equipment, mining equipment, 
telecommunications, oil and gas, medical equipment, computers and 
peripheral equipment, auto parts, food processing and packaging, 
agricultural machinery and franchising.  If you plan to visit Lima, we 
recommend you use the Gold Key Service offered by the commercial section 
to prepare your meetings while in Lima.

The agricultural sector also provides good opportunities for U.S. 
business.  The livestock sector is expected to show the strongest 
growth, as producers, backed by government programs, continue to 
increase herd and flock size.  Opportunities for grains, animal 
genetics, and meat will be strong.  One of the fastest growing sectors, 
however, is processed foods.  Imports of U.S. processed foods, such as, 
snacks, cereals, beverages, nuts, etc. have gone from $ 8.5 million in 
1990 to $21 million in 1994.

Peru offers opportunities for all types of U.S. business.  The U.S. 
Embassy in Lima is ready to help you capitalize on these opportunities.

Country Commercial Guides are available on the National Trade Data Bank 
on CD-Rom or through the Internet.  Please contact STAT-USA at 1-800-
STAT-USA for more information.  To locate Country Commercial Guides via 
the Internet, please use the following world wide web address:  CCGS can also be ordered in hard copy or on diskette 
from the National Technical Information Service (NTIS) at 1-800-553-

II.  Economic Trends and Outlook

Major Trends and Outlook

Peru's economy continued improving in 1994, achieving a GDP growth of 13 
percent (versus 6.5 percent in 1993), the highest growth rate in the 
world for that year.  Inflation has dropped from 7,650 percent in 1990 
to 15.4 percent in 1994 as a result of tight monetary and fiscal 
policies.  For the first five months of 1995, GDP was up 10 percent 
compared with the same period of 1994, and indications suggest overall 
1995 growth could exceed 8 percent.  The IMF letter of intent calls for 
1995 economic growth of 6-7 percent.  The Fujimori Administration hopes 
to achieve single-digit inflation in 1995, but if trends for the first 
five months of the year continue, the result could be around 12 percent.  
The IMF letter of intent calls for a CPI increase of 9-11 percent in 

Principal Growth Sectors

In 1994, the construction sector turned in the strongest performance, 
growing 34.7 percent above the previous year.  The fisheries industry 
also surged ahead in 1994, increasing 31.5 percent.  Other sectors 
reporting significant growth included manufacturing (17.1 percent), 
commerce (17 percent) and agriculture (13.2 percent).  The mining sector 
grew 4.3 percent overall with metals up 7 percent and petroleum 0.9 
percent.  The petroleum sector achieved steady growth through the first 
seven months of 1994 but declined during the balance of the year.

Through the first five months of 1995, construction continued to lead 
other sectors, growing 32.8 percent.  Commerce and agriculture also 
performed well, increasing 15.0 and 12.2 percent respectively.  Mining 
increased 4.2 percent, thanks to a 10.5 percent growth in the metals 
sector.  Although the petroleum sector was down 4.1 percent in the first 
five months of 1995, the industry should start rebounding by the end of 
the year as output from new development wells is projected to increase.

Government Role in the Economy

Since coming to power in July 1990, the Fujimori administration has 
liberalized trade, investment and foreign exchange regulations.  
Fujimori's economic restructuring  program also has eliminated domestic 
deficit financing through tax reform, corrections in public prices and 
expenditure control including elimination of subsidies.  The government 
has attained major successes in the pursuit of its goal of privatizing 
all state-owned enterprises.  In 1994, the GOP sold 29 companies for 
$2.6 billion.  The privatization program was put on hold temporarily 
during the run-up to the April 1995 presidential and congressional 
elections but has since gotten back on track.  President Fujimori has 
promised to continue the economic restructuring program into his second 
five-year term which will begin on July 28, 1995.

The GOP's 1995 budget totals $9.68 billion, an 18 percent increase in 
real terms over 1994 and about 16.8 percent of projected GDP.  Sectors 
receiving an increase in budget include health, energy, and general 

Balance of Payments Situation

Peru's balance of payments position improved in 1994 as record capital 
inflows offset by a large margin a $2,261 million current account 
deficit.  Merchandise imports totaled $5,611 million in 1994 against 
exports of $4,502 million, resulting in a trade deficit of $1,109 
million, the largest such deficit since 1989.  Net financial services 
(i.e., interest payments on debt) totaled $1,011 million in 1994, 
including $223 million or 22 percent paid by the private sector.  A net 
outflow of $614 million was reported for non-financial services, the 
lowest level since 1991.  Freight, insurance and communications 
accounted for the bulk of expenditures for non-financial services.  
Earnings from tourism rose 50 percent in 1994 to $402 million, exceeding 
for the first time since 1991 outflows from Peruvian tourists.  Net 
transfer payments for Peru were $473 million, the highest level since at 
least 1970.

In 1994, long-term capital flows into Peru were a record $3,652 million, 
195 percent above 1993.  The lion's share stemmed from privatization 
sales which brought $2,054 million to the GOP's coffers, against only 
$160 million in 1993.  Foreign investment in the Lima stock market also 
rose sharply in 1994, raising the intake of capital further. 

Peru's exports were up a respectable 36 percent in the first two months 
of 1995 but they lagged well behind imports, which jumped 51 percent.  
Growth in imports could slow by the third quarter, ending the year 
around 34 percent above the 1994 level.  At the same time, exports could 
slow down (with the recent reduction in key commodity prices), ending 
the year about 27 percent above 1994.  The ratio of capital goods to 
total imports should remain approximately 30 percent.  As in the past, a 
large portion of those goods will be purchased by foreign-owned 
companies undergoing modernization, which means they will not put an 
undue burden on the country's ability to service its debt.  Since the 
majority of companies importing capital goods are also exporters, the 
end result is expected to be a more favorable trade balance down the 

Inflows of capital for direct and portfolio investments are expected to 
offset almost three-quarters of Peru's 1995 current-account deficit.  
With those inflows and an estimated  $1,800 million of short-term 
capital, Peru could report a net capital inflow of $1,200 million in 
1995, against $3,118 million in 1994.

In 1995, Peru's debt payments (both principal and interest)  could rise 
slightly if the government negotiates a Brady Plan restructuring of its 
overdue commercial bank debt (estimated at $6-9 billion).  At the same 
time, a Brady Plan would almost certainly include a substantial amount 
of debt relief for Peru.

Infrastructure Situation

The distribution of goods and services outside Peru's capital city of 
Lima is a major problem for the economy and development of certain 
sectors, especially agribusiness.  The transport sector is in poor shape 
due to long neglect, but efforts are underway to remedy the situation.  
In 1994 the IDB funded a $210 million loan.  The GOP also contributed 
with $90 million to rehabilitate Peru's Pan American Highway as well as 
the Lima-Huanuco highway.  The IDB approved in March 1995 a loan of $420 
million to rehabilitate the transportation infrastructure which includes 
2,000 km of highways and 2,500 meters of bridges.  The Government is 
projecting an investment of $5,800 millions for the next ten years for 
transport infrastructure.  The GOP recently negotiated a $242 million 
transport infrastructure loan that would include funds for the rail 
system and airport runway upgrading as well.  The railroad system 
(Enafer) is slated to be privatized, as are the seaports.

Air transport is the only means to convey goods to many areas not served 
by the Pan American and Central Highways.  The airline industry has been 
liberalized in recent years and domestic air fares are set by market 
forces.  A number of small airlines have begun passenger and cargo 
flights throughout the country since 1991.  

In 1995, Peru had the lowest telephone density in Latin America at 3.0 
per 100 inhabitants.  Modernization of the telecommunications system is 
progressing, through the privatization of the phone system.  In May 
1994, Telefonica of Spain acquired the formerly state-owned 
telecommunications companies CPT and Entel with a commitment to invest 
$1.5 billion over five years to expand and improve service.  The two 
companies were formally merged in December 1994, allowing Telefonica to 
reduce overhead and improve efficiency.  The first digital lines were 
installed in August 1994.  By 1998, Telefonica plans to have installed 
or replaced 1.9 million lines, of which 96 percent will be digital.  The 
company is also installing a fiber-optic network, with the main branch 
along the Pacific coast to be completed in 1995. 

Peru suffers from an over reliance on hydropower, which leads to 
sporadic power outages, especially in times of drought.  Strong economic 
growth has brought in an increased demand for electricity.  The 
government has estimated that, if demand continues to grow at the 
present rate, there will be a power deficit of 100 megawatts by 1996.  
The power utilities are being privatized and the government is 
encouraging foreign investment in new electrical-generating plants.

Water-supply infrastructure in Lima and throughout Peru is decrepit and 
unreliable.  The water and sewage utility for Greater Lima (Sedapal) is 
being privatized and the World Bank, the International Finance 
Corporation, and the Japanese Government have provided a total of $375 
million in financing to upgrade the system.

III.  Political Environment

Peru is a republic with a dominant executive branch headed by President 
Alberto Fujimori, who was first elected in 1990 and won reelection by a 
landslide in 1995.  The President appoints a number of ministers to 
carry out and oversee the work of the executive branch.  The legislative 
branch is a unicameral congress with 120 members elected at large.  Like 
the president, they serve five-year terms.

Major political parties include President Fujimori's rather loosely 
organized "Cambio 90/Nueva Mayoria," which holds a majority in the new 
congress; the equally loosely organized "Union por el Peru" whose leader 
is former UN Secretary General and presidential runner-up Javier Perez 
de Cuellar; and the quasi-socialist "American Popular Revolutionary 
Alliance (APRA)".  There are a number of smaller parties with seats in 
the congress, including the socialist/marxist "United Left," centrist 
"Accion Popular," center-right "Partido Popular Cristiano," and the 
"Frente Independiente Moralizador".  APRA and Accion Popular currently 
control most of the country's municipal governments.  Nationwide 
municipal elections will be held in November 1995.

U.S. policy in Peru reflects varied goals:  the strengthening of 
democracy, fostering respect for human rights, the curtailment of 
illegal narcotics trafficking, supporting U.S. businesses and citizens, 
and encouraging sustainable development.  The United States development 
and humanitarian assistance program is currently the largest in South 

There has been considerable progress in Peru's human rights record 
during the last few years as the level of political violence has 
declined,  The numbers of political disappearances and extrajudicial 
killings have dropped dramatically since 1992.  Nonetheless, the U.S. 
government remains concerned about continued arbitrary detentions, lack 
of due process, reports of torture of detainees and limited prosecution 
of those government and military officials accused of abuses.

Armed conflict broke out between Peru and Ecuador in January 1995 over a 
portion of the undemarcated border.  Casualties for both sides were 
about 100 to 150 killed.  A cease-fire was agreed to in February 1995, 
and is still respected.  The U.S., along with Argentina, Brazil, and 
Chile, are guarantors of the Peru-Ecuador 1942 border treaty and are 
supporting Peruvian and Ecuadorian efforts to end the border conflict.

The security situation has improved considerably since the September 
1992 capture of terrorist leader Abimael Guzman.  However, Peru's two 
terrorist groups, Sendero Luminoso and the Tupac Amaru Revolutionary 
Movement, although seriously debilitated by the capture of their top 
leaders, have not been defeated.  Both groups continue to carry out 
terrorist activities, including attacks on foreign businesses and 
diplomatic missions.

For up-to-date information regarding the security situation, contact the 
U.S. Department of State or U.S. Embassy in Lima.


Distribution and Sales Channels

The population of Peru is extremely centralized, with 30% of all 
inhabitants living in the capital city of Lima. Therefore, most sales 
occur in Lima, but opportunities exist in other major population centers 
which should be part of an overall marketing strategy.  Representatives 
in Lima will have sales agents in these cities, thereby maintaining 
constant communication.

