Expert Guide on Security and Guarantees under Peruvian Law

Yes.

No, guarantees are only regulated as financial services when issued by a Peruvian regulated financial institution.

Yes, but see comments in Q4

Yes, subject to the restrictions set forth in Q4.

Financial assistance

Under Peruvian law, companies are prohibited from granting securities (including guarantees) in connection with the acquisition of their own equity interests. This rule encompasses both indirect and indirect acquisitions of equity interest.

Transfer pricing rules

Transfer pricing rules will apply in the case of transactions between related parties.

Besides the agreement being set forth in writing, the are no other legal formalities to be complied with. It is advisable:

if the guarantee is being granted by a natural personal, such person is married and such marriage is not governed by separate property rules, to have the grantor’s spouse execute the agreement; otherwise, only the assets solely owned by the grantor (if any) would be eligible for collection in an enforcement event
to have the guarantee documented in a public deed to avoid questionings regarding the execution of the agreement
to complement the guarantee with an aval by the grantor to any promissory note or similar instrument issued by the guaranteed obligor.

Yes, but the guarantee may not be enforced until such obligation becomes due and liquidated.

Yes, but the guarantee/security may also be drafted to secure the obligations arising from the main obligation being declared void, such as restitution obligations or cost and expenses incurred in connection with the transaction, in each case provided that the obligations become liquid.

Yes. However, trusts are subject to a maximum legal term of 30 years.

Yes. However, please find some practical considerations below:

Immovable property

In the case of mortgages over immovable property (including real estate, ships and concessions) and pledges over partnership interests (other than shares), security shall be documented in a public deed which shall be registered with the Peruvian Public Registry.

In case of pledges over partnership interests, in order for them to be enforceable before third parties, pledges shall also be registered with the Sistema Informativo de Garantías Mobiliarias – SIGM); more information on this item is given below. To achieve such registration, the secured creditor (or security agent) shall need to produce and file the following documentation for registration:

powers of attorney (POA) in favour of a representative able to physically execute the public deed in Peru; such POA shall be translated by an official translator if drafted in a language other than Spanish (alternatively, they can be executed in double column) and apostilled
an incumbency certificate regarding the authority of the person or corporate organ to grant the POA set forth in the item directly above; such certificate shall be translated by an official translator if drafted in a language other than Spanish (alternatively, they can be executed in double column) and apostilled
a recent certificate of good standing (or analogous document) produced by a competent public authority (or an authorised corporate official if no such authority exists), which shall be translated by an official translator if drafted in a language other than Spanish (the “Register Documentation”).

Movable property

With respect to security granted over movable property, although registration (i.e. publication in the SIGM) is not required for validity, it is necessary for enforceability against third parties. Under Peruvian law, only the secured party is authorised to publish security in the SIGM. In order to create the account needed for such purposes, POA must be granted in favour of a local representative and registered with the Public Registry. For registration, the Register Documentation will be required.

Although trusts may be created by private deeds, trustees usually require them to be documented in public deeds and registered. For both actions, in addition to POA granted to a representative able to physically execute the public deed in Peru, the Register Documentation will be required.

Yes, agent structures are market standard in Peru.

However, there is a risk that such structures may be challenged under Peruvian law, as the role of a security agent is not formally recognised.

Accordingly, we recommend including provisions in the transaction documents expressly stating that the secured creditors have granted POA to the agent, authorising it to act as their representative and to hold and enforce the relevant security on their behalf. The documents including such provisions do not need to be governed by Peruvian law.

Although parallel or abstract debt structures are theoretically possible, to our knowledge they are not used in the Peruvian market.

If security was granted directly to the assigning creditor, the security documents would need to be assigned to the assignee following the same formalities applicable to the creation of the security, including registration when required for validity or enforceability before third parties. The documents can allow such assignment to take place without the consent of the securing party. However, in any case, the assignment must be notified to the debtor in order to be enforceable against it.

If security was granted to a security agent for the benefit of the assigning creditor, provided that the security document sets forth that the secured parties include their assignees, no further actions would be required in connection with such document. As set forth in Q10 above, we recommend including provisions in the assignment documents (if not already included in the transaction documents) expressly stating that the assignee grants POA to the agent, authorising it to act as their representative and to hold and enforce the relevant security on their behalf.

