Employer of Record in Peru (EOR in Peru)

Hire Globally, Pay Locally, Expand Effortlessly

Peru, a country rich in both local natural resources and cultural heritage, presents attractive opportunities for businesses looking to invest in emerging markets. However, understanding its complex labor and tax laws is crucial for successful operations. An Employer of Record (EOR) in Peru can provide the necessary expertise and support.

Want to have a Team in Peru TODAY?

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Want to Have a Team in Peru TODAY?

Show me how to grow my business now!

We prefer to let others grow their business.

Streamline Your Business Expansion in Peru with an EOR in 3 Simple Steps

Step 1 – Detailed Planning & Assessment

Your collaboration with a Peruvian EOR, such as INS Global, starts with a comprehensive consultation to understand your business objectives. This involves determining the workforce needed, defining roles, and setting your expansion timeline. The EOR then customizes its services to meet your specific needs, ensuring a smooth entry into the Peruvian market.

Step 2 – Streamlined Setup, Recruitment & Onboarding

Whether you’re forming a new team in Peru or relocating existing staff, the EOR takes care of all legal and administrative requirements. This includes managing visas, work permits, payroll, contract administration, and ensuring compliance with Peruvian labor laws. By acting as your legal employer in Peru, the EOR removes the need for establishing a local entity, saving significant time and costs.

Step 3 – Continuous HR Management & Compliance

Once your employees are operational in Peru, the EOR oversees ongoing HR and payroll functions. This includes salary processing, managing employee benefits, and ensuring compliance with health insurance and social security obligations. The EOR serves as the HR intermediary between you and your Peruvian team, handling administrative tasks and addressing employee issues, allowing you to concentrate on growing your business confidently.

Benefits of Partnering with a Peruvian EOR

Quick Market Access

Partnering with a Peruvian EOR allows you to swiftly enter the Peruvian market without the need to establish a local entity, accelerating your business expansion.

Regulatory Adherence

The EOR ensures that your operations in Peru comply with local labor laws, including regulations on taxes, employment contracts, and employee benefits, reducing legal risks.

Talent Management

The EOR assists in recruiting and managing locally based staff, ensuring you have access to the best talent in Peru while handling all employment-related matters.

Reduced Costs

A Peruvian EOR saves you the costs associated with setting up and running a local entity. The EOR takes care of payroll, benefits, and HR tasks, freeing up resources for business growth.

Operational Flexibility

With a Peruvian EOR, you can scale your business operations up or down as needed without the complications of establishing a permanent local entity, offering greater operational flexibility.

Testimonial

Manuel Ramos

TERAO ASIA

Managing Director

We think INS Global is a good solution about starting business in new and complex markets. Understanding the market doesn’t mean you need to set up a company immediately.

 5/5

EOR vs. Company Incorporation in Peru: Making the Right Choice

While establishing a subsidiary in Peru is a traditional method for local expansion, partnering with an EOR presents several advantages:

Speed – With an EOR like INS Global, the setup process in Peru is accelerated, enabling you to start operations and hire staff much faster than the lengthy company incorporation process. An EOR can have your team operational within weeks or even days.
Compliance – Both EORs and subsidiaries must comply with Peruvian tax laws and labor regulations. EORs are well-versed in managing these complexities, ensuring your business remains compliant and reducing the risk of legal issues.
Cost – For smaller teams or short-term projects, EOR services are often more cost-effective than setting up a subsidiary, as they avoid the high costs associated with incorporation and ongoing administration. For larger companies, EORs provide streamlined solutions that integrate new markets into global payroll systems efficiently.
Control – While incorporating in Peru offers full control over HR, finances, and operations, EORs provide similar control over your workforce while minimizing administrative burdens and liability.

Important Considerations for Choosing the Right Employer of Record in Peru

Selecting the right EOR in Peru is key to a smooth market entry. Keep these key factors in mind:

Experience and Market Reputation – Look for a Peruvian EOR with a proven track record and a solid market reputation, like INS Global. Client feedback and industry recognition are reliable indicators of trustworthiness.
Full-Service Capabilities – Ensure the EOR provides all necessary services or can tailor their offerings to meet your needs, including visa and work permit support, payroll processing, tax compliance, and navigating Peru’s labor regulations.
Scalability and Flexibility – Choose an EOR that can expand its services as your business grows. Their team should be capable of managing an increasing workforce and adapting to evolving business requirements.
Effective Communication and Transparency – Select an EOR known for its consistent and clear communication. They should keep you informed about regulatory updates, upcoming deadlines, and potential issues, offering a dedicated point of contact and online tools for easy access to essential information.
Competitive and Transparent Pricing – Compare the pricing models of different EOR providers. Ensure their fees are clear, competitive, and free of hidden costs. Third-party advice can help you secure the best value for your EOR in Peru.

