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

The upgraded China-Peru free trade agreement entered into force on November 1, 2026, introducing new rules on standards, e-commerce, supply chains, and investment. This article outlines the key changes and practical implications for foreign founders with companies in China.

China-Peru FTA Upgrade Enters into Force

The Protocol to Upgrade the Free Trade Agreement between China and Peru officially took effect on November 1, 2026, according to the Chinese Ministry of Commerce (MOFCOM). The protocol was signed on November 14, 2024, following the conclusion of negotiations announced in June 2024. Both sides have completed their domestic ratification procedures.

Background: A Long-Standing Trade Relationship

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 was signed in April 2009 and entered into force in March 2010. It 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. Upgrade negotiations began in November 2018.

Key Highlights of the Upgraded Protocol

According to MOFCOM, the upgraded protocol aims to create a more favorable business environment and expand trade and investment opportunities for enterprises in both countries.

1. Higher-Level Rules and Commitments

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 persons, and investment.

Notably, the global supply chains chapter encourages multimodal transport and promotes foreign trade logistics corridors and infrastructure development—an innovation under the 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 of standards and reducing trade costs for businesses.

2. Improved Trade and Investment Environment

On trade in goods, the protocol includes electronic data exchange provisions and completes the transposition of product-specific rules of origin. It sets detailed rules for customs clearance, including responses to requests, information exchange, and clearance of goods, express shipments, and perishable goods. It also raises transparency requirements for sanitary and phytosanitary laws and regulations and establishes a consultation mechanism to resolve technical issues promptly.

On services and investment, the protocol adds four annexes covering professional services, transport services, cultural and audiovisual services cooperation, and telecommunications services, enhancing regulatory cooperation. It includes provisions for expedited visa application procedures for business persons and significantly improves the investment dispute settlement mechanism, detailing most-favored-nation treatment and expropriation provisions to better protect mutual investment.

3. Future-Oriented Liberalization

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 higher commitments.

What This Means for Foreign Founders in China

For foreign founders operating a company in China, the upgraded protocol offers several practical benefits:

• Lower trade costs: The standards cooperation mechanism and mutual recognition of standards can reduce compliance costs for products traded between China and Peru.
• Simplified customs procedures: Detailed clearance rules and electronic data exchange can speed up import/export processes.
• Easier business travel: Expedited visa application procedures for business persons facilitate short-term assignments and meetings.
• Stronger investment protection: The improved dispute settlement mechanism and clarified investment rules provide greater certainty for investors.
• New opportunities in services: The four new services annexes open up cooperation in professional, transport, cultural, and telecom services.

Founders involved in supply chains linking China and Peru, or in services sectors covered by the new annexes, should review the protocol's provisions to assess how they can benefit.

Implementation and Resources

China has completed its implementation preparations. The full text of the upgraded protocol is available on the China Free Trade Area Service Network (http://fta.mofcom.gov.cn). The General Administration of Customs has also published the revised measures for the administration of origin of import and export goods under the China-Peru FTA.

MOFCOM will work with relevant departments and local governments to strengthen publicity and services for enterprises, monitor the implementation, and maintain communication with Peru through the FTA implementation mechanism to ensure high-quality implementation.

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.