Peruvian law allows for the definition of guaranteed/secured obligations to be broadly construed to cover any changes thereof (including amounts, identity of the secured debtors or novation). If construed in that way, no amendments would be required. However, in order to minimise any risk, it is generally advisable to execute amendments to the relevant security agreements in order to update the guaranteed/secured obligations and register them following the same formalities applicable to the creation or enforceability before third parties of the security. An undertaking by the securing party to enter into such amendments, and file and comply with all required registrations, may be included in the security documents.

Mortgages and pledges require a maximum amount of the secured obligations to be set forth. If, as a consequence of changes to the secured obligations, such maximum amount is below the value of the secured obligations or otherwise insufficient, an amendment complying with the formalities applicable to the creation of the security and, to the extent required for the validity of the security or its enforceability before third parties, registration would be required. An undertaking by the securing party to enter into such amendments, and file and comply with all required registrations, may be included in the security documents. Notwithstanding the foregoing, it is market practice to draft the maximum amount of the secured obligations so that it will be automatically increased should the aforementioned situation take place, but such automatic increases (even if duly registered at the creation of the security) may be challenged.

Yes, securities created over assets physically located in Peru at the time of creation of the security must be governed by Peruvian law. However, assets located in Peru may be transferred to trusts governed by foreign law provided that, for Peruvian law, such transfer will be deemed a transfer of property to the trust (or the relevant trust party, as applicable under the law governing the trust) and not a trust assignment.

Intangible assets governed by Peruvian law (e.g. receivables) may be subject to foreign law securities. However, any pledge created under Peruvian law over such assets will automatically have a higher seniority.

Yes, under Peruvian law Peruvian courts have exclusive jurisdiction over claims relating to assets located in Peru (rights in rem).

Moreover, disputes concerning mortgages may not be validly submitted to arbitration to the extent the dispute involves in rem rights.

No.

1 year prior to the commencement of the insolvency proceeding by the grantor of the security or notification of the start of the proceeding to such party.

a. bank accounts;	Yes. Note that: in order for the security to be enforceable before third parties, the financial institution in which the pledge account is opened has to enter into a control agreement regulating the administration of the account, and most financial institutions will not enter into such agreements unless they are also the transaction’s security agent for operative reasons, some financial institutions need to make the account a blocked account upon the creation of the pledge.
b. receivables;	Yes.
c. IP rights;	Yes.
d. shares (public or a private company, listed or not listed)	Yes.
e. rights in a company (other than shares);	Yes.
f. insurance rights;	Yes.
g. inventory (goods in turnover);	Yes.
h. equipment/plant/machinery/other movables;	Yes.
i. goodwill;	No, goodwill is not an asset recognised by Peruvian law.
j. real estate property (other than land);	Yes.
k. land;	Yes.
l. objects under construction (object of unfinished construction);	Yes. If the asset is a building (or similar works): a mortgage created over the land can encompass the ongoing construction the building can be separated from the land via a right of superficies and mortgaged alongside the right of superficies. Otherwise, the object under construction may be pledged or assigned to a trust.
m. lease rights to real estate, including land;	Yes.

Yes, it is possible to create security over different types of assets under a single agreement, provided that such assets do not require specifical types of securities or they are assigned to a trust.

For instance, if the security package is envisaged to cover both movable and immovable property, unless a trust is put in place, at least two different agreements would be required: a pledge agreement for the movable property and a mortgage agreement for immovable assets.

However, to the extent that the different classes of asset require different regulations, it is market practice to draft separate agreements for each class of asset, even if legally such assets could be encompassed in a single security agreement.

Peruvian law does not recognise the concept of floating security.

Yes. However, under Peruvian law, companies are prohibited from granting securities over their issued security interests or in connection with the acquisition of their own equity interests. This rule encompasses both direct and indirect acquisitions of equity interest.

No, unless it is a mortgage or a pledge over equity interests other than shares, as a prior step to registration.

Yes, in all cases other than:

pledges over bank accounts, in which case only a control agreement executed by the bank in which the accounts are opened is necessary
pledges over physical movable property, in which case enforceability against third parties is achieved without registration if the secured creditor or security agent has possession of the assets serving as collateral.

Registration does not need to be renewed.

No. However, in order to register securities with the Public Registry or file them to court, the relevant documents must be executed in, or translated into, Spanish.

