Economy Profile Brazil

Ease of Doing Business in Brazil

Rankings on Doing Business topics – Brazil

Topic Scores

Starting a Business

This topic measures the number of procedures, time, cost and paid-in minimum capital requirement for a small- to medium-sized limited liability company to start up and formally operate in each economy’s largest business city.

To make the data comparable across 190 economies, Doing Business uses a standardized business that is 100% domestically owned, has start-up capital equivalent to 10 times the income per capita, engages in general industrial or commercial activities and employs between 10 and 50 people one month after the commencement of operations, all of whom are domestic nationals. Starting a Business considers two types of local limited liability companies that are identical in all aspects, except that one company is owned by 5 married women and the other by 5 married men. The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to legally start and formally operate a company (number)

Preregistration (for example, name verification or reservation, notarization)
Registration in the economy’s largest business city
Postregistration (for example, social security registration, company seal)
Obtaining approval from spouse to start a business or to leave the home to register the company
Obtaining any gender specific document for company registration and operation or national identification card

Time required to complete each procedure (calendar days)
Does not include time spent gathering information
Each procedure starts on a separate day (2 procedures cannot start on the same day)
Procedures fully completed online are recorded as ½ day
Procedure is considered completed once final document is received
No prior contact with officials

Cost required to complete each procedure (% of income per capita)

Official costs only, no bribes
No professional fees unless services required by law or commonly used in practice

Paid-in minimum capital (% of income per capita)
Funds deposited in a bank or with third party before registration or up to 3 months after incorporation

To make the data comparable across economies, several assumptions about the business and the procedures are used. It is assumed that any required information is readily available and that the entrepreneur will pay no bribes.

The business:

-Is a limited liability company (or its legal equivalent). If there is more than one type of limited liability company in the economy, the limited liability form most common among domestic firms is chosen. Information on the most common form is obtained from incorporation lawyers or the statistical office.

-Operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.

-Performs general industrial or commercial activities such as the production or sale to the public of goods or services. The business does not perform foreign trade activities and does not handle products subject to a special tax regime, for example, liquor or tobacco. It is not using heavily polluting production processes.

-Does not qualify for investment incentives or any special benefits.

-Is 100% domestically owned.

-Has five business owners, none of whom is a legal entity. One business owner holds 30% of the company shares, two owners have 20% of shares each, and two owners have 15% of shares each.

-Is managed by one local director.

-Has between 10 and 50 employees one month after the commencement of operations, all of them domestic nationals.

-Has start-up capital of 10 times income per capita.

-Has an estimated turnover of at least 100 times income per capita.

-Leases the commercial plant or offices and is not a proprietor of real estate.

-Has an annual lease for the office space equivalent to one income per capita.

-Is in an office space of approximately 929 square meters (10,000 square feet).

-Has a company deed that is 10 pages long.

The owners:

-Have reached the legal age of majority and are capable of making decisions as an adult. If there is no legal age of majority, they are assumed to be 30 years old.

-Are in good health and have no criminal record.

-Are married, the marriage is monogamous and registered with the authorities.

-Where the answer differs according to the legal system applicable to the woman or man in question (as may be the case in economies where there is legal plurality), the answer used will be the one that applies to the majority of the population.

Starting a Business – São Paulo

Figure – Starting a Business in São Paulo – Score

Figure – Starting a Business in São Paulo and comparator economies – Ranking and Score

DB 2020 Starting a Business Score

Note: The ranking of economies on the ease of starting a business is determined by sorting their scores for starting a business. These scores are the simple average of the scores for each of the component indicators.

Figure – Starting a Business in São Paulo – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Note: Online procedures account for 0.5 days in the total time calculation. For economies that have a different procedure list for men and women, the graph shows the time for women. For more information on methodology, see the Doing Business website (https://doingbusiness.org/en/methodology). For details on the procedures reflected here, see the summary below.

Details – Starting a Business in São Paulo – Procedure, Time and Cost

1 Check the availability of the company name and the feasibility of the location

Agency : Municipality (Prefeitura de São Paulo)

Business founders can check the availability of the company name online at: www.jucesponline.sp.gov.br but no interaction or response if needed. An analysis of the feasibility of the proposed company address (Análise de Viabilidade) must then be requested to the Municipality. This can be done online through the nationally integrated system for company registration (Sistema de Registro e Licenciamento de Empresas, RLE). It can be accessed at https://rle.empresasimples.gov.br/rle/. The applicant must provide information on the company's activities and on the exact proposed location. If the location is approved, a document (Protocolo REDESIM) will be issued online after a few minutes.

2 Apply for registration with the Federal Tax Authority (Receita Federal)

Agency : Federal Tax Authority (Receita Federal)

After verifying the availability of the company's name and the feasibility of the proposed location, the entrepreneur must submit an online application to the Federal Tax Authority (Receita Federal). This must be done by filing the Company's Registration File (Ficha Cadastral da Pessoa Jurídica, FCPJ) and the Members and Managers File (Quadro de Sócios e Administradores, QSA) at the Tax Authority's online platform ("Coleta Online", at https://www38.receita.fazenda.gov.br/redesim/). A document will be generated by the system (DBE, "Documento Básico de Entrada" or "Protocolo de Transmissão", if a digital certificate is used). This document must be presented to the State Commercial Registry (JUCESP) for company registration.

3 days no charge

3 Pay registration fees

Agency : Commercial Bank

Entrepreneurs choose whether to pay at any commercial bank or at the bank window/agency located inside the commercial registry. It is also possible to pay through a wire transfer, at a commercial bank's website in which the person making the payment holds an account. Examples are www.itau.com.br / banco.bradesco / santander.com.br / bb.com.br / caixa.gov.br.

A receipt of payment must be obtained to register the company at JUCESP (Commercial Registry).

Less than one day (online procedure)

fees included in procedure 4

4 Register with the State Commercial Registry (JUCESP) to complete registration with the Federal and State Tax Authorities (CNPJ and ICMS), Social Security (INSS) and the Companies Registry (NIRE)

Agency : Commercial Registry (Junta Comercial do Estado de São Paulo – JUCESP)

Company registrations have been simplified with a system called Empreenda Fácil. The company must register with the Commercial Registry (Junta Comercial do Estado de São Paulo – JUCESP) to obtain an identification number from the Companies Registry (Número de Identificação do Registro de Empresas – NIRE). In addition, registrations are carried out with the National Corporate Taxpayer Registry from the Federal Tax Authority (Cadastro Nacional de Pessoas Jurídicas – CNPJ), with the Sales Tax from the State Tax Authority (Imposto sobre Circulação de Mercadorias e Serviços – ICMS) and with the National Institute of Social Security (Instituto Nacional do Seguro Social – INSS).

The registration process is as follows: after the application with the Federal Tax Authority (Receita Federal) has been filed and a document called "Documento Básico de Entrada – DBE" has been generated, the applicant must submit an application for company incorporation at Via Rápida Empresa 2, an online platform offered by JUCESP (https://www.jucesp.sp.gov.br/VRE/). The business founders must then visit the Commercial Registry (JUCESP) to present the original documents. Upon the analysis and approval by JUCESP, an online version of the certificate of registration (Certidão de Inteiro Teor) will be made available for download.

5 Register with the Municipal Taxpayers’ Registry (Secretaria Municipal da Fazenda de São Paulo)

Agency : Municipal Taxpayers’ Registry (Secretaria Municipal da Fazenda de São Paulo) Enrollment with the Municipal Taxpayers' Registry (Cadastro de Contribuintes Mobiliários – CCM) is made through an electronic form that is filled online on the website of the City Hall (https://ccm.prefeitura.sp.gov.br/). Since since Normative Instruction SF/SUREM No. 4 of April 9, 2019, a visit to the municipality is no longer required.

After both the Federal Tax Authority and Commercial Registry approve the request, the CCM, when generated, is blocked and the entrepreneur shall unblock it online, through the City Hall

website.

Less than one day

(online)

no charge

Once this step has been completed, the company can proceed to Municipal tax registration and obtaining a Municipal license.

3 days R$145.91 + R$21.00 for registration + R$132.65 (service fee)

6 Obtain a digital certification (token) for the use of e-invoices

Agency : Serasa Experian

The costs involved in the obtainment of the digital certification may vary according to the accredited certifying chosen by the applicant. The information on how to obtain a token is available at https://www.receita.fazenda.gov.br/dvssl/atbhe/falecon/comum/asp/formulario.asp? topico=172

2 days R$ 355

7 Obtain an operations license (Auto de Licença de Funcionamento) from the Municipality

Agency : Municipality (Prefeitura de São Paulo)

Business founders must obtain an operations license (Auto de Licença de Funcionamento) from the Municipality. This document authorizes the operation of commercial, industrial, institutional, service, and similar activities.

2 days

no charge

For companies in some sectors of activity and under certain size and location restrictions, as determined by Decree No. 57,298 of 2016, a simplified operations license can be applied for and obtained online, through the integrated business registration system. In those cases, the license is applied for through RLE (Sistema de Registro e Licenciamento de Empresas, at https://rle.empresasimples.gov.br/rle/). For other cases, the license must be obtained from the District-level Municipality's office (Prefeitura Regional). In these cases, the process requires

further analysis and it may take several months to be completed.

Agency : Municipal Taxpayers’ Registry (Secretaria Municipal de Finanças)

According to the Municipality of São Paulo's rules, the annual cost of the TFE fee is based both on the company's activities as well as on the company's number of employees (www.prefeitura.sp.gov.br). After the company is registered with the (Cadastro de Contribuintes Mobiliários – CCM), the TFE fee and can be paid online. The invoice is sent by post or obtained online.

Less than one day (simultaneous with previous procedure)

R$ 470.87 (for retailing business, may vary in accordance with the company’s activities)

9 Register the employees in the social integration program (Programa de Integração Social – PIS)

Agency : Federal Savings Bank (Caixa Econômica Federal)

Employees must be registered at the company’s employee registry book (livro de registro de empregados) and their information must be up to date with the Social Integration Program (Programa de Integração Social – PIS/PASEP). The PIS/PASEP program is intended to identify workers with the social security system, so that they may request unemployment insurance and, if needed, benefit from the unemployment guarantee fund (Fundo de Garantia do Tempo de Serviço

– FGTS).

1 day (simultaneous with no charge

previous procedure)

If the employee already has a PIS/PASEP registration from previous employments, the employee must only inform the Federal Savings Bank of the new employment relationship, in order to update their information. Following the hiring, the employer must submit online the information on the company and its employees through a system called SEFIP (Sistema Empresa de Recolhimento do FGTS e informações à Previdência Social – available at https://conectividade.caixa.gov.br/).

Once SEFIP has been submitted, the FGTS account, which is a special account at the Federal Savings Bank (Caixa Econômica), will be opened for payment of the benefits related to the

unemployment insurance.

