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

The upgraded China-Peru Free Trade Agreement Protocol entered into force on November 1, 2026. For foreign founders operating companies in China, the protocol introduces new commitments on standards, competition, e-commerce, global supply chains, and environmental issues, along with improved trade and investment facilitation. This article summarizes the key changes and practical implications.

China-Peru FTA Upgrade: New Rules for Trade and Investment

On November 1, 2026, the Protocol to Upgrade the China-Peru Free Trade Agreement officially took effect. The Protocol was signed on November 14, 2024, following the announcement of the substantive conclusion of negotiations on June 28, 2024. Both sides have completed their domestic approval procedures. For foreign founders with companies in China—or those planning to register one—the upgraded agreement creates a more predictable and efficient environment for cross-border trade and investment with Peru.

Background and 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. The original China-Peru FTA, signed in April 2009 and in force since March 2010, was China's first comprehensive FTA with a Latin American country. Bilateral trade reached USD 50.4 billion in 2025, nearly seven times the USD 6.4 billion recorded in 2009. The upgrade negotiations were launched in November 2018.

Key Highlights of the Upgraded Protocol

The upgraded protocol modernizes the legal framework and deepens commitments in several areas relevant to foreign-invested enterprises in China.

1. Updated and Expanded Rules

The protocol adds new standalone chapters on standards cooperation, competition policy, e-commerce, global supply chains, and the environment. It also refines existing chapters on rules of origin, customs procedures and trade facilitation, sanitary and phytosanitary measures, intellectual property, trade in services, temporary entry of business personnel, and investment. Notably, the global supply chains chapter encourages multimodal transport and promotes foreign trade logistics corridors and infrastructure—an innovative feature in a bilateral FTA. The standards and conformity assessment cooperation chapter establishes a dedicated cooperation mechanism and an indicative list of cooperation areas, creating a platform for mutual recognition and reducing trade costs for companies in both countries.

2. Improved Trade and Investment Environment

For trade in goods, the protocol introduces electronic data exchange provisions, completes the transposition of product-specific rules of origin, and sets detailed rules on customs declaration responses, information exchange, cargo clearance, express consignment clearance, and clearance of perishable goods. It also raises transparency requirements for sanitary and phytosanitary laws and regulations and establishes a consultation mechanism to address technical issues promptly. For services and investment, the protocol adds four new annexes covering professional services, transport services, cultural and audiovisual services cooperation, and telecommunications services, enhancing regulatory cooperation. It also includes provisions for expedited application procedures for entry of business personnel, improving visa processing efficiency, and substantially improves the investment dispute settlement mechanism while clarifying most-favored-nation treatment and expropriation provisions. These changes provide stronger protection and facilitation for mutual investment.

3. Forward-Looking Commitments

The two sides agreed to launch negotiations on negative lists for trade in services and investment within two years after the protocol enters into force, aiming to further liberalize services trade and investment. They also committed to reviewing the competition chapter every two years to assess the possibility of making higher commitments.

Practical Implications for Foreign Founders

Foreign founders operating in China can benefit from the upgraded protocol in several ways:

• Reduced trade costs: The standards cooperation mechanism and simplified customs procedures lower compliance burdens for importing and exporting goods between China and Peru.
• More efficient logistics: The global supply chains chapter supports infrastructure and multimodal transport, which can improve supply chain reliability.
• Better investment protection: The improved dispute settlement mechanism and clearer investment rules offer greater certainty for investments in either country.
• Easier movement of personnel: Expedited visa procedures for business personnel facilitate short-term assignments and business travel.
• Future liberalization: The planned negative-list negotiations signal further opening in services and investment, which may create new opportunities.

For foreign founders registering a company in China, it is important to stay informed about these developments. The full text of the protocol is available on the China Free Trade Area Service Network (http://fta.mofcom.gov.cn). Companies and individuals can consult the specific provisions and seek advice on relevant issues. In addition, the General Administration of Customs has issued the revised Measures for the Administration of Origin of Imported and Exported Goods under the China-Peru FTA.

Implementation and Next Steps

China has completed all necessary preparations to ensure smooth implementation. The Ministry of Commerce will work with relevant departments and local authorities to strengthen outreach and services for enterprises, monitor the implementation, and maintain communication with Peru through the FTA implementation mechanism to promote high-quality implementation. Foreign founders should monitor further developments and consider how the upgraded protocol can support their China operations.

Call to Action: Foreign founders can contact ChinaMNC on WhatsApp / WeChat at +86 153 1898 8535 for help registering and operating a 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.