Individual Microentrepreneur Allows Big Business in Brazil
Brazil reached the mark of 11 million Individual Microentrepreneurs (MEI) in 2020. There were 1.8 million new companies during the pandemic.
The federal government launched the program in 2009 to regularize the small business.
With a number in the National Register of Legal Entities (CNPJ, in Portuguese), a worker can issue invoices for various jobs.
The difference about other categories is that the tax is not charged per invoice issued.
The category is provided for by Complementary Law 128, of December 19, 2008.
The company pays a flat fee per month. Currently, the value is 61 reais (11.37 dollars). Part of the money goes to the National Institute of Social Security (INSS). It is counting as contribution time for retirement.
The annual billing limit is 81,000 reais (15,000 dollars). That means 6750 reais (1,257 dollars) per month, an amount well above the average Brazilian salary.
There is a list of permitted activities. The most popular professions are jobs with high demand for service. The first one is the hairdressers with 850,000 businesses open.
The official data shows that on the program are many young adults. The age group with the largest number of entrepreneurs is 31–40 years old, with more than 3.5 million.
The Individual Microentrepreneur is an opportunity for many people to generate income.
The program wants to reduce the bureaucracy of companies’ access to formalization.
The opening occurs via the internet on a government portal. The page has very didactic tutorials to carry out the process.
A government agency, the Brazilian Support Service for Micro and Small Enterprises (Sebrae), assists with a training program.
In some locals, such as São Paulo, the city requires a physical presence to register the system’s password.
The MEI does not need an accountant. He needs to make an annual income statement.
The IRS also requires a statement that the company has no employees. The MEI can hire up to one person. This statement may need help from a professional.
The person having a CNPJ has some advantages. The entrepreneur can do business with the government and big companies.
The possession of a CNPJ allows obtaining credit easier and benefits in services such as health plans.
Beneficiary rights include time for retirement, sickness benefit, maternity pay, and death pension.
Critics of the program say it makes labor relations precarious. Some claim that it is not sustainable in the long term due to the social security issue.