The most common method of distribution, is the acquisition of a strong 
and qualified representative. Appointing an agent or distributor is 
advisable if your company is seriously considering entering the market.  
At present, U.S. companies are finding good success in locating 
qualified local agents.

An alternative approach in distribution, is to establish a local 
subsidiary or branch office. This method can create the best opportunity 
for you to give effective service and aggressive promotion of your 
product.  Expenses for commercial and industrial space are rapidly 
rising in the Lima area, which could make this an expensive option.

Use of Agents and Distributors - Finding a Partner

Customarily, suppliers enter the Peruvian market by appointing an agent, 
distributor, or wholesaler. Most are located in Lima with branch offices 
in the other main cities such as Arequipa, Trujillo, and Tacna.

Peruvian law does not require the use of local distributors for either 
private sector commercial sales or for sales to the government. 
Nevertheless, it is advisable to have a representative "on the ground" 
to keep up with the latest opportunities and developments.

You should be thorough in the selection of an agent or a representative.  
You may wish to take advantage of U.S. Department Commerce services by 
contacting you local Commercial Service Office in the U.S.  These 
include the Agent/Distributor service (ADS), which helps identify 
interested agents and distributors, and the Customized Marketing Survey 


Since 1993, franchises have expanded in Peru, although the country still 
presents fresh and challenging grounds when compared to other Latin 
American countries such as Mexico, Brazil, and Argentina, where 
franchising has already matured.

Peru's economic situation, open market mentality, credit access, and 
receptivity to foreign investment offers an excellent opportunity for 
franchising companies.  Economic growth is leading to a faster-paced 
society, creating a growing market for fast food and other services.  In 
fact, most franchises started in Lima are in the fast food sector, 
including Burger King, Kentucky Fried Chicken, Domino's Pizza, and Pizza 
Hut.  McDonalds will enter the market in 1996.

There is no special legislation for franchising.  So far, franchise 
companies operating in Peru are subject to regular trade laws.  There is 
a withholding tax on royalties and other off-shore charges, value added 
tax of 18 percent and import tariffs of 15 percent.

Unaddressed markets for franchising are in the areas of automotive, 
cosmetics, repair and rental services, cleaning (home and industrial), 
hotels/motels, clothing store, fitness centers, real state business, 
pharmacies, supermarkets, etc.  
Direct Marketing

Direct marketing is fairly well-established in Peru in the service 
sector, especially among financial institutions and seminar organizers.  
One common practice is to hire personnel for telemarketing and mailing 
campaigns or to contract these services from specialized firms.  Data 
bases for direct marketing are zealously guarded thus are not readily 
available.  Nevertheless, commercial information can be obtained through 
the chambers of commerce and trade associations (See Section X, Appendix 
E: U.S. Country Contacts).

Catalog sales for consumer goods in Peru is almost non-existent because 
of the high degree of mistrust in the quality of the product and the 
impossibility of obtaining warranty claims approvals if the good 
purchased is not entirely satisfactory to the customer.

Joint Ventures/Licensing

Peruvian law allows for joint ventures and licensing agreements with a 
legally established local partner who will be accountable for all legal 
matters.  Peru is just beginning to integrate itself into the global 
commercial network making it attractive to potential joint ventures and 
licensing agreements.  This is especially true in activities where local 
manufacturing or finishing assembly capacity for products whose market 
price is strongly affected by shipping costs. 

The textile manufacturing industry in Peru is rapidly becoming an 
attractive center for licensing and joint ventures.  Productivity has 
increased through modern technology which  has resulted in significant 
production in exports for very wellknown clothing brands.  Peru offers 
qualified labor and competitive production costs which makes it 
extremely attractive for local production.

Steps to Establish an Office

Foreign corporations that establish business in Peru  permanently do 
business within the country, or acquire real state in Peru must be 
registered in the Peruvian Mercantile Register.  To comply, the 
following documents must be provided:

1. Copy of the charter and bylaws of the corporation.
2. Copy of the stockholders' resolution appointing directors.
3. Copy of the directors' resolution to establish the branch in Peru.  
This resolution should specify:
   - Amount of assigned capital,
   - Duration of the branch (may be indefinite) and the commencement of 
the operations; and,
   - Name of person(s) authorized to act in the registration of the 
branch and its representation and powers vested in him.
4. The corporation's legal existence must be certified by a Peruvian 
attorney in accordance with the laws of the country of incorporation. 

Documents 1 and 3 require certification by a public notary or 
appropriate government official in the country of incorporation. The 
signatures have to be authenticated by a local Peruvian consul.  The 
documents should be in Spanish, but if not, they must be translated by 
the ministry's official translator. 

Fees payable upon registration are as follows:
1. Registry fee of approximately 3 percent per million on the amount of 
the assigned capital.
2. Translation fees.
3. Notarial and legal fees and expenses. 

The affiliate is directed by the holder of the parent corporation's 
power of attorney, duly registered.  Such power can be revoked anytime 
by the parent corporation.  There is no regulation that requires the 
parent company to submit its financial statements.  It is advisable that 
all companies that wish to operate in Peru seek legal assistance from 
reputable lawyers to ensure that their operations are within the 
framework of the legal system.  They should be aware of matters 
concerning taxes on corporate income, corporate residence, branch 
income, business equity tax, value-added taxes, income determination, 
capital gains, intercompany dividends, stock dividends, depreciation and 
depletion, net operating losses (tax losses), payment to foreign 
affiliates. Other significant points such as workers participation, tax 
incentives, withholding taxes, municipal operating permits, vacations 
and general labor laws that will affect the business as it starts 
operating must be considered.

Limited Liability companies (Empresas de Responsabilidad Limitada) is a 
form of business organization that is a legal entity different from its 
owner, who must be an individual and whose business liability is limited 
to his capital contribution.  Profit and losses obtained from the 
business activity carried on through this type of business structure are 
declared by the owner.

Once a residence or a domicile can be demonstrated, the foreign company 
must obtain the Remuneracion Unica del Contribuyente (RUC) number and 
officially initiate their corresponding activities.  The taxpayer will 
use his RUC number in all commercial transactions.  This is similar to 
the IRS number in the U.S.

A list of local lawyers can be provided by the embassy.

Selling Factors/Techniques

The one most important selling factor in Peru is price.  Price 
competitive products from Asian countries such as Taiwan and Korea far 
outsell more expensive European or North American products in the 
consumer product categories, such as, consumer electronics, appliances 
and automobiles.  With investment in sales promotion and service 
infrastructure, goods are more competitive than U.S. products that do 
not have quality service and lack high market profile needed to increase 
market share.

Dependability becomes more influential in purchases of advanced 
electronics and construction machinery.  The customer will often prefer 
more expensive North American or European products based on the decision 
factors of quality, durability, technology, good customer support, and a 
strong regional service structure where applicable.  

Many of the larger representatives have small regional offices in two or 
three additional cities outside of Lima.  The rest of the country is 
largely underpopulated, underdeveloped and does not offer an attractive 
market for technical equipment.

Payment for major purchases is generally on a net 30 days basis when 
invoices are used.  Over the counter purchases are done in cash, check 
or credit card.  Most retailers use credit terms as a sale technique and 
major department stores are starting to issue their own credit cards.

Advertising and Trade Promotion

Lima boats 15 daily newspapers, each of which strives to be a "national" 
newspaper.  Locally oriented dailies can be found in most provincial 
capitals.  First in influence and national readership is "El Comercio", 
which is also the nation's oldest paper with over 150 years of 
continuous publication.  The other most influential dailies are the 
right-of-center tabloid "Expreso", it's leftist counterpart "La 
Republica" and business daily "Gestion". The government daily which 
contains all procurement information is "El Peruano".

  Director: Aurelio Miro Quesada 
  Jr. Antonio Miro Quesada 300
  Lima, Peru
  Tel: (511) 426-4676/6292/4703 Fax: (511) 426-0810/7224

  Director: Manuel D'Ornellas
  Av. Libertad 117, Miraflores
  Lima, Peru
  Tel: (511) 444-7088/421-9828 Fax: (511) 447-9900

  Director: Manuel Romero Caro
  Calle General Salaverry 156, Miraflores
  Lima, Peru
  Tel: (511) 447-6919/6634  Fax: (511) 447-6569/6763

  Director: Daniel Ramsay Romero
  Av. Alfonso Ugarte 873
  Lima 1, Peru
  Tel: (511) 428-3460  Fax: (511) 424-9507

Radio has the largest audience of all communications media, reaching 
even the most isolated populations.  It is often the first source of up-
to-the-minute news, and is the principal vehicle for transmitting 
information about local issues and events outside of Lima.  However, it 
has little power to shape opinions, particularly among Peru's decision 

In all, there are close to 1,000 radio stations in Peru, broadcasting on 
AM, FM, and short wave frequencies.  Many of these stations are small 
storefront operations that serve relatively limited audiences.  Radio's 
most influential source of news and information is "Radio Programas del 
Peru" (RPP), one of the many media holdings of the Delgado Parker 
family.  With transmitters and correspondents in virtually every 
important city in Peru, RPP constitutes the country's only true national 
radio network.  In most major cities, including Lima, RPP leads AM 
ratings and is second in FM listenership to music-oriented "Radio 

Television permeates the urban environment in Peru and has become 
increasingly available to rural audiences as well.  As in the U.S., 
television is often the primary source of news for a majority of those 
who watch it.

The most important players in TV are the four Lima-based television 
networks, along with a government-owned service which for years was the 
only station available in many parts of the country.  These five 
broadcasters use affiliates in the provinces much like their 
counterparts in the U.S.  In addition there are several independent 
stations which serve the needs of a particular city or region.

Cable television has also begun to make inroads into the Peruvian market 
with three companies serving approximately 40,000 homes in the greater 
Lima areas.  These packages include CNN, the major U.S. networks, and 
programming from other Latin American and European countries.  The 
leading cable company, Telecable, also carries the WORLDNET signal.

Pricing the Product

In general, Peru enjoys a very open market with, trade restrictions held 
to a minimum.  Revised tariff rates are 15 percent ad-valorem.  
Distributor mark up varies acording to type of product, but usually 
ranges between 15 and 30 percent. All imports are subject to a 18 
percent value-added local sales tax.  Imports of $ 2,000 or more into 
Peru are also subject to pre-shipment inspection, which must be 
performed by one of the four selected supervision service companies.  
There are some exceptions: government entities do not pay these fees; 
decentralized industrial entities as classified by the General 
Industrial Law; industrial entities that have signed tax-stability or 
tax-exemption contracts with the government of Peru; enterprises 
established in the industrial free zones and special treatment zones; 
and companies that have their operations in the jungle regions of 
Loreto, Ucayali, Madre de Dios, Amazonas, and San Martin in accordance 
with the Peruano-Colombiano treaty.  Some luxury items have higher 
tariffs and some specific goods such as cigarettes, beer, wine, liquors, 
automobiles, etc., pay the excise tax according to the lists and rates 
included in Appendixes III and IV of Decree Law No. 25748.  Imports from 
countries with which Peru has bilateral agreements are covered by 
different, preferential tariff schedules.

Sales Service/Customer Support

Peruvians consider service and support a critical factor in making the 
final purchasing decision, especially for products that require periodic 
servicing.  The buyer must know and feel that he has service guaranteed.  
It is important for the product to be sold through a reliable 
distributor that offers the quality and services that the client 
requires for his product.  Servicing and availability are currently the 
two perceived advantage that Asian autos enjoy over their U.S. 
competitors in the Peruvian market. 

Selling to the Government

To sell to the government you need to register as a supplier with the 
appropriate ministry.  The second step is to provide credentials 
indicating that the firm is a legitimate representative of the company.  
This can be done by a letter with the signature of a Peruvian attorney.  
If using an agent, it need not be a national of Peru but can be one of 
your choosing.