Notifications:

a. bank accounts;	No. However, where the secured creditor is not the same entity as the financial institution with which the bank accounts are maintained, a control agreement with such financial institution must be executed.
b. receivables;	No. However, in order to enforce the security, third-party consents may be required where the underlying contracts prohibit the assignment of rights by the creditor. Where such assignment is permitted, notice must be given to the grantor’s counterparties to ensure that the assignment is enforceable against them.
c. IP rights;	No.
d. shares (either of a listed company or a private company);	Yes, the secured party must deliver notice to the company informing it of the creation of the security interest.
e. rights in a company (other than shares);	Yes, the secured party must deliver notice to the company informing it of the creation of the security interest
f. Insurance rights;	No, notice must be given to the grantor’s counterparties to ensure that the assignment is enforceable against them.
g. Inventory;	No.
h. Equipment/plant/machinery;	No. However, to the extent that the asset is leased (or under a similar arrangement which does not create rights over the asset), in order to enforce the security, the lease agreement (or similar arrangement) should be conditionally assigned to the secured creditor or security agent, or the lessor should consent that the agreement will be terminated in an enforcement event and surrender the asset at the request of the secured creditor or security agent.
i. Goodwill;	N/A
j. Real estate property (other than land);	No.
k. Land;	No.
l. Objects under construction (object of unfinished construction).	No.
m. lease rights to real estate, including land;	No. However, the consent of the grantor of such right or the owner of the land may be required.

Yes.

As a general rule, the priority or ranking of security is determined by the time at which the secured creditor’s right becomes enforceable to third parties (i.e. via registration with the Public Register, publication in the SIGM, possession of the collateral or the execution of a control agreement with the financial institution in which the accounts are opened, as applicable).

In an insolvency scenario, secured creditors would rank third to:

labour and social security obligations before employees
withholding obligations in connection with maintenance payments of the employees.

If the assets subject to the security are realised in order to satisfy the aforementioned higher-ranking claims, the secured creditors retain their third-ranking priority only up to the amount realised from adjudication of the collateral.
If an asset is encumbered by multiple securities, the secured creditors with the higher priority are paid first with the amount realised from adjudication of the collateral.

Any remaining balance in excess of such amount falls into the fifth-ranking category (after the claims of the tax administration) and is treated as unsecured debt.

Establishment of security and level of security regulation is generally:

Medium complexity

Yes, except in the case of mortgages over immovable property pledges over equity interests (other than shares), which require execution by public deed with wet-ink signatures to file for registration. Refer to Q9 for further details.

Yes, any person can access the register provided they create an account for such purposes.

In case of securities that must be registered with the Public Registry, the grantor, the debtor and the secured creditor are all entitled to file for registration. However, market standard is for grantors to undertake to cause the registration to be made within a given time frame and assume all costs in connection thereof.

In case of securities that are recorded through publication in the SIGM, only the secured creditor is authorised to publish the relevant notices relating to the security. See Q9 for further information regarding the creation of the required account.

a. Application for registration	Yes, but only mandatory in case of mortgages and pledges over security interest other than shares; and is customarily filed by the notary granting the security public deed.
b. Security/guarantee document	Yes, in case of securities that must be registered with the Public Registry, a public deed of the relevant security agreement must be executed before a Peruvian notary in order to apply for registration. In the case of securities that are recorded through publication in the SIGM, no supporting documents are required to be submitted. Instead, the relevant notice is published by filing the corresponding electronic form on the platform with the relevant security document’s information.
c. Principal obligation agreement	No.
d. Title documents to the collateral	No.
e. Other	No.

Movable property and immovable property (other than land):

time – quick
cost – low.

Land:

time – medium to high
cost – medium to high.

Note that it is customary for transaction documents to provide that the debtor and/or the grantor shall bear all costs.

Movable property:

time – quick
cost – low.

Immovable property:

time – medium
cost – high.

Note that it is customary for transaction documents to provide that the debtor and/or the grantor shall bear all costs.

Notarial costs:

time – quick
cost – usually high.

Notarial costs are calculated on the basis of the greater value between the secured obligations and the assets involved at a rate which varies depending on the notary.

Note that it is customary for transaction documents to provide that the debtor and/or the grantor shall bear all costs.

Perfection requirements:

cost – high.