11 Registration with the Employers' Union and with the Employees' Union

Agency : Employers' Union and with the Employees' Union

The requirements for company registration with the Employers' Union and Employees' Union (Sindicato Patronal and Sindicato dos Empregados) vary according to the representative Unions. Generally, in order to be registered with the unions, the company must present the following documents: company registration form, Federal Registry of Corporate Taxpayers, articles of association, employee's list etc. These documents can generally be submitted to the unions through their websites.

1 day (simultaneous with no charge

previous procedure)

Since the Labor Law was amended in July 2017, the payment of the contributions to the Unions

was made optional. Most entrepreneurs opt to register with the Unions after a new company has been incorporated.

10 Agency : Ministry of Labor (Cadastro Geral de empregados e desempregados, CAGED) Pursuant to Law No. 4.923 of December 23, 1965, the employer must inform the Ministry of Labor's General Cadaster of Employed and Unemployed Workers (Cadastro Geral de Empregados e Desempregados – CAGED) of any new hires or employees dismissals. This must be done until the seventh day of the month after the hiring. A form shall be transmitted online to the Ministry of Labor, at https://caged.maisemprego.mte.gov.br/portalcaged/paginas/home/home.xhtml.

Less than one day (simultaneous with previous procedure)

no charge

Starting a Business – Rio de Janeiro

Figure – Starting a Business in Rio de Janeiro – Score

Figure – Starting a Business in Rio de Janeiro and comparator economies – Ranking and Score

DB 2020 Starting a Business Score

Figure – Starting a Business in Rio de Janeiro – Procedure, Time and Cost

Details – Starting a Business in Rio de Janeiro – Procedure, Time and Cost

1 Check the availability of the company name and the feasibility of the location

Agency : Municipality of Rio de Janeiro

Business founders can check the availability of the company name online through the REGIN system at https://www.jucerja.rj.gov.br/Servicos/regin/ReginServicos#. An analysis of the feasibility of the proposed company address (Pedido de Viabilidade) must then be requested online at the Municipality's website (https://carioca.rio/). An answer is provided in 2 days.

2 Apply for registration with the Federal Tax Authority (Receita Federal)

Agency : Federal Tax Authority (Receita Federal)

3 Pay registration fees

Agency : Bank (Banco Bradesco)

The payment must be made at a bank (Banco Bradesco). The fees can be paid online at https://banco.bradesco/html/classic/produtos-servicos/mais-produtos-servicos/pagamentos.shtm.

A receipt of payment must be obtained to register the company at the Commercial Registry (JUCERJA).

Less than one day (online procedure)

fees included in procedure 4

4 Register with the State Commercial Registry (JUCERJA) to complete registration with the Federal and State Tax Authorities (CNPJ), Social Security (INSS) and the Companies Registry (NIRE)

Agency : Commercial Registry of Rio de Janeiro (Junta Comercial do Estado do Rio de Janeiro – JUCERJA)

Company registrations have been simplified with a system called REDESIM (https://www.redesimples.gov.br/). The company must register with the Commercial Registry (Junta Comercial do Estado do Rio de Janeiro – JUCERJA) to obtain an identification number from the Companies Registry (Número de Identificação do Registro de Empresas – NIRE). In addition, registrations are carried out with the National Corporate Taxpayer Registry with the Federal Tax Authorities (Cadastro Nacional de Pessoas Jurídicas – CNPJ), and with the National Institute of Social Security (Instituto Nacional do Seguro Social – INSS).

The registration process is as follows: after the application with the Federal Tax Authority (Receita Federal) has been filed and a document called "Documento Básico de Entrada – DBE" has been generated, the applicant must submit an online application for company incorporation (Protocolo Web, at JUCERJA's website – www.jucerja.rj.gov.br). The business founders must then visit the Commercial Registry (JUCERJA) to present the original documents. Upon the analysis and approval by JUCERJA, an online version of the certificate of registration will be made available for download.

Once this step has been completed, the company can proceed to Municipal tax registration and obtaining a Municipal license.

5 Register with the Rio de Janeiro Taxpayers’ Registry (Secretaria Municipal de Fazenda)

Agency : Municipal Taxpayers’ Registry (Secretaria Municipal de Fazenda)

Two days after the payment of the Taxpayers' Registry tax, the company must register with the Municipal Taxpayers' Registry (Cadastro Tributário Municipal) from Rio de Janeiro's Municipal Tax Authorities (Secretaria Municipal de Fazenda), to obtain a company identification number for tax purposes (inscrição municipal).

6 Apply and obtain digital a certification (token) for the use of e-invoices

Agency : Serasa Experian

A token must be obtained for the use of e-invoices. The company has a period of 2 days to schedule the withdrawal of the token, which will be activated within 24 hours.

2 days R$ 369

7 Obtain an operations license (Alvará de Licença para Estabelecimento) from the Municipality

Agency : Municipality of Rio de Janeiro

The company must obtain an operations license (Alvará de Licença para Estabelecimento) from the Municipality. After registration with the Municipal Tax Authorities (Secretaria Municipal de Fazenda – SMF), the company has 30 days to apply for the license by filling out the proper forms and submitting the required documents. The operations license is a prerequisite for the company to begin operations. The Municipality may conduct ex-post inspections to certain companies, based on a risk based assessment. Since December 2015, companies can request and obtain the business license online via the Municipality’s website, which is called Carioca Digital (https://carioca.rio/).

8 Update employees' information with Social Security (Programa de Integração Social – PIS)

Agency : Federal Savings Bank (Caixa Econômica Federal)

– FGTS).

1 day (simultaneous with no charge

previous procedure)

Once SEFIP has been submitted, the FGTS account, which is a special account at the Federal Savings Bank (Caixa Econômica), will be opened for payment of the benefits related to the

unemployment insurance.

Register with the Employers' Union and with the Employees' Union

Agency : Employers' Union and Employees' Union

1 day (simultaneous with

previous procedure)

no charge

Since the Labor Law was amended in July 2017, the payment of the contributions to the Unions was made optional. Most entrepreneurs opt to register with the Unions after a new company has

been incorporated.

9 Notify the Ministry of Labor (Cadastro Geral de empregados e desempregados, CAGED)

Agency : Ministry of Labor (Cadastro Geral de empregados e desempregados – CAGED) Pursuant to Law No. 4.923 of December 23, 1965, the employer must inform the Ministry of Labor's General Cadaster of Employed and Unemployed Workers (Cadastro Geral de Empregados e Desempregados – CAGED) of any new hires or employees dismissals. This must be done until the seventh day of the month after the hiring. A form shall be transmitted online to the Ministry of Labor, at https://caged.maisemprego.mte.gov.br/portalcaged/paginas/home/home.xhtml.

Less than one day (online, simultaneous with previous procedure)

no charge

Dealing with Construction Permits

This topic tracks the procedures, time and cost to build a warehouse—including obtaining necessary the licenses and permits, submitting all required notifications, requesting and receiving all necessary inspections and obtaining utility connections. In addition, the Dealing with Construction Permits indicator measures the building quality control index, evaluating the quality of building regulations, the strength of quality control and safety mechanisms, liability and insurance regimes, and professional certification requirements. The most recent round of data collection was completed in May 2019. See the methodology for more information

What the indicators measure

Procedures to legally build a warehouse (number)

Submitting all relevant documents and obtaining all necessary clearances, licenses, permits and certificates
Submitting all required notifications and receiving all necessary inspections
Obtaining utility connections for water and sewerage
Registering and selling the warehouse after its completion

Time required to complete each procedure (calendar days)

Does not include time spent gathering information
Each procedure starts on a separate day—though procedures that can be fully completed online are an exception to this rule
Procedure is considered completed once final document is received
No prior contact with officials

Cost required to complete each procedure (% of income per capita)

Official costs only, no bribes

Building quality control index (0-15)

Quality of building regulations (0-2)
Quality control before construction (0-1)
Quality control during construction (0-3)
Quality control after construction (0-3)
Liability and insurance regimes (0-2)
Professional certifications (0-4)

To make the data comparable across economies, several assumptions about the construction company, the warehouse project and the utility connections are used.

The construction company (BuildCo):

Is a limited liability company (or its legal equivalent) and operates in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Is 100% domestically and privately owned; has five owners, none of whom is a legal entity. Has a licensed architect and a licensed engineer, both registered with the local association of architects or engineers. BuildCo is not assumed to have any other employees who are technical or licensed experts, such as geological or topographical experts.
Owns the land on which the warehouse will be built and will sell the warehouse upon its completion.

The warehouse:

Will be used for general storage activities, such as storage of books or stationery.
Will have two stories, both above ground, with a total constructed area of approximately 1,300.6 square meters (14,000 square feet). Each floor will be 3 meters (9 feet, 10 inches) high and will be located on a land plot of approximately 929 square meters (10,000 square feet) that is 100% owned by BuildCo, and the warehouse is valued at 50 times income per capita.
Will have complete architectural and technical plans prepared by a licensed architect. If preparation of the plans requires such steps as obtaining further documentation or getting prior approvals from external agencies, these are counted as procedures.
Will take 30 weeks to construct (excluding all delays due to administrative and regulatory requirements).

The water and sewerage connections:

Will be 150 meters (492 feet) from the existing water source and sewer tap. If there is no water delivery infrastructure in the economy, a borehole will be dug. If there is no sewerage infrastructure, a septic tank in the smallest size available will be installed or built.
Will have an average water use of 662 liters (175 gallons) a day and an average wastewater flow of 568 liters (150 gallons) a day. Will have a peak water use of 1,325 liters (350 gallons) a day and a peak wastewater flow of 1,136 liters (300 gallons) a day.
Will have a constant level of water demand and wastewater flow throughout the year; will be 1 inch in diameter for the water connection and 4 inches in diameter for the sewerage connection.

Dealing with Construction Permits – São Paulo

Figure – Dealing with Construction Permits in São Paulo – Score

Figure – Dealing with Construction Permits in São Paulo and comparator economies – Ranking and Score

DB 2020 Dealing with Construction Permits Score

Note: The ranking of economies on the ease of dealing with construction permits is determined by sorting their scores for dealing with construction permits. These scores are the simple average of the scores for each of the component indicators.

Figure – Dealing with Construction Permits in São Paulo – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Dealing with Construction Permits in São Paulo and comparator economies – Measure of Quality

Details – Dealing with Construction Permits in São Paulo – Procedure, Time and Cost

1 Request and obtain proof of land ownership from the Real Estate Registry

Agency : Real Estate Registry

According to Art.1-Item IV of Federal Decree No. 93,240/86, Article 1, this certificate is valid for 30 days.

1 day

BRL 61

According to the official fee schedule of the Property Registrars Agency, the fee is BRL 60.8

2 Obtain results of Soil study

Agency : Private licensed company

15 days BRL 4,000

3 Obtain results of topographical study

Agency : Private licensed company

A topographical study is conducted prior to construction to measure the levels on the specific terrain. It is a general technical requirement when building a structure of this class. Cannot be simultaneous with the previous procedure, as a proof of land ownership is required before any field work can be conducted on the plot.