Peruvian law excludes all government officials on active duty from 
negotiating contracts with the government.  This is to ensure conflicts 
in interests do not occur.  Former government officials are not affected 
by this law.

Payment of commissions or fees to third parties in connection with sales 
to the government can be done under Peruvian law by a distributor 
working independently.  For example, a company in Peru can purchase 
certain products from a company in the United States and then resell 
them to the Peruvian government.

There are no controls in place on commissions or mark-ups on sales to 
the government by either agents or distributors.  Neither are there 
common nor customary rates in regard to this matter.

Government agencies usually publish tender notices in the main 
newspapers.  The Fujimori government, in order to ensure transparency 
for all government tenders, is currently using the United Nations 
Development Program (UNDP) to notify potentially interested suppliers.  

Protecting Your Product and IPR Infringement

Protection of intellectual property in Peru has improved significantly 
in recent years, but it still falls short of U.S. and international 
standards in several areas.  Peru thus remains on the special 301 watch 

The Peruvian government agency charged with promoting and defending 
intellectual property rights is the Institute for the Defense of 
Competition and Protection of Intellectual Property (INDECOPI).  
Patents, trademarks, utility models, and industrial designs are 
protected by Law No. 26017 of 1992 and by Andean Pact Decisions 344 and 
345.  In case of conflict, the statute offering the stronger protection 
will prevail.  Copyrights are protected by Law 13714 of 1961 and by 
Andean Pact Decision 351.  Peru is a signatory to the Berne Convention 
for the Protection of Literary and Artistic Works, the Universal 
Copyright Convention, the Geneva Convention for the Protection of Sound 
Recordings, the Brussels Convention on the Distribution of Satellite 
Signals, and the Paris Convention on Industrial Property.  In December 
1994, the Peruvian Congress ratified the Uruguay Round agreement on 
Trade-Related Aspects of Intellectual Property (TRIPS).

Registering a trademark is not a cumbersome procedure, although as a 
practical matter local legal counsel must be obtained.  Counterfeiting 
of trademarks is prevalent.  At times the local courts have failed to 
uphold INDECOPI trademark enforcement decisions in clear-cut cases.  
Illegal copies of copyrighted books, audio cassettes, motion-picture 
videos, and computer software are openly sold on the streets, as well as 
in video-rental outlets, computer stores, and shopping centers.  
INDECOPI enforcement efforts, together with greater availability of 
legitimate merchandise, have reduced the level of piracy somewhat in the 
last two years.

Decision 344 contains compulsory licensing provisions, but they are not 
likely to be applied in Peru, because of the onerous conditions that 
must be met.  There is no pipeline protection for pharmaceutical 
patents.  Patents may not be taken out on animal species, materials 
derived from the human body, nuclear and other fissible materials, or 
inventions deemed to be contrary to the public order or to the 
sustainable development of the environment.

Peruvian law does not protect semiconductor chip layout designs, but the 
Embassy is not aware of any infringements in this area.  Private 
freebooting of broadcast satellite signals may exist, but the 
commercialization of the captured signals without a license appears to 
have ended.

Need for a Local Lawyer

Obtaining legal counsel is a must in doing business in Peru.  Potential 
investors should contact an able attorney to understand the legal 
framework for investments found in the Foreign Investment Promotion Law, 
the Framework Law for Private Investment, the Law for the Promotion of 
Private Investment in State-Owned Companies, and the Law for the 
promotion of Private Investment in Public Utility Facilities.

In the event of a dispute, national or international arbitration is 
followed with national or international conformity.

V.  Leading Sectors for U.S. Exports and Investment

Best Prospects for Non-Agricultural Goods and Services
  (US$ Millions)

A. Rank: 1
B. Name of Sector: Telecommunications Equipment
C. Industry Code:  TEL

                           1994   1995   1996

D. Total Market Size       201.4  401.8  802.3
E. Total Local Production    2.0    2.4    2.9
F. Total Exports             0.6    0.6    0.6  
G. Total Imports           200.0  400.0  800.0
H. Total Imports from U.S.  50.0   70.0   98.0
I. Exchange Rate            1.85   2.25    3.0

The above statistics are unofficial estimates.

Comments: Peruvian telephone density is 3.0 telephone lines per 100 
inhabitants as opposed to the 9.28 per 100 average throughout South 
America.  Approximately 40 percent of the population has no access to 
telephone service.  The new operator, Telefonica del Peru S.A., must 
install 638,000 new lines in Lima and 559,600 lines throughout the rest 
of the country before the end of the century and must provide 
communications for every peruvian town over 500 inhabitants.  
Approximately $ 1 billion to US$ 1.5 billion in investment is expected 
to meet this criteria.  Best sales prospects will be concentrated in 
digital switches and network line equipment, cellular infrastructure 
equipment and telephones.

A. Rank: 2
B. Name of Sector: Construction Equipment
C. Industry Code:  CON

                             1994      1995     1996

D. Total Market Size         101.2  136.6  172.1
E. Total Local Production      5.5    7.4    9.3
F. Total Exports               0.0    0.0    0.0
G. Total Imports              95.7  129.2  162.8
H. Total Imports from U.S.    52.7   71.1   89.6
I. Exchange Rate              1.85   2.25    3.0

The above statistics are unofficial estimates.

Comments:  With the upturn of the Peruvian economy for the past two 
years, the construction sector has been growing an average of 35 percent 
a year.  This is mainly due to the highway rehabilitation program, 
maintenance, new highway construction, and new social housing 
infrastructure.  The effects of this growth could be seen in the cement 
industry that grew over 29.6 percent during the first six months of 
1995.  Similar affects could be seen in the steel corrugated bar 
industry that grew by 10.5 percent and asphalt industry by 36.1 percent.  
The housing shortage is still unsolved for  medium and lower income 
families.  The best estimate is close to a half million homes just in 
the capital, Lima.

Best subsector prospects are cement MFC equipment, highway construction 
equipment, and heavy building manufacturing equipment.

A. Rank: 3
B. Name of Sector: Computer/Peripherals
C. Industry Code: CPT

                              1994      1995       1996

D. Total  Market Size        135.2  168.0  209.8    
E. Total Local Production      2.5    2.7    3.0
F. Total Exports               0.5    0.6    0.7
G. Total Imports             133.2  166.0  207.5
H. Total Imports from U.S.    84.5  105.0  131.3
I. Exchange Rate              1.85   2.25    3.0  

The above statistics are unofficial estimates.

Comments:  Demand for these products in still unsatisfied and production 
of computers and peripheral equipment is only limited to parts and 
accessories that are assembled in the local market.  The total 1995 
market is estimated at $ 168 million and expected to grow at an annual 
rate of 25 percent.  Best sales prospects will be concentrated in the 
area of computer modular equipment, such as printers, CD readers, modems 
and like.  Personal computers and microcomputers are also very popular.

A. Rank: 4
B. Name of Sector: Auto Parts
C. Industry Code:  APS

                             1994  1995  1996

D. Total Market Size        238.5  262.35  288.59
E. Total Local Production    63.0    69.3   76.23
F. Total Exports              0.0     0.0     0.0
G. Total Imports            175.5   193.5  212.85
H. Total Imports from U.S.    7.8    8.58    9.44
I. Exchange Rate             1.25    2.85     3.0

The above statistics are unofficial estimates.

Comments:  With the increase of imports of new and used vehicles, the 
demand for auto parts for 1996 will grow approximately 10%.  More than 
D600 million in new and used vehicles were imported in 1994 (buses and 
vans 20.8%, passenger vehicles 33.2%, and pick ups and trucks 46%).  
Peru currently has 750,000 units for a population of 23 million 
inhabitants, i.e. one vehicle per 30 persons.  Major foreign suppliers 
of motor vehicles are Japan, Korea, European countries and the U.S.  
American auto parts are well regarded in terms of technology and 
reliability; however, the market is very competitive and the decision to 
import is based primarily on prices.  Local production is mostly 
concentrated in tires and batteries.

A. Rank: 5
B. Name of Sector: Mining Industry Equipment
C. Industry Code:  MIN

                          1994  1995  1996  

D. Total Market Size       50.1  70.1  112.2
E. Total Local Production   7.1   9.9   15.9
F. Total Exports            0.0   0.0    0.0
G. Total Imports           43.0  60.2   96.3
H. Total Imports from U.S. 28.0  39.2   62.7
I. Exchange Rate           1.85  2.25    3.0

The above statistics are unofficial estimates.

Comments:  Due to the size and importance of the mining industry in 
Peru, investments in mining equipment should continue to increase 
tremendously.  U.S. exports in mining equipment have an excellent 
reputation in comparison to their main competitors from Japan, Germany, 
and Australia.  The appreciation of the yen and deutsche mark will also 
contribute positively to U.S. exports of mining equipment and parts, 
making them even more attractive to mining companies.  The Ministry of 
Energy and Mines (MEM) expects continued large foreign investments in 
the mining sector for exploration, expansion, and new projects, in the 
range of approximately $ 6.5. billion from 1995 to the year 2000.  For 
these reasons, we consider the U.S. mining industry equipment sector to 
be well positioned to benefit from the continued growth of the mining 
sector in Peru well into future.  Best prospect subsectors would be 
heavy earth moving equipment, exploration technology, drilling 
machinery, purification plants, pollution control equipment, conveyors, 
transportation equipment, and parts.

A. Rank: 6
B. Name of Sector: Oil/Gas Equipment
C. Industry Code:  OGM

                              1994  1995  1996

D. Total  Market Size          78.2  98.5  128.0
E. Total Local Production       1.2   1.5    1.9
F. Total Exports                0.0   0.0    0.0
G. Total Imports               77.0  97.0  126.0
H. Total Imports from U.S.     62.8  79.1  102.8
I. Exchange Rate               1.85  2.25    3.0

The above statistics are unofficial estimates.

Comments:  The oil/gas sector in Peru is one of the few industries well 
positioned to take advantage of the investment opportunities in one of 
the world's unexplored areas that holds great potential.  Customarily, 
Peruvian and foreign petroleum companies purchase U.S. exports during 
the exploration-construction periods and a steady inflow of spare 
equipment during the operation phase.  The Ministry Energy and Mines 
(MEM) expects approximately $ 2 billion to be spent on oil exploration 
in the next few years in Peru, to relieve its dramatically dwindling oil 
reserves.  U.S. suppliers and manufacturers of oil/gas field machinery 
stand to benefit greatly with these future investments.

A. Rank: 7
B. Name of Sector: Medical Equipment
C. Industry Code:  MED

                              1994  1995  1996

D. Total Market Size          33.4   46.4   64.6
E. Total Local Production      3.3    3.6    4.0
F. Total Exports               1.6    1.6    1.6
G. Total Imports              31.7   44.4   62.2
H. Total Imports from U.S.    11.2   12.9   14.8
I. Exchange Rate              1.85   2.25    3.0  

The above statistics are unofficial estimates.

Comments:  The Peruvian Regionalization process now underway is supposed 
to significantly change the structure of the Ministry of Health, 
transferring most service delivery and program management 
responsibilities to Regional Offices and Municipal Governments.  There 
is no domestic production of medical equipment.  Local production is 
limited to simple medical furniture and supplies.  Estimated Ministry of 
Health investment program which started in 1993 and close in 1998 is 
estimated at $ 559.8 million and there is a new pre-investment program 
of an additional $ 646.2 million.  Best sales prospects will be 
concentrated in the area of exploratory examination apparatus, 
hemodialysis and electromedical equipment.

A. Rank: 8
B. Name of Sector: Food Processing/Packaging Equipment
C. Industry Code:  FPP

                               1994  1995  1996

D. Total Market Size          28.7  31.5  37.8   
E. Total Local Production      2.0   2.2   2.6
F. Total Exports               0.0   0.0   0.0
G. Total Imports              26.7  29.3  35.2
H. Total Imports from U.S.     N/A   N/A   N/A
I. Exchange Rate              1.85  2.25   3.0

The above statistics are unofficial estimates.

