Onerous Regulations Make Peru One of World's Most Complex Places to Do Business

Peru is one of the most complex countries for multinational companies to stay compliant with corporate regulation and legislation, according to TMF Group’s “Global Benchmark Complexity Index 2015.” The report comes just at a time Peru’s economy is expected to outpace nearly all of its neighbors this year, making it a sweet spot for multinational corporations looking to expand in Latin America.
What is disappointing, according the report, is the Andean country is not even attempting to simplify legislation.
The region as a whole is not performing better either. “Latin America is the most complex region for multinational companies to stay in compliance with corporate regulation and legislation, with five countries in the top 10,” states the report.
That means complying with regulation is similarly complex in Argentina, Colombia, Mexico, Bolivia, and Brazil. On the other hand, each of Uruguay, Ecuador, Chile, and Paraguay have performed relatively better in the survey.
Peru’s presidential race kicked off earlier this year, with candidates expected to focus on corruption and economic growth, two themes closely related to business compliance issues. While most of the candidates have highlighted reducing complexity as a priority, progress has been slow.
“Peru’s level of complexity is not in harmony with the growth that its economy has experienced in recent years,” said Walter Gutsch, managing director for Peru at TMF Group. “Reducing complexity is a promise that policymakers have not yet fully delivered on, but they have made an effort to show that the issue is still on the table.”
Peru offers both national and foreign investors legal and tax stability agreements, which stipulate that certain regulations in effect at the time of the investment contract will remain unchanged for that investment for 10 years.
“There is still much to do to reduce the level of complexity in Peru,” said Gutsch. “For example, centralizing all the regulatory institutions into one, with an aim towards simplifying the compliance process.”