4 Obtain Technical Term of Responsibility -ART

Agency : Engineers Syndicate (Crea)

Before the application process, the engineer and architect responsible for the project need to obtain an ART. An ART is a document required by the Engineers Syndicate (Crea) that defines, for legal purposes, who is responsible for the execution of works or services and provides an opportunity for professionals to register their works or services with Crea. The ART is required for each project according to Art. 1 of Federal Law N° 6.496 (December 1977)

For contracts or works of more than BRL 15,000.00, the fee is BRL 226.5

5 Request and obtain proof of land tax payment from the Treasury Department of the Municipality

Agency : Treasury (Municipality)

Attesting to payment of land taxes, this certificate may be issued online and is valid for only 30 days. This request can be done in parallel with procedure 2.

0.5 days no charge

6 Register employees with the Social Security Office

Agency : Social Security Office

7 Request and obtain construction approval permit and construction execution permit

Agency : Municipality

274 days

BRL 7,009

After examining the project's architecture and engineering and issuing the construction approval permit, the Municipality examines the practical and installation aspects and begins the process of issuing a construction execution permit.

According to Article 29 of São Paulo's Municipality Building Code, and Article 22 of São Paulo's Municipality Decree No. 57,776/17, the construction execution permit is valid for: (i) 2 years from the date of publication of the order granting the application, if the work has not been started, or (ii) 1 year from stoppage in work, if the work has been started.

For each construction site, BuildCo must register employees separately with the Social Security Office (Instituto Nacional do Seguro Social, INSS). This procedure can only be done whenever there is a proof of land tax payment,so it cannot be simultaneous with the previous one

0.5 days no charge

8 Submit project for analysis by Fire Department and obtain report

Agency : Fire Department

Build Co must present the building project to the Fire department for approval and obtain a report which includes all the fire security measures that need to be implemented.

Details – Dealing with Construction Permits in São Paulo – Measure of Quality

Dealing with Construction Permits – Rio de Janeiro

Figure – Dealing with Construction Permits in Rio de Janeiro – Score

Figure – Dealing with Construction Permits in Rio de Janeiro and comparator economies – Ranking and Score

DB 2020 Dealing with Construction Permits Score

Figure – Dealing with Construction Permits in Rio de Janeiro – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Dealing with Construction Permits in Rio de Janeiro and comparator economies – Measure of Quality

Details – Dealing with Construction Permits in Rio de Janeiro – Procedure, Time and Cost

1 Request and obtain proof of land ownership from the Real Estate Registry

Agency : Real Estate Registry

Attesting to proof of land ownership, this certificate is valid for only 30 days. This is one of the documents to be included in the application for the construction permit.

2 Obtain a topographic map

Agency : Private licensed company

3 Obtain soil test

Agency : Private agency

15 days

BRL 6,000

A topographic map is obtained prior to development of the building plans to assess the levels on the specific terrain. It is a general technical requirement when building a structure of this class.Although the law does not specifically ask for a topographic map to be submitted to obtain a building permit, it is consistently conducted in practice by professionals.

15 days BRL 3,500

4 Obtain Technical Term of Responsibility -ART

Agency : Engineers Syndicate (Crea)

The ART is required for each project according to the Federal Law N° 6.496 of 7 December 1977. It is possible to obtain it online within a couple of hours. The value of the fee varies according to the value of the contract or the cost of the work.

0.5 days BRL 227

5 Request and obtain proof of land tax payment from the Treasury Department of the Municipality

Agency : Treasury (Municipality)

Attesting to payment of land taxes, this certificate may be issued online and is valid for only 30 days. This document needs to be included in the application sent to the municipality.

6 Register employees with the Social Security Office

Agency : Social Security Office

For each construction site, BuildCo must register employees separately with the Social Security Office (Instituto Nacional do Seguro Social, INSS).

If the employer does not register all workers, it can get fined during the inspection. This can only be done once the previous documents have been issued.

0.5 days no charge

7 Request and obtain construction approval permit and construction execution permit

Agency : Municipality

BuildCo must apply for construction approval permit and the construction execution permit with the Municipality. If the project conforms to municipal legislation, zoning laws, and the municipal building code, the Municipality will issue a document approving construction. To apply for these permits, BuildCo must submit the In order to apply for a construction approval permit, BuildCo must submit to the Municipality the following documents: (i) architectural drawings, (ii) real estate ownership certificate, (iii) debt clearance certificate (CND/IPTU), (iv) copy of location plan of the property, (v) an statement issued by the professional responsible for the works or for the project that the property is not located less than 50 meters from water courses or near slopes (Declaration of rivers and canals), (vi) copy of registry of the responsible professionals before Crea-RJ and CAU, (vii) statement of the author of the project in accordance with Annex I of the Decree 10,426/91; (viii) proof of payment of 50% of the license fee and (ix) declaration of vegetation suppression. Valid for a year, the construction approval permit is a prerequisite for subsequent procedures. The construction execution permit is valid for 3 years.

150 days no charge

8 Submit project for analysis by Fire Department and obtain report

Agency : Fire Department

Build Co must present the building project to the fire department for approval and obtain a report which includes all the fire security measures that need to be implemented. The applicant needs to send the design, the ART of the engineer, ownership ownership certificate and copy of ID to the fire department.

The cost of this procedure is determined by a fee set by SEDEC, the annual fiscal unit of reference (UFIR) and the number of sq. m of the building.

Details – Dealing with Construction Permits in Rio de Janeiro – Measure of Quality

Getting Electricity

This topic measures the procedures, time and cost required for a business to obtain a permanent electricity connection for a newly constructed warehouse. Additionally, the reliability of supply and transparency of tariffs index measures reliability of supply, transparency of tariffs and the price of electricity. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to obtain an electricity connection (number)

Submitting all relevant documents and obtaining all necessary clearances and permits
Completing all required notifications and receiving all necessary inspections
Obtaining external installation works and possibly purchasing material for these works
Concluding any necessary supply contract and obtaining final supply

Time required to complete each procedure (calendar days)

Is at least 1 calendar day
Each procedure starts on a separate day
Does not include time spent gathering information
Reflects the time spent in practice, with little follow-up and no prior contact with officials

Cost required to complete each procedure (% of income per capita)

Official costs only, no bribes
Value added tax excluded

The reliability of supply and transparency of tariffs index (0-8)

Duration and frequency of power outages (0–3)
Tools to monitor power outages (0–1)
Tools to restore power supply (0–1)
Regulatory monitoring of utilities’ performance (0–1)
Financial deterrents limiting outages (0–1)

Transparency and accessibility of tariffs (0–1)

To make the data comparable across economies, several assumptions about the warehouse, the electricity connection and the monthly consumption are used.

The warehouse:

Is owned by a local entrepreneur and is used for storage of goods.
Is located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Is located in an area where similar warehouses are typically located and is in an area with no physical constraints. For example, the property is not near a railway.
Is a new construction and is being connected to electricity for the first time.
Has two stories with a total surface area of approximately 1,300.6 square meters (14,000 square feet). The plot of land on which it is built is 929 square meters (10,000 square feet).

The electricity connection:

Is a permanent one with a three-phase, four-wire Y connection with a subscribed capacity of 140- kilo-volt-ampere (kVA) with a power factor of 1, when 1 kVA = 1 kilowatt (kW).
Has a length of 150 meters. The connection is to either the low- or medium-voltage distribution network and is either overhead or underground, whichever is more common in the area where the warehouse is located and requires works that involve the crossing of a 10-meter road (such as by excavation or overhead lines) but are all carried out on public land. There is no crossing of other owners’ private property because the warehouse has access to a road.
Does not require work to install the internal wiring of the warehouse. This has already been completed up to and including the customer’s service panel or switchboard and the meter base.

The monthly consumption:

It is assumed that the warehouse operates 30 days a month from 9:00 a.m. to 5:00 p.m. (8 hours a day), with equipment utilized at 80% of capacity on average and that there are no electricity cuts (assumed for simplicity reasons) and the monthly energy consumption is 26,880 kilowatt-hours (kWh); hourly consumption is 112 kWh.
If multiple electricity suppliers exist, the warehouse is served by the cheapest supplier.
Tariffs effective in January of the current year are used for calculation of the price of electricity for the warehouse. Although January has 31 days, for calculation purposes only 30 days are used.

Price of electricity (cents per kilowatt-hour)*

*Note: Doing Business measures the price of electricity, but it is not included in the ease of doing business score nor in the ranking on the ease of getting electricity.

Getting Electricity – São Paulo

Figure – Getting Electricity in São Paulo – Score

Figure – Getting Electricity in São Paulo and comparator economies – Ranking and Score

DB 2020 Getting Electricity Score

Note: The ranking of economies on the ease of getting electricity is determined by sorting their scores for getting electricity. These scores are the simple average of the scores for all the component indicators except the price of electricity.

Figure – Getting Electricity in São Paulo – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Getting Electricity in São Paulo and comparator economies – Measure of Quality

Details – Getting Electricity in São Paulo – Procedure, Time and Cost

1 Obtain a project approval (Anotação de Responsabilidade Técnica, ART) from the Regional Council of Engineering (CREA-SP)

Agency : Regional Council of Engineering (Conselho Regional de Engenharia e Agronomia, CREA-SP)

In order to apply for a new connection, the client's electrician must obtain a project approval from the Regional Council of Engineering (Conselho Regional de Engenharia e Agronomia, CREA-SP). This document can be obtained online at https://creanet1.creasp.org.br/Seguranca/Login.aspx?

Acesso=UHJvZmlzc2lvbmFs&solicitacao=preencherArt

This document is obtained online in 2 days upon payment of the fee, which is charged based on the cost of works.

2 calendar days BRL 150.44

2 Submit application to Enel Distribuição São Paulo and receive service layout

Agency : Enel Distribuição São Paulo

The customer needs to submit, online or in person, a set of documents, including the electrical project and the ART (obtained from CREA-SP, the Engineers' Association), to Enel Distribuição São Paulo. After receiving the documents, the technicians may conduct an external site inspection and develop a work project to make the necessary adjustments in the network with estimated costs and time and send it back to the client. The site visit is done outside of the property and the customer need not be present.

After approval, the utility will issue a technical opinion ('parecer técnico'), to be accepted by the client along with the cost estimate.

30 calendar days BRL 0

3 Sign energy supply agreement and receive external connection works

Agency : Enel Distribuição São Paulo

The costumer receives an invoice with the estimated value of the works, a contract and a service order ('ordem de serviço'). Once the contract and the service order are signed and the invoice is paid, Enel Distribuição São Paulo will proceed to scheduling the necessary adjustments in its network.

