Employment setup in Peru

Entering Peru involves many workstreams: incorporation, tax registration, banking, premises. Employment tends to be treated as one more item on the list, often handled by a local manager who has just been hired or by a regional HR team working from abroad. Yet the decisions taken in the first months, such as which contract types to use, how pay is structured and which registrations are made, shape the entity’s employment cost and exposure for years.

The business problem

Peruvian law presumes that any personal, paid and subordinated service is an employment relationship of indefinite duration. Fixed-term contracts are exceptions that require a written objective cause. Every employee must be registered in the electronic payroll system (T-Registro) no later than the day they start work, and the employer must provide Vida Ley life insurance from the first day. On top of salary, employers pay two statutory bonuses a year (gratificaciones, in July and December), deposit CTS (a severance fund paid into a bank account in the employee’s name) in May and November, contribute 9% to EsSalud (the public health insurance system), and, above 20 employees, share profits. Foreign nationals need approved employment contracts and an appropriate immigration status before they begin working.

None of this is unusual once it is known. The difficulty is sequencing it correctly while the business is also being launched. Our guide to employing in Peru sets out the full picture for international companies; this service implements it for a specific entity.

How we approach it

We begin with the hiring plan. For each planned role we decide how it should be engaged: indefinite employment, a fixed-term modality with a documented cause, a genuine independent contractor, or a foreign national subject to additional requirements. We explain the cost and risk of each choice to the regional team.

We then build the documents: contract templates, offer letters, core policies and the adaptation of group clauses, following the principles in our note on employment contracts in Peru. We sequence registrations and mandatory insurance so that nothing is missing on the first day. Where foreign managers are part of the launch, the work is coordinated with our foreign employees service and the requirements described in our note on hiring foreign employees in Peru.

What the engagement includes, and its limits

The service covers the setup roadmap, contracts, policies, the registration and insurance checklist, a cost memo and a compliance calendar for the first year. Once the entity is running, many companies continue with outsourced employment counsel.

We do not incorporate the company, obtain its tax registration, open bank accounts or recruit staff; those workstreams are handled by corporate, tax and recruitment advisers, with whom we coordinate. We do not act as employer of record.

Coordination with the parent company, finance and payroll

The first payroll is where setup decisions become real. Lynch Payroll executes monthly payroll, and Lynch Laboral advises on the decisions that generate it; when a company uses both, the handover is direct. When payroll is run by another provider, we share the contract terms, pay structure and benefit treatment with them before the first run. Finance receives a cost memo it can use for budgeting, and the regional office a bilingual summary of obligations and deadlines.

Getting started

Tell us the planned roles, locations, start dates and whether any foreign nationals will be involved. We will propose a setup roadmap and the order of work.