Hiring of Foreign Employees: Legal Compliance without Contingencies

Immigration management and the proper hiring of foreign employees constitute a fundamental pillar for any organization’s workforce. This is not merely an administrative procedure, but rather a set of legal obligations whose compliance ensures the legitimacy of employment relationships and prevents contingencies that could be costly for the company. Therefore, prior to hiring any foreign employee, it is essential to consider certain immigration and labor aspects in order to ensure compliance with current regulations.

 

Validation of immigration status

The first element to verify is the qualifying immigration status of the foreign employee. This determines whether said citizen is legally permitted to perform dependent work activities in our country.

Among the immigration categories that allow dependent employment in Peru are the following: Resident Worker, MERCOSUR agreements, Family Member of a Resident, among others.

 

Hiring of Foreign Citizens

Once the immigration status has been validated, the next step is to execute a Foreign Employee Employment Contract and register it through the Online Platform offered by the respective Labor Authority (SIVICE).

In cases where the organization hires a large number of foreign employees or has a limited number of local employees, it becomes essential to determine whether they remain within the statutory percentage limits established for their hiring. Peruvian legislation prioritizes the hiring of local personnel, providing that the number of foreign employees must not exceed 20% of the total workforce, and their compensation must not exceed 30% of the total payroll. Failure to comply with these limits may result in penalties being imposed on the organization.

Key information: Current regulations establish various scenarios for exemptions and exclusions from the percentage limits:

  • Employees who qualify as specialized professional or technical personnel are exempt from the percentage caps, as are those performing executive or managerial duties in new business activities or business restructuring processes, among others.
  • Excluded from the Foreign Employee Hiring Regime, among others, are Spanish citizens, citizens of member countries of the MERCOSUR Agreement (e.g., Argentina, Brazil, Uruguay, among others) and the Andean Community (CAN) Agreement (Colombia, Ecuador, and Bolivia), and individuals holding Permanent Immigration Status, among others.

In other words, the same hiring rules applicable to local employees will apply.

 

Permanent monitoring of immigration status

Another significant aspect is monitoring the expiration dates of residence permits and timely processing the corresponding extensions. Failure to renew them within the established deadlines may result in overstays, employment restrictions, and even the loss of immigration status, affecting not only the employee’s situation but also the company’s compliance with labor regulations.

 

Personal Obligations

Finally, certain immigration-related obligations fall directly upon the foreign employee, such as updating immigration information, renewing the Foreign Identification Card, or cancelling their residence, when applicable.

Although these obligations do not fall directly on the employer, verifying compliance is important to ensure that the foreign employee does not incur violations that could make them subject to penalties.

 

Key considerations

Failure to comply with the obligations associated with the proper hiring of foreign employees may result in the imposition of very serious penalties that can reach up to 52.53 tax units, i.e., up to PEN 288,915.00 (Two hundred eighty-eight thousand nine hundred and fifteen with 00/100 peruvian soles). 

In this regard, the implementation of internal controls, the periodic monitoring of immigration status, and the proper formalization of employment contracts constitute essential practices for effective risk mitigation.

Receiving specialized advisory in immigration and labor matters enables organizations to develop a culture of prevention, identify risks in a timely manner, and ensure compliance with the obligations applicable to foreign personnel. At BDO SERVICIOS LEGALES Y LABORALES S.A.C., we have a team with vast expertise in corporate immigration management and in verifying compliance with the obligations related to the hiring of foreign employees, providing comprehensive support tailored to each organization.

For further information or assistance, please contact us at servicioslegales@bdo.com.pe.

 


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