Comments:  The food processing industry was seriously affected by import 
restrictions of capital goods and the lack of local production from the 
early seventies to the early nineties.  Most of the equipment is 
obsolete, except for that belonging to multinational companies and 
export companies that have quickly upgraded their infrastructure to 
become competitive in the export market.  Best sales prospects will be 
in packaging supplies, equipments and processes.  

A. Rank: 9
B. Name of Sector: Agriculture Machinery
C. Industry Code:  AGM

                                1994  1995  1996

D. Total Market Size             45.7  52.5  63.1
E. Total Local Production         0.0   0.0   0.0  
F. Total Exports                  0.0   0.0   0.0
G. Total Imports                 45.7  52.5  63.1
H. Total Imports from U.S.       25.5  31.5  41.0
I. Exchange Rate                 1.85  2.25   3.0

The above statistics are unofficial estimates.

Comments:  The agricultural machinery and equipment industry is expected 
to grow approximately 7% over the next year.  The greatest demand for 
U.S. exports exists in overhaul tractors and water irrigation systems.  
Agricultural services, such as consulting, is also in great demand as 
Peruvian farmers look for new crops for export and innovative methods of 

A. Rank: 10
B. Name of Sector: Franchising
C. Industry Code:  FRA

                                 1994  1995  1996

D. Total  Market Size             N/A  N/A  N/A
E. Total Local Production         N/A  N/A  N/A
F. Total Exports                  N/A  N/A  N/A
G. Total Imports                  N/A  N/A  N/A  
H. Total Imports from U.S.        N/A  N/A  N/A
I. Exchange Rate                 1.85  2.25  3.0

The above statistics are unofficial estimates.

Comments:  Franchising is a relatively undeveloped sector in Peru.  This 
has created an unique opportunity for U.S. investors in the franchising 
sector.  Specific demands are in the areas of fast food, restaurant, 
hotel, and construction services.  Excellent potential also exists in 
the development of tourist related franchises outside the Lima areas.  
Over the next couple of years expect the current level of franchises to 
increase by three or four times as the Peruvian market becomes more 
accustomed to the franchising system.

Best Prospects for Agricultural Products

Product Statistics & Data Code: Hard Wheat (1000 MT)

                                 1994   1995   1996

A. Total Market Size            1,204     1,408  1,528  
B. Total local production         129       178    196
C. Total exports                    0         0      0
D. Total imports                1,075     1,230  1,332
E. Total imports from U.S.        461       470    505
F. Exchange Rate(Soles/US$)      2.20      2.40    3.0

Comments: Peru produces about 100,000 MT of soft wheat unsuitable for 
milling and used for purees and soups. Peru imports much of its hard 
wheat from Argentina, because this country offers better credit terms 
and prices under the Latin American Integration System (ALADI).

Product Statistics & Data Code: Yellow Corn (1000 MT)

                               1994      1995      1996  
A. Total Market Size          1,232     1,230     1,328
B. Total local production       536       600       648
C. Total exports                  0         0         0
D. Total imports                696       630       680
E. Total imports from U.S.      182       250       270
F. Exchange Rate(Soles/US$)    2.20      2.40       3.0

Comments:  Consumption of yellow corn is related mainly to consumption 
of poultry meat, which has become the most popular source of animal 
protein.  Consumption of yellow corn will keep increasing as long as 
consumption of poultry meat increases. Argentina is the main supplier of 
yellow corn because of generally lower prices during their export 
season, and a preference for the greater content of yellow pigment in 
its corn. Peru produces about 180,000 MT of starchy corn which is mainly 
for direct human consumption. Peru also exports about 2,500 MT of a 
special variety of starchy corn.
Products Statistics & Data Code: Milled Rice (1000 MT) 

                               1994      1995      1996

A. Total Market Size           1166       922       950
B. Total local production       954       752       750
C. Total exports                  0        80         0
D. Total imports                212       170       200
E. Total imports from U.S.       74        40        70
F. Exchange Rate(Soles/US$)    2.20      2.40       3.0

Comments: In 1995, rice production decreased slightly from the bumper 
crop of 1994. Because of relatively high prices for local rice, lack of 
credit terms for local sales, and lack of uniform quality, rice 
distributors favor imported rice. The main exporters of rice to Peru are 
Vietnam and Uruguay, followed by the U.S. (which has higher prices but 
superior quality). 

Products Statistics & Data Code: Crude Soybean Oil (1000 MT)

                              1994       1995     1996

A. Total Market Size            84        84        90
B. Total local production        0         0         0
C. Total exports                 0         0         0
D. Total imports                84        84        90
E. Total imports from U.S.       0        25        27
F. Exchange Rate(Soles/US$)      2.20      2.40     3.0

Comments: Argentina is the main supplier of crude soybean oil, due to 
generally lower prices than the U.S. product, partially because of a 
more favorable duty rate.

Product Statistics & Data Code: Beans and Pulses (1000 MT)
                               1994      1995      1996

A. Total Market Size           112       137       147
B. Total local production       80        96       103
C. Total exports                10        15        16
D. Total imports                42        56        60
E. Total imports from U.S.      32        46        49
F. Exchange Rate(Soles/US$)      2.20      2.40      3.0

Comments:  Lentils, whole and split green peas are the most common 
pulses imported form the U.S. Peru is the third largest U.S. market for 
these products. Consumption of these products has grown dramatically in 
recent years.

Other comments:  There are other products which Peru also imports in 
large amounts but are supplied by countries other than the U.S. Among 
these we find sugar, livestock products (mainly offals), dairy products 
and vegetable seeds. 

The market for U.S. animal genetics, including live animals, promises to 
be very interesting over the next several years.   Livestock and meat 
products show great potential, even though prices for U.S. meat and 
offals are higher than those of other countries, mainly Argentina.  U.S. 
prime and choice meat, are beginning to find acceptance in restaurants 
and specialty stores, but its demand is quite limited for the time 

One of the fastest growing markets for imports in Peru is the processed 
food market. New products are catching the interest of the Peruvian 
consumer. Imports of U.S. processed products such as snacks, beverages, 
cereals, nuts, processed fruits and dairy products (cheese) have gone 
from $ 8.5 million in 1990 to over $ 21 million in 1994.  

Significant Investment Opportunities

The government has embarked on a major privatization program, with the 
goal of selling off all remaining state-owned enterprises by the end of 
1996.  Since 1991, the government has privatized nearly 90 enterprises 
for a total of more than $3.5 billion.  The privatization program was 
put on hold temporarily during the lead-up to the presidential and 
congressional elections of April 1995,  but it has since resumed.  In 
July 1995 the government was seeking public input as to the best manner 
to privatize the state oil company, PetroPeru.  The sale is expected to 
commence in late 1995.  The company is most likely to be broken up into 
separate operating units.  There are also significant assets left to be 
sold in the mining and energy sectors, as well as financial services and 
public utilities.  For more information about the privatization schedule 
below, contact the U.S. Embassy (see Appendix E).  

Peruvian Companies to be Privatized in 1995-1996

Company                                      Business

Bayovar phosphate rock deposit               mining
Berenguela copper deposit(Minero Peru)       mining 
Cemento Andino                               cement plant
Cemento Sur                                  cement plant
Centromin                                    mining-smelting
Copes                                        fish-processing
Corpac                                       airport authority
Edegel                                       electricity-generation 
ElectroPeru                                  electricity
Enafer                                       railroads
Enapu                                        port services
Enata                                        cigarettes
Fertisa                                      fertilizer
Incasa                                       mining
Las Bambas copper deposit(Minero Peru)       mining
Michiquillay copper deposit (Minero Peru)    mining
Paramonga                                    paper mill
PescaPeru                                    fish-processing
PetroPeru                                    petroleum
Popular y Porvenir                           insurance
Reaseguradora Peruana                        insurance
Sedapal                                      water/sewage service
SiderPeru                                    steel mill

The government of the United States acknowledges the contribution that 
outward foreign direct investment makes to the U.S. economy.  U.S. 
foreign direct investment is increasingly viewed as a complement or even 
a necessary component of trade.  For example, roughly 60 percent of U.S. 
exports are sold by American firms that have operations abroad.  
Recognizing the benefits that U.S. outward investment brings to U.S. 
economy, the government of the United States undertakes initiatives, 
such as Overseas Private Investment Corporation (OPIC) programs, 
investment treaty negotiations and business facilitation programs, that 
support U.S. investors.

VI.  Trade Regulations and Standards

Trade Barriers and Import Taxes

Peru maintains 15 percent tariffs on 95 percent of the items on the 
tariff schedule and 25 percent on the remainder.  The weighted-average 
tariff is approximately 16 percent, down from 80 percent in mid-1990.  
The government intends to move to a flat 15 percent rate, which will 
eventually be reduced to 12 percent.  This could change, however, if 
Peru joins the Andean Customs Union and adopts its common external 
tariff schedule of varying rates between 5 to 20 percent. 

Most imports are also subject to an 18 percent value added tax on the 
same basis as domestically produced goods.  In addition, selective 
consumption taxes are applied to certain products.  Port fees have been 
reduced but are still relatively high for Latin America.  There are no 
quantitative import restrictions.

In March 1991, Peru introduced "temporary" import surcharges on six 
basic agricultural commodities: wheat, wheat flour, rice, corn, sugar 
and milk products.  The government argued that the surcharges were 
necessary to offset subsidies by exporting countries.  The surcharges 
are calculated on a weekly basis, according to prevailing international 
prices for each commodity.  As a condition for disbursement of a trade 
sector loan from the Interamerican Development Bank, the government 
agreed to phase out the surcharges over a three year period ending in 
1997.  The government began reducing the surcharges in increments in 
April 1994.  It the past, it is difficult for U.S. grain exporters to 
compete in the Peruvian market.  However, Peru is now eligible under the 
CCC-GSM program, which allows for credit soles to Peru.  Additionally, 
the GOP has been lowering surcharges which are practically zero right 
now.  This will allow U.S. grain export to increase.

Customs Valuation

The government has recently reformed Peru's Customs service with help 
from the Interamerican Development Bank and the UN Development Program.  
The reform seems to be working, collections have more than tripled since 
1991, despite dramatically lower tariff rates.  Corrupt officials have 
been fired and computerization has been installed.  Contraband has been 
reduced but is still estimated at $400-600 million a year.  The tariff 
schedule was simplified (see above), also facilitating collection.  The 
Customs service employs foreign import-supervising firms, such as the 
Swiss firm SGS, to evaluate all shipments worth more than $2,000.  The 
importer pays up to 1 percent of the FOB value of the goods to cover the 
cost of the valuation.  Peru plans to implement the GATT customs 
valuation code by the year 2000.

Import Licenses

The government has abolished import licenses for the vast majority of 
products.  The only remaining products requiring licenses are firearms, 
munitions and explosives imported by private persons, chemical 
precursors (used in cocaine production) and ammonium nitrate fertilizer, 
which has been used as a blast enhancer for terrorist car bombs.

Export Controls

Export licenses are required for cultural relics and items of antiquity.  
In addition, end-user certificates are required for the export or re-
export of items on the International Munitions List, the International 
Chemical/Biological Warfare (CBW) List and the Missile Technology 
Control Regime (MTCR) list.  Such licenses cover an extremely small 
portion of total Peruvian exports less than one percent.

Import/Export Documentation

For imports, the government requires an invoice, bill of lading, a 
packing list, proof of insurance, and a certificate of customs 
inspection for items worth over $2,000 prior to shipment.  If the 
product is imported from the Andean region (Colombia, Venezuela, Ecuador 
and Bolivia), a certificate of origin is required to qualify for Andean 
Pact tariff preferences.  A certificate of quality is required for 
pharmaceutical products.

