Tax implications are low on the list of investment criteria for angel and seed stage investors in Peru (as they should be). However, as the probability of a successful exit increases, tax considerations come to the forefront. Venture capital investors will seek to optimize returns and avoid startups that have inefficient tax structures.
Keep in mind these points:
- Founders and investors can be subject to different tax rates
- Restructuring to a U.S. C Corp triggers a taxable event for shareholders in Peru
- Applicable tax rates for shareholders (founders and investors) can change following a “flip” to a international HoldCo structure
Below is a table that shows tax rates for shareholders based on shareholder profile and domicile of the startup.
This information comes from a report on International Holding Companies for startups in Peru that was made in collaboration with founders, investors, and lawyers in Peru and the U.S.
I’m Canadian. Canada and Peru have both a tax treaty and a free trade treaty. How does that affect the calculation?
Thank for the question. Unfortunately, I’m note sure about the specifics for any one country. The next step on this report should be to look into the type of treaties that you mention. Hopefully a local lawyer will be able to help us.