In case of pledges, a common representative must be appointed to act on behalf of both the grantor and the secured creditor for purposes of enforcement in the event of default.

In case of a security trust, the trustee charges a periodic (typically monthly) fee for the administration of the trust, plus a fixed fee for the structuring and drafting of the trust agreement.

Note that it is customary for transaction documents to provide that the debtor and/or the grantor shall bear all costs.

Yes.

Yes, to the extent that such breaches are provided for in the security document.

Yes, to the extent that such circumstance is provided for in the security document.

Yes, to the extent they are established in the security document.

No.

Yes, out-of-court enforcement is available for all securities other than mortgages. However, courts may be needed to enforce the decision of the party in charge of the enforcement (common representative in case of pledges or trustee in case of trusts) or arbitration tribunals.

Yes, the value of the collateral is to be determined pursuant to the terms and conditions of the security document.

No.

Generally not mandatory, but granting a Power of Attorney to the security agent (where applicable) or creditor to such end may be advisable to facilitate the process.

a. bank accounts;	Yes, but only to the extent subject to a pledge. The appointment of a common representative, and the granting of irrevocable POA by the parties, is mandatory. This representative is responsible for conducting the enforcement process on behalf of the secured creditor.
b. receivables;	Yes, but only to the extent subject to a pledge. The appointment of a common representative, and the granting of irrevocable POA by the parties, is mandatory. This representative is responsible for conducting the enforcement process on behalf of the secured creditor. It is advisable for the secured party to be given irrevocable POA to notify the creation of the security or negotiate any amendment to the relevant agreement to allow for the enforcement of the collateral should the grantor fail to do so, and instruct the payments to be channelled through an account of the secured creditor.
c. IP rights;	Yes, but only to the extent subject to a pledge. The appointment of a common representative, and the granting of irrevocable POA by the parties, is mandatory. This representative is responsible for conducting the enforcement process on behalf of the secured creditor
d. shares (either of a listed company or a private company);	Yes, but only to the extent subject to a pledge. The appointment of a common representative, and the granting of irrevocable POA by the parties, is mandatory. This representative is responsible for conducting the enforcement process on behalf of the secured creditor. It is advisable for the secured party to be given irrevocable POA to notify the company of any assignment of the shares and vote in the shareholders’ meeting during any event of default.
e. rights in a company (other than shares);	Yes, but only to the extent subject to a pledge. The appointment of a common representative, and the granting of irrevocable POA by the parties, is mandatory. This representative is responsible for conducting the enforcement process on behalf of the secured creditor. It is advisable for the secured party to be given irrevocable POA to notify the company of any assignment of the rights and vote in the shareholders’/partners’ meeting during any event of default.
f. Insurance rights;	Yes, but only to the extent subject to a pledge. The appointment of a common representative, and the granting of irrevocable POA by the parties, is mandatory. This representative is responsible for conducting the enforcement process on behalf of the secured creditor. It is advisable for the secured party to be given irrevocable POA to instruct the insurer not to cancel the policy or channel payments to be channelled through an account of the secured creditor during an event of default.
g. Inventory;	Yes, but only to the extent subject to a pledge. The appointment of a common representative, and the granting of irrevocable POA by the parties, is mandatory. This representative is responsible for conducting the enforcement process on behalf of the secured creditor.
h. Equipment/plant/machinery;	Yes, the appointment of a common representative, and the granting of irrevocable POA by the parties, is mandatory. This representative is responsible for conducting the enforcement process on behalf of the secured creditor. In case of security trusts, the trustee is the entity responsible for carrying out the enforcement process.
i. Goodwill;	N/A.
j. Real estate property (other than land);	N/A.
k. Land;	N/A.
l. Objects under construction (object of unfinished construction).	Yes, but only to the extent subject to a pledge. The appointment of a common representative, and the granting of irrevocable POA by the parties, is mandatory. This representative is responsible for conducting the enforcement process on behalf of the secured creditor.

No.

Trusts:

easy
market standard is creditor-friendly agreements
timing depends on assets involved: accounts – quick; other movable assets – average; immovable assets – long.

Pledges:

fairly easy
out-of-court foreclosure: market standard is creditor-friendly; court foreclosure – debtor-friendly
timing: out-of-court foreclosure – average; court foreclosure – long.