Enel will obtain the necessary permits for works on a public road from the Municipality and any other relevant authorities. After that, they will schedule the works. Once the works have been completed, the utility informs the costumer and a request for the external connection must be made.

4 Hire a private company to purchase and install a transformer

Agency : Electrical contractor

In parallel with the connection works, the customer must hire an electrical contractor to purchase and install a transformer with a shed (cabine primária). These costs must be paid by the client.

90 calendar days BRL 16,736.54

7 calendar days BRL 90,000

5 Receive an inspection, meter installation and electricity flow from utility

Agency : Enel Distribuição São Paulo

The customer must request an inspection and meter installation to Enel. The utility will schedule a visit to inspect the wiring and the transformer's shed and install the meter. After the visit, in 2 days the electricity is available at the switchboard/meter.

Takes place simultaneously with previous procedure.

10 calendar days BRL 0

Details – Getting Electricity in São Paulo – Measure of Quality

Answer

Reliability of supply and transparency of tariff index (0-8) 6

System average interruption duration index (SAIDI) 6.3

Total duration and frequency of outages per customer a year (0-3) 1

What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0

System average interruption frequency index (SAIFI) 3.5

Does the distribution utility use automated tools to monitor outages? Yes

Mechanisms for monitoring outages (0-1) 1

Does the distribution utility use automated tools to restore service? Yes

Mechanisms for restoring service (0-1) 1

Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of supply? Yes

Regulatory monitoring (0-1) 1

Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages exceed a certain cap? Yes

Financial deterrents aimed at limiting outages (0-1) 1

Are effective tariffs available online? Yes

Communication of tariffs and tariff changes (0-1) 1

Link to the website, if available online https://www.eneldistribuic

Are customers notified of a change in tariff ahead of the billing cycle? Yes

aosp.com.br/para-seu- negocio/tarifa-de-energia- eletrica and https://www.eneldistribuic aosp.com.br/para-seu- negocio/impostos-e- outros-encargos

Note:

If the duration and frequency of outages is 100 or less, the economy is eligible to score on the Reliability of supply and transparency of tariff index. If the duration and frequency of outages is not available, or is over 100, the economy is not eligible to score on the index.

If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.

Getting Electricity – Rio de Janeiro

Figure – Getting Electricity in Rio de Janeiro – Score

Figure – Getting Electricity in Rio de Janeiro and comparator economies – Ranking and Score

DB 2020 Getting Electricity Score

Figure – Getting Electricity in Rio de Janeiro – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Getting Electricity in Rio de Janeiro and comparator economies – Measure of Quality

Details – Getting Electricity in Rio de Janeiro – Procedure, Time and Cost

1 Obtain a project approval (Anotação de Responsabilidade Técnica, ART) from the Regional Council of Engineering (CREA-RJ)

Agency : Regional Council of Engineering (Conselho Regional de Engenharia e Agronomia, CREA-RJ)

In order to apply for a new connection, the client's electrician must obtain a project approval from the Regional Council of Engineering (Conselho Regional de Engenharia e Agronomia, CREA-RJ). This document can be obtained online at https://creaonline.crea- rj.org.br/creaOnLine/home/efetuarloginAction.do?action=inicioProfissional

This document is obtained online in 2 days upon payment of the fee, which is charged based on the cost of works.

2 calendar days BRL 150.44

2 Submit application to Light and await estimate

Agency : Light

The customer must submit an application for a new connection along with the following documents:

Sign Up Form Technical Information – Substations Simplified – duly completed and with all data and assessed the installed load demand;

Descriptive loads (2 copies);

Plant Situation / Location (4 copies) listed; Project approval (ART) duly repaid (1 copy);

Power of Attorney, on letterhead and notarization as attached model (1 copy); Charter Service Request (2 copies);

Letter of no parallelism with Light's network (2 copies);

Copy of the contract or bylaws in force, or the like, according to the type of legal entity, and subsequent changes, together with the election of its current directors, duly registered with the competent agency documents;

Copy of card from the National Register of Legal Entities (CNPJ);

Copies of Identity and Registration of Individuals (CPF) of the Legal Representatives; Copy of Lease Agreement or similar, if the customer is not the owner of the property; Copy of proof of ownership of the property (certificate of encumbrances);

All documents have to be notarized. Each notarization costs BRL 10. All documents should be already in possession of the applicant except for the ART and the proof of ownership. The utility has a deadline of 30 days to respond, according to Art. 31 of Resolution 414 of ANEEL.

30 calendar days BRL 0

3 Receive an inspection by utility

Agency : Light

Light carries out an inspection to verify where will the connection point be and the future network's location and conditions. To avoid delays, it is advisable that the electric engineer responsible for the works is present, in case the technician conducting the inspection has questions about the process.Within 3 days of the site visit, the client receives a budget, if there is a cost, and a supply contract ('carta-contrato'), for signing. Works will be scheduled by Light after the contract is signed.

3 calendar days BRL 0

4 Sign a contract and receive external works from utility

Agency : Light

After the site visit, Light will calculate the cost estimate and determine if the client must partially cover the connection costs. Connection costs are by Law partially absorbed by the utility, and can be partially paid by the client. For this type of connection, generally Light will absorb the costs and the client is not charged. Also, the regional network's capacity is usually sufficient, and a transformer would not be required. It depends on the client's preference to be connected to low- or medium-voltage. However, the customer may be charged based on the utility's cost analysis for each situation.

Once the contract is signed, Light will schedule the necessary works to connect the warehouse to the network. The Municipal permit for works on a public space will be obtained by the utility, which will then procure the materials, schedule the works and notify the region of potential power cuts. The client will be informed once works are completed.

83 calendar days BRL 0

5 Receive meter installation and electricity flow from utility

Agency : Light

At the end of the works, Light will proceed to scheduling a visit for final inspection and meter installation. The client or a representative has to be present for the meter to be installed. Once it is finalized, the client starts to receive energy within 1 day.

Takes place simultaneously with previous procedure.

5 calendar days BRL 0

Details – Getting Electricity in Rio de Janeiro – Measure of Quality

Answer

Reliability of supply and transparency of tariff index (0-8) 6

Total duration and frequency of outages per customer a year (0-3) 1

System average interruption duration index (SAIDI) 7.2

System average interruption frequency index (SAIFI) 4.0

What is the minimum outage time (in minutes) that the utility considers for the calculation of SAIDI/SAIFI 3.0

Does the distribution utility use automated tools to monitor outages? Yes

Mechanisms for monitoring outages (0-1) 1

Does the distribution utility use automated tools to restore service? Yes

Mechanisms for restoring service (0-1) 1

Does a regulator—that is, an entity separate from the utility—monitor the utility’s performance on reliability of supply? Yes

Regulatory monitoring (0-1) 1

Does the utility either pay compensation to customers or face fines by the regulator (or both) if outages exceed a certain cap? Yes

Financial deterrents aimed at limiting outages (0-1) 1

Are effective tariffs available online? Yes

Communication of tariffs and tariff changes (0-1) 1

Are customers notified of a change in tariff ahead of the billing cycle? Yes

ra-residencias/Sua- Conta/composicao-da- tarifa.aspx

Note:

If the minimum outage time considered for SAIDI/SAIFI is over 5 minutes, the economy is not eligible to score on the index.

Registering Property

This topic examines the steps, time and cost involved in registering property, assuming a standardized case of an entrepreneur who wants to purchase land and a building that is already registered and free of title dispute. In addition, the topic also measures the quality of the land administration system in each economy. The quality of land administration index has five dimensions: reliability of infrastructure, transparency of information, geographic coverage, land dispute resolution, and equal access to property rights. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Procedures to legally transfer title on immovable property (number)

Preregistration procedures (for example, checking for liens, notarizing sales agreement, paying property transfer taxes)
Registration procedures in the economy's largest business city.
Postregistration procedures (for example, filling title with municipality)

Time required to complete each procedure (calendar days)

Does not include time spent gathering information
Each procedure starts on a separate day – though procedures that can be fully completed online are an exception to this rule
Procedure is considered completed once final document is received
No prior contact with officials

Cost required to complete each procedure (% of property value)

Official costs only (such as administrative fees, duties and taxes).
Value Added Tax, Capital Gains Tax and illicit payments are excluded

Quality of land administration index (0-30)

Reliability of infrastructure index (0-8)
Transparency of information index (0–6)
Geographic coverage index (0–8)
Land dispute resolution index (0–8)
Equal access to property rights index (-2–0)

To make the data comparable across economies, several assumptions about the parties to the transaction, the property and the procedures are used.

The parties (buyer and seller):

Are limited liability companies (or the legal equivalent).
Are located in the periurban (that is, on the outskirts of the city but still within its official limits) area of the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Are 100% domestically and privately owned.
Perform general commercial activities.

The property (fully owned by the seller):

Has a value of 50 times income per capita, which equals the sale price.
Is fully owned by the seller.
Has no mortgages attached and has been under the same ownership for the past 10 years.
Is registered in the land registry or cadastre, or both, and is free of title disputes.
Is located in a periurban commercial zone (that is, on the outskirts of the city but still within its official limits), and no rezoning is required.
Consists of land and a building. The land area is 557.4 square meters (6,000 square feet). A two- story warehouse of 929 square meters (10,000 square feet) is located on the land. The warehouse is 10 years old, is in good condition, has no heating system and complies with all safety standards, building codes and legal requirements. The property, consisting of land and building, will be transferred in its entirety.
Will not be subject to renovations or additional construction following the purchase.
Has no trees, natural water sources, natural reserves or historical monuments of any kind.
Will not be used for special purposes, and no special permits, such as for residential use, industrial plants, waste storage or certain types of agricultural activities, are required.
Has no occupants, and no other party holds a legal interest in it.

Registering Property – São Paulo

Figure – Registering Property in São Paulo – Score

Figure – Registering Property in São Paulo and comparator economies – Ranking and Score

DB 2020 Registering Property Score

Note: The ranking of economies on the ease of registering property is determined by sorting their scores for registering property. These scores are the simple average of the scores for each of the component indicators.

Figure – Registering Property in São Paulo – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Registering Property in São Paulo and comparator economies – Measure of Quality

Details – Registering Property in São Paulo – Procedure, Time and Cost

1 Acquire 10 Certificates of Registries and Disputes (Certidão dos Cartórios de Protestos) from the Distributor of Disputes Registry

Agency : Disputes Registry (Cartórios de protesto)

The buyer can request the certificates on the existence of debts on the website: https://www.protesto.net.br/index.php?act=certidao. Although this certificate is not required by law, it is common practice to request it particularly in transactions between companies that tend to be more conservative and are usually assisted by lawyers. The seller will usually request 5-year certificates. 10-year certificates are also available for higher fees. There are 10 Protest Notaries in São Paulo, and it is necessary to research them all.