For exports, a bill of lading and invoice are required, as well as an 
end-user certificate in the case of the export of munitions-controlled, 
CBW, or MTCR items.

Temporary Entry

Goods admitted into the country temporarily for re-export can receive 
duty drawback from customs.  Documentation requirements are the same as 
those listed above.

Labeling, Marking Requirements

Labeling requirements are not onerous.  Basically products normally 
retain their original labels and the name and taxpayer identification 
number (RUC) must be added to the packaging.

Prohibited Imports

Very few items have been prohibited from import in the last three years.  
The importation of used clothing and shoes is prohibited, although 
imports of donated used clothing and shoes are exempt from the 
prohibition.  Import of plagicides (insecticides against insect plagues) 
and toxic waste is also prohibited.


The government has no specific standards required for imports.  Even 
right-hand drive vehicles are permitted, although purchasers are 
supposed to adapt them to left-hand drive once they are imported.  Some 
industry standards are developing in the private electronics and 
construction industries.

Free Trade Zones

Peru currently has two free trade zones: Ilo and Tacna.  Both are 
located near the Chilean border and were areas previously subject to a 
substantial contraband trade.  Items enter the free trade zones free of 
duty, but when they enter the rest of Peru they are subject to normal 
duties.  The products are exempt from duties only if they are imported 
into Tacna or Ilo and used as inputs to manufacture products for export.

Special Import Provisions

Products destined to the sparsely populated jungle area are subject to a 
special tariff regime.  However, to prevent fraud, the government 
attempts to closely monitor these products to ensure they remain in the 

Membership in Free Trade Arrangements

Peru is a member of the Andean Pact but does not currently participate 
fully in the Pact's free-trade area or customs union, because of 
disagreements over the Pact's common external tariff and certain 
subsidies and other policies maintained by other Pact members.  Peru is 
to decide by January 31, 1996, whether it will remain in the Pact.  In 
the meantime, Peru maintains bilateral trade agreements with each of the 
other four members of the Pact.  The agreement with Bolivia is 
essentially a full-fledged free-trade agreement.  Peru is in the process 
of negotiating a comprehensive free-trade agreement with Chile.

VII. Investment Climate

Openness to Foreign Investment

The Fujimori government seeks to attract both foreign and domestic 
investment in all sectors of the economy.  Macroeconomic instability, a 
hostile political climate and terrorism discouraged significant 
investment in the past, but a deepening of the reform process, along 
with increasing success in the war on terrorism, have helped attract 
more foreign investors.  The new constitution (enacted January 1, 1994), 
Legislative Decree 662 (DL 662) of September 2, 1991, the Foreign 
Investment Promotion Law and DL 757 of November 13, 1991 and the 
Framework Law for Private Investment Growth are the basic legal 
frameworks for foreign investors in Peru.  Supreme Decree 162 (DS 162) 
of October 12, 1992, provides the implementing regulations for these 
legislative decrees.

Foreign investment is now subject to national treatment and is permitted 
in all economic activity.  Article 63 of the new constitution states 
"national and foreign investment are subject to the same terms," 
although foreign investment is required to be registered with the 
National Commission on Foreign Investment and Technology (CONITE).  All 
investors need prior approval to invest in industries that manufacture 
weapons.  Foreigners can obtain concessions and rights within 50 
kilometers of Peru's borders with the authorization of a supreme 
resolution.  Otherwise, no screening, authorization or prior registry is 
required for foreign investment.

Foreign investors have the same rights as national investors and thus 
would benefit from any investment incentives such as tax exonerations.  
Foreign investors are offered to obtain tax stability and juridical 
stability  contracts.  Such contracts are currently offered for all 
investments, particularly for petroleum and mining concessions.  Foreign 
investors also have international arbitration rights to settle 
investment contract disputes.  Industries established in free-trade 
zones are allowed to import manufacturing components free of all duties 
and fees.  Users of these zones are exempt from all taxes for a period 
of 15 years. There are no performance requirements.  Nor are there 
discriminatory or excessively onerous residence or work permit 
requirements inhibiting foreign investors.

Conversion and Transfer Policies

There are no exchange controls in Peru.  All restrictions on remittances 
of profits, dividends, royalties and capital have been eliminated, 
although foreign investors are required to register their investments 
(an automatic process) to ensure these guarantees.  Exporters and 
importers are not required to channel their foreign exchange 
transactions through the central bank and can conduct their transactions 
freely on the open market.  Residents and non-residents may open and 
maintain accounts in foreign currency in Peruvian financial 
institutions.  American firms have experienced no problems or delays in 
transferring funds or remitting capital, earnings, loan repayments or 
lease payments.

Currency is freely convertible and there is a single exchange rate for 
all transactions.  Such  convertibility is guaranteed by the 1993 
constitution.  Embassy Lima purchases local currency at the free-market 
rate.  In 1994, the sol depreciated nominally against the dollar by only 
1.4 percent.  For the first five months of 1995, the sol depreciated 2.7 

Expropriation and Compensation

The government's power to expropriate private property is legally 
limited to those instances where it is required by the public interest 
and then only through a specific act of congress.  Public interest 
reasons are defined as those required to carry out public works.  The 
government's stated intention is to comply with international standards, 
although, by virtue of the fact that no expropriations have been carried 
out by the current government, it is impossible to judge whether there 
actually would be due process or have a prompt, adequate and effective 

Dispute settlement

The Fujimori administration has worked from the outset to resolve 
investment and expropriation disputes it inherited from previous 
administrations.  The eight year-old dispute over the Belco Petroleum 
expropriation was finally resolved on August 28, 1993.  The Fujimori 
government signed a compensation agreement with the American 
International Group for the 1985 expropriation of the Belco assets.  The 
long-standing dispute between AIG and the GOP came to a close on 
September 28, 1993, with the first payment of $30 million towards 
settlement of AIG's $184.7 million claim.  The next payment under the 
seven-year agreement is due July 31, 1994.  The GOP paid pay AIG about 
$54 million in 1994 and $24 million per year through 1999.  Investment 
disputes with Southern Peru Copper Corporation (controlled by ASARCO) 
and Occidental Petroleum were resolved in December 1991.

Since September 1993, a U.S. investor has tried unsuccessfully to obtain 
a license from the GOP to operate a casino.  The matter has bounced back 
and forth between the courts and Ministry of Industry and Tourism.  The 
investor, who has spent over $3 million trying to get established in 
Lima, has charged the GOP with discrimination.  Well-connected Peruvian 
casinos apparently have obtained licenses more expeditiously than the 
American investor.  In May, 1995,  the investor was advised that the 
Ministry of Industry could not approve the license because the investor 
had a pending lawsuit against the GOP.  We are not aware of other U.S. 
investment disputes ongoing in Peru.

Peru accepts binding international arbitration of investment disputes 
between foreign investors and the state, in accordance with national 
legislation or international treaties signed by the government.  A law 
permitting international arbitration of disputes between foreign 
investors and the government or state-controlled firms was issued by 
decree during December 1992.  Peru is a party to the 1958 New York 
Convention on Recognition and Enforcement of Foreign Arbitral awards.

Peru's adherence to ICSID (International Center for Settlement of 
Investment Disputes) has improved the GOP's ability to attain investment 
agreements with European countries.  Disputes between foreign investors 
and the state regarding existing contracts must still be submitted to 
national courts.  However, investors who conclude a juridical stability 
agreement for new investment (see next section for more details) are 
permitted to submit contract disputes with the government to national or 
international arbitration by mutual agreement.

Enforcement of property and contractual rights has generally been 
effective, although the Peruvian legal system is slow and corruption is 
endemic.  Improving the efficiency and transparency of the judicial 
system is a high priority of the Fujimori government, although a 
majority of judges and prosecutors appointed by the Fujimori 
administration since the April 5, 1992 coup remain in temporary status.  
Some problems with government interference in the court system still 
occur.  Peru has written commercial and bankruptcy laws.  Bankruptcy law 
is administered by Indecopi (the National Institute for the Defense of 
Free Competition and the Protection of Intellectual Property).  The 
creditor hierarchy is similar to U.S. bankruptcy law and monetary 
judgments are usually made in local currency.  In principle, secured 
interests in property, both chattel and real, are recognized.  In terms 
of real property, the government is still working to complete the 
retitling of agricultural land expropriated under the agricultural 
reform of 1968.  A system of home mortgages secured by property has not 
existed for several years, but a new system has been established and 
should begin operation very soon.

Political Violence

The level of political violence continues to decline in Peru, in large 
part due to the government's counter-insurgency efforts.  As a result, 
actions by Sendero Luminoso (SL) and the Tupac Amaru Revolutionary 
Movement (MRTA) in 1994 were roughly one-third the number in 1993.

There were approximately 400 terrorist attacks and 750 violence-related 
deaths nationwide in 1994; the level of violence continued to decline in 
the first half of 1995.  The worst recent violence has occurred in the 
Upper Huallaga Valley, especially northern Huanuco Department, southern 
San Martin Department, and northwestern Pucallpa Department; the eastern 
jungle areas of Junin Department; the mountain provinces of La Libertad 
Department and rural Ayacucho Department.  Approximately half of Peru's 
population lives in a designated emergency zone.

The SL has specifically targeted foreign companies as well as local 
businesses in an effort to create an uncertain business climate and 
embarrass the government.  For instance, telephone company branch 
offices were hit by small explosive devices after the company was 
privatized and bought by Telefonica de Espa_a.  Bank offices and 
embassies have been frequent targets of bombs.  In May 1995, a large car 
bomb at a hotel in the Miraflores district of Lima killed four and 
injured two dozen.

Performance Requirements/Incentives

Peru offers foreign and national investors in certain sectors juridical 
stability agreements to stimulate private investment.  These agreements 
guarantee that current statutes on income taxes, foreign exchange, 
trade, drawback, administrative procedures  and labor hiring will remain 
unchanged for that investment for 10 years.  To qualify, an investment 
must exceed $2 million within two years or exceed $500,000 within the 
two years provided that it generates more than 20 permanent jobs or 
generates more than $2 million in exports during the first three years 
of the agreement.  There are no performance requirements for foreign 
investors, other than those to obtain juridical stability guarantees.

Companies receiving new investment may also enjoy legal stability with 
regard to the income tax, provided the new funds amount to more than 50 
percent of the equity capital and retained earnings and will enhance 
productivity or technology.  Juridical stability agreements are subject 
to Peruvian civil law, which means they cannot be altered unilaterally 
by the government.  Investors are also offered protection from liability 
for acquiring state-owned enterprises.

Parties may freely negotiate contractual conditions related to licensing 
arrangements and other aspects of technology transfer without prior 
authorization.  Registry of a technology transfer agreement is required 
for a payment of royalties.  Such registration is automatic upon 
submission to the appropriate government authority.

Rules regarding hiring of foreigners have been liberalized.  Legislation 
still limits foreigners to no more than 20 percent of total employees in 
a local company, whether owned by foreign or national interests and 
their combined salaries to no more than 30 percent of total company 
salaries.  However, legislative decree 689 of November 4, 1991 provided 
a variety of exceptions to these limits which effectively negate their 
impact in most cases.  For example, a foreigner will not be counted 
against his company's total if he holds an immigrant visa, has a certain 
amount invested in the company ( currently about $5,000), or if his 
country has a reciprocal labor or double nationality agreement with 
Peru.  Foreign banks and service companies and international 
transportation companies are exempt from these hiring limits, as are all 
firms located in free trade zones.  Furthermore, companies may apply for 
exemption from the limitations for managerial or technical personnel.

