THE PROVISIONAL BUSINESS ENVIRONMENT MEASURE

THE PROVISIONAL BUSINESS ENVIRONMENT MEASURE

SUMMARY
INTRODUCTION
Page 03

Point 1
PROTECTION OF MINORITY SHAREHOLDERS
Page 05

Point 2
END OF THE TIME-CONSUMING LOCAL VIABILITY
Page 08

Point 3
AUTOMATIC LICENSES AND PERMITS FOR
MEDIUM RISK
Page 10

Point 4
CENTRALIZATION AND SHARING
OF INFORMATION
Page 12

Point 5
BUSINESS REGISTRATION
Page 14

Point 6
FUNCTIONING OF FOREIGN
COMPANIES IN BRAZIL
Page 17

Point 7
SIMPLIFICATION OF FOREIGN
TRADE SYSTEMS
Page 19

Point 8
FACILITY TO CONNECT ELECTRICITY
TO ESTABLISHMENTS
Page 23

PBEM • THE PROVISIONAL BUSINESS ENVIRONMENT MEASURE                                                                  03

INTRODUCTION

      The current President of the Republic issued the Provisional
Measure Nº. 1040/2021, known as the “MP” for the Business Environment
or “MPAN”, with the aim of facilitating the opening of companies, favoring
the business environment and improving Brazil’s position in the Doing
Business ranking, of the World Bank. The measure was published in the
Federal Official Gazette on March 30.

        This ranking categorizes 190
world economies according to their
ease of trading, from 1 to 190. A good
position in this ranking means that the
regulatory framework for the business
environment is more favorable for
starting and operating a local company.
Until 2020, New Zealand was ranked in
first place, while Brazil was ranked in the
124th position.

                                                      https://www.doingbusiness.org/en/reports/global-reports/doing-business-2020

PBEM • THE PROVISIONAL BUSINESS ENVIRONMENT MEASURE                        04

      In this sense, the Brazilian Federal Government, when editing the
MPAN, aims, among other objectives, to transform the country into one of
the 50 best economies to do business in the world, in addition to seeking
to modernize the business environment as an economic recovery strategy
post-Covid-19 pandemic.

       The Doing Business report analyzes 10 indicators and the MPAN, in
turn, proposes to improve some of them, with other indicators being the
subject of specific bills, such as the Insolvency Resolution issue, in which
there was a recent reform of the Bankruptcy Law. The MPAN focuses
mainly on the aspects of:

                Opening of companies.

                Foreign trade.

                Protection of minority shareholders. Its innovations
                largely affect what provide the Law Nº. 6404/1976
                (Corporations Law), Law Nº. 8934/1994 (Business
                Registration) and Law Nº. 11598/2007 (“REDESIM”),
                emphasizing that the deadline for adapting of the Public
                Administration and systems adequacy will be 60 days.

       The main topics of change and adaptation by the MPAN are
highlighted below:

Point 1

PROTECTION
OF MINORITY
SHAREHOLDERS

PBEM • THE PROVISIONAL BUSINESS ENVIRONMENT MEASURE                       06

PROTECTION
OF MINORITY
SHAREHOLDERS
Point 1

      Art. 122 was amended to include item X, which adds the following
powers to the General Meeting: to resolve, when dealing with
publicly-held companies, on:

      A
      The sale or contribution to another company of assets, if the
      value of the operation corresponds to more than 50% of the
      value of the company’s total assets included in the last approved
      balance sheet.

      B
      The execution of transactions with related parties that meet the
      criteria of relevance to be defined by the CVM. This widening of
      the Assembly’s competences aims to protect the minority
      shareholder, who now has more participation in decisions on
      these matters.

PBEM • THE PROVISIONAL BUSINESS ENVIRONMENT MEASURE                     07

      Item II of § 1 of art. 124 has also been changed, and now the
deadline for calling General Meetings is 30 days for publicly-held
companies, no more only 15.

       Item I of § 5 of art. 124 has been changed and now the CVM can
“declare that documents and information relevant to the General
Meeting’s decision have not been made available to shareholders in a
timely manner and determine the General Meeting’s postponement for up
to 30 days”. Another protection for minority shareholders, guaranteeing
their access to information before deliberations.

      The insertion of § 3 in art. 138 represents an important advance for
the application of best corporate governance practices, prohibiting, in
publicly-held companies, the accumulation of the positions of chairman of
the Board of Directors and CEO or chief executive officer of the company,
except if expressly permitted by CVM in companies minors. The
participation of independent directors on the Boards of Directors of these
companies is now also mandatory.

      WITH THESE CHANGES, IT IS
      BELIEVED THAT THE CAPITAL
      MARKET WILL BECOME MORE
      SECURE AND ATTRACTIVE TO
      NATIONAL AND FOREIGN INVESTORS.

Point 2

END OF THE
TIME-CONSUMING
LOCAL VIABILITY

PBEM • THE PROVISIONAL BUSINESS ENVIRONMENT MEASURE                      09

END OF THE TIME-CONSUMING
LOCAL VIABILITY
Point 2

       The main change of MPAN on “REDESIM” (a network that integrates
all municipalities, states and Federal Government agencies) was the
disconnection of the procedure of the previous research of locational
viability, a request that every entrepreneur should make, for the
municipality to answer if the address was appropriate for the intended
activity. This process could take up to 76 days, extending the deadline for
obtaining a CNPJ (National Register of Legal Entities).

