Monday, 14 July 2014

Starting a business in São Paulo : To register or not to register?

In a scale that ranks economies based on ease of doing business, Brazil is ranked 116 out of 189 (1). If you are going to set up a business here you need to be prepared for the weeks, months or years that something simple (yes, like opening a bank account) can take, or firing a registered employee (which I'm currently going through) or getting paid by a client or just getting some business cards made here (that don't cost an arm and a leg)!!! Patience is not one of my top virtues but it is such an essential one that I have been learning in my time here in Brazil.

If you are passionate about your amazing business idea, have lots of patience, keen to learn and adapt yourself to the culture here (I was very quick to learn that things were never going to happen the way I wanted them to happen) then this roller-coaster ride of setting up and running business here in São Paulo is just the thing for you.

My first start up business was registered in London (that took 1 day to register, 1 week to set up a bank account); I've registered my Cupcake business here in São Paulo (that took 4 months before I got my CNPJ / tax number, and 2 months to set up a bank account) ; I've run events (SP Night Market, Social, Connect) unregistered but any corporate accounts can be run through our accountants CNPJ. But for this blog I'll be focused on my Cupcake business which I registered over 1.5 years ago here in São Paulo,  set up a bank account, hired and registered staff and now in the process of firing one.


To register or not to register
The bureaucracy of registering your company is something that you want to put off a long as possible. Until you know that your business is on the up and up, and you need to hire officially and issue nota fiscals I would hold off on registering your business.

If you do want to register your start up business - say, it's a service like photography or consultancy - and you need to issue invoices (nota fiscals) then your best bet is to register your company as a Microempreendedor. It's similar to being self-employed where you do not need to register all your receipts; you agree that your expenses will having a ceiling of X (will check this figure and get back to you). You can register via the site here or you can even go in person to Sebrae which is a great source of information particularly if you need to know about legalities, paperwork, laws that might affect your particular business - essential to speak Portuguese. You do not need to make an appointment. The monthly fee for registering as a Micro-empreendedor is R $36,20 per month and taxable earnings are limited to R$60k and you can only hire 1 employee.

From my experience I have learnt that paid advice is worth it - as long as you're getting good advice! We tried to do our visas ourselves with cheaper agent and it was a nightmare, crying after each visit to the Policia Federal so after 4 years here in Brazil I am very happy to pay our accountant for sound, legit advice. I hired him to help me set up my Limited company here - I didn't want to be limited to R$60k per year, and just 1 employee - so I can't give you the how-to-set-up list myself as he did everything but at minimum you must have Permanent Residency (which we got through having a baby here, or you can also get through marrying a Brazilian), and recent proof of address. Be prepared to have a million copies of everything made, and cartorised. I highly recommend first going to get your signature registered at a local cartorio and if you need to get your documents authenticated take a baby / small child with you to skip the queue - or if you have no access to one, take your Portuguese homework to do while you wait in queue.

Another option, as a non-Brazilian is to set up your company and enter the country on an investor visa which was our first visa. I can highly recommend agents and lawyers to help you through this process. I believe the investment fee is still a minimum of $R$150,000, and the business must employ   more than 10 Brazilians within 5 years of being operational (2).


I'll cover a few more topics in my blog over the next month:

To hire or not to hire

Banking: Opening an account

Website & Marketing

Networking

Co-working spaces/ Coffee shops for working


1. http://data.worldbank.org/indicator/IC.BUS.EASE.XQ
2. Will confirm this numbers shortly with agent

8 comments:

  1. Without a doubt Brazil has margin for improvement in the ease of doing business. Looking at the study I was shocked at how many EU countries were ranked so low.

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  2. Now there's an idea. Sao Paolo is an enticing jurisdiction. That's a whole new market you are opening up for yourself, for any trade you may partake in, and it's a whole new market you can seize and occupy for yourself. For as long as you truly market the most out of your products, I don't see how anyone can miss on the action and not make your trade work. Good luck!

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