PERU Law and Practice Contributed by: Alfred Kossuth Wieland and Edgardo Bernal Santos, Thorne, Echeandia & Lema Abogados
1. Legal System and Regulatory Framework 1.1 Legal System
lated by the Consumer Protection and Defence Code, while entities participating in the capital markets are subject to the Securities Market Law, which seeks to ensure transparency and the orderly development of the stock exchange. 1.2 Regulatory Framework for FDI Foreign direct investment (FDI) in Peru is not subject to prior review or approval by any national or federal authorities. The Peruvian constitutional framework establishes the principle of equal treatment between domestic and foreign investors, under which foreign investment may be freely made and operated under the same legal conditions applicable to national investment, without the need for authorisations, reg - istrations or screening mechanisms. This open regime reflects Peru’s long-standing policy of promoting foreign investment by ensuring legal cer - tainty and non-discrimination. Foreign investors ben - efit from the same rights and guarantees granted to local investors, including protection of private proper - ty, freedom of enterprise and commerce, and access to arbitration for the resolution of investment-related disputes. As a result, there is no general supervisory authority with jurisdiction to approve or deny FDI on economic or strategic grounds. However, Peruvian law establishes specific restric - tions applicable to foreign investors in certain sensitive areas. For reasons of national security and defence, foreigners are prohibited from acquiring or owning, directly or indirectly, assets located within 50 km of Peru’s international borders, unless an exception is granted by means of a supreme decree issued by the Council of Ministers in cases of public necessity. In addition, sector-specific limitations apply to foreign participation in activities such as the following, which are subject to particular statutory rules: • commercial aviation; • private security and surveillance services; • the commercialisation of arms and explosives; • radio broadcasting services; and • maritime transportation of hydrocarbons.
Peruvian legislation is structured according to a hier - archical system comprising the following, in descend - ing order of authority: • the Constitution; • statutory laws enacted by Congress; • legislative decrees issued by the Executive under delegated powers; The formation and day-to-day functioning of compa - nies in Peru are primarily governed by a set of key legal instruments, including: • the General Corporations Law, which establishes the rules applicable to corporate incorporation and governance; and • the Civil Code, which sets out the general legal regime for civil transactions and contractual arrangements involving companies. • emergency decrees; • supreme decrees; and • resolutions of a general application. Commercial activities are further regulated by the Code of Commerce, which addresses matters such as: • merchants and commercial acts; • accounting and bookkeeping obligations; • commercial contracts; • general warehouse companies; • specific regimes for banking and agricultural enti - ties; • commercial agency and commission agreements; • letters of credit; • current account contracts; and • maritime commerce. In addition, companies are subject to the Tax Code with respect to their fiscal duties, the Labour Produc - tivity and Competitiveness Law regarding employ - ment-related obligations, and the Framework Law for Operating Licences governing the authorisation of business premises. Consumer relations are regu -
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