2 Acquire a Civil Distributor's Certificate (Certidão dos Distribuidores Cívies), a Fiscal Executive Certificate (Certidão de Executivos Fiscais) and a Bankruptcy Certificate (Certidão de Falencias e Concordatas) from the City Court Office

Agency : Distributor of the State Courts (Tribunal de Justiça de São Paulo)

These three certificates guarantee that the seller does not owe any payment as a result of a civil, fiscal, and commercial legal dispute. Additionally, it states that no pending sentences or legal proceedings are linked to the seller.

These certificates can be retrieved online at no cost since August 2016 (https://esaj.tjsp.jus.br/sco/abrirCadastro.do). It takes around 1 day for the certificate to be issued if it is negative (that is, that the seller does not have any pending payment nor legal proceedings)

3 Obtain a Labor Justice Certificate (Certidão da Justiça do Trabalho) from the Regional Labor Court

Agency : Regional Labor Court (Tribunal Regional de Trabalho No. 2)

This document is not required by law. Technically, the buyer and seller can agree to trust that all these checks are represented and warranted by the seller without needing to submit the certificate to the public notary. In practice, however, for transactions between companies, the seller will provide these documents.

Since January 2016, the Labor Justice certificate can be retrieved online immediately according to Act GP/CR No. 1/2016. This certificate identifies all the ongoing procedures at the Regional Labor Court in which the company (buyer) is a defendant. The certificate is valid for 90 days, and its

authenticity can be verified online as well.

Less than one day,

online

no charge

Certificates are issued immediately when requested in person at the Fórum do Tribunal de Justiça.

2 days BRL 133; (BRL 13.30 each (the total is BRL 133.30))

1 day no charge

4 Obtain a Certificate of Good Standing on Labor Debts (Certidão Negativa de Débitos Trabalhistas)

Agency : High Labor Court (Tribunal Superior do Trabalho)

5 Obtain a 20-year certificate (Certidão de matrícula) from the Real Estate Property Registry (Cartório de Registro de Imóveis)

Agency : Real Estate Property Registry (Cartório de Registro de Imóveis)

The 20-year certificate (Matricula) needs to be obtained in order to (i) certify the successive chain of owners (and ownership titles) of the plot in the past 20 years; (ii) check if the seller is really the owner of the property; and (iii) check about any encumbrances over the land.

The certificate might be requested online at

https://www.registradores.org.br/Servicos/frmTabelaCustas.aspx. The digital certificate has the same legal validity as the one issued on paper format.

Less than one day,

online

BRL 52.85

The Certificate of Good Standing on Labor Debts is not required by law and therefore does not prevent the registration of real estate transactions. It is, however, common practice and highly recommended to check the standing on labor debts of the seller.

Less than one day, online

no charge

6 Request a Land-Tax Certificate and a Cadastral Certificate (Certidão de Dados Cadastrais do Imovel) from City Hall

Agency : Municipal Prefecture of Sao Paulo (Prefeitura Municipal de São Paulo) These certificates can be obtained in the website: www.prefeitura.sp.gov.br They will establish if there is any pending tax debt affecting the property.

The certificate is free if obtained online.

The buyer can waive this certificate if he assumes the obligation to pay all pending land tax debt related to the real state according to § 2 of Art. 1 of Decree 93.240/86.

Less than one day, online

no cost if obtained online

12 Drafting of Public Deed of Purchase and Sale (Escritura Pública de Venda e Compra) by a Public Notary (Tabelião de Notas)

Agency : Public Notary (Tabelião de Notas do Estado de São Paulo)

The notary will review all the documents obtained in the previous Procedures and proceed to notarize the sale deed. Notary fees are incurred for the notarization of the sale and purchase agreement.

3 days BRL 5,099.02; (BRL

5,099.02 (according to the fee schedule published on the official notary website))

13 Register the escritura (transfer deed) at the appropriate Real Estate Registry with jurisdiction over the property to finalize registration and name change

Agency : Real Estate Registry (Cartório de Registro de Imóveis)

There are 18 Real Estate Registries in São Paulo. The registration of the deed at the corresponding Real Estate Registry is required for the transfer of ownership of the property. It can be arranged directly by the parties or by the notary if the notary offers this supplementary service. By law, the Real Estate Registry has 30 days to analyze the documents and register the transfer deed.

15 days

BRL 3,712.31; (BRL

3,712.31 (according to the schedule in https://www.registradores. org.br/Servicos/frmTabela Custas.aspx))

Update the land taxation records (IPTU – Imposto Predial e Territorial Urbano) to the new

14 owner's name at City Hall

Agency : Municipal Prefecture of Sao Paulo (Prefeitura Municipal de São Paulo)

Theoretically, the Real Estate Registry should inform the Municipality about the transfer of the real estate and the Municipality should automatically update its land taxation records. In practice, however, this automatic system does not really work. The Municipality updates the records a few times a year, sometimes even only once a year. Therefore, in practice, the parties need to go to the Municipality and request the update.

5 days no charge

Takes place simultaneously with previous procedure.

Details – Registering Property in São Paulo – Measure of Quality

Registering Property – Rio de Janeiro

Figure – Registering Property in Rio de Janeiro – Score

Figure – Registering Property in Rio de Janeiro and comparator economies – Ranking and Score

DB 2020 Registering Property Score

Figure – Registering Property in Rio de Janeiro – Procedure, Time and Cost

* This symbol is shown beside procedure numbers that take place simultaneously with the previous procedure.

Figure – Registering Property in Rio de Janeiro and comparator economies – Measure of Quality

Details – Registering Property in Rio de Janeiro – Procedure, Time and Cost

1 Obtain the certificates of Certificates of Registries and Disputes (Certidão dos Cartórios de Protestos), Acquire a Civil Distributor's Certificate (Certidão dos Distribuidores Cívies), a Fiscal Executive Certificate (Certidão de Executivos Fiscais) and a Bankruptcy Certificate (Certidão de Falencias e Concordatas) from the City Court Office

Agency : Rio Rapido

These certificates guarantee that all civil, fiscal, and commercial legal settlements have been finalized and no pending sentences or legal proceedings are linked to the seller. In Rio de Janeiro, it is possible to request these certificates online via a centralized certification office named "Rio Rapido". Although they can be requested online, they need to be picked up personally.

Additionally, since December 2017 it is possible to request and receive these certificates online through E-Cartorios RJ (https://e-cartoriorj.com.br/Home/View/Default.aspx#/kitcertidoes. The majority of practitioners are still using Rio Rapido as of May 1, 2018.

2 Obtain a 20-year certificate (Certidão de matrícula) from the Real Estate Property Registry (Cartório de Registro de Imóveis)

Agency : Real Estate Registry (Cartório de Registro de Imóveis)

The 20-year certificate (Certidão Vintenária) needs to be obtained in order to (i) certify the successive chain of owners (and ownership titles) of the plot in the past 20 years; (ii) check if the seller is really the owner of the property; and (iii) check about any encumbrances over the land.

The Internal Affairs Bureau of the State Court of Rio de Janeiro ("Corregedoria Geral da Justiça do Tribunal de Justiça do Rio de Janeiro") together with the Association of Public Notaries and Public Registry Offices in the State of Rio de Janeiro ("ANOREG-RJ") have implemented E- Cartorios RJ (https://e-cartoriorj.com.br/Home/View/Default.aspx#/kitcertidoes) which is an online platform that aims to concentrate the issuance of all certificates for transferring property, in order to make the process of issuing and registering public deeds faster. The 20-year certificate is one of the certificates that may be obtained online, but only in connection with Real Estate Registries in the City of Rio de Janeiro.

The digital certificate has the same legal validity as the one issued in physical format.

4 days BRL 1,125.49; ((i) BRL

114.04 for each Civil Distributor's Certificate issued by the 1st, 2nd, 3rd and 4th Distributor (x4)

BRL 125.18 for the Fiscal Executive Certificate;
BRL 114.04 for each Bankruptcy Distributor's Certificate issued by the 1st, 2nd, 3rd 4th Distributor (x4)
BRL 87.99 for the Certificate of Registries and Disputes)

3 days BRL 107.73

3 Obtain a Labor Justice Certificate (Certidão da Justiça do Trabalho) from the Regional Labor Court

Agency : Regional Labor Court (Tribunal Regional do Trabalho No. 1)

The Labor Justice Certificate (Certidão de Feitos Trabalhistas) may have one or several sheets. It will depend on the quantity of suits against the company under analysis. The cost for a one page certificate is BRL 5.53 and for each additional page BRL 5.53.

There are 24 Regional Labor Courts in Brazil. The certificates must be issued by the Regional Labor Court of seller's headquarters and of the location of the real estate. Some practitioners request two certificates, one about 1st instance cases and another on 2nd instance cases at the Regional Labor Court.

3 days BRL 5.53

4 Obtain a Certificate of Good Standing on Labor Debts (Certidão Negativa de Débitos Trabalhistas)

Agency : High Labor Court (Tribunal Superior do Trabalho)

Less than one day, online

no charge

Pay transfer tax (ITB I) at the Bank

Agency : Commercial bank

The buyer must pay the transfer tax before the parties can sign the transfer deed. Most notaries prefer to receive the tax payment themselves and then take care of transferring it to the Municipality because they are responsible for checking that the tax payment is correct. Notaries must also file a declaration of all the transactions that they were part of, given that they are jointly liable, to the tax authorities. Therefore, the notary provides the payment on behalf of the buyer and the parties pay at the notary. The payment slip in most cases can be issued online at https://smfonlineitbi.rio.rj.gov.br/cgi-bin/itbi2simulacao_cgi.exe/EntSimulacao. Payment can only be made at Banco Santander's office in the City Hall.

1 day

BRL 48,130; (3% of the

property value)

11 Drafting of Public Deed of Purchase and Sale (Escritura Pública de Venda e Compra) by a Public Notary (Tabelião de Notas)

Agency : Notary's office (Tabelião de Notas)

The notary will review all the documents obtained in the previous Procedures and proceed to notarize the sale deed. Notary fees are incurred for the notarization of the sale and purchase agreement.

An electronic platform to issue electronic public deeds through a Notary has been tested in several Notary offices of Rio de Janeiro, however it has not been implemented widely as of May 1, 2018.

3 days BRL 3,699.98; (BRL

3,235.49, based on the following fee schedule: Public deed with a declared amount up to R$ 15,000.00 costs BRL

191.38. From R$

15,000.01 to R$ 30,000.00

– BRL 316.22/ From R$ 30,000.01 to R$

45,000.00- BRL 441.09/

From 45,000.01 to R$ 60,000.00 – BRL 540.95/

From 60,000.001 to R$ 80,000.00 – BRL 958.80/

From 80,000.01 to R$ 100,000.00 – BRL

1.131.92/ From

100,000.01 to R$

200,000.00 – BRL 1,531.41

/ From 200,000.01 to R$ 400,000.00 – BRL

12 Update the land taxation records (IPTU – Imposto Predial e Territorial Urbano) to the new owner's name at City Hall

Agency : Tax Deparment of the Municipality of Rio de Janeiro (Secretaria municipal da fazenda) Before presenting the title to the Real Estate Registry Office, the new owner needs to update his name on the municipality's records. The information is submitted online to the Municipality. Once the information is submitted, a protocol number for the name change request is issued, which needs to be informed to the registrar. The registrar will verify the information submitted and attach the number of registration of the property (numero de matricula) and then sends the information to

the municipality via the internet portal (https://dief.rio.rj.gov.br/dief/asp/mcriweb/login_usuri.asp)

Less than one day,

online

no charge

1,643.24. For properties valued at R$ 400,000.01 and higher – BRL 144.75 for each additional R$ 100,000.00.)

