Measures to eliminate red tape for doing business in Brazil could soon come into force, with a new statute only awaiting senate approval after recently clearing the lower house.
The Business Environment Statute aims to establish a new legal framework for doing business in the South American country, which will have important repercussions for company formation in Brazil, as well as patents and trade names. The Brazilian senate has until August 9 to analyze and deliberate on the measure.
The framework is an initiative from the country’s Ministry of Economy, intended to cut bureaucracy and improve legal certainty, while also modernizing the operational landscape for doing business in Brazil.
Among the intended benefits for business in Brazil are increasing the ease with which companies can be established, bolstering foreign trade and asset recovery, and better protecting minority shareholders.
The Statute promises to significantly affect patents and trade names in the business in Brazil, with the measure revoking Article 229-C of the Patent Statute and handing oversight of pharmaceutical invention patents to the National Health Surveillance Agency (ANVISA). This will reduce serious backlogs at the Brazilian National Institute for Industrial Property (INPI).
The measure will also remove Article 40 of the Patent Statute, which states that a 20-year patent term — which begins when an application is filed — cannot be less than 10 years from the patent grant. Article 40 was introduced in 1996 to compensate for major delays in examining patent applications seen at INPI.
With regards to trade names, the Statute establishes that the Brazilian Registry of Commerce and other registration bodies must inform a newly set up company of the availability of a trade name, and prevents the registration of a company with a trade name that is already in use by another entity.
Under the measure, conflicts between entities over a trade name must be settled by the Ministry of Economy’s National Department of Business Registration and Integration.
It also allows a legal entity to trade under its Brazilian taxpayer number.
New measure latest to promote innovation
Anyone running a business in Brazil will welcome the new measure or planning to enter the market. The country is well-known for having one of the longest processes for company formation in the region, and any measure to streamline business formation will be good for promoting commercial activity.
According to the World Bank, the country ranks 124th globally for ease of doing business, earning a mid-range score of 59.1 in 2020. While the country ranks well in terms of starting a business — earning a score of 81.3 — some administrative processes, such as paying taxes, are known for being more difficult.
The Business Environment Statute is also joined by a recently introduced Legal Framework for Startups and Innovative Entrepreneurship, which aims to facilitate the establishment of new business in Brazil and promote innovation.
That framework promises to increase available resources and funding to new startups while creating a regulatory sandbox intended to promote innovation by creating a more streamlined and responsive regulatory environment.
Biz Latin Hub can help you doing business in Brazil
At Biz Latin Hub, our multilingual team of corporate support experts has the skills and experience to assist you in doing business in Brazil. With our complete portfolio of back-office services, including company formation, legal, accounting, and recruitment services, we can be your single point of contact for entering and doing business in Brazil or any of the other 18 markets around Latin America and the Caribbean where we have teams in place.
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