For many, opening a business in Brazil is a practically impossible task.
Bureaucracy, inefficiency and the large number of stages and fees cause many people to give up on opening their own business, or at least regularizing it.
To address this situation, especially for self-employed professionals, the MEI was created, a government program that allows for the registration of companies in a more simplified manner.
Still, the program is at the center of many questions about how to ensure that the business remains fully compliant with the law.
If this is your case, don’t worry, because below we will answer your questions about entrepreneurship and about individual microentrepreneurs. Keep reading!
What does MEI mean?
MEI is the acronym for Microentrepreneur Individual and is a program created with the aim of promoting the regulation of self-employed professionals.
Before the creation of the MEI, self-employed professionals encountered many difficulties in regularising their professional activity and, therefore, many lost the opportunity to act in a completely regular manner.
With the creation of this program, everything became easier. Registration can be done without intermediaries and the transfer of CNPJ (registry managed by the Federal Revenue Service of Brazil that records the cadastral information of legal entities) occurs automatically after approval.
In addition, the individual micro-entrepreneur pays all his/her tax obligations in a single document, which makes life easier for those who have small businesses.
How to become an MEI?
To become an MEI, registration is done online through the Entrepreneur Portal .
After entering your CPF and date of birth, you will be redirected to another page where you must enter your RG number, voter registration number, or the number of your last Personal Income Tax Return (DIRPF) if you are not exempt.
After that, you will be taken to an area where you fill out information about your company, in order to obtain the CNPJ.
It is very important to be careful and go to the Municipal Hall before registration.
For those who intend to work from home , it is necessary to make this enquiry in order to obtain the authorisation to carry out the activity according to the area. Depending on where you live, the activity you intend to carry out and the municipal regulations, it may or may not be possible to work from home.
Street vendors and owners of small establishments must contact the Municipality to obtain an operating license, usually in the form of a licence.
With all this regularized and with the registration as MEI complete, you must print the MEI Simplified Collection Document (DAS), which allows payment of the amounts due.
It is also necessary to print the Individual Microentrepreneur Certificate (CCMEI) and the CNPJ card along with the Federal Prescription.
What types of businesses fit as MEI?
Before talking about the possible activities for an MEI, it is important that you know what the rules are for participating in this program.
In order to deserve the name of the program, it is required that the MEI does not have any partners.
Furthermore, the MEI cannot be the owner of another company and the activity that will be carried out by him must be different from that which he carries out if he is employed under CLT (Consolidation of Labor Laws) conditions.
Regarding billing, the current limit is R$ 60,000 gross annual billing, which corresponds to a maximum of R$ 5,000 per month. However, there is a proposal being processed in the National Congress that aims to increase this limit to R$ 72,000 per year, or R$ 6,000 per month.
In relation to the number of employees, a MEI type business can have a maximum of one employee under the CLT regime.
Once these conditions have been met, it is necessary to keep in mind which activities are permitted by the program.
Some of the most common activities that are allowed by the program include:
●Artisan
●Merchant at stall
●Hairdresser
●Merchant of various products
●Day laborer domestic employee
●Sweet
●Editor of books, magazines or newspapers
●Electrician
●Manufacturer of various products
●Photographer
●Miscellaneous products lessor
●Manicure
●Painter
●Maintenance technician in various areas
●Cargo transporter, among others.
Other activities are not planned in the program.
Graphic design and translation are just two activities that are not on the list of permitted activities, which means that anyone wishing to open a business based on these activities needs to choose other regularization options.
The complete list of all permitted activities can be found on the Entrepreneur Portal website .
What are the advantages and disadvantages of being an MEI?
By the end of 2015, the MEI program had nearly 6 million members after growing by more than 20%. This is largely due to the program’s advantages, which include points such as:
Ease of compliance with legal obligations
The MEI is the simplest way to become an individual entrepreneur and, above all, to formalize your business before the law.
The payment for the single guide is R$ 45.00 for the area of commerce or industry, R$ 49.00 for the provision of services and R$ 50.00 for the area of commerce and services.
These values include the guarantee of payment of all taxes, contributions to the INSS and maintenance of the regularity of the business.
Another important point of this regime is that there is no opening fee, apart from the payment of the DAS itself. With this, it is possible to regularize the business cheaply.
Accounting made easy
All this ease translates into accounting that is simpler than any other option.
Generally speaking, the Individual Microentrepreneur does not need to do formal accounting, such as keeping a journal, for example.
It is recommended that the MEI keep all invoices and maintain control, including financial control, of what it buys and sells.
