PERU Law and Practice Contributed by: Walter Aguirre, María Angela Vásquez and Sebastian Montes, Aguirre Abogados & Asesores
10. Execution Formalities 10.1 Authentication, Notarisation, Witnessing, Etc Peruvian law does not impose any formal execution requirements on the franchisor or the franchisee in relation to a franchise agreement. Nonetheless, to lend greater formality and legal certainty to the trans - action in the event of a potential dispute, it is recom - mended that, at a minimum, the parties’ signatures on the franchise agreement be notarised and/or that the agreement be formalised as a public deed. The use Pursuant to the provisions of Law No 27269, electron - ic signatures are granted the same legal validity and enforceability as handwritten signatures, which means that the use of electronic signatures is permitted when executing a franchise agreement. However, it is worth noting that, at present, the use of electronic signa - tures for this type of transaction is still not widespread. Therefore, the authors continue to recommend the use of handwritten signatures, as well as the notarisation of the parties’ signatures before a notary public and/ or the formalisation of the franchise agreement as a public deed. 10.3 Stamp Duties There are no stamp duties in Peru. of witnesses is not required. 10.2 Electronic Signatures
restrictions on making payments in foreign currency, or on the amount of royalties payable. 9.2 Withholding Tax Under Peru’s current Income Tax Act, non-resident taxpayers are subject to tax only on income derived from Peruvian sources. Accordingly, as a general rule, there is an obligation to withhold the applicable tax on behalf of a non-resident franchisor in connection with the payment of the initial franchise fees, royalties and services. The applicable withholding tax rate on royal - ties paid to a non-resident franchisor is currently 30%. These payments may be deducted by the franchisee in accordance with applicable tax regulations. The exact withholding rate will depend on the specific nature of the income and whether any of the dou - ble taxation agreements (DTAs) entered into by Peru are applicable. Peru currently has DTAs in force with Brazil, Canada, Chile, Mexico, Portugal and Switzer - land, among other countries. Therefore, carrying out a case-specific tax analysis to determine the applicable Pursuant to current Peruvian legislation, it is permis - sible to enter into obligations denominated in foreign currency, and the terms set forth in the franchise agreement in this regard are valid and enforceable. It is important to note that no foreign exchange controls are currently in effect in the country. treatment is strongly recommended. 9.3 Foreign Currency Controls
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