Peru Steps Up Transparency Efforts with Beneficial Ownership Determination
Increased Transparency and Combatting Financial Secrecy in Peru
Lima, Peru - In a move aimed at increasing transparency and combating financial secrecy, Peru has passed Legislative Decree 1372, requiring legal entities to report and identify their ultimate beneficial owners. This decree, effective as of August 2, 2018, mandates that the information be submitted to the Peruvian Tax Authority (SUNAT) within a 120-day period.
Definition of Ultimate Beneficial Owner
The law defines an ultimate beneficial owner (UBO) as any individual who directly or indirectly possesses at least 10% of a company’s capital, regardless of how acquired. It also includes individuals who exercise control over the entity through a chain of command, as well as those who hold a trustor, trustee, or beneficiary status.
Compliance Requirements
All legal persons and entities must submit an affidavit identifying their UBO in accordance with regulatory standards. The information collected will be used by SUNAT, the Superintendence of Banks and Insurance (SBS), and the Superintendence of Securities Markets (SMV).
- No sanctions for non-compliance have been specified, but monetary penalties are expected to be imposed on entities that fail to provide UBO information.
- Lawyers, accountants, and finance professionals acting as owners of companies or holding other roles cannot rely on confidentiality privileges to avoid compliance.
Administrative Burden on Businesses
The decree is expected to impose an administrative burden on businesses in Peru, requiring them to collect and maintain accurate and updated information about their UBOs. It is essential for businesses to partner with local experts to ensure compliance and stay ahead of the regulatory requirements.
Importance of Local Expertise
Peru’s ranking as one of the most challenging jurisdictions for corporate compliance globally by TMF Group’s Compliance Complexity Index underscores the need for businesses to partner with local experts to ensure compliance. TMF Group Peru has already implemented a standard process called Know Your Client (KYC) for clients, which is similar to complying with the new UBO requirements in Peru.
Expert Guidance
TMF Group Peru offers corporate secretarial services and local knowledge to help multinational companies navigate the complexities of doing business in Peru. With increasing complexity in legal compliance, it is essential for businesses to identify and address challenges and opportunities. TMF Group Peru can provide expert guidance on how to stay compliant and expand operations efficiently across borders.
Conclusion
The passage of Legislative Decree 1372 marks a significant step towards increased transparency and combating financial secrecy in Peru. As the decree takes effect, it is crucial for businesses to be aware of their obligations and seek local expertise to ensure compliance and navigate the complexities of doing business in Peru.