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As the commodity supercycle comes to an end and economic growth eases, the Peruvian government has introduced legal changes to promote foreign investment and stimulate growth. This chapter highlights the most important recent changes in Peru’s legal framework, including measures to expedite permits, public-private partnerships, pensions and the Work for Taxes regime. This chapter contains an interview with Pablo Berckholtz, Managing Partner, Estudio Echecopar, a member firm of Baker & McKenzie International.

As part of an overview of the Peruvian tax regime, this chapter covers areas of particular interest to investors such as corporate and individual income tax, stability agreements, tax exemptions and pension fund contributions. This chapter contains an interview with Esteban Chong, Senior Partner, PwC Peru.

Public spending on education and health is set to increase significantly in coming years as the government attempts to address one of the biggest challenges facing both sectors; a sizeable infrastructure gap that continues to perpetuate a significant urban-rural divide. In the process, opportunities for the private sector through public-private partnerships (PPPs) should abound. In the education sector, the government’s most recent effort to improve quality came in the form of a new university law which will increase oversight and requirements for students and professors. Meanwhile, in the health sector, a reform package passed in 2013 and the allocation of $8.4bn to address the infrastructure gap in the public health system are indicative of the government’s commitment to raising sector standards. A new emphasis on PPPs to boost public health infrastructure is expected to generate opportunities for an already dynamic and fast-growing private sector. This chapter contains interviews with José Dextre Chacón, President, Federation of Private Institutions of Higher Education and Elsa Del Castillo, President, University of the Pacific.

The telecoms and IT sectors, which combined make up a market of around $8bn, have seen substantial growth in recent years. Recent regulatory changes, large-scale investments, and the emergence of new players are effectively shaking up the telecommunications sector, which saw sales reach $5.5bn in 2013, according to the Supervising Organisation for Private Investment in Telecommunications (Organismo Supervisor de Inversión Privada en Telecomunicaciones, OSIPTEL). New regulations imposed by OSIPTEL, the sector’s watchdog, are putting pressure on operators to provide better service, while the entrance of a fourth mobile operator is set to see competition increase. Though the market is still largely dominated by the leading operator, Telefónica, regulatory changes aimed at opening the market to other competitors should lower entry barriers for smaller players. Meanwhile, government efforts to establish a country-wide fibre-optic network is also driving growth in the IT market, which is expected to expand by 14.8%.

Increased domestic consumption, exports and investment have led to consistent growth in the agriculture sector for more than a decade. From 2003-12 growth averaged 4.14%, according to the Ministry of Agriculture and Irrigation. However, a decline in production volumes of key crops, in particular coffee, saw growth slow to 2.2% in 2013. The development of industrial and export-oriented agriculture, concentrated on the Peruvian coast, is leading sector growth and diversification efforts. The government has supported growth in this segment with a number of large-scale irrigation infrastructure projects that are quickly expanding irrigated land. Meanwhile, the fishing industry is facing a second year of troubled waters as supplies of anchovies, the sector’s prime catch, have fallen to a record-low. In a climate of instability, the sector is increasing diversification efforts to reduce dependence on the delicate resource. This chapter features an interview with José Chlimper, CEO, Agrokasa.