Peru is still undergoing an institutional crisis, following the successful impeachment of President Martíz Vizcarra and the subsequent resignations of his replacement, Manuel Merino, the interim president of Congress, Luis Valdez, and 13 of the 18 government ministers, after the controversial police repression of protesters in November 2020. Congress removed Martín Vizcarra by passing a motion of censure against him for "moral incapacity" to exercise the presidency due to alleged corruption during his time as governor of Moquegua (south) between 2011 and 2014. Immediately, Vizcarra filed a lawsuit before the Constitutional Court, which was rejected since they considered that he had been legally dismissed. On November 17, Francisco Sagasti, who has opposed the impeachment of Vizcarra, was appointed as the new president of both the Republic and the Congress, obtaining 97 votes from the 130 members of the House. 

Nevertheless, and despite these continuous political crises, Peru’s institutions are relatively stable, and the country’s leadership is committed to market-friendly policies. The transitions to power have been peaceful, and the different governments have promoted a popular anti-corruption agenda along with reform efforts in education, healthcare, and business regulations. Sagasti's government has been forced to shelve most of its agenda and regulatory reforms in the wake of the COVID-19 crisis. The pandemic will continue to absorb the government's attention and resources through 2021. Parties from across the political spectrum and social organizations will remain broadly committed to democratic governance, but the party system is fractured and divided, incresing the difficulty to pass legislation on political and judicial reform, social inclusion, and critical infrastructure development.

Transparent elections and peaceful transitions of power from one democratic government to another have underlined continued stability in the political system. Peru will likely retain its prudent and business-friendly policy framework, maintaining the orthodox policies that have underpinned positive growth and poverty reduction over the past decade. However, the unicameral Congress has emerged as a stronger counterbalance to the once-dominant executive, as demonstrated by Vizcarra’s inability to consolidate a majority voting block since he took office in March 2018. Vizcarra’s successor in 2021 is currently unclear, and will not be known until the second round of the elections take place (June 2021). 

Frequent (and growing) corruption scandals involving government officials will erode already low levels of public trust in the government, and businesses will remain exposed to corrupt officials. Anti-corruption reforms and high-profile investigations will leave the political class more exposed, leading to a somewhat improved integrity outlook. However, corruption will remain a problem across all levels of government.

Peru is considered a Flawed Democracy in the 2019 Democracy Index, developed by The Economist Intelligence Unit (EIU), where the country ranks 58 out of 167 countries scored.

The country ranks 82 on the 2019 Human Development Index developed by the United Nations Development Programme.

The COVID-19 emergency has caused significant operational disruption to businesses in Peru. Companies operating in the country will remain exposed to heightened operational risks during the first quarter of 2021. High rates of contagion and an overstretched healthcare system are likely to fuel new restrictions on mobility and daily activities, which will result in periodic operational disruptions. Currently, companies will remain exposed to operational risks due to increasing contagion rates and renewed limitations on mobility and business activities, such as those imposed during the national quarantine implemented on 16 March 2020. This quarantine forced most major companies to implement remote working, reduce their operations, or shut down industrial activities entirely. Companies exempted from the quarantine, such as those in the food, essential goods, and utility sectors have had to implement social distancing protocols within their premises, reducing capacity and output. 

Energy shortages continue to pose an obstacle to investment in the mining sector, though ongoing projects are likely to reduce energy risks in the medium-term. Infrastructure in rural areas, particularly the road system, is sub-optimal. The legal system remains beset by corruption and inefficiency despite improvements since the 2000s. Petty corruption also persists in the customs service and law-enforcement agencies, as well as among some departmental authorities. Bureaucratic procedures can be cumbersome, despite improvements in cutting red tape over recent years. Unions resort to disruptive strike action relatively frequently, and the risk of direct action and social unrest persists.

President Sagasti is likely to continue improving Peru’s business-friendly operational environment. The private sector is highly influential in terms of policymaking. Since the 1990s, successive Peruvian governments have welcomed foreign direct investment as a primary component for economic and social development. Port, airport, sanitation, and road infrastructure upgrades are a government priority. Infrastructure remains poor in remote regions far from the capital Lima and coastal areas. Levels of corruption and bureaucracy are still high. Unlike local community opposition against extractive industries, frequent labor strikes tend to be non-violent and less disruptive.

Travelers should be aware that roads are generally poorly maintained and roads in mountainous areas can be particularly dangerous; fatal car accidents are common. It is advisable to only drive during daylight hours in rural areas and along the Pan-American Highway. Highway banditry is also an issue in rural areas. For long-distance travel, consider traveling by air. All major destinations are served by an airport. No Peruvian airlines appear on the European Union's "blacklist" of airlines that are banned from EU airspace due to substandard security practices. For security reasons, never take an unlicensed taxi.