13 Register the escritura (transfer deed) at the appropriate Real Estate Registry with jurisdiction over the property to finalize registration and name change

Agency : Real Estate Registry (Cartório de Registro de Imóveis)

There are 12 Real Estate Registries in Rio de Janeiro. The registration of the deed at the competent Real Estate Registry is required for the transfer of ownership of the property. It can be arranged directly by the parties or by the notary if the notary offers this supplementary service. By law, the Real Estate Registry has 30 days to analyze the documents and register the transfer deed.

30 days BRL 3,704.9; (As of Jan, 2017 the fee for registration is BRL 3,240.22 based on the following fee schedule: Registration of economic content to R$ 15,000.00 costs BRL 191.38. From R$ 15,000.01 to R$ 30,000.00 – BRL 316.22/

From R$ 30,000.01 to R$ 45,000.00- BRL 441.09/

From 45,000.01 to R$ 60,000.00 – BRL 540.95/

From 60,000.001 to R$ 80,000.00 – BRL 958.80/

From 80,000.01 to R$ 100,000.00 – BRL

1.131.92/ From

100,000.01 to R$

200,000.00 – BRL 1,531.41

/ From 200,000.01 to R$ 400,000.00 – BRL

1,647,97. For properties valued at R$ 400,000.01 and higher – BRL 144.75 for each additional R$ 100,000.00.)

Details – Registering Property in Rio de Janeiro – Measure of Quality

Getting Credit

This topic explores two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Strength of legal rights index (0–12)

Rights of borrowers and lenders through collateral laws (0-10)
Protection of secured creditors’ rights through bankruptcy laws (0-2)

Depth of credit information index (0–8)

Scope and accessibility of credit information distributed by credit bureaus and credit registries (0-8)

Credit bureau coverage (% of adults)

Number of individuals and firms listed in largest credit bureau as a percentage of adult population

Credit registry coverage (% of adults)

Number of individuals and firms listed in credit registry as a percentage of adult population

Doing Business assesses the sharing of credit information and the legal rights of borrowers and lenders with respect to secured transactions through 2 sets of indicators. The depth of credit information index measures rules and practices affecting the coverage, scope and accessibility of credit information available through a credit registry or a credit bureau. The strength of legal rights index measures the degree to which collateral and bankruptcy laws protect the rights of borrowers and lenders and thus facilitate lending. For each economy it is first determined whether a unitary secured transactions system exists. Then two case scenarios, case A and case B, are used to determine how a nonpossessory security interest is created, publicized and enforced according to the law. Special emphasis is given to how the collateral registry operates (if registration of security interests is possible). The case scenarios involve a secured borrower, company ABC, and a secured lender, BizBank.

In some economies the legal framework for secured transactions will allow only case A or case B (not both) to apply. Both cases examine the same set of legal provisions relating to the use of movable collateral.

Several assumptions about the secured borrower (ABC) and lender (BizBank) are used:

ABC is a domestic limited liability company (or its legal equivalent).
ABC has up to 50 employees.
ABC has its headquarters and only base of operations in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Both ABC and BizBank are 100% domestically owned.

The case scenarios also involve assumptions. In case A, as collateral for the loan, ABC grants BizBank a nonpossessory security interest in one category of movable assets, for example, its machinery or its inventory. ABC wants to keep both possession and ownership of the collateral. In economies where the law does not allow nonpossessory security interests in movable property, ABC and BizBank use a fiduciary transfer-of-title arrangement (or a similar substitute for nonpossessory security interests).

In case B, ABC grants BizBank a business charge, enterprise charge, floating charge or any charge that gives BizBank a security interest over ABC’s combined movable assets (or as much of ABC’s movable assets as possible). ABC keeps ownership and possession of the assets.

Getting Credit – São Paulo

Figure – Getting Credit in São Paulo – Score

Figure – Getting Credit in São Paulo and comparator economies – Ranking and Score

DB 2020 Getting Credit Score

Note: The ranking of economies on the ease of getting credit is determined by sorting their scores for getting credit. These scores are the sum of the scores for the strength of legal rights index and the depth of credit information index.

Figure – Legal Rights in São Paulo and comparator economies

Details – Legal Rights in São Paulo

Figure – Credit Information in São Paulo and comparator economies

Details – Credit Information in São Paulo

Note: An economy receives a score of 1 if there is a "yes" to either bureau or registry. If the credit bureau or registry is not operational or covers less than 5% of the adult population, the total score on the depth of credit information index is 0.

Getting Credit – Rio de Janeiro

Figure – Getting Credit in Rio de Janeiro – Score

Figure – Getting Credit in Rio de Janeiro and comparator economies – Ranking and Score

DB 2020 Getting Credit Score

Figure – Legal Rights in Rio de Janeiro and comparator economies

Details – Legal Rights in Rio de Janeiro

Figure – Credit Information in Rio de Janeiro and comparator economies

Details – Credit Information in Rio de Janeiro

Protecting Minority Investors

This topic measures the strength of minority shareholder protections against misuse of corporate assets by directors for their personal gain as well as shareholder rights, governance safeguards and corporate transparency requirements that reduce the risk of abuse. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Extent of disclosure index (0–10): Disclosure, review, and approval requirements for related-party transactions
Extent of director liability index (0–10): Ability of minority shareholders to sue and hold interested directors liable for prejudicial related-party transactions; Available legal

remedies (damages, disgorgement of profits, disqualification from managerial position(s) for one year or more, rescission of the transaction)
Ease of shareholder suits index (0–10): Access to internal corporate documents; Evidence obtainable during trial and allocation of legal expenses
Extent of conflict of interest regulation index (0-30): Sum of the extent of disclosure, extent of director liability and ease of shareholder suits indices
Extent of shareholder rights index (0-6): Shareholders’ rights and role in major corporate decisions
Extent of ownership and control index (0-7): Governance safeguards protecting shareholders from undue board control and entrenchment
Extent of corporate transparency index (0-7): Corporate transparency on ownership stakes, compensation, audits and financial prospects
Extent of shareholder governance index (0–20): Sum of the extent of shareholders rights, extent of ownership and control and extent of corporate transparency indices
Strength of minority investor protection index (0–50): Sum of the extent of conflict of interest regulation and extent of shareholder governance indices

To make the data comparable across economies, a case study uses several assumptions about the business and the transaction.

The business (Buyer):

Is a publicly traded corporation listed on the economy’s most important stock exchange.
Has a board of directors and a chief executive officer (CEO) who may legally act on behalf of Buyer where permitted, even if this is not speciﬁcally required by law.
Has a supervisory board in economies with a two-tier board system on which Mr. James appointed 60% of the shareholder-elected members.
Has not adopted bylaws or articles of association that go beyond the minimum requirements. Does not follow codes, principles, recommendations or guidelines that are not mandatory.
Is a manufacturing company with its own distribution network.

The transaction involves the following details:
Mr. James owns 60% of Buyer, sits on Buyer’s board of directors and elected two directors to Buyer’s ﬁve-member board.
Mr. James also owns 90% of Seller, a company that operates a chain of retail hardware stores. Seller recently closed a large number of its stores.
Mr. James proposes that Buyer purchase Seller’s unused ﬂeet of trucks to expand Buyer’s distribution of its food products, a proposal to which Buyer agrees. The price is equal to 10% of Buyer’s assets and is higher than the market value.
The proposed transaction is part of the company’s principal activity and is not outside the authority of the company.
Buyer enters into the transaction. All required approvals are obtained, and all required disclosures made—that is, the transaction was not entered into fraudulently.
The transaction causes damages to Buyer. Shareholders sue Mr. James and the executives and directors that approved the transaction.

Protecting Minority Investors – São Paulo

Figure – Protecting Minority in São Paulo – Score

Figure – Protecting Minority Investors in São Paulo and comparator economies – Ranking and Score

DB 2020 Protecting Minority Investors Score

Note: The ranking of economies on the strength of minority investor protections is determined by sorting their scores for protecting minority investors. These scores are the simple average of the scores for the extent of conﬂict of interest regulation index and the extent of shareholder governance index.

Figure – Protecting Minority Investors in São Paulo and comparator economies – Measure of Quality

Details – Protecting Minority Investors in São Paulo – Measure of Quality

Protecting Minority Investors – Rio de Janeiro

Figure – Protecting Minority in Rio de Janeiro – Score

Figure – Protecting Minority Investors in Rio de Janeiro and comparator economies – Ranking and Score

DB 2020 Protecting Minority Investors Score

Figure – Protecting Minority Investors in Rio de Janeiro and comparator economies – Measure of Quality

Details – Protecting Minority Investors in Rio de Janeiro – Measure of Quality

Paying Taxes

This topic records the taxes and mandatory contributions that a medium-size company must pay or withhold in a given year, as well as the administrative burden of paying taxes and contributions and complying with postfiling procedures (VAT refund and tax audit). The most recent round of data collection for the project was completed in May 2019 covering for the Paying Taxes indicator calendar year 2018 (January 1, 2018 – December 31, 2018). See the methodology for more information.

What the indicators measure

Tax payments for a manufacturing company in 2018 (number per year adjusted for electronic and joint filing and payment)

Total number of taxes and contributions paid or withheld, including consumption taxes (value added tax, sales tax or goods and service tax)
Method and frequency of filing and payment

Time required to comply with 3 major taxes (hours per year)

Collecting information, computing tax payable
Preparing separate tax accounting books, if required
Completing tax return, filing with agencies
Arranging payment or withholding

Total tax and contribution rate (% of commercial profits)

Profit or corporate income tax
Social contributions, labor taxes paid by employer
Property and property transfer taxes
Dividend, capital gains, financial transactions taxes
Waste collection, vehicle, road and other taxes

Postfiling Index

Time to comply with VAT refund (hours)
Time to obtain VAT refund (weeks)
Time to comply with a corporate income tax correction (hours)
Time to complete a corporate income tax correction (weeks)

Using a case scenario, Doing Business records taxes and mandatory contributions a medium size company must pay in a year, and measures the administrative burden of paying taxes, contributions and dealing with postfiling processes. Information is also compiled on frequency of filing and payments, time taken to comply with tax laws, time taken to comply with the requirements of postfiling processes and time waiting.

