Almost every foreign investment in Peru involves at least a few people from outside the country: a country manager sent by the parent, engineers who bring know-how the local market lacks, a finance lead who knows the group’s reporting systems. Peru is open to that kind of mobility, but it regulates it through a specific regime that sits on top of ordinary employment law. The foreign employee needs a particular type of contract, the employer must respect quotas measured against its own workforce and payroll, the contract must go through an approval step with the labor authority, and none of it works without the right immigration status.
This article explains how that regime operates for subsidiaries, branches and regional headquarters. It complements our guide to employing in Peru and the broader overview of employment contracts in Peru.
Legal framework
The rules come from two sets of norms that operate together:
- Labor rules. Legislative Decree 689, the Law for the Hiring of Foreign Workers, and its regulations (Supreme Decree 014-92-TR) govern quotas, contract formalities and approval by the labor authority.
- Immigration rules. Legislative Decree 1350, the Migration Law, and its regulations (Supreme Decree 007-2017-IN) govern the immigration status that allows a foreign national to work in Peru.
Once employed, the foreign employee is also subject to the general framework: the Labor Productivity and Competitiveness Law (LPCL), statutory benefits, social security and inspection by SUNAFIL, Peru’s national labor inspection authority.
Key point
Three separate conditions must all be met before a foreign national starts work for a Peruvian employer: the quota (or an exemption), an approved foreign-worker contract and an immigration status that authorizes employment.
The quotas: 20% of headcount and 30% of payroll
Article 4 of Legislative Decree 689 sets two limits that apply at the level of the employer:
- Foreign employees may not exceed 20% of the employer’s total workforce.
- Their pay may not exceed 30% of the employer’s total payroll of wages and salaries.
Both limits matter. A small subsidiary with a handful of local staff and one highly paid expatriate manager can exceed the payroll limit even if it respects the headcount limit.
Foreign nationals treated as Peruvians
Article 3 lists situations in which a foreign national is not counted against the limits because they are treated as a national for these purposes. Among them are foreign nationals whose spouse, parents, children or siblings are Peruvian; those holding an immigrant visa; and those covered by reciprocity or dual-nationality agreements, among other cases. Nationals of Andean Community countries and persons covered by Mercosur residence arrangements may receive special treatment; the precise scope should be confirmed case by case.
Exemptions from the limits
The same law allows employers to request exemption from the limits for certain profiles. Examples include specialized professionals and technicians, management staff for a new business activity or a business restructuring, university teachers and staff of multinational service companies, among others. An exemption is not automatic; the employer must fit the case and document it.
| Situation | Counted against the limits? | What the employer should document |
|---|---|---|
| Standard foreign employee | Yes | Headcount and payroll calculation at the date of hiring |
| Foreign national with Peruvian family ties, immigrant visa or treaty coverage | No, treated as national | Evidence of the qualifying relationship or status |
| Specialized professional or technician, or management of a new activity | Exemption may be available | Basis for the exemption and supporting evidence |
| Renewal of an existing contract | Yes, recheck the limits | Updated calculation, since the workforce may have changed |
The foreign-worker contract
Article 5 of Legislative Decree 689 sets the formal requirements:
- Written form. The contract must be in writing.
- Fixed term. It must be for a determined period of up to three years, renewable successively for periods of the same length.
- Training commitment. It must include the employer’s commitment to train Peruvian staff in the same occupation.
The fixed term is a feature of the foreign-worker regime and is independent of the contratos sujetos a modalidad, the statutory fixed-term contracts for Peruvian employees explained in fixed-term employment contracts in Peru. The contract should otherwise contain the elements of any Peruvian employment contract: role, pay, working time, probation if applicable and the employer entity. Our overview of contract elements and forms sets them out.
Approval by the labor authority
The contract is filed with the labor authority through the online system of the Ministry of Labor and Employment Promotion (MTPE). Approval is generally automatic upon filing, subject to later review. That review can take place during an inspection, so the quota calculation and any exemption file should be kept ready. Procedural details of the online filing, including any fees, should be confirmed at the time of filing.