Right to Private Ownership and Establishment

Foreign and domestic entities are permitted to invest in any legal 
economic activity and to freely establish, acquire and dispose of their 
interests.  This includes direct foreign investment, portfolio 
investments and investment in real property.  Capital contributions may 
include goods and technology.  The Fujimori government has dismantled 
virtually all previously existing monopolies in all sectors of the 
economy, including in the provision of public services.  Foreign 
investors participate in the privatization of state firms on an equal 
footing with national investors.  The Fujimori government has undertaken 
widespread and deep structural reforms to improve the efficiency of 
markets and capital allocation decisions and to foster competition, 
bureaucratic procedures have been streamlined, price controls and import 
license requirements terminated, government monopolies eliminated, the 
tax system simplified and labor laws liberalized.  The government 
intends to privatize or liquidate all state-owned firms by 1996, 
although there are indications the privatization of PetroPeru (a GOP 
owned petroleum conglomerate) could extend into 1996.

The government created INDECOPI in 1992 to protect free competition and 
intellectual property rights, centralizing functions previously carried 
out by various government entities.  INDECOPI is responsible for anti-
trust enforcement, anti-dumping and subsidy actions, consumer protection 
and implementation of other policies to ensure fair competition.

Public sector tariffs have been increased to conform with market forces.  
A complex tax reform resulted in occasional mixed signals or current and 
new taxes as well as regulations.  Due to heavy indirect taxes, fuel and 
electricity prices are significantly higher than world averages.

Regulatory System

The GOP has adopted a transparent policy and effective laws to promote 
competition including the establishment of  INDECOPI.  Bureaucratic 
procedures, e. g., registration of security licensing, are sufficiently 
streamlined and transparent, although difficulties have been encountered 
in obtaining licenses for casino operations.  High import duties on 
capital goods, large payroll taxes and onerous labor laws (e.g., the 
requirement to provide severance pay for fired employees) could impede 
the efficient mobilization and allocation of investment.

Bilateral Investment Agreements

Peru has signed bilateral investment agreements with the U.K., Spain, 
France, Germany, Switzerland, Denmark, Romania, China, Korea, Japan and 
Thailand.  Peru has expressed interest in negotiating a bilateral 
investment treaty with the United States.

OPIC and Other Investment Insurance Programs

The Overseas Private Investment Corporation (OPIC) signed agreements 
with Peru in December 1992 and a year and a half later (July 1994) OPIC 
approved a request for political risk investment insurance.  As of June 
1995, OPIC coverage in Peru totaled $230 million.

Peru is a member of the Multilateral Investment Guarantee Agency.


Labor is abundant and trainable, although there is a shortage of highly 
skilled workers.  The presence of organized labor in the Peruvian 
economy continues to decline.  Probably less  than 6 percent of the 
labor force is organized.  As much as 60 percent of the economically 
active population works in the informal sector.  Nearly 80 percent of 
the workforce is either unemployed or working at very low wage levels 
(below what the government considers a subsistence wage).  Since 
February 1992, the legal minimum wage for workers is 72.00 soles per 
month (about $33 at the early November exchange rate) which is far below 
that necessary to meet minimum living requirements.

A comprehensive labor law was promulgated in 1992, allowing for multiple 
forms of unions across company or occupational lines, thus permitting 
multiple unions in the same company.   Workers in probational status or 
on short-term contracts are not eligible for union membership.  
Bargaining agreements are considered contractual agreements, valid only 
for the life of the contract.  The concept of "acquired rights" carrying 
over from pervious contracts has been abolished.  Productivity 
provisions must be included in any collective bargaining agreement.  The 
number of officials and the amount of time union officials may devote to 
union work with pay is limited to 30 days per year.  Unless there is a 
pre-existing labor contract covering an occupation or industry as a 
whole, unions must negotiate with each company individually.  A labor 
law passed in July 1995 which has further liberalized hiring.

A union can request binding arbitration in contract negotiations.  
Strikes may be called only after approval by a majority of all workers 
(union and non-union) voting by secret ballot.  Unions in essential 
public services as determined by the government must provide during the 
strike sufficient workers, as determined by the employer, to maintain 

The new constitution provides for a maximum work day of 8 hours, with 48 
hours as the maximum per week.  The labor code also sets a 45-hour 
workweek for women, including 24 hours rest per week and 30 days paid 
annual vacation for all workers.  These and other benefits are readily 
sacrificed in exchange for regular employment.  Strike activity has 
declined markedly over the past three years with the continued severe 
deterioration of the economy during that period.

Foreign Trade Zones/Free Ports

Decree Law 704 of November 1991 governs the four types of free trade 
zones in Peru -- export processing zones, special commercial treatment 
zones, special development zones and tourist zones.  The rules and 
benefits applying to these zones are the same for foreign and national 

Activities in export processing zones are exempt for 15 years from the 
customs duties and any taxes except social security.  In addition, 
companies may hire workers under temporary contracts and keep their 
accounting in foreign currency.  Export processing zones exist at Ilo, 
Chimbote, Matarani, Paita and Trujillo.  Tourist zones receive the same 
benefits as export processing zones to promote national or foreign 
tourist development.  The only tourist zone created thus far is at Ilo.  
Companies locating in special commercial treatment zones in frontier and 
jungle areas pay only 10 percent customs duties (normal rates are 15 or 
25 percent) are exempt from sales taxes and may keep their accounting in 
foreign currency.  Tacna and Tumbes are the only special commercial 
treatment zones at the moment.  Special development zones may be 
established by the government to encourage  investment in designated 
areas.  The benefits and locations of these zones are to be established 
by presidential decree.

Capital Outflow Policy

Peru has no restriction on capital outflows for both nationals and 
foreigners.  The GOP does not provide Peruvian citizens any special 
incentives (e.g., subsidies, tax rebates) to invest in foreign 

Although the United States was the largest foreign investor in Peru 
until 1994, U.S. direct registered investment grew only $54 million 
during 1989-1993.  This sluggish development reflected, to a large 
degree, Peru's mounting foreign debt and the GOP's refusal to repay 
foreign loans, widespread corruption, hyperinflation, and political 
instability at the hands of the terrorist group Sendero Luminoso.  But 
President Fujimori's highly successful economic stabilization and 
liberalization program, the GOP's successful war against Sendero 
Luminoso, and the privatization program have restored much investor 
confidence.  In 1992, the U.S. company Newmont invested about $37 
million and a further $40 million in 1994-95 in the Yanacocha gold mine.  
In March 1994, U.S. investors bought the former government owned Cerro 
Verde copper mine for $37 million with a commitment to invest an 
additional $million in the project.  In November 1994, U.S. investors 
paid $ 218 million in cash plus $55 in debt paper for the Tintaya Copper 
mine, with a commitment to invest $85 million in 5 years.  In 1994, 
direct U.S. investment rose about $100 primarily due to the Southern 
Peru Company's investment in the Ilo copper refinery, and the Magma 
company's investment in the Tintaya copper mine.

Based on projections from Conite and other sources, additional foreign 
investment in existing foreign-owned companies could exceed $ 6.7 
billion in the near future.  Most of this investment is expected to go 
to already privatized companies, although companies purchased outside of 
the privatization  program could receive a significant amount of 
additional investment.  The majority of privatization contracts have 
included commitments for further investment.  The La Granja copper 
deposit was purchased in March 1994 for only $ 1 million, but the 
investment commitment was $ 25 million with a projected total investment 
of over $770 million.  Likewise the Cerro Verde mine was sold for $37 
million but the contract called for an additional $485 million 
investment.  On top of the $2.0 billion privatization of Entel and CPT, 
Spain's Telefonica agreed to invest an additional $1 billion in 
Entel/CPT. Telefonica recently announced it could invest another $900 
million by the end of 1998. (For further information see Appendix D. 
Investment Statisitics.)

VIII.  Trade and Project Financing

Banking System

The Peruvian banking system consists of 23 commercial banks, plus the 
Central Bank, the Banco de la Nacion and the government-operated 
development bank Cofide.  Total liquidity of the banking system was 
about  $7.4 billion in May, 1995.  Of the 23 commercial banks, 18 are 
locally chartered, four operate under rules for "multinational" banks,  
and only one, Citibank, is a foreign commercial branch bank.  The 
banking law of December 1993 allows for the creation of consumer credit 
companies and investment banks.   

The Peruvian banking system has been cleaned up significantly  with the 
liquidation of insolvent government sectoral development banks, as well 
as most savings and loans and cooperatives.  In part this cleanup was 
required under the conditions of financial-sector loans from the World 
Bank and the Inter-American Development Bank (IDB) that accompanied 
Peru's clearance of its arrears to international financial institutions 
(IFI's) and reinsertion into the international financial community.  The 
Superintendency of Banking and Insurance (SBS) has received IMF and IDB 
support in reclassifying bank portfolios and setting new standards of 
prudence, including norms on concentration of loan portfolios.  Under 
new banking legislation of 1993, banks were required to recapitalize and 
institute more prudent rules and the SBS was given greater supervisory 

Peruvian law allows banks freely to take deposits and make loans in both 
foreign and domestic currency.  The Peruvian economy is highly 
"dollarized."  In May 1995, dollars comprised about 65 percent of 
liquidity in the banking   system, 5 percentage points below the level 
in mid-1994.  Although some Peruvian bankers have expressed interest in 
strengthening the role of the Peruvian sol, the dollar likely will 
remain a key part of the banking system for the foreseeable future.  
Lending rates for dollars and soles are still relatively high, but they 
have come down in the past year.  Average sol lending rates were about 
37 percent per annum in June 1995; rates for preferred customers were as 
low as 25 percent while risky clients were charged over 100 percent 
interest.  The reserve requirement for sol loans is only 9 percent.  
Lending rates for dollar loans averaged about 15 percent in June 1995.  
The reserve requirement for dollar loans is 45 percent.  

The sol and dollar are freely convertible and there are no exchange 
controls or import or export licensing requirements that would affect 
access of importers to foreign currency.

Financing Available

The success of Peru's economic stabilization/liberalization program has 
brought about a marked expansion of the financial sector in just a few 
years.  The amount of money in the financial system as a percent of GDP 
was about 15 percent in early 1995 compared to only 4 percent in the 
early 1990s.  Peruvian bankers hope to expand the financial system 
further.  In September 1994, Banco Wiese sold $ 51 million worth of 
stock (in the form of ADRs) on the New York Stock Exchange to bolster 
bank assets and expand lending capacity.  With annual inflation now 
nearing single digits, mortgages are being offered for 15-20 years.  
(Previously mortgages had to be renegotiated every few months.)  Within 
the past year, bond sales in the Lima Stock Exchange have grown 
significantly.  The creation of private pension funds also have 
increased financing capacity. 

Top Peruvian banks now boast they have access to short and medium-term 
capital for LIBOR plus 2-3 percent.  Less than two years ago, the same 
banks reportedly had to pay enormous premiums for credit from world 
capital markets.  While selected Peruvian banks now appear to have the 
confidence of the world financial community, most loans for Peru still 
are either extended by international financial institutions (e.g., the 
World bank, Inter-American Development Bank, and the IMF),  or channeled 
through the GOP's financing corporation COFIDE.  An acceleration of 
commercial bank lending to Peru is expected soon, especially if the GOP 
negotiates a Brady Plan on the country's commercial debt which was 
renounced by the Garcia Administration (1985-1990).  That debt totals 
$6-9 billion of including $3 billion principal, and $3-6 billion of past 
due interest.

Peruvian firms import through letters of credit confirmed by 
correspondent banks in the U.S. or other supplying countries.  All 
Peruvian commercial banks have correspondent relationships with banks in 
the United States, Europe and Asia. Given Peru's improving track record, 
more foreign commercial banks are expected to show interest in trade 
financing and correspondent relationships with Peruvian commercial 

In August 1994, the U.S. Export-Import Bank announced that it would 
provide both short- and medium-term (up to 5 years) financing for the 
private sector.  Under EXIM's medium-term program, U.S. exports of 
capital equipment to Peru are eligible for loans, guarantees and 
insurance.  Exports of consumer goods, spare parts and raw materials are 
eligible for short-term (up to 180 days) credit insurance.

