Peru is one of the most important countries in Latin America. Some of its most representative characteristics include a variety of climates, large territorial extension, important natural resources, solid economy, diverse culture and people of great skills and high academic standards.

With 29.4 million habitants, Peru is a country with rich deposits of copper, silver, gold, lead, zinc, natural gas and petroleum. Due to the weather and natural and cultural variations along its natural regions, Peru is internationally recognised as a mega diverse country. Its abundant resources are mainly found in the Highlands, through its mineral deposits, and vast coastal waters that have traditionally provided excellent fishing.

Peru has achieved significant advances in macroeconomic performance in recent years with very dynamic GDP growth rates, a stable currency exchange rate and low inflation. The country’s impressive 9.8% development rate obtained in 2008 placed it among the fastest-growing economies in the region. Although the rate fell to 0.9% in 2009 due to the global crisis, Peru’s economy has recovered very quickly. It has officially increased more than 8.78% in 2010 and is expected to grow 6% in 2011. The country’s rapid expansion has helped to reduce the national poverty rate by almost 15% in the last years to about 34.8% of its population in 2009.

The country’s recent positive development performance has much to do with the competent monetary and tax policy pursued over the last two decades, with falling levels of public debt (from 37.8% of the GDP to 21% in 2009) and consistent budget surpluses. Measures which were taken to complement the liberalisation of the goods and labour markets included: the opening of trade and foreign direct investment; and the maximisation of the country’s revenues resulting from its rich natural resources.

In the last few years Peruvian exports have also grown significantly from US$ 7.7 billion in 2002 to US$ 33.4 billion in 2010. The boom in Peruvian exports has been fostered by the signing of a series of Free Trade Agreements with the United States, China, Thailand, Canada, Singapore and the European Free Trade Association. Peru has also concluded negotiations with the European Union, Korea and Japan. Peru’s main exports consist of gold, copper, zinc textiles and fish meal; and its major trade partners are the United States, China, Brazil and Chile.

In December 2009, Peru’s credit rating was raised to investment grade by Moody’s Investors Service and matched similar moves by Standard & Poor’s and Fitch Ratings in the previous years. Sound economic prospects, with estimated medium-term GDP growth rates of 7% for 2010, are key factors that attributed to this upgrade. These robust development prospects are supported by rapidly increasing investment levels and a significant decline in Peru’s tax and external vulnerabilities.

The upgrade to investment grade has brought Peru a great deal of positive attention worldwide. More importantly, it has produced a positive impact on the local economy and is currently boosting the stock market and the appreciation of the Peruvian currency in the short term. Nowadays, many multinational corporations are watching the country with greater interest. The stock of foreign investment as of June 2009 is US$ 18.8 billion.

Investment promotion conditions

Peru actively seeks to attract both foreign and domestic investment in all sectors of the economy. It has therefore taken the necessary steps to establish a consistent investment policy that eliminates the obstacles to foreign investment. As a result, Peru is now considered to have one of the most open investment regimes in the world.

Peru has adopted a framework for investments that offers automatic investment authorisation. Moreover, it has established the necessary economic stability rules to protect investors from arbitrary changes in the legal terms and conditions of their ventures. The Peruvian government guarantees foreign investors legal stability on income tax and dividend distribution regulations. The foreign investors entitled to obtain this tax and legal stability are those willing to invest in Peru for at least a two-year term; to invest a minimum amount of US$ 10 million in the mining and/or hydrocarbon sectors or of US$ 5 million in any other economic activity; or to acquire more than 50% of the shares of a privatised state-owned company.

The Peruvian legal framework protects foreign investment by offering:

• Equal and non-discriminatory treatment
• Unrestricted access to most economic sectors
• Free capital transfer
• Free competition
• Guarantee to private property (no expropriations or nationalisations)
• Freedom to purchase domestic stocks
• Freedom to access internal and external credit
• Freedom to transfer royalties
• Protection through a network of bilateral investment agreements and the membership of the Investment Committee of the Organisation for Economic Cooperation Development (OECD)
• Protection under the membership of the International Centre for Settlement of Investment Disputes (ICSID) and the Multilateral Investment Guaranty Agency (MIGA)

Investment opportunities

Peru offers great investment opportunities in the fields of agribusiness, fisheries, mining, forestry, real estate and tourism.

In the agribusiness sector, Peru boasts some of the best agricultural yields in the world for sugar cane, asparagus, olives, artichokes and grapes and seasonal windows in the most important markets. Peru exports US$ 2.5 billion of fresh and processed products to over 113 countries. Projections expect that 90,000 ha. currently used for agro exports to double as a consequence of large irrigation projects in its portfolio. Peru is already the first world producer of fresh asparagus, paprika and organic bananas; the second world producer of artichokes and the sixth world producer of coffee.

In the fisheries sector, Peru counts on an extensive coast (3,080km) and “water mirrors” that offer adequate conditions for the development of marine and continental aquaculture. It is the first producer of fishmeal and fish oil in the world and exports fisheries products to more than 100 countries.

In the mining sector, Peru stands out as one of the most important countries for the production of minerals and non-metallic goods. It is the first world producer of silver, the second of zinc, the third of copper, the forth of lead and the fifth of gold. Additionally, it possesses large deposits of iron, phosphate, tin and manganese. Only 20% of its territory with mining potential has been explored. The investment in the sector exceeded US$ 14 billion between the years 1999 and 2009; investments have been projected to total US$ 37 billion in the coming years.

In the field of forestry, Peru is the second country in Latin America with the largest natural forest area where there is a great biological diversity and highly valued timber. Its natural forests cover an area of 78.8 million ha., 10 million for reforestation and other areas for afforestation (plantations). Forestry products exports grew to US$ 296 million in 2009 and the Government is promoting investments for the development of hard tropical timber in the Amazon jungle and soft timber in the highlands, as well as industrial timber complexes.

In the real estate sector, construction’s annual average growth was 10.6% for the period 2005 – 2009 and the projections for next few years are 12.5%. Housing deficits affect 25% of households. There are several programmes for housing financing, based on economic conditions and income level. Mortgage credits grew an average of 25% in the period 2005 – 2009 and construction credits grew 33%.

Finally in the tourism sector, Peru offers important cultural destinations such as the Citadel of Machu Picchu, that was chosen as one of the new 7 Wonders Of The World, and a diversity of natural landscapes. The capital of Peru, Lima, is the gastronomic capital of Latin America where it registered significant invesments in hotels and restaurants of international recognition. There are other tourist attractions to be explored such as the North Eastern circuit, among others. Between 2002 and 2010, the numbers of tourists visiting Peru grew from 998,000 to more than 2.5 million and projections are very promising for the next few years.