     From July 2021, all municipalities will have to answer the user
automatically, under penalty of this step being totally dispensed with.

      Among the countries that are in the Top 50 of the Doing Business
      report, none makes this type of requirement as a mandatory step
      for opening companies, so the measure is seen as an attempt to
      adapt to the parameters of the best economies.

Point 3

AUTOMATIC
LICENSES AND
PERMITS FOR
MEDIUM RISK

PBEM • THE PROVISIONAL BUSINESS ENVIRONMENT MEASURE                           11

AUTOMATIC LICENSES
AND PERMITS FOR
MEDIUM RISK
Point 3

                The MPAN also allows the Federal Executive Branch to
          apply a national classification of medium risk activities to
          municipalities that do not have their own classification. When
          the entrepreneur has the activity classified as medium risk, he
          can declare his knowledge and receive permits and licenses
          immediately and automatically, without the need for prior
          inspection. For low-risk activities, following the classification
          of the Economic Freedom Act, licenses and permits must
          already be automatic throughout the national territory.

Point 4

CENTRALIZATION
AND SHARING OF
INFORMATION

PBEM • THE PROVISIONAL BUSINESS ENVIRONMENT MEASURE                           13

CENTRALIZATION
AND SHARING OF
INFORMATION
Point 4

       The entrepreneur may no longer be required to provide any data
previously required, even if by another agency. Thus, if the Federal
Revenue has collected certain information, states and municipalities will
no longer be able to require the entrepreneur to re-present it and should
pull the data directly from the integrated system.

      Facilitating the registration of legal entities, a unique tax registration
that encompasses the state and the municipal should be created. When
registering a CNPJ, the competent state and municipal systems will be
automatically informed and may not require additional data.

               THIS IS IN LINE WITH THE
            PROCEDURE ADOPTED IN THE
          WORLD’S FIRST ECONOMIES AND,
           IN FACT, IT SHOULD HAVE BEEN
              IMPLEMENTED SINCE 2014.

Point 5

BUSINESS
REGISTRATION

PBEM • THE PROVISIONAL BUSINESS ENVIRONMENT MEASURE                       15

BUSINESS
REGISTRATION
Point 5

      The declarations and information that must be included in contracts
and bylaws have been reduced, due to the modification of art. 35, items
III and V, of Law No. 8934/94, such as the requirement to detail precisely
the purpose of the company.

      It is determined that the process of prior analysis of a new business
name should be automatic, no longer manual, ensuring greater speed to
the registration process and reducing human errors. Even the CNPJ can be
used as a business name, according to the inclusion of the new art. 35-A.

      Once the protection of the corporate name is guaranteed, if a third
party feels harmed due to the registration of a name, a proper procedure
for the defense of their interests is ensured.

     The MPAN ends the discussion on the need for notarization in any
documents submitted to the Commercial Registries, making it clear that
no document submitted needs to have a notarized signature.

       All documents of the Commercial Registries can be scanned, and
the physical files can be eliminated after their images are preserved in the
virtual/digital environment. The objective, in addition to speeding up the
digitization and sharing of information, is to reduce the space required and
the cost spent to file all documents from the Commercial Boards.

PBEM • THE PROVISIONAL BUSINESS ENVIRONMENT MEASURE   16

WITH THESE MEASURES,
AS WELL AS OTHERS THAT HAVE
ALREADY BEEN IMPLEMENTED
IN RECENT YEARS (ONE-STOP
SHOP, FOR EXAMPLE), IT IS
EXPECTED THAT THE PROCESS
OF OPENING, CHANGING,
AND CLOSING COMPANIES
IN BRAZIL WILL BECOME
SIMPLER, FASTER AND
LESS COSTLY.

Point 6

FUNCTIONING
OF FOREIGN
COMPANIES
IN BRAZIL

PBEM • THE PROVISIONAL BUSINESS ENVIRONMENT MEASURE                          18

FUNCTIONING OF
FOREIGN COMPANIES
IN BRAZIL
Point 6

                 Changes in the Public Company Registration Law (Law
          nº 8934/94), with an adaptation to the current reality: the DREI
          (National Department of Business Registration and
          Integration), department that determines the rules to be
          followed by the Commercial Registries of the whole country,
          already makes the authorization for nationalization or
          installation branch, agency, main branch or establishment in
          the country by a foreign company. The old 45-day procedure
          already happens in up to 3. The whole process has been much
          simplified and the MPAN just adapts the law to reality.

Point 7

SIMPLIFICATION
OF FOREIGN
TRADE SYSTEMS

PBEM • THE PROVISIONAL BUSINESS ENVIRONMENT MEASURE                      20

SIMPLIFICATION
OF FOREIGN
TRADE SYSTEMS
Point 7

     The MPAN lists a series of measures to overcome the current
scenario of foreign trade in Brazil, such as:

      A
      Make the creation of import licensing requirements more
      thorough, removing non-tariff barriers and facilitating imports,
      consequently making products cheaper.