To make data comparable across economies, several assumptions are used:

TaxpayerCo is a medium-size business that started operations on January 1, 2017. It produces ceramic flowerpots and sells them at retail. All taxes and contributions recorded are paid in the second year of operation (calendar year 2018). Taxes and mandatory contributions are measured at all levels of government.

The VAT refund process:

In June 2018, TaxpayerCo. makes a large capital purchase: the value of the machine is 65 times income per capita of the economy. Sales are equally spread per month (1,050 times income per capita divided by 12) and cost of goods sold are equally expensed per month (875 times income per capita divided by 12). The machinery seller is registered for VAT and excess input VAT incurred in June will be fully recovered after four consecutive months if the VAT rate is the same for inputs, sales and the machine and the tax reporting period is every month. Input VAT will exceed Output VAT in June 2018.

The corporate income tax audit process:

An error in calculation of income tax liability (for example, use of incorrect tax depreciation rates, or incorrectly treating an expense as tax deductible) leads to an incorrect income tax return and a corporate income tax underpayment. TaxpayerCo. discovered the error and voluntarily notified the tax authority. The value of the underpaid income tax liability is 5% of the corporate income tax liability due. TaxpayerCo. submits corrected information after the deadline for submitting the annual tax return, but within the tax assessment period.

Paying Taxes – São Paulo

Figure – Paying Taxes in São Paulo – Score

Figure – Paying Taxes in São Paulo and comparator economies – Ranking and Score

DB 2020 Paying Taxes Score

Note: The ranking of economies on the ease of paying taxes is determined by sorting their scores for paying taxes. These scores are the simple average of the scores for each of the component indicators, with a threshold and a nonlinear transformation applied to one of the component indicators, the total tax and contribution rate. The threshold is defined as the total tax and contribution rate at the 15th percentile of the overall distribution for all years included in the analysis up to and including Doing Business 2015, which is 26.1%. All economies with a total tax and contribution rate below this threshold receive the same score as the economy at the threshold.

Figure – Paying Taxes in São Paulo and comparator economies – Measure of Quality

Details – Paying Taxes in São Paulo

Notes:

Names of taxes have been standardized. For instance income tax, profit tax, tax on company's income are all named corporate income tax in this table. The hours for VAT include all the VAT and sales taxes applicable.

The hours for Social Security include all the hours for labor taxes and mandatory contributions in general.

The postfiling index is the average of the scores on time to comply with VAT refund, time to obtain a VAT refund, time to comply with a corporate income tax correction and time to complete a corporate income tax correction.

N/A = Not applicable.

Paying Taxes – Rio de Janeiro

Figure – Paying Taxes in Rio de Janeiro – Score

Figure – Paying Taxes in Rio de Janeiro and comparator economies – Ranking and Score

DB 2020 Paying Taxes Score

Figure – Paying Taxes in Rio de Janeiro and comparator economies – Measure of Quality

Details – Paying Taxes in Rio de Janeiro

Details – Paying Taxes in Rio de Janeiro – Tax by Type

Notes:

The hours for Social Security include all the hours for labor taxes and mandatory contributions in general.

N/A = Not applicable.

Trading across Borders

Doing Business records the time and cost associated with the logistical process of exporting and importing goods. Doing Business measures the time and cost (excluding tariffs) associated with three sets of procedures—documentary compliance, border compliance and domestic transport—within the overall process of exporting or importing a shipment of goods. The most recent round of data collection for the project was completed in May 2019. See the methodology for more information.

What the indicators measure

Documentary compliance

Obtaining, preparing and submitting documents during transport, clearance, inspections and port or border handling in origin economy
Obtaining, preparing and submitting documents required by destination economy and any transit economies
Covers all documents required by law and in practice, including electronic submissions of information

Border compliance

Customs clearance and inspections
Inspections by other agencies (if applied to more than 20% of shipments)
Handling and inspections that take place at the economy’s port or border

Domestic transport

Loading or unloading of the shipment at the warehouse or port/border
Transport between warehouse and port/border
Traffic delays and road police checks while shipment is en route

To make the data comparable across economies, a few assumptions are made about the traded goods and the transactions:

Time:

Time is measured in hours, and 1 day is 24 hours (for example, 22 days are recorded as 22×24=528 hours). If customs clearance takes 7.5 hours, the data are recorded as is. Alternatively, suppose documents are submitted to a customs agency at 8:00a.m., are processed overnight and can be picked up at 8:00a.m. the next day. The time for customs clearance would be recorded as 24 hours because the actual procedure took 24 hours.

Cost:

Insurance cost and informal payments for which no receipt is issued are excluded from the costs recorded. Costs are reported in U.S. dollars. Contributors are asked to convert local currency into U.S. dollars based on the exchange rate prevailing on the day they answer the questionnaire. Contributors are private sector experts in international trade logistics and are informed about exchange rates.

Assumptions of the case study:

For all 190 economies covered by Doing Business, it is assumed a shipment is in a warehouse in the largest business city of the exporting economy and travels to a warehouse in the largest business city of the importing economy.
It is assumed each economy imports 15 metric tons of containerized auto parts (HS 8708) from its natural import partner—the economy from which it imports the largest value (price times quantity) of auto parts. It is assumed each economy exports the product of its comparative advantage (defined by the largest export value) to its natural export partner—the economy that is the largest purchaser of this product. Shipment value is assumed to be $50,000.
The mode of transport is the one most widely used for the chosen export or import product and the trading partner, as is the seaport or land border crossing.
All electronic information submissions requested by any government agency in connection with the shipment are considered to be documents obtained, prepared and submitted during the export or import process.
A port or border is a place (seaport or land border crossing) where merchandise can enter or leave an economy.
Relevant government agencies include customs, port authorities, road police, border guards, standardization agencies, ministries or departments of agriculture or industry, national security agencies and any other government authorities.

Trading across Borders – São Paulo

Figure – Trading across Borders in São Paulo and comparator economies – Ranking and Score

Note: The ranking of economies on the ease of trading across borders is determined by sorting their scores for trading across borders. These scores are the simple average of the scores for the time and cost for documentary compliance and border compliance to export and import.

Figure – Trading across Borders in São Paulo – Time and Cost

Details – Trading across Borders in São Paulo

Details – Trading across Borders in São Paulo – Components of Border Compliance

Details – Trading across Borders in São Paulo – Trade Documents

Trading across Borders – Rio de Janeiro

Figure – Trading across Borders in Rio de Janeiro – Score

Figure – Trading across Borders in Rio de Janeiro and comparator economies – Ranking and Score

Figure – Trading across Borders in Rio de Janeiro – Time and Cost

Details – Trading across Borders in Rio de Janeiro

Details – Trading across Borders in Rio de Janeiro – Components of Border Compliance

Details – Trading across Borders in Rio de Janeiro – Trade Documents

Enforcing Contracts

The enforcing contracts indicator measures the time and cost for resolving a commercial dispute through a local first-instance court, and the quality of judicial processes index, evaluating whether each economy has adopted a series of good practices that promote quality and efficiency in the court system. The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Time required to enforce a contract through the courts (calendar days)

Time to file and serve the case
Time for trial and to obtain the judgment
Time to enforce the judgment

Cost required to enforce a contract through the courts (% of claim value)

Average attorney fees
Court costs
Enforcement costs

Quality of judicial processes index (0-18)

Court structure and proceedings (-1-5)
Case management (0-6)
Court automation (0-4)
Alternative dispute resolution (0-3)

The dispute in the case study involves the breach of a sales contract between two domestic businesses. The case study assumes that the court hears an expert on the quality of the goods in dispute. This distinguishes the case from simple debt enforcement.

To make the data on the time and comparable across economies, several assumptions about the case are used:

The dispute concerns a lawful transaction between two businesses (Seller and Buyer), both located in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
The Buyer orders custom-made furniture, then fails to pay alleging that the goods are not of adequate quality.
The value of the dispute is 200% of the income per capita or the equivalent in local currency of USD 5,000, whichever is greater.
The Seller sues the Buyer before the court with jurisdiction over commercial cases worth 200% of income per capita or $5,000 whichever is greater.
The Seller requests the pretrial attachment of the defendant’s movable assets to secure the claim.
The claim is disputed on the merits because of Buyer’s allegation that the quality of the goods was not adequate.
The judge decides in favor of the seller; there is no appeal.
The Seller enforces the judgment through a public sale of the Buyer’s movable assets.

Enforcing Contracts – São Paulo

Figure – Enforcing Contracts in São Paulo – Score

Figure – Enforcing Contracts in São Paulo and comparator economies – Ranking and Score

DB 2020 Enforcing Contracts Score

0 100

80.9: China (Rank: 5)

72.2: Russian Federation (Rank: 21)

67.0: Mexico (Rank: 43)

65.4: São Paulo

64.7: Chile (Rank: 54) 62.0: Rio de Janeiro

Note: The ranking of economies on the ease of enforcing contracts is determined by sorting their scores for enforcing contracts. These scores are the simple average of the scores for each of the component indicators.

Figure – Enforcing Contracts in São Paulo – Time and Cost

1000

Time (days)

800

600

400

200

Chile China Latin America

& Caribbean

Time (days) Cost (% of claim value)

32.0

33.0

911

25.6

774.2

24.0

731

519

589.6 21.5

20.7

496

16.2

16.5

341 337

Mexico OECD

high income

Rio de

Janeiro

Russian Federation

Cost (% of claim value)

São Paulo

Figure – Enforcing Contracts in São Paulo and comparator economies – Measure of Quality

São Paulo

Chile

China

1.5

3.5

2 3

5.5

3.5

3 5

Mexico

Rio de Janeiro

2.5

3.3

0.5

3.8

3 5

Russian Federation

2.5

4 0 3

OECD high income

Latin America & Caribbean

2.5

2.4

2.2

3.2

2.4

3.6

0 2 4 6 8 10 12 14 16 18

Sub-Indicator Score

Alternative dispute resolution (0-3) Case management (0-6) Court automation (0-4) Court structure and proceedings (-1-5)