Watch out
Automatic approval is not a safe harbor. If the quotas were exceeded without a valid exemption, or the contract lacks its mandatory content, the approval does not cure the defect when the file is reviewed later.
Immigration status
The foreign employee may begin work only after the contract has been approved and once they hold an immigration status that allows them to work, such as the Residente Trabajador (resident worker) status. The immigration process is handled with Peru’s migration authority and runs in parallel with the labor filings; each depends on documents from the other. In practice, the sequence and timing should be mapped before the expatriate’s travel date is fixed.
Obligations once employment starts
Once working, the foreign employee is an ordinary employee for most purposes:
- Registration in the T-Registro electronic payroll no later than the start date.
- CTS (a severance fund the employer deposits twice a year into a bank account in the employee’s name), gratificaciones (statutory bonuses paid in July and December), 30 days of annual leave and EsSalud health contributions.
- Affiliation to a pension system: the pension reform includes foreign workers with regular immigration status among those required to join.
- Monitoring of contract and immigration expiry dates, which should be diarized alongside other recurring obligations in an annual employment compliance calendar.
Secondees from the parent company
Groups often prefer to keep an expatriate on the parent’s payroll and “second” them to Peru. That structure needs care. Peruvian law presumes an employment relationship wherever there is personal, paid and subordinated work, and SUNAFIL applies the primacy-of-reality principle. If the secondee works in Peru under the day-to-day direction of the local entity, integrated into its organization, the relationship may be treated as local employment regardless of who pays the salary, with the local entity bearing the payroll, benefit and foreign-worker obligations. Before choosing a secondment model, the group should decide who will direct the individual’s work, which entity will be the employer of record in Peru and how that fits with the immigration status being requested. Where the individual will genuinely run or work in the Peruvian business, a local foreign-worker contract is usually the clearer route.
Illustrative scenario
Illustrative scenario
Illustrative scenario: a US software company incorporates a Peruvian subsidiary with eight local employees and plans to bring in a country manager from Mexico and two senior engineers from Spain. With ten employees, three foreign nationals would represent 30% of headcount, above the 20% limit, and the expatriates’ salaries would also exceed 30% of payroll. The subsidiary reviews each case: the country manager may fit the exemption for management of a new activity, and the engineers may qualify as specialized professionals. It documents the exemptions, prepares three-year contracts with the training commitment, files them through the MTPE system and coordinates the resident-worker applications. Their start dates are set only after both approvals are in place. A year later, when a buyer runs an employment due diligence, the exemption files and approvals are available and the foreign-worker contracts do not become a negotiating point.
Common mistakes
- Letting an expatriate start work on a business or tourist entry while the process is pending.
- Checking only the headcount limit and overlooking the payroll limit.
- Assuming a parent-company secondment removes the need for a local contract when the individual works under the direction of the Peruvian entity.
- Using a translated group employment contract without the mandatory foreign-worker clauses.
- Forgetting to recheck quotas and renew both the contract and the immigration status before expiry.
Checklist before a foreign hire starts
- Quota calculation (headcount and payroll) at the planned start date.
- Determination of whether the individual is treated as a national or qualifies for an exemption, with supporting evidence.
- Written, fixed-term contract of up to three years, with the training commitment.
- Contract filed and approved through the MTPE system.
- Qualifying immigration status obtained.
- T-Registro registration, benefits set-up and pension affiliation arranged.
- Expiry dates for the contract and immigration status diarized.
Closing
Foreign-employee hiring in Peru is manageable when it is planned as a sequence rather than an afterthought: quotas and exemptions first, then the contract and its approval, then immigration status, and only then the start date. Our foreign employees service coordinates those steps with the rest of the subsidiary’s employment set-up so that the people a group sends to Peru can start on time and on a secure legal footing.