Brazil taking away the red tape

According to the World Bank survey comparing 190 countries, Brazil remains one of the slowest and most bureaucratic countries when it comes to incorporating businesses and, not only, running them.

According to the same sources, in 2018 Brazil rose 16 positions from 125th to 109th place in the doing business environment. It was the largest advance in Latin American countries.

However, despite this improvement, we remain at the bottom half of the table, behind countries like Colombia (65th) and Chile (56th). The main reasons for this improvement were the growth of online business environments, especially in the processes of incorporate and registration of new companies (Redesim – Brazil new system).

Among the BRICS’ countries (group of emerging economy countries made up of Brazil, Russia, India, China and South Africa), Brazil is in worst position. The bloc is led by Russia (31st) and followed by China (46th), India (77th) and South Africa (82th). The lead  continues with New Zealand, followed by Singapore, Denmark, Hong Kong and South Korea. The United States remained in 8th place.

The Word Bank annual report count on Albieri and Associates collaboration and measures the impact of laws, regulations and bureaucracy on the businesses’ operations. Among the evaluated items, we can highlight the number of days spent to incorporate a new businesses, paying taxes, obtaining building permits, connecting to the electricity grid and registering a property, obtaining credit and performing contracts and insolvency resolution. The study identified 314 reforms implemented last year in 128 countries for business facilitation. According to the World Bank, these changes enable job creation and stimulate private investment.

In Brazil, the report cited the changes introduced by the labor reform that was approved by the National Congress, the reduction of business incorporation time to 20.5 days (in São Paulo, from 101 to less than 7 days) and greater facilities in obtaining credit and in international trade.

Brazil remains the country where companies spend the major time calculating and paying taxes: 1,958 hours per year on average. In Bolivia, it is 1,025 hours per year and in Argentina, for example, the average time is 311,5 hours / year.

We can also highlight some more dysfunctions and negative points that hinder further progress, such as the amount of taxes in force, the still very high expenditure on the deadline for incorporating and closing companies, the limitations of online access in the most different entities and agencies in all spheres, not counting the number of application filings, paper forms in which each state, municipality or agency have.

To the entrepreneurs it is quite challenging. Simple, efficient, more agile and transparent processes can contribute directly to increased productivity and income in the country. There are some points that can directly interfere with a company’s results on the way to its goals. We can highlight the waste of resources, not knowing how to retain talent and excessive bureaucracy. Knowing how to deal with these issues is critical to leveraging results.

In our next article we will talk about how to circumvent these bureaucratic processes in Brazil through a structured management.