Selling to the Public Sector

Last published date: 2022-08-18

Selling to the Government

When selling to the Peruvian government, interested suppliers must participate in a tender process, in which registration with the National Registry of Suppliers (Registro Nacional de Proveedores, or RNP) is necessary. The RNP includes the following categories:

Suppliers of goods
Services
Goods and services
Construction firms
Construction consultants

To register with the National Registry, a company must follow several steps, including a fee of approximately $17 for non-domiciled foreign suppliers of goods and services or roughly $180 for non-domiciled foreign consultants. In addition, companies must appoint local legal representation registered with the Peruvian Public Registry and are required to provide proof of incorporation demonstrating the company’s legal status, duly apostilled. Finally, an official Peruvian interpreter needs to translate the documents into Spanish.

Peruvian law allows an independent distributor to pay commissions or fees to third parties in connection with sales to the government. For example, a company in Peru can purchase products from a company in the United States and then pay a third-party fee to resell them to the Peruvian government. There are no Peruvian restrictions on commissions or mark-ups on sales to the government by either agents or distributors, and the rates vary depending on the product, client, and competition.

Government agencies must announce tender notices for all major purchases in their official publications, and at times, in the leading local newspapers. Peru is not a signatory to the WTO Agreement on Government Procurement; however, the PTPA includes a chapter on Government Procurement (“Contratacion Pública” in Spanish). Despite the PTPA’s stipulations, selling to government agencies remains problematic.

A legislative decree issued in September 2018 (DL 1444) modified the public procurement law to allow government agencies to use G2G agreements to facilitate procurement processes. The GOP sees this G2G procurement model as a method for expediting priority infrastructure projects in a manner that is more transparent and less susceptible to corruption. The U.S., however, does not have a mechanism to support Peru’s G2G contracts. The U.S. Embassy has raised concerns with the GOP that its use limits U.S. firms’ participation in infrastructure solicitations. Peru continued to use G2G agreements in 2021 on large infrastructure projects such as a $1.6 billion general reconstruction initiative (related to damages caused by the El Nino event of 2017), a $5 billion Lima metro line project, and 3.2 billion for advice on the construction of the new central highway among others. U.S. companies can compete as members of another third country’s consortium. Under the current Castillo administration, Peru has not yet used the G2G mechanism.

U.S. companies bidding on Government tenders may qualify for U.S. Government advocacy. A unit of the U.S. Commerce Department’s International Trade Administration, the Advocacy Center coordinates U.S. Government interagency advocacy efforts on behalf of U.S. exporters bidding on public sector contracts with international governments and government agencies. The Advocacy Center works closely with the U.S. Commercial Service worldwide and inter-agency partners to ensure that exporters of U.S. products and services have the best chance of winning government contracts. Advocacy assistance can take many forms but often involves the U.S. Embassy or other U.S. Government agencies expressing support for the U.S. bidders directly to the foreign government. Consult Advocacy for Foreign Government Contracts for additional information.

Project Financing

Since the market reforms of the early 1990s, the private sector has implemented nearly all major infrastructure projects, though sometimes in a PPP arrangement with the government (via ProInversion). Foreign companies have undertaken large projects with financing obtained in their countries of registration, multilateral development banks, and local lenders. There is intense local competition for lending in Peru due to the limit on the amount that Peruvian pension funds can invest abroad, which is 49%, determined by the Central Bank. In Peru, several private sector entities manage pension funds: Banco de Credito, Sura, Scotiabank, and Habitat. Multilateral development banks have partially funded some projects, including the IDB, World Bank, and Andean Finance Corporation (CAF). Some projects utilized simultaneous or subsequent financing from the local capital market (e.g., corporate bonds).

A wide variety of sources of project financing are available in Peru, both from the United States and international organizations. The U.S. International Development Finance Corporation (DFC), Export-Import Bank of the United States (EXIM), and the U.S. Trade and Development Agency (USTDA) have all engaged in private sector projects in Peru. In addition, the International Finance Corporation (IFC), the Multilateral Investment Guaranty Agency (MIGA), the World Bank, and the Inter-American Development Bank are all active players in project finance in Peru.

The Commercial Service maintains Commercial Liaison Offices in the main Multilateral Development Banks, including the Inter-American Development Bank (IDB) and the World Bank. These institutions lend billions of dollars to developing countries on projects to accelerate economic growth and social development by reducing poverty and inequality, improving health and education, and advancing infrastructure development. The Commercial Liaison Offices help American businesses learn how to get involved in bank-funded projects and advocate on behalf of American bidders. Learn more by contacting the following:

Commercial Liaison Office to the Inter-American Development Bank

Commercial Liaison Office to the World Bank.

U.S. International Development Finance Corporation (DFC)

The DFC is an independent agency of the U.S. Government that provides financing for private development projects. The Better Utilization of Investments Leading to Development (BUILD) Act of 2018 consolidated the Overseas Private Investment Corporation (OPIC) and Development Credit Authority (DCA) of the United States Agency for International Development and created DFC. In addition to OPIC and DCA’s existing capabilities, DFC has an investment cap of $60 billion and new financial tools, including medium to long-term financing and political risk insurance. Peru is a member of the Multilateral Investment Guarantee Agency.

Export-Import Bank of the United States - EXIM Bank

The Export-Import Bank of the United States offers loans and loan guarantees to U.S. exporters of goods and services and foreign purchasers. The EXIM Bank also provides credit insurance to U.S. businesses against non-payment by foreign buyers in the case of political or commercial risk, focusing on short-term risk. This protects against losses due to non-payment.

Length: Short term (less than 1 year) and Medium-term (1-7 years)

Amount: For medium-term, less than $25 million

Coverage: Short-term (up to 95% for most products and up to 98% for bulk agriculture) Medium-term (up to 85% of contracts)

Other Programs

In 1991 the Peruvian Congress ratified the convention establishing the Multilateral Investment Guarantee Agency (MIGA) of the World Bank. The MIGA covers substantial investments, mainly in the mining and financial sectors. Peru has concluded agreements for the promotion and protection of investments with more than 20 countries in Europe, Asia, and America. Negotiations to conclude these agreements with 23 more countries are underway.

Peru also joined China’s “Belt and Road” initiative in June 2019.