Brazil

Starting a Business in

Brazil

Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Brazil. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 185 economies. The most recent round of data collection was completed in June 2012.

Compare Brazil to 184 other economies.

YearNew business densityNumber of new limited liability companies
2009 2.38315,645

  • Standardized Company

  • Legal Form: Sociedade Limitada
  • Paid in Minimum Capital Requirement: None
  • City: São Paulo

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No. Procedure Time to Complete Associated Costs
1 Check company name with State Commercial Registry Office

The name can be searched online at: www.jucesponline.sp.gov.br
1 day no charge
2 Pay registration fees

A receipt of payment must be obtained for use in the Procedure 3.
1 day see following procedures
3 Register with the commercial board of the state where the main office is located and obtain identification number (NIRE)

The registration cost for limited liability companies before (i) the Board of Trade of the state of São Paulo is about R$75 (according to Resolution Jucesp No. 1, issued on January 1, 2012). Currently, certain State of São Paulo Board of Trade offices, also provide for expedited registration of corporate documents. The website of the State of São Paulo Board of Trade (JUCESP) is www.jucesp.fazenda.gov.br.

There are 3 agencies of the São paulo's Board of Trade (JUCESP) that currently accept the payment of the expedite fee of BRL 50 for a faster incorporation: Sindicato da Micro e Pequena Indústria de São Paulo (SIMPI), Associação Comercial de São Paulo (ACSP) and Sindilojas -São Paulo's Retailers Union .

On April 4th 2008, the Board of Trade of the State of São Paulo implemented the electronic system in accordance with Administrative rule (Portaria) N. 021. As a result, the entrepreneur completes the forms www.jecesp.fazenda.sp.gov.br and file such forms with the artciles of association to be registered directly with the Board of Trade.
When the company has a high potential of profit, the company's Article of Association must be co-signed by a lawyer, which shall be responsible for the incorporation of such company (see article 36 of Decree n. 1.800, of January 30, 1996).

1 day R$75 registration + R$50 (expediting fee)
4 Register for federal and state tax (Secretaria da Receita Federal do Ministério da Fazenda, SRF/MF) to obtain the CNPJ number and state tax number , which also registers employees with the National Institute of Social Security (Instituto Nacional da Segur

For registering a company before the Institute of Social Security (INSS), it is necessary to present to the INSS the company's Articles of Association registered before the Register of Commerce of State of São Paulo and the CNPJ Certificate.

The Normative Rule (IN) n. 748, of June 28, 2007 was revoked and substituted by the Normative Rule n. 1183, of August 19, 2011. In such normative, it is not expressly mentioned that relevant companies shall obtain licenses from CETESB and/or Sanitary Surveillance Department. Furthermore the Resolution SF/SMA 1 of November 27, 2009 is the normative regulation that determines the need of obtaining the Installation License in order to the company to obtain the taxpayer's registry and also establishes which activities are subject to the environmental licensing before being rendered with the taxpayer's registry number.

The Normative Rule no. 1,006 was replaced by Normative Rule no. 1,087, dated November 29, 2010, which updates the "Programa Gerador de Dados (PGD, which updates the Programa Gerador de Documentos do Cadastro Nacional da Pessoa Jurídica (PGD CNPJ). Indeed, the registration process is sinchronized only across the Brazilian Federal Revenue Services and the State Tax Authorities. The Municipality of São Paulo has not been included in this process yet.

The registration process was synchronized across the federal revenue and tax authorities of both the state and the city of São Paulo, which allows the sharing of company registry data. When the company requests the CNPJ number, the SRF/MF, via an internal system, informs the tax authorities of São Paulo of that request. Once the company obtains registration in the CNPJ registration, its legal representative visits the Office of Federal Revenue to confirm the information contained in the forms presented to Secretaria da Receita Federal do Ministério da Fazenda (SRF/MF1).

State tax authorities schedule an official inspection of the company's head office before approving its registration. Registration of businesses before the SRF/MF (to obtain the CNPJ number) and before the tax authorities of the state of São Paulo is done simultaneously.
Between 15 to 25 (including inspection visit) no charge
* 5 Receive state tax inspection


1 day (simultaneous with procedure 4) no charge
6 Register with the Municipal Taxpayers’ Registry (Secretaria Municipal de Finanças) of the City of São Paulo

The municipal taxpayer enrollment is made through an electronic form that is filled online on the website of the City Hall (www.prefeitura.sp.gov.br). The information concerning the facility in which the company is located, described in the IPTU, is required in order to fulfill the electronic form on the web site of the Municipal Treasury Affairs.
5 days no charge
* 7 Pay TFE to the Municipal Taxpayers’ Registry

The proof of payment of the location, installation, and operation tax (TLIF) has been replaced by a new tax, the taxa de fiscalização de estabelecimento (TFE). The main difference between the TLIF tax and the TFE tax is the basis for the annual rate: The TLIF is based on the company’s number of employees, and the TFE is based on the company’s corporate purpose.

According to the Municipality of São Paulo's rules, the annual cost of the TFE is based both on the company's activities as well as on the company's number of employees (www.prefeitura.sp.gov.br). The annual rate of the TFE, for the fiscal year of 2012, varies from R$ 108.66 to R$ 20,024.00.

