Tax changes in Brazil lead to double-digit angel investment growth

Brazil is not the easiest place to be an entrepreneur. The excessive amount of regulation and taxes can sometimes overburden a business – particularly a small one. Recently, though, Latin America’s largest economy has reduced taxes on small businesses, which has led to an explosion of investments in startups, particularly through angel investment. According to a study by Anjos do Brasil, a network to stimulate new business in Brazil, this type of investment rose by 16 percent last year, amounting to an all-time record BRL 984 million.

The average annual volume per investor also increased, reaching BRL 129,000 (or USD 32,428). While that number remains much lower than in the U.S., where each angel investor invests an average of USD 82,000, it has surpassed Europe, where the average is USD 25,000.

But reduced taxation is not the only driving force behind the growth in angel investment, as Cassio Spina, the president of Anjos do Brasil, explains. The very nature of angel investment helps to explain its upward trend despite the crisis. According to Mr. Spina, this is a type of investment which looks toward the long-term, and is therefore less subject to short-term fluctuations that the...