October, 2019 – Brazil – Rossetti Advogados
On September 20, 2019, the Brazilian Federal Government enacted Federal Law No. 13.874, named Economic Freedom Law. This law presents a new cycle in the country, revisiting the Government’s role in the economy, lessening the bureaucracy and simplifying the economic activity, especially for small and medium-sized entrepreneurs.
The principles guiding the new law are (i) freedom as guarantee in the exercise of economic activities; (ii) good faith of private agents in the relations with the government; (iii) subsidiary and exceptional interference of the Government in the exercise of economic activities; and (iv) acknowledgment of the vulnerability of private agents in the relations with the government.
The law contains more flexible labor rules, such as the waiver of the use of time cards for companies with up to 20 employees, facilitates the access of small and medium-sized companies to the stock exchange, eliminates government authorizations for low risk activities, such as operation, sanitary and fire department permits.
In addition, in the event of ventures requiring prior authorization by the government, it sets forth a new term after which the license will be automatically granted. Therefore, undue delays by the government bodies are prohibited.
The text also separates the assets of members of companies from the debts of the legal entities, and prohibits the use of assets of the same group of companies to settle debts of one of the companies.
The Economic Freedom Law resulted from the conversion of Provisional Measure No. 881 of April 30, 2019 into law, and the Ministry of Economy estimates that the Economic Freedom Law may create 3.7 million jobs in ten years, in addition to generating an additional GDP (Gross Domestic Product) growth by more than 7% in a decade.
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This article is based on publicly available information and given for informational purposes only. It is not intended as legal advice or as a comprehensive analysis of the matters referred to herein.