In June 1995, Japan's Foreign Cooperation Fund (OECD) approved 
concessional loans to Peru totaling $400 million.  One loan totaling 
about $200 million was earmarked for development of the port of Callao.  
Another loan of $200 million was approved for irrigation, water and 
sewage systems.  The latter loan reportedly will be co-financed by the 
World bank with OECD providing about $100 million.  The two loans will 
be extended for 30 years with a 10-year grace period and an annual 
interest rate of 3 percent.  In addition, OECD is evaluating yet another 
loan totaling $240 million for two hydroelectric facilities and a sewage 
treatment plant.

Correspondent Banks:  The following is a list of banks based in Peru 
which have correspondent relations with U.S. banks:

     Banco de Comercio
     Banco de Credito
     Banco del Sur
     Banco Financiero
     Banco Interamericano de Finanzas
     Banco Interandino
     Banco Internacional (INTERBANC)
     Banco Latino
     Banco de Lima
     Banco Wiese
     Citibank, N.A.
     Banco Continental
     Banco del Nuevo Mundo
     Banco Mercantil
     Banco Banex
     Banco Regional del Norte
     Banco de la Republica
     Banco Sudamericano
     Banco Libertador
     Banco del Trabajo
     Banco Solventa
     Banco de la Nacion (GOP owned bank) 

IX. Business Travel

Business Customs  

Business is conducted in Spanish, although there are a great number of 
executives in the Peruvian business community who speak English.  All 
promotional literature must be in Spanish.  Business hours in Peru are 
generally from 8 a.m. to 5 p.m.  Breakfast meetings are not common, but, 
business lunches are normally scheduled between the hours of 1:30 to 
3:30 p.m.  However, shops and some businesses operate 11:00 a.m. to 1:00 
p.m. and from 4:00 p.m. to 8:00 p.m.  Business offices are closed on 
Saturdays.  In the provinces, business hours are usually from 9:00 to 
1:00 p.m. and from 4:00 to 7:00 p.m.  Lima is situated directly south of 
New York and is in the Eastern Standard time zone, but does not follow 
Daylight Savings Time.  Dates are written starting the day of the month, 
the month and finishing with the year.  The currency is the Nuevo Sol, 
which replaced the Inti.  As of July 1995, the exchange rate was 2.25 
soles to one U.S. dollar.  The metric system is used for weights, 
measures, and mathematical expression.

Travel Advisory and Visas 

The State Department travel advisory, now called the Consular 
Information Sheet, can be obtained from the U.S. Department of State.  
The latest information sheet "warns all U.S. citizens of the dangers of 
travel to Peru.  With the exception of certain tourist areas, terrorist 
violence, which has diminished over the past year, continues to occur in 
many parts of the country.  Foreign visitors have not been specifically 
targeted and tourist areas have generally been free of terrorist 

The information sheet also contains reports about crime, terrorist 
activity, entry requirements, travelling to emergency zones, drug 
penalties, adoptions and registration of U.S. citizens at the U.S. 
Consulate upon arriving to Peru.  Representatives of U.S. companies 
coming to Peru on exploratory trips should do so on a tourist visa.  For 
more information on Peruvian visa requirements, contact the Peruvian 
Embassy in Washington D.C. or consulates in the following cities: 
Chicago, Houston, Los Angeles, Miami, New York, Peterson, New Jersey, 
Puerto Rico, San Francisco, and Washington D.C.


The Peruvian official holidays are:

- New Year's Day             January 1996
- Maundy Thursday            April 4 1996
- Good Friday                April 5 1996
- Labor Day                  May 1 1996 
- Saints Peter And Paul      June 29 1996 
- Independence Day           July 28/29 1996
- Santa Rosa de Lima         August 30 1995
- Battle Of Angamos          October 8 1995
- All Saints' Day            November 1 1995
- Immaculate Conception      December 8, 1995
- Christmas Day              December 25, 1995 

Business Infrastructure

The transport sector is in poor shape due to long neglect, but efforts 
are underway to remedy the situation. For more information regarding the 
infrastructure situation please refer to Chapter II.  The state-run 
railroad system is underdeveloped, but as privatization proceeds, expect 
the rail system to attract new investments.  

Peru has two international air carriers Faucett and Aeroperu.  There are 
a number of smaller airlines covering domestic routes, such as Aero 
Continente, Americana, Expreso Aereo and Imperial Air.  Lima is also 
served by two U.S. Airlines- American and United.  International flights 
are available to most major cities in South America.  Currently, the 
only direct flights to the United States are to Miami, although Aeroperu 
has indirect service to Los Angeles.  There are daily cargo Flights to 
Miami on both Peruvian and U.S. carriers (Challenge Air Cargo).  A new 
civil aviation agreement between the United States and Peru was 
concluded in July 1995, which should lead to an expansion of air service 
in the near future, including possible direct flights to New York, 
Houston, Los Angeles and Baltimore/Washington.

Public ground transportation is not recommended. Taxis are abundant and 
not metered, so fares must be negotiated. More reliable radio taxis are 
recommended. Transportation to and from the airport by radio taxi or 
taxi service is approximately $15.  Tips are not expected on short 
rides.  If you have a car and driver a tip is common. 

The hotel infrastructure is at this time inadequate and relatively 
expensive throughout the Lima area. Completion of new hotel projects in 
1996 will help ease this problem. Cost and availability of rented 
residential space, apartments, or homes is surprisingly high driven by 
increased demand by returning businessmen.  Construction in these areas 
has been expanding rapidly to meet over growing demand.  

The telephone system was recently privatized, so some improvement in 
service is being seen.  It is not possible to directly access credit 
card numbers for AT&T, Sprint, MCI, etc.  Cost of a call to the U.S. is 
approximately $2.50 per minute.

Peruvian medical facilities do not generally meet U.S. standards, 
however, if visitors take certain precautions about food and drink, the 
level of risk will be reduced.  Cholera and other infectious diseases 
such as hepatitis are present in Peru.  Travelers in Peru should 
substitute bottled beverages for potentially contaminated water.  Fish, 
shellfish and vegetables should not be eaten unless well cooked, and all 
food should be eaten while still hot.  Peeled fruits are safe.  
Travelers to the jungle areas of Peru should have up-to-date yellow 
fever vaccine and malaria prophylaxis.  There are several clinics in the 
Lima area which have U.S. trained personnel and up to date medical 
equipment.  Since U.S. medical insurance is not always valid outside the 
United States, supplemental insurance could prove useful.  


Population:  23.4 million (1994 est.)  
Population Growth Rate:  2.1 percent annually  
Religions:  Roman Catholic Church (89 percent), Evangelical religions 
(3.5 percent), other Christian (2 percent)
Government System:  Republic, President elected by popular vote in two 
rounds, 120 member unicameral congress elected at-large by popular vote.  
Languages:  Spanish and Quechua (official), Aymara (highlands), dozens 
of others spoken by native inhabitants in the Amazon basin

Source:  National Statistical Institute


                              1994        1995      1996
                                         (proj)     (proj.)

GDP in current (USD mil)    32,700       35,500     38,000
Real GDP growth (percent)     13.0          8.0        6.0
GDP per-capita (current $)   1,346        1,485      1,585
Government Spending as
Percent of GDP                10.7         10.9       11.2
Consumer price index
(pct change)                  15.4         10.0        9.0
Unemployment (pct)             8.9          8.5        8.0
Foreign exchange reserves
(USD mil)                    5,696        6,500       6,000   
Av. exchange rate for year
(sol/$)                       2.24         2.28        2.32 
Foreign debt  1/ (USD mil)  23,398       24,000      24,500
      Debt serv. as pct.
of merch. exports             20.3         20.0        20.0
U.S. Econ./Mil. Assistance   151.9        152.2         151


                            1994  1995    1996  
                                      (US$ Million)
Exports (Fob)               4,502   6,000   8,000
Imports (Fob)               5,611   7,800  10,000
U.S. Exports to Peru        1,069   1,600   1,800
U.S. Imports from Peru        754     900   1,000


                       (US$ Million)

  1990  1,330.4

  1991  1,370.1

  1992  1,531.8

  1993  1,683.4

  1994  4,455.6

  1995 (Apr 30)  4,505.6

Source: National Commission for Foreign Investment and Technology 
(CONITE) Dec 31, 1994

        1992 - 1995 (US$ Million)

Country              1992     1993         1994      1995 

Spain                 3.1      3.1       2,058.4      2,058.4
United States       630.3    656.2         756.1        756.3
United Kingdom      133.6    145.9         361.3        375.7
Nethlds.             35.4     40.8         267.6        269.4
Panama  /2          175.1    204.7         223.4        195.4
Chile                 1.8     35.9         163.9        164.4
China               118.1    118.1         118.1        118.1
Switz.  /2          103.7    104.7         108.3        108.3
Canada               36.6     36.6          36.8         87.0
Uruguay              40.6     44.7          45.1         45.1 
Others              253.5    292.7         316.6        327.5  

TOTAL             1,531.8  1,683.4       4,455.6      4,505.6

1/ As of 30 April 1995.
2/ Note: Peruvians have set up companies in Panama and
Switzerland for the purpose of making investments in Peru.

SOURCE:  CONITE. Actual foreign investment is higher as the  above table 
only reflects foreign direct investment registered with CONITE at book 

Sector            (US$ million)  Percentage        

Communications       2,002.2     44.4
Mining                 935.3     20.8
Industry               540.3     12.0
Energy                 364.3      8.1
Finance                258.3      5.7
Commerce               231.7      5.1
Services                66.7      1.5
Transport               30.7      0.7
Others                  76.1      1.7
TOTAL                4,505.6    100.0


           MAJOR PRIVATIZATION, 1992 - 1994

                        Pct of   Val of
                        Shares/  Shares   Major
Company          Year     Assets    Mil $  Sharehol.
-------          ----     ------   ------  --------
(mining)         1992      90/1      120    China
Stations         1992      90/1       39    Peru
(oil ex-            20 year
traction)         1993     lease     200     U.S.
(airline)         1993       70       25     Mexico
Cerro Verde 
(copper mine)     1993       90/1     35     Peru       
Cemento Yura
(Cement)          1994       90/1     67     Peru
(Telcom)          1994       35    1,391     Spain
Refinery          1994       100      66     U.S.
Cementos Lima
(Cement)          1994        49     104     Peru
(Electricity)     1994        60     176     Canada
(Electricity)     1994        60     212     Chile
(Finance)         1994       99.8     51     U.S.
(Copper mine)     1994       90/1    273     U.S.
(Zinc refin.)     1994       90/1    153     Canada
(Hotels)          1994       90/1            Peru

1/ Although bids were made for 100 percent of the shares,
under Peruvian law, employees have the right to buy up to
10 percent of the company's shares.  Share-holders may buy any of the 
shares not purchased by the employees.

Source:  Commission for the Promotion of Private Investment


Investing Company              US$ Million  

Telefonica International 
de Espana, S.A.               1,000  /1 
Shell/Mobil                   1,900  /2
Cambior Inc.7                   771
Empresa Minera de
Mantos Blancos, S.A.            560
Cyprus Amax Metals              485
Panworld Minerals Int.          450  /3
Southern Peru Copper            300  /4
Petro-Tech                      265
Maple Corp                      150
Magma Copper                     85
Newmont Mining Corp.             60
Shell Petroleum Co.              44
Occidental Oil/Gas Co.           34
Others                          600

Total      6,707

1/ As stipulated in Telefonica's agreement to buy
Entel and CPT.  In May 1995, Telefonica management 
said investment could reach $ 1.9 billion by 1998.
2/ This is the projected investment to develop the 
Camisea Gas Deposit.
3/ This investment reportedly is for an iron-ore
mine that probably will not be developed for at 
least the next five years because of the lack of
nearby infrastructure facilities.
4/ About half of this amount already has been 

Source:  Conite and Private Estimates.  


