Brazil: Nearly 4 million new businesses opened in 2021

RIO DE JANEIRO, BRAZIL – The opening of small businesses in the country reached a record last year, according to a survey published by the Brazilian Micro and Small Business Support Service (Sebrae).

In 2021, more than 3.9 million entrepreneurs created micro and small businesses or registered as individual microentrepreneurs (MEI).

This number represents a 19.8% growth compared to 2020, when 3.3 million businesses were opened. Compared to 2018, the expansion reaches 53.9%. This year, 2.5 million national registrations of legal entities (CNPJ) were created.

According to Sebrae, the pandemic has forced many people to become entrepreneurs out of necessity, while encouraging the search for this way of life out of necessity. The agency estimates that the growth trend will continue in the coming years.

The Global Entrepreneurship Monitor report estimates that by 2020, 50 million Brazilians who are not yet entrepreneurs plan to open their own business in the next three years.

Of that total, one-third would have the pandemic as their primary motivation, but two-thirds would have a “natural” tendency to be entrepreneurial. The report was produced by Sebrae and the Brazilian Institute for Quality and Productivity (IBPQ).

MICROENTREPRENEURS

Sebrae attributes the increase in business creation to the reduction of bureaucracy through the 2019 Economic Freedom Law, the integration of chambers of commerce, and improvements in the simplified electronic registration of new businesses.

Of particular note is the consolidation of the legal figure of the individual microentrepreneur (MEI), which accounted for 3.1 million business startups last year, or 80% of the total. In 2018 and 2019, this category accounted for 75% of business startups.

In 2021, 682.7 thousand microenterprises were opened (17.35% of the total), with a turnover of up to R$ 360 thousand per year, a record in the historical series for this segment. A total of 121,900 small businesses (2.65% of the total) were created. This category includes companies with annual sales from R$ 360 thousand to R$ 4.8 million.

The opening of microenterprises has steadily increased over the years. From 540,600 in 2018, the number increased to 579,300 in 2019 and 579,500 in 2020. For small businesses, the total number increased from 75,000 in 2018 to 94,300 in 2020.