Overall, Peru ranks 76 out of 190 countries scored at the 2020 Doing Business Index by the World Bank and 101 out of 198 at the 2019 Corruption Perception Index by the Transparency International Organization.

Street crime is currently the main security threat in Peru, with the highest incidence in Lima and coastal cities. Although crime rates have remained stable in recent years, violent crime such as armed robbery, homicide, assault, extortion of businesses and car theft may continue to increase in coastal cities and around ports and airports, especially in El Callao, Chimbote, Piura and Trujillo.

Assaults and short-term kidnappings remain the most frequent risks for individuals. In fact, 26.6% of Peruvians reported having been victims of crime in 2019. In the city of Lima, the following red zones have been identified for their high crime rates: the old district of Lima (Cercado), La Victoria, Rimac, Breña, El Agustino and Barranco. The spread of COVID-19 has increased the risks of looting in urban centres.

Large and medium-scale protests are likely to escalate into violence, through clashes with police and sporadic attacks on public and private property. Mining, oil and gas projects are routinely exposed to violent protests by local communities and opposition groups, particularly concentrated in the regions of Ancash, Apurímac, Arequipa, Ayacucho, Cajamarca, Cusco, Junín, Piura, Puno and Tacna. Projects in southern Peru (including the Las Bambas project in Apurimac) also face a higher risk of protests and delays due to environmental and social concerns of local communities. Even so, the risks of cancellation are low, and investment in these regions, through the Social Advancement Fund, will help mitigate protest risks.

The risk related to criminal gangs operating as so-called trade unions (some are even legally constituted as such) must also be carefully considered. These groups have made activities such as blackmail, extortion, imposition of ghost workers on staff and quota payments, if not threats and even murder, common practice. According to several news reports, at least 80% of construction companies in Peru have admitted to being victims of extortion.

After their heyday in the late 1980s and early 1990s, far-left guerrilla groups now pose less of a threat to foreign companies. The main insurgent group Shining Path has declined in strength and no longer poses a security threat beyond the remote coca-growing areas in which it operates, especially in the south. The area of activity of SL and its dissidents is now concentrated in the south-central valley of the Apurímac, Ene and Mantaro rivers (VRAEM), where it cooperates closely with drug trafficking groups. The Shining Path's presence in this region gives rise to ongoing risks of extortion, sabotage, property damage and kidnapping for companies operating in and around the VRAEM. Construction and natural gas companies and military helicopters face an increased risk of attack in this area.

As of 2012, Peru is the world's second largest cocaine producer and has the second largest area of coca leaf cultivation after Colombia. About half of cocaine exports are transported by land and via the so-called 'air bridge' to Bolivia and Brazil and the other half by sea to the north, thanks to the collaboration of local groups with Colombian and Mexican cartels.

The risk of war will remain low and decrease further after the International Court of Justice's favourable ruling on a maritime border dispute with Chile in 2014. Both countries have pledged to respect it and are likely to continue strengthening their relations within the regional integration framework of the Pacific Alliance. The country last fought a war in 1995 against Ecuador, but signed a peace treaty in 1998 and peaceful trade-driven international relations will continue to improve. The president is expected to continue good relations with his neighbours and to make further progress in regional economic integration.

Peru ranks 84 out of 163 in the Institute for Economics and Peace's 2020 Global Peace Index.

No vaccinations are required to enter the country.

Peru ranks 49 out of 195 within the 2019 Global Health Security Index, a project of the Nuclear Threat Initiative (NTI) and the Johns Hopkins Center for Health Security (JHU), developed with The Economist Intelligence Unit (EIU).

Peru is prone to natural disasters, particularly due to its location within an active seismic zone. In August 2007, a violent earthquake (magnitude-8.0) hit the coastal areas to the south of Lima (affecting the towns of Pisco, Chincha Alta, Nazca, Ica, and San Vicente de Cañete), leaving more than 500 dead and causing substantial damage to roads and tourist facilities in its wake. The country is also home to a number of active volcanoes, including Mount Ubinas, located approximately 100 km (60 mi) from Arequipa, Peru's second-largest city.

The rainy season typically lasts from November through April (from January to May in the Cusco region). Torrential rains with the potential to cause deadly floods (e.g. along the Tumbes River) and landslides are common during this period.  The 2017 rainy season was particularly devastating. More than a million people across Peru were affected by torrential rains - which resulted in major flooding and landslides and more than 100 fatalities - from December 2016 to April 2017. The northwest of the country was particularly hard hit.

If you plan to visit Peru, stay informed by the National Institute of Civil Defense of Peru.