How do you get a municipal business license (licencia de funcionamiento) in Peru, and what can they ask for?

What it is and who needs one

The licencia de funcionamiento is the authorization a municipality grants to carry out a business activity at a specific establishment (TUO of Law 28976, art. 3). The current text is the consolidated text (Texto Único Ordenado, TUO) approved by Supreme Decree 163-2020-PCM, as later amended by Law 31914 (2023) and Legislative Decree 1657 (2024).

It must be obtained before opening by individuals or companies, Peruvian or foreign, for profit or not, that carry out commercial, industrial or service activities at an establishment (art. 4). The district municipality issues it, or the provincial one where the law gives it that role (art. 5).

Rules worth knowing:

• One location, one license. Two shops need two licenses (art. 3).
• Several activities on one license, as long as they are related or complementary under your municipality’s ordinance (art. 3).
• Change of activity at low- or medium-risk premises: approval is automatic with a prior sworn statement, as long as safety is not affected and the risk level does not rise (art. 3).
• Delivery and banking agents need no extra procedure (art. 3).
• Not required (art. 20): central, regional and local government bodies for their public functions, the Armed Forces and Police; embassies and consulates; the Volunteer Fire Brigade; and temples, monasteries or convents. The exemption does not cover commercial activities.

If you are just setting up, the MYPE classifier helps you see which small-business regime applies, and RUC and Clave SOL covers the step before this one.

The maximum the municipality can ask for

Article 7 says these requirements are the maximum (como máximo):

1. Application that counts as a sworn statement, with your RUC number and your DNI or carné de extranjería (and your representative’s, if you use one).
2. For companies: a sworn statement by the legal representative that their power of attorney is in force, giving the Sunarp registry entry (partida and asiento) numbers. If you represent an individual, a simple signed authorization letter (carta poder simple).
3. Building safety: a sworn statement that the premises meet safety conditions, for low or medium risk. For high or very high risk, the documents listed in the Building Safety Inspection Regulation.
4. Special requirements, only in these cases:
   • Health services: sworn statement that you hold a current professional degree and are registered with the professional association.
   • Activities that by law need a prior sector authorization: sworn statement that you have it.
   • Buildings declared a National Cultural Heritage Monument: since Legislative Decree 1657 (20 September 2024), a sworn statement of conservation of the building’s structure, replacing the Ministry of Culture authorization required by the earlier text.

The municipality assesses only two things: zoning and compatible use, and safety conditions (art. 6). Everything else is checked later.

Deadlines and positive silence

The municipality classifies your premises’ risk level when you file, using the risk matrix (art. 8.2). Everything depends on that:

Positive administrative silence (silencio administrativo positivo) means that if the deadline passes with no answer, your application is automatically approved as you filed it (TUO of Law 27444, art. 199.1).

One more rule, from article 7: if the safety inspection ended with a favorable report but you do not receive the ITSE certificate within 3 business days, you can request the license and the official must issue it, under personal liability.

What it costs

There is no national fee. Each municipality sets its own, and it must reflect the real cost of the procedure: assessing zoning, compatible use and, where applicable, safety (art. 17). It must display its cost breakdown, its zoning map and its forms, and give you that information free (art. 18).

Example: the gob.pe page of the Municipality of Lince, updated on 9 March 2022, charges S/ 121.30 for low risk and S/ 140.10 for medium risk. Check your own municipality’s page.

Where gob.pe pages and the law differ

Some official pages do not match the law. We do not pick one: we tell you what each says.

• Transfer. The general gob.pe page (updated 25 August 2022) says the license is “personal and non-transferable”. Article 13 of the TUO allows transfer when a running business is transferred with the same activities and zoning, by filing a simple copy of the contract.
• Temporary license. The same page mentions a temporary license “(1 year)”. Article 12 of the TUO allows temporary licenses on request but does not set one year.
• Deadline for the ITSE. The general page and the Lince page say that, for low or medium risk, you have 1 month after receiving the license to request the ITSE certificate, or it is revoked. That period is not in the TUO of Law 28976; it comes from the inspection regulation, which we did not review.
• Monuments. The Lince page (2022) still asks for Ministry of Culture authorization. Legislative Decree 1657, from 2024, replaced it with a sworn statement.
• Powers of attorney. For companies, the Lince page asks for the representative’s certificate of current powers (vigencia de poder) and an authorization letter. Article 7 speaks of a sworn statement by the representative giving the registry entry numbers.

If your municipality demands something outside the article 7 list, see what to do if a procedure is refused. Indecopi supervises compliance with this law (art. 19).

Validity, closing down and forced closure

• The license does not expire (art. 12). The ITSE certificate lasts two years.
• If you shut down, you notify the municipality with a simple written notice, approved automatically (art. 14).
• Law 31914 (2023) regulates closures (clausura). Temporary closure applies, among other cases, if you have no license, no ITSE (unless renewal is in process), or carry out a different activity. It does not apply to administrative breaches that pose no imminent risk, or when the problem can be fixed during the inspection. Lifting it cannot be made conditional on paying fines. The law defines permanent closure as a penalty at the end of a sanctioning procedure, or in other cases the law provides.

Law 31914 added these provisions as articles 19 to 22 of Law 28976, numbers that do not match the 2020 TUO’s numbering. It ordered the Executive to update the TUO; we did not find an updated TUO.

Once you open, you also have duties toward customers: the complaints book is one of them.