Mortgage:

complicated
debtor-friendly
long.

No.

CMS Expert Guide for taking security in Peru

jurisdiction

GUARANTEE

1. Can a guarantee be granted by one entity/person to secure obligations of another entity/person?

2. Is guarantee treated under the law as:

2.1 a type of security?

2.2 a financial service?

3. Can a corporate guarantee be granted:

3.1 Upstream?

3.2 Downstream?

3.3 Lateral?

4. Are there any special aspects to be taken into account in relation to granting a guarantee (e.g. financial assistance, transfer pricing, corporate benefit, any other limitations)?

5. Are there any formal requirements or practical recommendations for the execution, validity and/or enforceability of a guarantee?

PRINCIPAL OBLIGATIONS

6. Is it possible for a guarantee/security to secure future obligations?

7. Is the validity of a guarantee/security dependant on the validity of a principal (guaranteed/secured) obligation? Does the concept of indemnity exist or would be recognised under the law?

8. Can guarantee/security be continuing for as long as guaranteed/secured obligations remain outstanding or shall it have a definite term?

9. Can guarantee / security be granted to a foreign creditor?

10. Is it possible for a guarantee and/or security to be created by way of parallel debt/trust/agent structures?

11. In case of transfer of guaranteed/secured liabilities to a new creditor (partially or fully), what are the formalities required to ensure that the guarantee/security package is maintained in favour of a new creditor?

12. In case of any changes to guaranteed/secured obligations (including a change of a principal debtor, adding another debtor), what are the formalities required to ensure that the guarantee/security package is maintained in favour of a creditor?

13. Are there any restrictions regarding the governing law of a guarantee/security?

14. Are there any restrictions regarding submission of disputes under guarantee/security to foreign courts’ jurisdiction or to arbitration?

15. Are there any currency control/capital movement restrictions with respect to guarantees, security or loans?

16. What is the hardening period with respect to guarantee/security?

SECURITY

17. Is it possible to have security over:

18. Is it possible to create security over multiple assets by one security document? Is floating security possible?

19. Can a security be granted to secure liabilities of a holding company, a shareholder, a subsidiary or any other affiliate?

20. In order to be enforceable against third parties, must a security/security agreement be:

20.1 Notarised?

20.2 Registered?

20.3 Executed in/translated into local language?

20.4 Other?

21. Does registration in most cases protect the secured creditor against the debtor’s subsequent dealings with the collateral?

22. How is the priority/rank of security established?

EXECUTION AND PERFECTION MECHANICS, TIMING AND COSTS

23. Can a guarantee/security be executed by way of e-signing?

24. Are registers of guarantees/encumbrances over movable/immovable assets publicly available and accessible online?

25. Which party shall/can apply for registration of security in a relevant register?

26. What documents need to be submitted and in what form for the guarantee/security registration with a relevant register?

27. How much time and cost does it take to:

27.1 check if any encumbrances over collateral exist (i.e. obtain extracts)

27.2 register/deregister/amend/remove an encumbrance in a relevant register?

27.3 notarise (if required) a security document?

27.4 comply with other perfection requirements?

SECURITY ENFORCEMENT

28. The right to enforce security arises when:

a. the secured debt is unpaid and due?

b. there is any other breach under the principal obligation agreement?

c. there is any other breach of the pledge/security agreement?

d. the debtor or guarantee/security provider becomes insolvent?

e. any other grounds?

29. Is there any mandatory period for curing a default and/or any other formalities to be fulfilled before proceeding to enforcement?

30. Is out-of-court security enforcement available? Is any additional instrument for direct enforcement required?

31. Which out-of-court enforcement methods are available and how the collateral value is determined thereunder:

31.1 taking over the title to the collateral?

31.2 selling collateral to a third party by way of direct sale or private or public auction?

31.3 notarial writ?

31.4 other?

32. Are powers of attorney or any other (conditional) instruments used to facilitate an out-of-court enforcement by a secured party? Are they mandatory or recommended?

33. Is there anything else of which a creditor should be aware as unusual or particularly difficult?

34. Is security enforcement in practice: generally easy, fairly easy or complicated? –more debtor- or creditor-friendly or balanced?– quick, average or long in terms of timing?

35. Are there any upcoming changes to guarantee/security regulations/rules?

Last updated · 25 Aug 2026

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