      B
      Extinguish the Integrated System of Foreign Trade in Services
      (SISCOSERV) and simplify the international trade in services,
      through the elaboration of a new system in order to simplify the
      performance of companies.

      C
      Promote the revision of the regulatory stock of import licenses,
      revoking measures that may make foreign trade slower and less
      beneficial.

PBEM • THE PROVISIONAL BUSINESS ENVIRONMENT MEASURE                        21

     D
     Extinguish the market reserve in long-haul navigation, which
     implies the absence of restrictions for foreign trade to be carried
     out only by vessels flying the Brazilian flag.

     E
     Strengthen the Single Electronic Portal for Foreign Trade,
     digitizing the filling of forms and centralizing information and
     documents on the Portal, making processes simpler and faster.

     F
     Reduce the bureaucracy of the research system of
     non-preferential origin, so that prior import licenses will not be
     required, besides that there will only be a punishment after the
     investigation is completed, using as parameters the principles of
     good faith and subsidiary and exceptional intervention in the
     economy.

PBEM • THE PROVISIONAL BUSINESS ENVIRONMENT MEASURE                       22

              For Brazil, the changes represent an attempt to attract
       more Foreign Direct Investments to the country, with an
       increase to economic growth estimated around 3.5 and 10
       billion reais.

             With this, in general, it is understood that the MPAN text
       reflects the effort to leverage Brazilian foreign trade by
       eliminating the main barriers in this area, especially through
       the reduction of bureaucracy and the modernization of
       procedures.

Point 8

FACILITY
TO CONNECT
ELECTRICITY
TO ESTABLISHMENTS

PBEM • THE PROVISIONAL BUSINESS ENVIRONMENT MEASURE                           24

FACILITY TO CONNECT
ELECTRICITY TO
ESTABLISHMENTS
Point 8

                The MPAN establishes a maximum period of 5 days for
          the issue of authorization for the connection of electricity on
          public roads and establishes tacit approval, in case the
          competent authority does not manifest itself. This greatly
          optimizes the time of effective operation of companies in
          physical establishments, since in locations like São Paulo, the
          procedure for external connection of electricity could last up
          to 90 days. The total deadline for obtaining electricity was also
          modified, defined by Aneel (National Electric Energy Agency)
          as 45 to 60 days.

PBEM • THE PROVISIONAL BUSINESS ENVIRONMENT MEASURE                                24

SOURCES

BRASIL. Medida Provisória de Ambiente de Negócios – Apresentação Executiva.
Presidência da República, Secretaria-Geral da Presidência da República, Ministério
da Economia, Ministério da Justiça e Segurança Pública, Ministério de Minas e
Energia, Advocacia Geral da União, 2021.

Disponível em:
https://fenacon.org.br/wp-content/uploads/2021/03/compact_MP-de-Ambiente
-de-Negocios-Apresentacao-Executiva_compressed.pdf. Acesso em 30 março
2021.

BRASIL. Lei nº 13.874, de 20 de setembro de 2019. Institui a Declaração de Direitos
de Liberdade Econômica. Presidência da República, Secretaria-Geral, Subchefia
para Assuntos Jurídicos, Brasília/DF.

Disponível em:
http://www.planalto.gov.br/ccivil_03/_ato2019-2022/2019/lei/L13874.htm.
Acesso em 30 março 2021.

BRASIL. MEDIDA PROVISÓRIA Nº 1.040, DE 29 DE MARÇO DE 2021. Dispõe sobre
a facilitação para abertura de empresas, a proteção de acionistas minoritários, a
facilitação do comércio exterior, o Sistema Integrado de Recuperação de Ativos,
as cobranças realizadas pelos conselhos profissionais, a profissão de tradutor e
intérprete público, a obtenção de eletricidade e a prescrição intercorrente na Lei nº
10.406, de 10 de janeiro de 2002 - Código Civil. Diário Oficial da União, publicado
em 30 de março de 2021.

Disponível em:
https://www.in.gov.br/en/web/dou/-/medida-provisoria-n-1.040-de-29-de-marc
o-de-2021-311282231. Acesso em 02 abril 2021.

PBEM • THE PROVISIONAL BUSINESS ENVIRONMENT MEASURE                              25

SOURCES

GODINHO, Daniel Marteleto. As investigações de falsa declaração de origem como
novo instrumento de defesa da indústria. Revista Brasileira de Comércio Exterior, nº
109, dezembro de 2011, pp. 50-57.

Disponível em:
http://www.funcex.org.br/publicacoes/rbce/material/rbce/109_dmg.pdf.        Acesso
em 30 março 2021.

WORLD BANK. 2020. Doing Business 2020. Washington, DC: World Bank.
DOI:10.1596/978-1-4648-1440-2. ISBN: 978-1-4648-1441-9. License: Creative
Commons Attribution CC BY 3.0 IGO.

Disponível em:
https://openknowledge.worldbank.org/bitstream/handle/10986/32436/97814648
14402.pdf. Acesso em 30 março 2021.

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