Peru Labor Law Overview

Contracts – In Peru, employment contracts are a legal requirement and must be written for both permanent and temporary employment. These contracts detail the terms of employment, including job responsibilities, salary, working hours, and conditions for termination. Peruvian labor law, governed by the General Labor Law and other specific regulations, distinguishes between indefinite-term contracts and fixed-term contracts, with indefinite contracts being the most common form. Fixed-term contracts are only allowed under specific circumstances, such as for seasonal work or project-based employment. Approximately 60% of the Peruvian workforce is employed under indefinite contracts, reflecting the stability offered by this type of agreement.
Probationary Periods – Peruvian labor law permits probationary periods, which typically last up to 3 months but can be extended up to 6 or even 12 months for positions requiring special trust or qualifications. During this period, employers can terminate the employee without the obligation to provide severance pay as long as the termination is not discriminatory or abusive. Despite this flexibility, employees on probation are still protected under the law against wrongful termination. Probationary periods are commonly used across various sectors, particularly in industries where performance assessment over a short period is critical.
Working Hours – Standard working hours in Peru are set at 8 hours per day or 48 hours per week, as stipulated by the General Labor Law. Overtime is compensated at a minimum rate of 125% of the regular hourly wage for the first 2 hours and 150% for subsequent hours. However, actual working hours can vary, especially in sectors like mining and agriculture, where flexible working schedules are often applied. In recent years, there has been growing discussion around reducing the workweek to improve work-life balance, but the standard remains among the highest in Latin America, with many workers in urban areas exceeding the typical 48-hour workweek.
Paid Leave – Peruvian labor law mandates that employees are entitled to 30 calendar days of paid annual leave after completing their first year of service. Additionally, employees receive paid leave for public holidays, which vary but typically total around 12 days per year. Maternity leave in Peru is 98 days, with the possibility of an additional period for high-risk pregnancies or complications. Paternity leave is shorter, generally around 10 days. Paid sick leave is covered by the public health insurance system (EsSalud) after the first 20 days, with employers covering the initial period.
Social Insurance – Peru’s social insurance system, administered primarily through EsSalud and the National Pension System (SNP), covers health insurance, pensions, and work-related accident insurance. Employees contribute 13% of their salary to the pension system, with 9% allocated to health insurance. As of 2023, the social insurance system covers about 40% of the workforce, with many informal sector workers remaining outside of the system. Recent efforts by the government aim to expand coverage and improve benefits, particularly in rural areas and among low-income workers. The system plays a crucial role in providing Peruvians with financial security and access to healthcare.
Severance Pay – Severance pay in Peru, known as “Compensación por Tiempo de Servicios” (CTS), is a mandatory benefit for employees with more than a month of service. Employers are required to deposit 1 month’s salary into a CTS account for every year of service, which the employee can access upon termination or in certain cases of financial hardship. Additionally, employees are entitled to 50% of their legal bonuses as part of their severance pay. Severance pay is a key component of job security in Peru, offering financial support to workers during periods of unemployment. The CTS system is a significant feature of the Peruvian labor market, designed to cushion the impact of job loss in a country where formal employment can be unstable.

Navigating these complexities demands significant time and ongoing awareness of legal changes. By partnering with an EOR in Peru, you establish a local legal partner that ensures your business complies with labor laws and mitigates potential risks.

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FAQs

How does an EOR support market entry in Peru?

An EOR in Peru takes care of all the legal, HR, and compliance-related tasks, enabling businesses to quickly enter the Peruvian market without establishing a local subsidiary.

What financial benefits come with using an EOR in Peru?

Using an EOR in Peru is often more cost-effective than setting up a local entity, as it avoids the high costs of incorporation and reduces ongoing administrative expenses.

Can an EOR handle the visa and work permit processes in Peru?

Yes, a Peruvian EOR manages the entire visa and work permit process, ensuring full compliance with local immigration laws and procedures.

What types of businesses benefit most from EOR services in Peru?

EOR services in Peru are ideal for companies of all sizes that seek rapid market entry, cost efficiency, and minimal administrative responsibilities.

How does an EOR ensure adherence to Peruvian labor laws?

EORs in Peru employ local specialists who stay updated on legal changes and manage compliance tasks, ensuring your business operates within Peruvian labor law parameters.

What level of control do I retain over my employees when working with a Peruvian EOR?

While the EOR is the legal employer in Peru, you retain significant control over the day-to-day management and strategic decisions regarding your employees.

Employer of Record in Peru (EOR in Peru)

Hire Globally, Pay Locally, Expand Effortlessly

Streamline Your Business Expansion in Peru with an EOR in 3 Simple Steps