Are Rentistas Allowed to Work in Peru?

By Ricardo Guevara Bringas RGB Avocats

Foreigners who hold a rentista carné de extranjería have always been told that they cannot carry out any money-making activities whilst living in Peru.

However, amendments to Peruvian law made in June 2008 have modified the very definition of who is a rentista, raising the question of whether a rentista is allowed to work in Peru.

I must confess that since the new law is rather unclear on this issue, my answer to this question is not as categorical as I’d like it to be. But this article at least earns merit for raising a hot topic that is often posed by rentistas and which has not yet been dealt with in Peru by academics or Peruvian lawyers.

1- The definition of rentista before the Decreto Legistaltivo N°1043 of 25th June 2008

Before June 2008, the Peruvian Law about rentistas (Ley N° 28072) defined rentistas as follows: “Those foreigners who benefit from a pension or permanent income and wish to reside in the country (Peru) and that fulfill the requirements set out, but THAT CANNOT PERFORM ANY REMUNERATED OR MONEY-MAKING ACTIVITIES (my capital letters)”

On the basis of this definition, it could easily be concluded that:

• holders of a rentista carné de extranjería were forbidden to be employees of any company or any individual,
• holders of a rentista carné de extranjería were forbidden to conduct any type of commercial activity, for instance the sale and resale of goods, consulting services etc.

The sanction for violating these regulations could be found in article 10 of Ley N° 28702 by which a rentista could loose his migratory status if the “fulfillment of the requirements on the basis of which the rentista obtained his migratory status no longer holds…”

However, under this former regulation things were not totally straightforward. Very often rentistas asked if they could be shareholders in a Peruvian company. My personal viewpoint was that they were allowed since they did not run the company. In effect, a shareholder of a limited liability company is not required to carry out any money-making activities, for that is the company’s responsibility.

But apart from these normal queries, the limits and scope of rentistas were fairly precise. On the contrary, the new regulation blurs the definition of the rentista migratory status.

2- The new definition of rentista after the Decreto Legislativo N°1043 of 25th June 2008

Article 1 of the Decreto Legislativo N°1043, which modifies article 11 of the Ley de Extranjería Decreto Legistativo N° 703, newly defines the rentista migratory status as follows: “Those foreigners who benefit from a pension or permanent income and wish to reside in the country (Peru). If they receive any foreign income they must fulfill the requirements set out in Law N° 280722”.

This new definition appears to lift the prohibition on rentistas performing money-making activities and the relevant law does not give any explanation for this amendment.

Thus, in theory, we could assume that since it is no longer prohibited for rentistas to be employees or to carry out business, they can do so without modifying their migratory status. However, given the fact that the new law does not clarify this point, it would be safer not to make the assumption.

But note that according to certain officials from the Peruvian tax office, there will be no problems in assigning tax identification numbers (RUCs) to rentistas who hold carnés de extranjería. This is difficult to understand. As we said previously, since the law is unclear, it is almost impossible to provide a definite answer. From a personal viewpoint, I believe it wise to wait for the law to be clarified.