New data released by the Brazilian Institute of Geography and Statistics shows that Brazil had 13.2 million individual micro-entrepreneurs back in 2021 — just over half of them (50.2 percent) worked in the services sector.
According to the IBGE, over 9 percent of MEIs registered in 2021 were made up of hairdressers, with another 7 percent working as clothing salespeople.
Established by law in 2008, the concept of the Individual Micro-entrepreneur (MEI) emerged to facilitate the formal inclusion of millions of Brazilians who were previously working informally. Those who register as a MEI become legal entities, enabling them to issue invoices, acquire business permits, and contribute to social security — while enjoying special tax conditions.
Since the 2017 labor reform, which freed up companies to outsource work for their core activities, the number of MEIs has skyrocketed in Brazil. New yearly registrations went from just over 1 million in 2017 to nearly 3 million in 2021.
The proportion of micro-entrepreneurs among the total employed population grew from 3.5 percent in the last quarter of 2015 to 5.1 percent in the third quarter of 2022. Data from Serasa Experian indicates that 75 percent of new companies that opened in Brazil in the first four months of the year were MEIs.
The Brazilian government wants to raise the MEI revenue threshold from BRL 81,000 to BRL 144,000 and permit entrepreneurs to have two employees instead of one. But economists say the move would not help the intended demographic.
Research by Fernando Veloso, Fernando de Holanda Barbosa Filho, and Paulo Peruchetti — members of the Brazilian Institute of Economics at think tank Fundação Getulio Vargas — shows that today’s MEIs differ from the initial target audience of the program.
A story by business reporter Diogo Rodriguez shows that MEIs “are much more educated than the group the program was initially designed for,” as explained by Fernando de Holanda Barbosa Filho. According to him, “the micro-entrepreneur program was designed to assist vulnerable workers and include them in the social security system.”
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