 | 2007 | 2006 |
Overall Score: | 41 | 47 |
Regional Ranking: | 10th (tied) | 5th |
Despite its poor showing in the 2007 Scorecard, Peru has been proactive in working to build a VC/PE industry. In place are a formal capital markets promotion agency, growing policymaker awareness, and institutional investor involvement. If corruption and judicial concerns are addressed, coupled with appropriate legislation on fund formation, tax treatment, and protection of minority shareholder and intellectual property rights, Peru’s score should improve in coming years.
Strengths: Peru earned top scores for quality local accounting, with international standards in use and international firms present. Local institutional investor participation is feasible – in fact, pension funds and insurance funds are major players in Peru’s stock market with few formal restrictions. Peru has simple registration, and foreigners can participate directly in the stock market with no reserve requirements.
Challenges: With relatively strong disclosure requirements and legal recourse for shareholders, Peru shows positive momentum on issues of corporate governance. However, Peru has room for improvement with just partial Board regulation (issues must typically be dealt with in shareholder agreements), and voluntary code compliance still indeterminate. Peru’s score for perceived corruption – though slightly improved from 2006 – remains low, and the nation earned bottom marks for the strength of its judicial system.
| Score | Change |
| Overall score | 41 | ▼ 6 |
| Laws on VC/PE fund formation and operation | 1 | |
| Tax treatment of VC/PE funds & investments | 1 | ▼ 1 |
| Protection of minority shareholder rights | 1 | |
| Restrictions on institutional investors investing in VC/PE | 2 | ▼ 1 |
| Protection of intellectual property rights | 1 | |
| Bankruptcy procedures/creditors' rights/partner liability | 2 | ▲ 1 |
| Capital markets development and feasibility of exits | 2 | |
| Registration/reserve requirements on inward investments | 3 | |
| Corporate governance requirements | 2 | ▼ 1 |
| Strength of the judicial system | 0 | |
| Perceived corruption | 1 | ▲ 1 |
| Quality of local accounting/use of international standards | 4 | |
Indicators are scored from 0-4 where 4=best score.
Overall score ranges from 0-100 where 100=best score. |
