On August 26, 2021, the Federal Government sanctioned Law No. 14,195/21 (“New Business Environment Law”), whose main purpose is to amend and revoke some acts to reduce bureaucracy and to bring innovations to the business process in Brazil, aiming to make the country advance at least 20 positions in the World Bank’s Doing Business ranking.
The main measures of the New Business Environment Law include:
- Facilitate the opening and operation of companies: the competent bodies and authorities must implement the changes within 60 days as of the New Business Environment Law’s publication. Among them, (A) the automatic granting, without human analysis, of business operating licences and other documents to companies classified in low/medium-risk activities; (B) the unification of fiscal registries at federal, state and municipal levels in the National Register of Legal Entities (TaxPayer’s ID); (C) the electronic summoning of legal entities; (D) the ending of requirement of residency for foreign administrators, upon granting an attorney-in-fact resident in Brazil with powers to, at least three years after the end of the administrator’s management; (E) the adoption of digital books; (F) greater freedom for operating hours; (G) the removal of the requirement of physical establishment to run the business activities, which can be a virtual address.
- Creation of Plural Vote (super voting shares): mechanism originating from the legislation of the United States of America, it is now allowed in publicly-held or privetely-held companies. A share with plural vote allows its holder to guarantee shareholding control of the company even if its participation in the capital stock is less than 10%, whose creation depends on the aproval of an absolute majority of the shareholders.
- EIRELI corporate type is extinguished: All the Individual Limited Liability Companies in operation actually will be transformed into Sole Partership, a corporate type that does not require the payment up of a minimum capital stock at the moment of opening the company.
- Easing of Foreign Trade: simplification of licenses, authorizations and administrative requirements, such as prohibiting agencies and entities of public administration from requiring documentation other than through a single electronic ticket, upon the standardization of payment of international trade fees and the abolition of SISCOSERV, integrated information system of the Ministry of Economics, which consisted of the obligation to record information related to transactions carried out between residents or domiciled in Brazil and residents or domiciled abroad with related to services, intangibles and other operations that produce variations in equity individuals or legal entities.
It is also noted that the Country is undergoing a transformation that aims the facilitating and simplifying the business environment and, in this sense, Santos & Santana, through its Contracts and Corporate legal team is available for any questions, updates or clarifications about the matter in the following e-mail: [email protected].
Lucas Domingues do Lago and Ana Huang, specialized lawyers in Contract Law and Corporate Law.