Happy Friday! Today, looking behind the curtain on Brazil’s new business figures. Federal Police set their sights on Bolsonaro’s social media in fake news investigation. Galeão Airport causing headaches for the government and Rio.
Brazil’s entrepreneurial boom is misleading
The Economy Ministry reported that Brazil broke its record of new companies setting up shop in a single year, with over 4 million entities appearing in 2021. That is a 20-percent bump from the previous year.
Spin. The government celebrated the figures as “the byproduct of a more dynamic and less bureaucratic business environment.” The truth, however, is less rosy. Over 3.3 million businesses created in 2021 were individual companies.
Why it matters. Individual companies are usually a ruse businesses use to hire staffers without actually entering a formal employment relationship, thus remaining exempt from offering certain labor rights and benefits. Instead of hiring a person, firms will contract members of staff as individual companies.
- This is due to formal hiring remaining very expensive in Brazil; most companies can’t afford all the standard obligations that come with contracting employees.
- Brazil has seen a boom in individual companies over the past decade. Not coincidentally, the 2010s were Brazil’s worst decade...