U.S. Embassy Lima, Peru
Unit 3710
APO AA 34031
Av. La Encalada Cdra. 17 S/n
Urbanizacion Monterrico Sur
Surco, Lima 33, Peru
Tel: (511) 221-1202 Fax: (511) 221-3543
Alvin P. Adams, Ambassador
James Mack, Deputy Chief of Mission

U.S. Department of Commerce (U.S. Embassy Lima, Peru)
Unit 3780
APO AA 34031
Tel: (511) 221-1512 Fax: (511) 221-1513
Ann M. Bacher, Senior Commercial Officer
Tom Welsh, Desk Officer Washington D.C.
Tel: (202) 482-2375 Fax: (202) 482-0464

U.S Department State (U.S. Embassy Lima, Peru)
Unit 3730
APO AA 34031
Tel: (551) 221-2410 Fax: (511) 221-3543
John Riddle, Economic Counselor
Marti Melzow, Desk Officer Washington D.C.
Tel: (202) 647-3360 Fax: (202) 647-2628

U.S Department of Agriculture (U.S. Embassy Lima, Peru)
Unit 3785
APO AA 34031
Tel: (511) 221-1514 Fax: (511) 221-1515
Daryl Brehm, Regional Agricultural Officer

American Chamber of Commerce (AMCHAM)
Av. Ricardo Palma 836
Lima 18 - Peru
Tel: (511) 447-9349 Fax: (511) 447-9352
James Plunkett, General Manager

Confederacion Nacional de Comerciantes (CONACO)
AV. Abancay 210, Piso 3
Lima 1 - Peru
Tel: (511) 427-2567, 427-4914, 427-3528, Fax: (511) 427-2567
Joaquin Scwalb Lopez Aldana, President
Herless Buzzio Zamora, Director General Manager
(Traders' association)

Sociedad Nacional de Industrias (SNI)
Los Laureles 365
San Isidro
Lima 27 - Peru
Tel: (511) 421-8830 Fax: (511) 442-2573
Roberto Nesta, President
Bruno Tomatis, General Manager
(Manufacturers' society)

Sociedad Nacional de Mineria y Petroleo 
Francisco Grana 671
Lima 17 - Peru
Tel: (511) 460-1560, 460-1600, 460-2088 Fax: (511) 460-1616
Walter Sologuren, President
Carlos Diez-Canseco, General Manager
(Mining and petroleum society)

Asociacion de Exportadores (ADEX)
Av. Javier Prado Este 2875
San Borja
Lima 41 - Peru
Tel: (511) 224-2020, 224-2030, 224-2040 Fax: (511) 437-3773
Juan Pendavis, President
Pedro Martinez Torres Lara, General Manager
(Exporters' association)

Camara de Comercio de Lima
Gregorio Escobedo 398
Jesus Maria
Lima 11 - Peru
Tel: (511) 463-3434 Fax: (511) 463-9864
Juan Musso, President
Pedro Flores, General Manager
(Lima Chamber of Commerce)

Camara Peruana de la Construccion (CAPECO)
Av. Paseo de la Republica 571
Piso 12
Lima 1 - Peru
Tel: (511) 428-7480 Fax: (511) 433-0188
Jose Ortiz, President
Alfonso Merino Reyna, General Manager
(Chamber of Engineering and Construction Firms)

Confederacion Nacional de Instituciones Empresariales (CONFIEP)
Vanderghen 595
San Isidro
Lima 27 - Peru
Tel: (511) 440-6050, 442-9122 Fax: (511) 441-5072
Arturo Woodman, President
(Confederation of Business Executives)

Asociacion de Bancos
Jr. Miro Quesada 247, Of. 409
Lima 1 - Peru
Tel: (511) 428-8850 Fax: (511) 433-3665
Sra. Maria Vivanco
(Association of Banks)

Asociacion de Industriales Lacteos
Los Ibis 120
Urb. El Palomar,Corpac, San Isidro
Lima 27 - Peru
Tel: (511) 440-9758
Rolando Piskulich, Manager
(Largest importers of powder milk, milk fat, whey and other dairy 

Asociacion Peruana de Porcitultores
Pomalca 327
Urb. Centro Comercial Monterrico
Lima 33 - Peru
Tel: (511) 436-3729, 436-4168 Fax: (511) 436-3729
Ana Maria Trelles
(Importers of animals, equipment and feed grain for pork production.)

Asociacion Peruana de Avicultura
Esmeralda 255
Chacarilla del Estanque
Lima 33 - Peru
Tel: (511) 437-9282 Fax: (511) 437-2555
Fernando Caceres, Manager
(Importers of baby chicks, equipment, and inputs for poultry and egg 

Asociacion de Fongales
Pumacahua No. 877, Of. 306
Jesus Maria
Lima 11 - Peru
Tel/Fax: (511) 423-4642
Rodolfo Malarin de Azambuja, President
(Importers of inputs, equipment, and cattle for milk production.)

Comite de Molinos de Trigo 
Los Laureles 365
San Isidro
Lima 27, Peru
Tel: (511) 440-8700 Fax: (511) 442-4351
Alejandro Daly, Manager
(Importers of wheat)

Ministerio de Agricultura
Av. Salaverry s/n
Lima 1 - Peru
Tel: (511) 432-4040, 432-0712, 432-9098 Fax: (511) 432-0990
Absalon Vasquez, Minister
(Ministry of Agriculture)

Instituto Nacional de Recursos Naturales
Ministerio de Agricultura
Calle 17 No. 355
Urb. El Palomar, San Isidro
Lima 27 - Peru
Tel: (511) 441-4606, 441-0425 Fax: (511) 441-4606
Miguel Ventura, Chief
(This institute supervises all matters related to use, exports, 
development, and preservation of land and natural resources such as 
wetlands, woodlands, wildlife, etc.)

Servicio Nacional de Sanidad Agraria
Ministerio de Agricultura
Av. Salaverry s/n
Jesus Maria
Lima 11 - Peru
Tel/Fax:  (511) 433-7802
Elsa Carbonell, Director
(Equivalent to APHIS.  Supervises sanitary conditions of imported 
agricultural commodities and animals.)

Ministerio de Economia y Finanzas
Jr. Junin 319
Lima 1 - Peru
Tel: (511) 427-3930 Fax: (511) 428-2101
Jorge Camet, Minister
(Ministry of Economy and Finance)

Ministerio de Energia y Minas
Av. Las Artes 260
San Borja
Lima 41 - Peru
Tel: (511) 475-0065 Fax: (511) 475-0689
Amado Yataco, Minister
(Ministry of Energy and Mines)

Ministerio de Industria, Turismo, Integracion y Negociaciones 
Comerciales Internacionales
Calle Uno s/n
Urb. Corpac, San Isidro
Lima 27 - Peru
Liliana Canale Novella, Minister
Tel: (511) 224-3261, 224-3282, 224-3345 Fax: (511) 224-3144
(Ministry of Industry, Tourism, Integration and International 

Ministerio de Pesqueria
Calle Uno Oeste S/n
Urbanizacion Corpac, San Isidro
Lima 27 - Peru
Tel:(511) 470-4737, 470-9737 Fax:(511) 460-4090
Jaime Sobero Taira, Minister
(Ministry of Fisheries)

Ministerio de Relaciones Exteriores
Jr. Lampa 535
Lima 1 - Peru
Tel: (511) 427-3860 Fax: (511) 432-3479
Efrain Goldenberg, Minister
(Ministry of Foreign Affairs)

Ministerio de Salud
Av. Salaverry Cdra. 8
Lima 1 - Peru
Tel: (511) 432-3535 Fax: (511) 431-3671
Eduardo Yong Motta, Minister
(Ministry of Health)

Ministerio de Transportes, Comunicaciones, Vivienda y
Av. 28 de Julio 800
Lima 1 - Peru
Tel: (511) 433-7800 Fax: (511) 433-9378
Alm. A.P. Juan Castilla Meza, Minister
Waldo Carreno, Vice Minister of Transport
Willy Contreras, Vice Minister of Communications
(Ministry of Transport, Communications, Housing and 

Dun & Bradstreet S. A.
Republica de Chile 388, Piso 2
Lima 1 - Peru
Tel: (511) 433-5533, 433-2989 Fax: (511) 433-2897
Florencio Kohata, Manager

Apoyo S.A.
Gonzales Larra_aga 265
Lima 18 - Peru
Tel: (511) 444-5555/445-5237 Fax: (511) 445-0535/445-5946
Felipe Ortiz de Zevallos
(Consulting firm)

Cuanto S.A.
Plaza del Ovalo 203
San Isidro
Lima 27 - Peru
Tel: (511) 442-3421 Fax: (511) 442-5460
Rosario Cespedes
(Consulting firm)

Gerencia y Marketing S.A.
Arturo Aguilar 289
Lima 33 - Peru
Tel: (511) 448-0054 Fax: (511) 449-2696
Alfonso Gatanadui
(Consulting firm)




Commercial Service Publications 1995-96.
Computers and Peripheral Equipment; Construction; Telecommunications; 
Industrial Chemicals; Franchising; Food/Packaging Equipment; Auto Parts; 
Mining Industry Equipment; Oil/Gas Equipment; Medical Equipment; 
Agriculture Machinery.

Foreign Agricultural Service Publications
Oilseeds Report: Includes information on fishmeal, soybean meal, 
cottonseed meal, fishoil, soybean oil, cottonseed oil, palm and palm 
kernel oil;Grains and Feed Report: Includes information on Wheat, Rice 
and Corn; Sugar Report; Coffee Report; Asparagus Report;

Agricultural Situation Report: provides general information on the 
situation of the agricultural sector in Peru. Also Includes information 
on agricultural imports and exports.

Dairy Report: Provides information on production of fresh milk, imports 
of powder milk (whole and skim), anhydrous milk fat, butteroil and 
consumption of these products.

A complete list of market research topics are available through the 
National Trade Data Bank. 


AUG 25-29, 1995  West Virginia Trade Mission to South
        America, Lima, Peru
        West Virginia Development Office
        Capitol Complex
        Charleston, WV 25305-0311
        Tel: (304) 558-2234 Fax: (304) 558-0449
AUG 23-30, 1995  Doing Business with the U.S., Tacna, Peru
        U.S. & Foreign Commercial Service
        American Embassy
        Unit 3780
        APO AA 34031
        Tel: (511) 221-1512 Fax: (511) 221-1513

NOV 17-26, 1995  21 Pacific International Trade Fair of the
         Pacific, Lima, Peru
        CMC International Division
         200 N. Glebe Rd.
        Suite 710
        Arlington, VA 22203
        Tel: (703) 527-8000  Fax: (703) 527-8006

MARCH 6-7, 1996  Visit USA Workshop, Lima, Peru
        Visit USA Committee
        U.S. & Foreign Commercial Service
        American Embassy
        Unit 3780
        APO AA 34031
        Tel: (511) 221-1512 Fax: (511) 221-1513
MARCH 18-19, 1996  Power Expo'96 Trade Mission, Lima, Peru
        U.S. Department of Commerce
        Office of Energy, Infrastructure and
         Machinery, Room 4033/4326    
        Washington, D.C. 20230
        Tel: (202) 482-2390 Fax: (202) 482-0170

APR 14-23, 1996  8 Tecnotron International Trade Fair,
         Lima, Peru
        CMC International Division
        200 N. Glebe Rd.
        Suite 710
        Arlington, VA 22203
        Tel: (703) 527-8000  Fax: (703) 527-8006
To the top of this page