Once the company has been registered with the Secretaria Municipal de Finanças, it shall pay an annual fee for the control and fiscalization of the compliance with municipal laws. This payment is due on the tenth day of the second month following commencement of company operations. The TFE tax is related to the operations permit (alvará de funcionamento).
1 day (simultaneous with previous procedure) R$ 425.46 (for retailing business), may vary in accordance with the company’s activities
8 Apply and obtain digital certification (token) for the use of e-invoice

The costs involved in the obtainment of digital certification may vary according to the accredited certifying authority chosen by the applicant. The information on how to obtain a token is available here.

 2 days The cost may vary from R$ 450.00 to R$ 600.00
9 Apply to the municipality for an operations permit (auto de licença de funcionamento)

After registration with the Secretaria Municipal de Finanças, the company has 30 days to apply for the operations permit by filling out the proper forms and submitting the required documents. The operational license is a prerequisite for the company to begin operations. However, because of practicalities and the long processing time to obtain the license, municipalities have permitted companies to operate provided that they pay the TFE. The municpality conducts ex-post inspections to certain companies, using a random sample.

The operational license must be requested through the website of the Municipality of São Paulo (here), and in case of possible errors or demands, one should proceed to the attendance desk at the corresponding Municipality desk. The Municipality charges the taxpayers a small fee corresponding to 1 UFM, administrative fees and bank charges (here)
90 days no charge
* 10 Register the employees in the social integration program (Programa de Integração Social, PIS)

After duly registering the new hire in the employee registry book (livro de registro de empregados), the employer must proceed to register the employees in the social integration program (Programa de Integração Social, PIS/PASEP). The PIS/PASEP registry is intended to identify the worker in order to establish an unemployment guarantee fund (FGTS) account, to request unemployment insurance, and to be entered in the National Registry of Social Information (Cadastro Nacional de Informações Sociais).

The employee must thus be registered into the PIS/PASEP to not only set up an FGTS account but also to be eligible for unemployment insurance, if necessary. To register the employee, the employer must complete a PIS/PASEP registry form (documento de cadastramento do trabalhador, DCT), to be delivered to the federal savings bank responsible for the FGTS account. The enrollment is completed in about 5 to 10 business days from application if all enrollment requirements are met. The employee is enrolled with the Social Integration Program (Programa de Integração Social, PIS) upon entry, and if the employee has already a PIS/PASEP registry, the employer must only inform the Federal Savings Bank of the new employment relationship. The employer will obtain the receipt of the application to PIS within 15 days.
1 day, (simultaneous with procedure 10) no charge
* 11 Open a special fund for unemployment (FGTS) account in bank

After duly registering the new employees in the social integration program (Programa de Integração Social, PIS/PASEP), the employer must open an Fundo de Garantia por Tempo de Serviço (FGTS account for each employee). To open the account, the company's representative or attorney-in-fact must go to any local branch of the federal savings bank (Caixa Economica Federal) with a copy of the company's taxpayer registry number (CNPJ/MF), the adhesion form issued by the Federal Saving Bank (Caixa Economica Federal), the list of employees, and the company's articles of association or bylaws. Upon opening the employee FGTS accounts, the company will make monthly deposits equal to 8% of the total payroll. The employees are entitled to withdraw those deposits for specific events provided by law (termination without cause and serious disease or disability, among others).

A new online procedure (Sistema Empresa de Recolhimento do FGTS e informações à Previdência Social, SEFIP) was developed to speed up FGTS payment and information exchange between the employer and the federal savings bank. SEFIP can be accessed through the Federal Savings Bank’s Web site. This procedure permits the online transfer of data, creating a company file with all information required by the FGTS and Social Security. After the referred data transmission, the program issues a tax payment form (guia de recolhimento do FGTS) necessary for employer contribution payment.
1 day, (simultaneous with procedure 10) no charge
* 12 Notify the Ministry of Labor (Cadastro Geral de empregados e desempregados, CAGED)

Pursuant to Law No. 4.923, dated as of December 23, 1965, the employer must inform the Ministry of Labor of any new hires or employees dismissals. The CAGED shall be transmited only by eletronic means to the Ministry of Labour and solely by exception it can be delivered in magnetic means at the Regional Agency of the Ministry of Labour (Superintendência Regional do Trabalho e Emprego).     
1 day,(simultaneous with procedure 10) no charge
* 13 Registration with the Patronal Union and with the Employees Union.

Pursuant to labor law, registration with the employees union is mandatory and ensures that the company is obeying employee labor rights. Each municipality and state must have unions that represent the activities performed by the company. Once a year, employees and employers must contribute to their representative employee unions and employer associations an amount equivalent to one day’s salary (regardless of whether they are affiliated to the union or association). The employer must withhold this amount from the employee’s pay and send it to the respective union by March of each contribution year or upon hiring the employee. As a result, the company must check each new employee’s employment booklet to verify whether any union contributions have been recorded for the year of hire. If not, the company must discount the union contribution from the employee’s pay at the end of the first month after hire and must forward the contribution to the employee’s union.

The payment of the company’s contribution to the employer's association shall be proportional to the company’s corporate capital. Payment is due every January, except for the first payment, which is due in the month of the company’s registration. The time may vary for each employers union and employees union.
5 days, (simultaneous with procedure 10) Annual fee to be paid depending on the Union.
* Takes place simultaneously with another procedure.
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