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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 protocol entered into force on November 1, 2026, improving rules on origin, customs, IP, services, and investment. Here is a practical overview for foreign founders with China-based companies.

China-Peru FTA Upgrade Protocol Enters into Force

On November 1, 2026, the Protocol between the Government of the People's Republic of China and the Government of the Republic of Peru on Upgrading the Free Trade Agreement (hereinafter the “Upgrade Protocol”) officially took effect. For foreign founders who register and operate companies in China, this development can affect cross-border trade and investment planning with Peru, though it does not change domestic company registration procedures.

The two sides launched negotiations to upgrade the FTA in November 2018 and signed the Upgrade Protocol on November 14, 2024. The Upgrade Protocol revises the original FTA and is structured around improvements to existing chapters and the addition of new ones.

What the Upgrade Protocol Covers

The Upgrade Protocol improves seven existing chapters of the original FTA:

• Rules of origin
• Customs procedures and trade facilitation
• Sanitary and phytosanitary measures
• Intellectual property
• Trade in services
• Temporary entry of business personnel
• Investment

It also adds five new chapters:

• Cooperation on standards and conformity assessment
• Competition policy
• E-commerce
• Global supply chains
• Environment and trade

In addition, the two sides established future provisions for negotiations on negative lists for trade in services and investment, with the aim of further raising openness in these areas.

Trade Growth Under the Original FTA

The China-Peru FTA has been in force since 2010 and has played an important role in promoting bilateral economic and trade cooperation. According to the source, bilateral trade rose from USD 6.4 billion in 2009 to USD 50.4 billion in 2025, an increase of nearly seven times.

Following the entry into force of the Upgrade Protocol, the expectation is that bilateral trade and investment opportunities will be further explored, a better business environment will be provided for enterprises of both sides, and new vitality will be injected into economic and trade relations.

Practical Implications for Foreign Founders in China

For foreign founders who have registered a company in China or are considering doing so, the Upgrade Protocol is relevant primarily for cross-border operations involving Peru. The improvements to rules of origin and customs procedures may affect how goods qualify for preferential treatment and how documentation is handled. Enhanced trade facilitation could influence logistics planning. Changes to intellectual property, services, and investment chapters may be relevant for service providers and investors.

The new chapters on e-commerce, global supply chains, and competition policy signal areas where cooperation may develop, but the source does not specify detailed commitments or timelines. Founders should monitor implementing regulations and customs guidance as they become available.

It is important to note that the Upgrade Protocol does not alter the domestic legal framework for registering or operating a company in China. Foreign founders still need to comply with China's company law, foreign investment rules, tax regulations, and other applicable requirements. The protocol is an international trade agreement and does not create exemptions from domestic registration or licensing procedures.

Key Takeaways

• Effective date: The Upgrade Protocol took effect on November 1, 2026.
• Scope: It improves seven existing chapters and adds five new chapters.
• Trade value: Bilateral trade reached USD 50.4 billion in 2025, up from USD 6.4 billion in 2009.
• Future work: Future provisions set the stage for negative-list negotiations on services and investment.
• For founders: The protocol may affect cross-border trade and investment with Peru but does not replace China's domestic company registration and compliance requirements.

Foreign founders should consider how the upgraded agreement might fit into their broader China strategy, particularly if they trade with or invest in Peru. As with any international agreement, the practical effects will depend on implementation and accompanying domestic measures.

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

For assistance with registering and operating a company in China, foreign founders can contact ChinaMNC on WhatsApp or WeChat at +86 153 1898 8535.