UBO: a new requirement for companies in Peru
Article 3 minutes read

UBO: a new requirement for companies in Peru

04 October 2018

Peru has taken the next steps towards increased transparency by passing Legislative Decree 1372, which requires legal entities to report and identify their ultimate beneficial owners. This information must be reported to the Peruvian Tax Authority.

This decree was passed on August 2, 2018 but its enforcement is subject to the actual publication within a 120-day term. This obligation applies to funds, investment funds, trusts, foreign trusts with a Peruvian administrator and joint ventures.

Details of Legislative Decree 1372

The law classifies the ultimate beneficiary as: 

  1. the individual that directly or indirectly possess at least ten percent (10%) of the capital of a legal entity, no matter how acquired;
  2. the individual that eventually owns or controls the entity based on the chain of command in a company; and
  3. a trust or investment fund, the person who holds the status of trustor, trustee, trustee or group of beneficiaries and any other natural person who, having the status of a participant or investor; exercises the effective control of the ownership, results or profits.

All legal persons and entities are required to present an affidavit identifying the ultimate beneficiary based on the regulatory standards. Information regarding the ultimate beneficiary may be used by the SUNAT (National Superintendence of Tax Administration), the SBS (Superintendence of Banks and Insurance) and the SMV (Superintendence of Securities Markets).

No sanctions for noncompliance have yet to specified but it is expected that these will include be monetary penalties, for not supplying the ultimate beneficiary information to the Tax Authority.

Businesses in Peru must comply with this new regulation and implement procedures to obtain and maintain updated information about the ultimate beneficiary of the entity. Collecting and keeping this information accurate and updated can impose an administrative burden on their business.

Lawyers, accounting and finance when acting as owners of companies, partners, directors or other roles cannot rely on privileges of confidentiality to avoid compliance.

Peru was ranked as one on the most challenging jurisdictions for corporate compliance globally, according to TMF Group’s Compliance Complexity Index. Peru’s relatively high position this year underscores the government’s efforts to toughen compliance protocols with laws like Legislative Degree 1352.  It is therefore important to partner with the local experts to stay compliant.

TMF Group

TMF Group Peru has been keeping abreast of with the global trends towards transparency and already has been applying a standard process for clients called Know Your Client (KYC). This process is very similar to complying with the new UBO requirements in Peru.

The increasing complexity of legal compliance in Peru will make it harder for multinational companies to establish businesses in the country. TMF Group has the local knowledge to help you identify and face any challenge or opportunity for your business. Learn more about TMF Group Peru.

Questions? Make an enquiry with us today.

Don’t let complexity hold you back - find out how our corporate secretarial services help companies of all sizes reach even greater heights.

Written by

Esteban Hilgert

Managing Director, Peru

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