How to become an individual entrepreneur in Brazil*

It is a fact that the economic growth and new business opportunities that have arisen in Brazil favor entrepreneurship. However, for investment to be a success, research, planning and preparation are essential.

In this sense, entrepreneurs must know the market in which they will operate, seeking new opportunities and anticipating threats that may possibly appear.

In Brazil, it is possible to formalize an enterprise through registration as an Individual Micro-Entrepreneur [MEI – Microempreendedor Individual] or Individual Entrepreneur [EI – Entrepreneur Individual], both of which are provided for in the General Law of Micro and Small Enterprises.

Both MEI and EI allow manicures, taylors, painters, mechanics, merchants, confectioners, popcorn sellers and other professionals of the non-intellectual category to formalize their status, equally allowing them to obtain a National Registration of Legal Entities [CNPJ – Cadastro Nacional de Pessoa Jurídica]) and pension coverage.

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However, to become an Individual Entrepreneur, it is necessary to bill a maximum of R$ 60,000.00 per year. Furthermore, one cannot participate in another company as a partner, director or holder, or have more than one employee.

Registrating oneself as an Individual Entrepreneur is free of charge on the Entrepreneur Portal, available online at www.portaldoempreendedor.gov.br. Thus, after completion, registrations regarding Trade Board, CNPJ, INSS and Provisional Operation Permit are obtained immediately, generating a single document that is the Certificate of Individual Micro-Entrepreneur Condition – CCMEI.

There will be no fees for the registration of the company, however, the Micro-Entrepreneur  must pay 5% of the monthly minimum wage + Service Tax (ISS) fixed at R $ 5.00 + Tax on Sales and Services (ICMS) set at R $ 1.00 + Social Security (INSS) fixed at R $ 31.10, being exempt from federal taxes such as IR, PIS, Confis, IPI e CSLL. These values are collected simultaneously by means of a carnet that is issued exclusively by the Entrepreneur Portal, the 20th of each month being the expiration day for tax payment.

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It should be noted that the individual entrepreneur can hire one single employee that exclusively receives a minimum wage or the lowest wage in their professional category, whichever is higher.

Finally, the benefits to individual entrepreneurs who are formalizing their status are: access to banking services, including credit, legal performance activity, simplified formalization without major bureaucracies, reduction and simplification of tax collection and exemption of formal accounting.

(Vanessa C. Bueno)

vanessa@odireitosemfronteiras.com

* Translation of:

Como tornar-se um empreendedor individual no Brasil

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