Avaldatud · Estonian

China-Peru FTA Upgrade Protocol Takes Effect: What Foreign Founders Need to Know

The upgraded free trade agreement between China and Peru entered into force on November 1, 2026, introducing new rules on standards, e-commerce, supply chains, and investment. For foreign founders operating in China, the changes could lower trade costs and improve market access.

China-Peru FTA Upgrade Protocol: Key Changes for Foreign Founders

On November 1, 2026, the Protocol to Upgrade the Free Trade Agreement between China and Peru (the "Upgrade Protocol") officially took effect. The Protocol was signed in November 2024 and follows the original China-Peru FTA, which was signed in April 2009 and entered into force in March 2010 as China's first comprehensive FTA with a Latin American country. The Upgrade Protocol is designed to modernize the trade rules between the two countries and create a more favorable business environment for companies on both sides.

For foreign founders with companies in China—or those considering setting up operations—the Protocol introduces several changes that could affect how you import, export, invest, and move personnel between China and Peru. Below is a breakdown of the key provisions and what they might mean for your business.

Background: Deepening Economic Ties

China and Peru are comprehensive strategic partners with highly complementary economies. China is Peru's largest global trading partner, largest export market, and largest source of imports. Peru is China's fourth-largest trading partner in Latin America and an important investment destination. Bilateral trade reached US$50.4 billion in 2025, nearly seven times the US$6.4 billion recorded in 2009.

The original FTA significantly boosted economic ties. In November 2018, the two sides announced the launch of upgrade negotiations. On June 28, 2024, during a meeting in Beijing between President Xi Jinping and then-President of Peru Dina Boluarte, the substantive conclusion of the negotiations was announced. The Upgrade Protocol was formally signed on November 14, 2024. After both sides completed their respective domestic approval procedures, the Protocol entered into force on November 1, 2026.

What the Upgrade Protocol Covers

The Protocol builds on the existing FTA and introduces new chapters on standards cooperation, competition policy, electronic commerce, global supply chains, and environment. It also refines and expands existing chapters on rules of origin, customs procedures and trade facilitation, sanitary and phytosanitary measures, intellectual property, trade in services, temporary entry of business persons, and investment.

1. Updated Rules and New Areas of Cooperation

• Global Supply Chains: A new chapter encourages multimodal transport and promotes the development of foreign trade logistics channels and infrastructure. This is an innovative addition under the FTA and signals both countries' commitment to maintaining stable and smooth supply chains.
• Standards and Conformity Assessment: A dedicated cooperation mechanism and a list of intended cooperation areas will facilitate mutual recognition of standards and reduce trade costs for companies.
• Electronic Commerce: New provisions aim to enhance cooperation in e-commerce, though specific details are not provided in the source.
• Competition Policy and Environment: These new chapters set out commitments to promote fair competition and environmental protection, with a review mechanism for competition policy every two years.

2. Improved Trade and Investment Environment

Trade in Goods: The Protocol includes provisions on electronic data exchange and completes the transposition of product-specific rules of origin. It also sets detailed requirements for customs procedures, including responses to inquiries, information exchange, clearance of goods, express consignments, and perishable goods. Greater transparency is required for sanitary and phytosanitary laws and regulations, with a consultation mechanism to address technical issues promptly.

Services and Investment: Four new annexes cover professional services, transport services, cultural and audiovisual services cooperation, and telecommunications services, raising the level of regulation and cooperation in these sectors. A fast-track application procedure for the entry of business persons aims to improve visa processing efficiency. The investment dispute settlement mechanism has been significantly improved, with detailed provisions on most-favored-nation treatment and expropriation, providing stronger protection for mutual investment.

3. Future-Oriented Commitments

Within two years of the Protocol's entry into force, the two sides will launch negotiations on negative lists for trade in services and investment, with the goal of further liberalizing these areas. Additionally, both parties have committed to reviewing the competition chapter every two years to assess the possibility of making higher commitments.

Practical Implications for Foreign Founders in China

If you run a company in China that trades with or invests in Peru, the Upgrade Protocol may bring tangible benefits:

• Lower trade costs: The standards cooperation mechanism and simplified customs procedures can reduce compliance burdens and speed up clearance, especially for perishable and express goods.
• Easier movement of personnel: The fast-track visa application process for business visitors could make it simpler to bring Peruvian staff to China or send Chinese employees to Peru.
• Stronger investment protection: The improved dispute settlement mechanism and clearer rules on expropriation and most-favored-nation treatment offer greater certainty for investors.
• New opportunities in services: The annexes on professional, transport, cultural, and telecom services open up possibilities for service providers.

Implementation and Resources

China has completed its domestic preparations to ensure the Protocol's smooth implementation. The full text of the Upgrade Protocol is available on the China Free Trade Area Service Network (http://fta.mofcom.gov.cn), where companies and individuals can consult specific provisions and seek further information. In addition, the General Administration of Customs has published the revised Measures for the Administration of Origin of Imported and Exported Goods under the China-Peru FTA.

The Ministry of Commerce will work with relevant departments and local governments to strengthen outreach and services for businesses, monitor the implementation, and maintain communication with Peru through the FTA implementation mechanism to ensure high-quality implementation and help companies benefit from the agreement.

For foreign founders registering or operating a company in China, staying informed about these developments can help you take advantage of the new opportunities. If you need assistance with company registration, compliance, or understanding how the FTA affects your business, ChinaMNC is here to help. Contact us on WhatsApp or WeChat at +86 153 1898 8535 for expert guidance on setting up and running your company in China.

This summary is based on information published by the relevant Chinese government website and is general information, not legal or tax advice.