Brazil

How a New Program Is Cutting the ‘Brazil Cost’ for São Paulo’s Entrepreneurs

Starting a business in Brazil takes an average of 100 days. São Paulo mayor João Doria wants it to happen in 48 hours.

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São Paulo mayor João Doria (center)

Marcelo Sasso worked in the finance department of a São Paulo advertising firm, and was good at his job. So good, in fact, that friends and acquaintances often came to him for advice. This raised a question: Why not start his own financial administration and consulting company?

For starters, the risks were daunting. The country was facing an economic crisis, and Sasso had a daughter to support. Plus, there was Brazil’s infamous red tape: Opening a business would take him an average of 100 days, according to the World Bank’s “Doing Business” study. Brazil ranks 175 out of 190 countries, just after Kuwait, in the report’s “starting a business” category.

But then his accountant gave him some good news: The São Paulo city government had launched a program called Empreenda Fácil, or “Easy Business,” to reduce the time it takes to open a business to just seven days.

The program turns what used to be an arduous pilgrimage to various government agencies, all with long wait lists and slow processing times, into one visit to an online portal that integrates federal, state and municipal organs into one place.

Sasso went for it.

“I decided to be brave,” he said. “That’s what entrepreneurship is, right?

Sasso was not the only one to take advantage of the new program. His was one of some 18,000 applications Empreenda Fácil has received since it was launched on May 8, just over a month ago.

São Paulo, Brazil’s most populous city and its undisputed business capital, saw an average of 250 new businesses opened per day under the old system, according to the city government. The new, faster route will likely encourage business creation, said Professor Letícia Menegon, the coordinator of the Center for Development and Entrepreneurship at the Superior School of Advertising and Marketing (ESPM) in São Paulo.

“This can have a significant impact,” Menegon said of Empreenda Fácil. “We’re beginning to shape up to the international standard.”

In this first phase, the program is processing only applications involving businesses that do not require specific licensing. These make up about 80 percent of enterprises in São Paulo. The second phase will include businesses that require extra layers of scrutiny and approval, like hospitals. The third phase will speed up the process for closing businesses. The long-term goal is for an entrepreneur to take no more than two days to open a business.

Automation is key to the program’s success, said Márcio Shimomoto, the president of the São Paulo accountants’ union, SESCON. Because starting a business is so cumbersome, entrepreneurs like Sasso often…

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