Brazil: Operating a business

Sociedade de Responsabilidade Limitada (SARL): Limited Liability Company

Number of partners: 2 partners minimum.
Capital (max/min): No minimum capital requirement.
Shareholders and liability: Liability is limited to the amount of capital contributed. Partners are also jointly liable for the company's commitments within the limit of the capital remaining to be paid up.

Sociedade Anônima (SA): Public Limited Company.

Number of partners: 2 partners minimum.
Capital (max/min): No minimum capital requirement.

10% minimum of the issue price of the subscribed shares must be paid up in cash.
Shareholders and liability: The partners' liability is limited to the amount of capital contributed.

General Partnership

Number of partners: 2 partners minimum.
Capital (max/min): No minimum capital requirement.
Shareholders and liability: The partners' liability is limited to the amount of capital contributed.

Sociedade em Comandita Simples (SCS): Limited Joint-Stock Partnership

Number of partners: 2 partners minimum.There are two types of partners - active partners and the silent partners.
Capital (max/min): No minimum capital requirement.
Shareholders and liability: The liability of the active partners is unlimited. The liability of the silent partners is limited to the amount of capital contributed as long as they do not participate in the management of the company.

Business Setup Procedures

The Competent Organisation

All necessary information is on the SEBRAE website. It is also possible to make an application for registration by Internet. It is advisable to call on a lawyer for assistance.

For Further Information

Consult Doing Business Website, to learn more about procedures to start a business in Brazil
Register of Commerce

Financial Information Directories

Dun & Bradstreet - Worldwide directory with financial information on businesses

Kompass Brazil - Business directory for Brazil

Recovery Procedures

Principle

Law 11 101 of 2005 simplified bankruptcy, recovery and repurchasing procedures in order to favor creditors and credit fluidity. The new system enables minority creditors who are too insistent to be marginalized and favors dialogue between debtor and creditor in order to perpetuate the activity of the company. The priorities in reimbursing debts in the case of bankruptcy are according to several categories: the employees (within a limit of 150 salaries minimum), then the fiscal administration, then the other creditors according to the preferential rank given to their claims.

Minimum Debt-to-Capital Ratio Triggering Liquidation

A creditor or an association of creditors can claim bankruptcy if the debtor cannot reimburse his debts at the required date, from an amount equivalent to 40 salaries minimum.

Bankruptcy Laws

LEI N o 11.101, DE 9 DE FEVEREIRO DE 2005. (Law 11.101 of 9 February 2005)

Reorganization and Rehabilitation Laws

Legal and extra-legal stabilizing procedures are always possible. In the first case, under the direction of a judge and with the agreement of some of the creditors (at least 1/3 of the claims in each category and the majority for two of them), all debts are suspended for a maximum of 6 months to leave the debtor company the time to reorganize the payment of its debts. In the second case, there is a simple renegotiation and rescheduling of the debt between the company and its creditors, but it requires the agreement of the creditors who hold at least 60% of each category of debt. The same law as for bankruptcies governs legal stabilizing.

Opening Hours

 

• Legal Weekly Duration

The legal duration is 44 hours, although the norm in Brazilian and foreign companies is 5 weekly working days of 8 hours.

• Maximum Duration

Overtime is paid 50% more than the basic wage. The maximum number of hours per day and/or per week is 2 hours a day, with the agreement of both parties.

• Night Hours

A maximum of seven consecutive hours is allowed in town (from 10 p.m. to 5 a.m.) and height hours in the countryside (from 9 p.m. to 5 a.m.). Hours worked over this are considered to be overtime.

Working Rest Day

Saturday and Sunday.

Paid Annual Vacation

30 days of annual vacation granted at the end of the first year in the job.

Retirement Age

65 years old for men, 62 years old for women.

Child Labour and Minimum Age For Employment

The minimum age for working is 16 and 14 for apprentices.

Pay

Minimum Wage

BRL 1,212 per month ($ 217.18 dollars) since the 1st of January 2022 (Agência Brasil).

Average Wage

Gross average monthly wage: BRL 1,921 in 2021 (FDR)

Other Forms of Pay

• Pay For Overtime

150% of the basic wage.
A maximum of six consecutive hours is allowed. Hours worked over this are considered to be overtime.

• Pay For Rest Days Worked

Considered to be overtime (50% more than the basic wage).

• Pay For Night Hours

In urban areas, there is an increase of 20% within a limit of 8 hours of daily work, equivalent to 7 hours at night (a night hour lasts 52 min 30s). In rural areas the increase is 25%, but the legal limit is 8 hours per night.

• Pay For Overtime at Night

The increase for night work is added to the increase for overtime.

Social Security Costs

The Areas Covered

Social insurance (covering old age, disability, maternity, unemployment), social assistance (for people in situations of increased vulnerability) and health.

Contributions

Contributions Paid By the Employer: Employers are required to contribute 8% of an employee’s wages for the severance fund, 20% to the public pension system, and a maximum of 8.8% for other social security taxes. In some business sectors, the 20% INSS contribution has been replaced by a contribution levied on gross revenue (temporary measure until 31 December 2023) (Deloitte, 2022).
Contributions Paid By the Employee:

Employees contribute 8% to 11% to social security, depending on their salary categories (Deloitte, 2022).

Recruitment

Recruitment Agencies

Brazilian and international recruitment agencies are taking a growing place on the job market.

Recruitment Websites

Recruitment website
People consulting
Jora

The Contract

Dispute Settlement

Social Partners

Social Dialogue and Involvement of Social Partners

Labour unions, especially in sectors such as metalworking and banking, tend to be well-organised and aggressive in defending wages and working conditions. Unions in various sectors engage in industry-wide collective bargaining negotiations mandated by federal regulation. Strikes occur periodically, particularly amongst public sector unions.

The Labour Code prohibits having too many unions for a single profession and in each region. Although the law has not created a central institution representing the unions, four groups have tried to provide this, but without legitimacy: the Unitarian Workers Group (CUT), the General Confederation of Workers (CGT) and the Força Sindical (FS). Some industrial and mining sectors have powerful unions; however, the unions are more or less absent from the rural areas where the great landowners still hold sway.

Unionisation Rate

The Ministry of Labour estimates that there are 15,000 labour unions in Brazil, but these figures are considered by some to be inexact. Labour unions account for approximately 19% of the official workforce according to the Brazilian Institute of Geography and Statistics (IBGE). Union dues are compulsory for all workers in the formal sector and are set at one working day's income per year.

Labour Unions

Unitarian Workers Group
CGT Brazil
Força Sindical