Brazil Registers 1 Million New Small Businesses in 2 Months

Over a Million in Sixty Days

Brazil formalized more than one million new small businesses in the first two months of 2026, setting a record for the period. The figure of 1,033,208 new registrations — covering individual micro-entrepreneurs (MEIs), microenterprises, and small companies — represents a 3% increase over the previous high set in the same January–February window of 2025, according to data from the Federal Revenue Service compiled by Sebrae, the government’s small business support agency.

The three categories of small businesses accounted for 97.3% of all new legal entities created in Brazil during the period. MEIs, which allow individuals to formalize with annual revenues of up to 81,000 reais ($15,500) and a single employee, dominated with 79.5% of all new registrations. Microenterprises, which can earn up to 360,000 reais ($69,000), made up 17%, while small companies with revenues of up to 4.8 million reais ($920,600) represented 3.5%.

Services Dominate, Healthcare Grows

The services sector led new registrations by a wide margin, accounting for roughly 65% of all formalizations in February. Commerce followed at 19.6%, industry at 7.6%, and construction at 6.8%. Among individual micro-entrepreneurs, the most common activities were courier and delivery services, road freight transport, and advertising — categories closely tied to the growth of e-commerce and the gig economy.

For microenterprises and small companies, healthcare services emerged as the fastest-growing segment. Ambulatory care provided by doctors and dentists, combined office and administrative support services, and other health-related activities led new registrations in this category — a trend that analysts link to Brazil‘s aging population, expanding private health coverage, and growing demand for specialized outpatient care in mid-sized cities. Construction-related micro-businesses also posted strong growth, driven by a residential building cycle in secondary urban centers outside the traditional São Paulo–Rio de Janeiro corridor.

The Engine of Formal Employment

The scale of small business formation matters because these firms are the backbone of Brazil’s formal labor market. Sebrae data from 2025 show that micro and small businesses accounted for more than 80% of net formal job creation in the country — a proportion that has remained stable for several years and distinguishes Brazil’s employment dynamics from those of most major economies, where large firms tend to dominate hiring. The MEI category in particular has become a powerful formalization tool, pulling millions of workers out of informality and into the tax base.

The record also reflects policy choices. Brazil’s simplified tax regime for small businesses, known as Simples Nacional, has been progressively expanded in recent years, and the government’s National Export Culture Policy (PNCE) has focused on integrating smaller firms into international supply chains. The Acredita Exportação program, recently approved by Congress, will return the equivalent of 3% of export revenues to qualifying small businesses — a direct incentive to push micro-entrepreneurs beyond the domestic market.

Two Records on the Same Day

Sebrae president Décio Lima framed the results as evidence of resilience among millions of Brazilians seeking economic opportunity even in uncertain times. The record comes alongside a separate milestone announced the same day: Brazil ended 2025 with 29,818 exporting companies, also an all-time high, with four in ten exporters now classified as small businesses. Together, the two reports paint a picture of an entrepreneurial base expanding both domestically and internationally, even as the broader global economy faces disruption from the Iran war, volatile energy prices, and shifting trade alliances across the hemisphere.

This is part of The Rio Times’ daily coverage of Latin American news and Latin American financial news.

For more context, read Brazil’s Morning Call and the Chile IPSA report.