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News - 24/05/21

Brazilian Legal Framework for Startups is approved by the Chamber of Deputies

On 05/11/21, the Brazilian Chamber of Deputies finished the voting process on the Complementary Law Project 146/19 (PL nº 146/19), the Legal Framework for Startups, which has the power to significantly impact the Brazilian business environment. The amendments proposed to the project by the Brazilian Senate were substantially accepted, 7 out of the 10 amendments were approved. The bill is pending on presidential approval for its final version to be published.

The discussion regarding the drafting of the project on the topic began in 2019, and included the development of two versions: (i) the proposal made by parliamentarians (PL nº 146/19), and (ii) the one presented by the Ministry of Science, Technology and Innovation (PL No. 249/20).[1] The two proposals were consolidated in December 2020 and the resulting text was sent to the Brazilian Senate analysis, which proposed 10 amendments to the draft. The Chamber of Deputies approved 7 of the 10 amendments submitted by the Federal Senate.

The definition of Startup, as proposed by the Legal Framework, consists of companies and cooperative societies operating in the area of ​​product, service or business model innovation. In this sense, some requirements must be met for the company to be considered a startup: having gross revenue of up to R$ 16 million in the previous year, having up to ten years of enrollment with the CNPJ (national register of public entity), declaring in its constitutive act the use of innovative models or that it fits into the special regime of Inova Simples, provided for in the Brazilian Micro and Small Business Statute. If the company chooses to follow the path of enrolling to the Inova Simples regime, it will be limited to the gross revenue of R$ 4.8 million, a requirement imposed in the mentioned Statute.

The main themes regulated by the project are: (i) the definitions, principles and fundamental guidelines (section that prescribes the concept of investidor anjo – angel investor – and the experimental regulatory environment – regulatory sandbox), (ii) rules for framing companies as startups, (iii) innovation investment instruments, (iv) fostering research, development and innovation, (v) experimental regulatory environment programs (regulatory sandbox); and (vi) the hiring of innovative solutions by the government.

 

 

[1] We published an article addressing the main point proposed by PL nº 249/20, which is available at: http://depauladias.com/publications/brazilian-legal-framework-for-startups-and-innovative-entrepreneurship-understand-the-main-aspects-of-draft-bill-no-249-2020/?lan=_en