Regarding the declaration for the Federal Revenue, the MEI only needs to make the simplified declaration with the value of the billing of the previous year.
Monthly, the submission of the Monthly Gross Revenue Report is required by the 20th, indicating all receipts with invoices issued and received.
Provides more security for the business
Another very important advantage is that by becoming an Individual Microentrepreneur, you will also increase the security of the business.
With the entire situation regularized, there are no problems with the inspection, which could lead to the seizure of goods, fines or impediment to carrying out the activity.
Issuing invoices increases security, not only for the business owner but also for customers, which helps improve the perception of the business and its subsequent growth.
Guarantees important rights
One of the biggest problems for those who work informally is the lack of rights. Without contributions to the INSS, it is not possible to retire under Social Retirement or receive maternity assistance, for example.
The MEI is here to help. By participating in the programme, micro-entrepreneurs are guaranteed these important rights. By making a minimum contribution for 180 months and at the appropriate age, the MEI can retire on a minimum wage.
The entrepreneur can now receive maternity assistance if she is up to date with her DAS payments and has a minimum of 10 months of contribution waiting until the time of birth or adoption. The benefit will be paid by the INSS for 120 days.
Low billing limit
The maximum annual billing limit of R$ 60 thousand is quite restrictive for many activities.
Some entrepreneurs meet all the requirements to be MEI, but are prevented from participating due to billing.
With inflation and interest rates, the value of the frozen billing limit is considered a disadvantage and a barrier to formalization, since in this case the entrepreneur needs to adopt other more complex frameworks.
Limited options for activities
Another disadvantage is that the options for businesses that can be MEI are still relatively limited.
Many businesses that have emerged since the creation of the MEI are not on the list of permitted activities, which complicates the lives of micro-entrepreneurs in general.
Limitation on business growth
One of the biggest disadvantages of this program is the limitation on business growth.
Since it can only have one employee, the business cannot have partners or subsidiaries.
With this, growth or inclusion in the program become antagonistic.
In order not to compromise business development, this feature forces entrepreneurs to change their tax regime, which can become a headache if it is not done with the help of good accounting professionals.
5 tips to become a successful MEI
To become an MEI without complications and with great opportunities for success, it is important to plan and prepare.
With these tips, it will be much easier to become a market-ready MEI and recommendations include:
If your business is going to open soon, you need to plan not only to establish yourself in the market, but also to become an MEI.
This is because in addition to choosing the main activity, you will also be able to define the secondary activity for the framework and this requires a lot of knowledge of your business.
Taking this precaution is especially important croatia mobile database to prevent your business from engaging in an activity that is not planned and/or not registered in the land registry, which could force your business to close its doors.
Consider having the help of professionals
It is true that the MEI is a very simplified program for registering and formalizing a business and practically anyone can register on their own.
However, this does not mean that you should disregard any help.
A professional will be able to guide you through this entire process and ensure that your business benefits.
For this reason, it is worth considering looking for an accountant or accounting office specialized in MEI so that you can clarify all your doubts and receive the necessary help to succeed in the entire process.
Learn about your city’s legislation
The MEI is a federal program and, naturally, has national scope.
However, this does not mean that local laws of municipalities should be disregarded. For this reason, in order to become a successful MEI, it is essential that you thoroughly know the legislation practiced by your city.
In this way, you will discover which activities are christmas campaigns only with sendpulse create effective email permitted and which are not, as well as knowing the requirements related to obtaining an operating license.
Don’t rule out the possibility of using financial control tools
It’s not because MEI has simpler accounting that means you can throw out all business control.
Even if you don’t need to keep a journal, it’s important to know what your business’s income and expenses are.
Thus, using cash flow statements, financial statements, and separating personal accounts from business accounts are effective ways to ensure your business can succeed.
Closely monitor business development
If you do everything right with your business, it is quite likely that being an MEI will be just a transitional period in your entrepreneurial career.
With more success and growth, your business will no longer be subject to the MEI conditions, making it necessary to change to another regularization and taxation regime.
If you do not pay attention to the development of your business, two things can happen: first, your business can become irregular and bring risks to your performance; second, growth can be impeded, causing you to lose good business opportunities.
It is very important to closely observe the eu phone number business’s progress in order to correctly identify when it is time to change the regime, allowing growth and regularization to go hand in hand.
Clarifying doubts about becoming an MEI is very important because only then is it possible to decide if that is the best option for your business and, if so, how to proceed to obtain registration.
Ultimately, it will be easier to have a regular business ready to grow and develop in the market.
