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Working in Lima
Find out how to get a job and work in Lima
Working in Lima makes you a part of the rapidly developing Latin American economy. You might be involved with a Peruvian or an international company, but either way you need some tips on the general financial state of Lima and on doing business in the city in general.
Need to move abroad? Organizing an international relocation is not something you should do on your own. As expats, we understand what you need, and offer the the essential services to help you move and live abroad easily. Contact us today to jump start your move, and begin the preparations with our free relocation checklist.
Employment in Lima
Since its industrialization in the 1930s, Lima has not looked back. The city continues to grow into one of the largest financial centers in Latin America, drawing more and more international companies to set up shop in its business district. Working in Lima will thus be an exciting experience, whether you are involved in the financial or the industrial side of business.
Important for Peru: Lima’s Industrial Sector
Lima’s industrial activities account for more than two-thirds of all of Peru’s industrial production. Within the larger metropolitan area of Lima, there are around 7,000 factories. The products they manufacture include clothing, food, and textiles. Thousands of jobs depend on these industries.
Chemicals, leather, and oil derivatives are also of great importance. If you are involved in the industrial sector while working in Lima, you will recognize the necessity of manufacturing such products at a high rate. The products are then exported from Callao seaport, one of the main commerce ports in South America, thus creating a thriving import and export business.
Getting Down to Business
If you are working in Lima as an expat, chances are you will be based in San Isidro, the capital’s financial district. This high technology district is the home of both Peru’s national companies and plenty of international corporations as well.
As an expat, you might be involved with one of the major banks with headquarters in San Isidro. These include Banco de Crédito del Perú, Banco Continental, Banco de Comercio, Banco Finaciero, Banko Interamericano de Finanzas, Bank of the Nation, Scotia Bank, and Interbank.
Apart from major banks, Lima is home to numerous corporate businesses, and as an expat it should be fairly straightforward to start working at one of them. After all, the unemployment rate in Peru is only 6.8% as of August 2015.
Where to Go Job Hunting
The chances of finding a job are high, but most expats begin working in Lima after being sent there by their company. If you wish to find a job in the capital on your own accord, then you need to visit Lima to search for work before moving there permanently.
However, you can check some job listings at home on sites such as Vende, Empleos Peru, or Computrajabo. If you do end up working in Lima for a Peruvian company, then there are some guidelines you need to follow. You must send your signed work contract to the Peruvian Ministry of Labor, and you have to renew it after the maximum period of three years.
You can find additional information on our Working in Peru page about further regulations for foreigners working in Lima and advice on business etiquette.
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Social Security and Taxation in Lima
Unfortunately, Peru is not known for its excellent worker benefits. Understanding what you will gain in terms of social security is an important part of settling into your new life in Lima. This article will help elucidate the problem areas of taxation and benefits for expats.
Top Priority: Social Security
When choosing your social security coverage, you will have a choice of two different plans. The first is the SNP, or public social insurance. The second is the SPP, an individual account. If you do not make a choice, you will automatically become an SPP member. If you are an SNP member, you may become an SPP member instead, but you cannot change back to the SNP system (exceptions exist but are rare).
Both the SNP and SPP are available for private and public sector employees. If you are a fisherman, or a member of the military or police force, there will be alternative arrangements in place. If you are self-employed in Lima, then you can only opt for voluntary coverage under the SPP system.
The difference between the two lies in the amount of social security payments required on a monthly basis. If you are part of the SNP system, you need to pay 13% of your gross earnings. This is true of all earnings above the minimum monthly wage of 675 PEN. If you are part of the SPP system, you need to pay 10% of your gross earnings, as well as (on average) 1.87% of your gross earnings for administrative fees, and 0.96% of these earnings for disability and survivor insurance.
The different systems will also account for when you can qualify for the various pensions. The most popular, the old age pension, is available at the age of 65 in both the SNP and SPP systems. However, in the SNP system, you must have made at least 20 years of contributions. On the SPP system, you can have your pension at any age if your account has assets that replace at least 50% of your earnings in the previous 120 months.
Full details of all further conditions and differences between SNP and SPP can be found on the US Social Security Administration page for Peru.
No Way Out: Taxation
You are classified as a resident in Lima after you have spent 183 days legally working in the country. After this period, everyone is required to pay taxes. Your net taxable income is taxed at staggered rates of 15%, 21%, and 30%. For non-residents, the tax rate is also 30%. . These taxes enter directly into the pension and healthcare systems, whether they are private or public.
Please note that Peru has a double-taxation treaty with a handful of countries: Bolivia, Brazil, Chile, Colombia, Ecuador, Mexico, Canada, South Korea, Switzerland, and Portugal. This helps facilitate overseas business and trade. If you are not a resident of one of these countries, then you need to visit your home country’s tax bureau to make sure you pay taxes correctly during your stay in Lima.
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