Bolsonaro signs decree to enhance business environment in Brazil

The move aims to raise Brazil's position on the World Bank's ranking

Published in 30/03/2021 - 18:05 By Andreia Verdélio - Brasília

President Jair Bolsonaro today (Mar. 29) signed a provisional presidential decree to modernize and de-bureaucratize Brazil’s business environment, raising the country’s position on the World Bank’s Doing Business ranking. The document includes simpler rules for creating a company, protection measures for minority investors, easier international trade of goods and services, and permits for low-risks construction projects.

By means of ten indicators, the World Bank assesses how easy it is to do business in 190 of the world’s economies. In the latest survey, Brazil ranked 124th.

The decree, the Economy Ministry reported, should push Brazil up 18 to 20 positions on the list. “Having outlined and implemented the measures since 2020, along with the implementation of the decree and its proposal, Brazil, in the short run, may appear for the first time among the hundred best economies for doing business,” the statement reads.

The goal of the Bolsonaro administration is to place Brazil among the 50 best countries for doing business.

The document was signed during a short ceremony at the Planalto presidential palace. The government expects it to be deliberated and approved by Congress still this year.

“These are short-term measures not only crucial to mitigate the impact of the COVID-19 pandemic on the economy, but also urgent, as the legislative changes proposed must be adopted in time to be reflected on the replies to the questionnaire on the first half of 2021 and have its outcome displayed in the World Bank’s report for 2022,” a note issued by the president’s secretariat says.

The measures

When it comes to registering a new firm, the decree unifies fiscal registration numbers at federal, state, and municipal level into a single firm number, “eliminating viability assessment stages—which only exist in Brazil—and making it possible for a company’s name to be checked automatically in seconds,” the ministry stated.

The decree also deals with the protection of minority investors by changing the Law of Joint-Stock Companies, “in compliance with good practices defined by the World Bank.” These changes are believed to increase share-holders’ decision power, including that of minority investors, by extending the deadline for the submission of information for use in a meeting. Also laid out in the text are the enhancement of provisions on communication and the ban on the assignment of too many tasks among the responsibilities of the company’s main director and the chair of the administration board.

On the international trade of goods and services, the text mandates, for instance, that an electronic option must be available for importers and exporters, and stipulates that any requirements based on the characteristics of the goods must be imposed only by law, “modernizing the system for verification of rules on non-preferential origin.”

The presidential decree is also said to bring a new set of norms on the profession of the “public translator and commercial interpreter,” revoking Decree number 13.609, of 1943. “The change de-bureaucratizes the profession by allowing translators to work countrywide and conduct their work electronically, ensuring more legal security to the activity, indispensable to the development of foreign trade and the evolution of Brazil in a number of other indicators linked to the business environment,” the note says.

As for the execution of contracts, the government has instituted the Integrated System for the Recovery of Assets—SIRA in the original acronym—to speed up the collection and recovery of credit. SIRA will be capable of gathering registration data, relations, and property bases of both natural persons and firms to slash transaction costs in the concession of credit by increasing the effectiveness of legal measures involving the recovery of public and private credit.

According to the president’s secretariat-general, the change allows professional councils to take administrative measures for collection, like extra-judicial notifications and keeping a record of insolvents, “contributing to decreasing Brazil’s judicial overload.”

Another topic addressed in the presidential decree concerns the provision of electricity “to speed up certain measures aimed at expanding access to electric energy.” The text proposes solutions to the issue, like setting a deadline for authorities to approve initiatives to expand electronic energy distribution networks.

Translation: Fabrício Ferreira -  Edition: Lilian Beraldo

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