Details – Enforcing Contracts in São Paulo

Indicator

Time (days) 731

Trial and judgment 480

Filing and service 41

Cost (% of claim value) 20.7

Enforcement of judgment 210

Court fees 7

Attorney fees 12.6

Quality of judicial processes index (0-18) 12.5

Enforcement fees 1.1

Case management (0-6) 3.0

Court structure and proceedings (-1-5) 3.5

Alternative dispute resolution (0-3) 3.0

Court automation (0-4) 3.0

Details – Enforcing Contracts in São Paulo – Measure of Quality
	Answer	Score
Quality of judicial processes index (0-18)		12.5
Court structure and proceedings (-1-5)		3.5
1. Is there a court or division of a court dedicated solely to hearing commercial cases?	No	0.0
2. Small claims court		1.5
2.a. Is there a small claims court or a fast-track procedure for small claims?	Yes
2.b. If yes, is self-representation allowed?	Yes
3. Is pretrial attachment available?	Yes	1.0
4. Are new cases assigned randomly to judges?	Yes, automatic	1.0
5. Does a woman's testimony carry the same evidentiary weight in court as a man's?	Yes	0.0
Case management (0-6)		3.0
1. Time standards		0.0
1.a. Are there laws setting overall time standards for key court events in a civil case?	Yes
1.b. If yes, are the time standards set for at least three court events?	No
1.c. Are these time standards respected in more than 50% of cases?	No
2. Adjournments		0.0
2.a. Does the law regulate the maximum number of adjournments that can be granted?	No
2.b. Are adjournments limited to unforeseen and exceptional circumstances?	No
2.c. If rules on adjournments exist, are they respected in more than 50% of cases?	n.a.
3. Can two of the following four reports be generated about the competent court: (i) time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report?	Yes	1.0
4. Is a pretrial conference among the case management techniques used before the competent court?	No	0.0
5. Are there any electronic case management tools in place within the competent court for use by judges?	Yes	1.0
6. Are there any electronic case management tools in place within the competent court for use by lawyers?	Yes	1.0
Court automation (0-4)		3.0
1. Can the initial complaint be filed electronically through a dedicated platform within the competent court?	Yes	1.0
2. Is it possible to carry out service of process electronically for claims filed before the competent court?	No	0.0
3. Can court fees be paid electronically within the competent court?	Yes	1.0
4. Publication of judgments		1.0
4.a Are judgments rendered in commercial cases at all levels made available to the general public through publication in official gazettes, in newspapers or on the internet or court website?	Yes
4.b. Are judgments rendered in commercial cases at the appellate and supreme court level made available to the general public through publication in official gazettes, in newspapers or on the internet or court website?	Yes
Alternative dispute resolution (0-3)		3.0
1. Arbitration		1.5
1.a. Is domestic commercial arbitration governed by a consolidated law or consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects?	Yes
1.b. Are there any commercial disputes—aside from those that deal with public order or public policy— that cannot be submitted to arbitration?	No
1.c. Are valid arbitration clauses or agreements usually enforced by the courts?	Yes

2. Mediation/Conciliation 1.5

2.b. Are mediation, conciliation or both governed by a consolidated law or consolidated chapter or

section of the applicable code of civil procedure encompassing substantially all their aspects (for example, definition, aim and scope of application, desig

Yes

2.a. Is voluntary mediation or conciliation available? Yes

2.c. Are there financial incentives for parties to attempt mediation or conciliation (i.e., if mediation or conciliation is successful, a refund of court filing fees, income tax credits or the like)?

Yes

Enforcing Contracts – Rio de Janeiro

Standardized Case

Claim value BRL 61,363

City Covered Rio de Janeiro

Court name Rio de Janeiro Civil Court (Vara Cível)

Figure – Enforcing Contracts in Rio de Janeiro – Score

Indicator

Rio de Janeiro

Latin America & Caribbean

OECD high income

Best Regulatory Performance

Time (days)

911

774.2

589.6

120 (Singapore)

Quality of judicial processes index (0-18)

14.0

8.8

11.7

None in 2018/19

Cost (% of claim value) 24.0 32.0 21.5 0.1 (Bhutan)

35.2

73.1

77.8

Time

Cost

Quality of judicial processes index

Figure – Enforcing Contracts in Rio de Janeiro and comparator economies – Ranking and Score

DB 2020 Enforcing Contracts Score

0 100

80.9: China (Rank: 5)

72.2: Russian Federation (Rank: 21)

67.0: Mexico (Rank: 43)

65.4: São Paulo

64.7: Chile (Rank: 54)

62.0: Rio de Janeiro

Figure – Enforcing Contracts in Rio de Janeiro – Time and Cost

1000

Time (days)

800

600

400

200

Chile China Latin America

& Caribbean

Time (days) Cost (% of claim value)

32.0

33.0

911

25.6

774.2

24.0

731

519

589.6 21.5

20.7

496

16.2

16.5

341 337

Mexico OECD

high income

Rio de

Janeiro

Russian Federation

Cost (% of claim value)

São Paulo

Figure – Enforcing Contracts in Rio de Janeiro and comparator economies – Measure of Quality

Rio de Janeiro

Chile

China

1.5

3.5

3 5

2 3

5.5 3 5

Mexico

2.5

3.3

0.5

3.8

Russian Federation

2.5

4 0 3

São Paulo

OECD high income

Latin America & Caribbean

2.5

2.4

2.2

3.2

2.4

3.6

3.5

0 2 4 6 8 10 12 14 16 18

Sub-Indicator Score

Alternative dispute resolution (0-3) Case management (0-6) Court automation (0-4) Court structure and proceedings (-1-5)

Details – Enforcing Contracts in Rio de Janeiro

Indicator

Time (days) 911

Trial and judgment 660

Filing and service 41

Cost (% of claim value) 24.0

Enforcement of judgment 210

Court fees 7

Attorney fees 15.9

Quality of judicial processes index (0-18) 14.0

Enforcement fees 1.1

Case management (0-6) 3.0

Court structure and proceedings (-1-5) 5.0

Alternative dispute resolution (0-3) 3.0

Court automation (0-4) 3.0

Details – Enforcing Contracts in Rio de Janeiro – Measure of Quality
	Answer	Score
Quality of judicial processes index (0-18)		14.0
Court structure and proceedings (-1-5)		5.0
1. Is there a court or division of a court dedicated solely to hearing commercial cases?	Yes	1.5
2. Small claims court		1.5
2.a. Is there a small claims court or a fast-track procedure for small claims?	Yes
2.b. If yes, is self-representation allowed?	Yes
3. Is pretrial attachment available?	Yes	1.0
4. Are new cases assigned randomly to judges?	Yes, automatic	1.0
5. Does a woman's testimony carry the same evidentiary weight in court as a man's?	Yes	0.0
Case management (0-6)		3.0
1. Time standards		0.0
1.a. Are there laws setting overall time standards for key court events in a civil case?	Yes
1.b. If yes, are the time standards set for at least three court events?	No
1.c. Are these time standards respected in more than 50% of cases?	No
2. Adjournments		0.0
2.a. Does the law regulate the maximum number of adjournments that can be granted?	No
2.b. Are adjournments limited to unforeseen and exceptional circumstances?	No
2.c. If rules on adjournments exist, are they respected in more than 50% of cases?	n.a.
3. Can two of the following four reports be generated about the competent court: (i) time to disposition report; (ii) clearance rate report; (iii) age of pending cases report; and (iv) single case progress report?	Yes	1.0
4. Is a pretrial conference among the case management techniques used before the competent court?	No	0.0
5. Are there any electronic case management tools in place within the competent court for use by judges?	Yes	1.0
6. Are there any electronic case management tools in place within the competent court for use by lawyers?	Yes	1.0
Court automation (0-4)		3.0
1. Can the initial complaint be filed electronically through a dedicated platform within the competent court?	Yes	1.0
2. Is it possible to carry out service of process electronically for claims filed before the competent court?	No	0.0
3. Can court fees be paid electronically within the competent court?	Yes	1.0
4. Publication of judgments		1.0
4.a Are judgments rendered in commercial cases at all levels made available to the general public through publication in official gazettes, in newspapers or on the internet or court website?	Yes
4.b. Are judgments rendered in commercial cases at the appellate and supreme court level made available to the general public through publication in official gazettes, in newspapers or on the internet or court website?	Yes
Alternative dispute resolution (0-3)		3.0
1. Arbitration		1.5
1.a. Is domestic commercial arbitration governed by a consolidated law or consolidated chapter or section of the applicable code of civil procedure encompassing substantially all its aspects?	Yes
1.b. Are there any commercial disputes—aside from those that deal with public order or public policy— that cannot be submitted to arbitration?	No
1.c. Are valid arbitration clauses or agreements usually enforced by the courts?	Yes

2. Mediation/Conciliation 1.5

2.b. Are mediation, conciliation or both governed by a consolidated law or consolidated chapter or section of the applicable code of civil procedure encompassing substantially all their aspects (for

example, definition, aim and scope of application, desig

Yes

2.a. Is voluntary mediation or conciliation available? Yes

2.c. Are there financial incentives for parties to attempt mediation or conciliation (i.e., if mediation or conciliation is successful, a refund of court filing fees, income tax credits or the like)?

Yes

Resolving Insolvency

Doing Business studies the time, cost and outcome of insolvency proceedings involving domestic legal entities. These variables are used to calculate the recovery rate, which is recorded as cents on the dollar recovered by secured creditors through reorganization, liquidation or debt enforcement (foreclosure or receivership) proceedings. To determine the present value of the amount recovered by creditors, Doing Business uses the lending rates from the International Monetary Fund, supplemented with data from central banks and the Economist Intelligence Unit. The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Time required to recover debt (years)

Measured in calendar years
Appeals and requests for extension are included

Cost required to recover debt (% of debtor’s estate)
Measured as percentage of estate value
Court fees
Fees of insolvency administrators
Lawyers’ fees
Assessors’ and auctioneers’ fees
Other related fees

To make the data on the time, cost and outcome comparable across economies, several assumptions about the business and the case are used:
- A hotel located in the largest city (or cities) has 201 employees and 50 suppliers. The hotel experiences financial difficulties.
- The value of the hotel is 100% of the income per capita or the equivalent in local currency of USD 200,000, whichever is greater.
- The hotel has a loan from a domestic bank, secured by a mortgage over the hotel’s real estate. The hotel cannot pay back the loan, but makes enough money to operate otherwise.
In addition, Doing Business evaluates the quality of legal framework applicable to judicial liquidation and reorganization proceedings and the extent to which best insolvency practices have been implemented in each economy covered.

Outcome
Whether business continues operating as a going concern or business assets are sold piecemeal

Recovery rate for creditors
Measures the cents on the dollar recovered by secured creditors
Outcome for the business (survival or not) determines the maximum value that can be recovered
Official costs of the insolvency proceedings are deducted
Depreciation of furniture is taken into account
Present value of debt recovered

Strength of insolvency framework index (0- 16)
Sum of the scores of four component indices:
Commencement of proceedings index (0-3)
Management of debtor’s assets index (0-6)
Reorganization proceedings index (0-3)
Creditor participation index (0-4)

Resolving Insolvency – São Paulo

Indicator

São Paulo

Latin America & Caribbean

OECD high income

Best Regulatory Performance

Recovery rate (cents on the dollar)

18.2

31.2

70.2

92.9 (Norway)

Cost (% of estate)

12.0

16.8

9.3

1.0 (Norway)

Time (years) 4.0 2.9 1.7 0.4 (Ireland)

Figure – Resolving Insolvency in São Paulo – Score

Strength of insolvency framework index (0-16)

13.0

7.2

11.9

None in 2018/19

Outcome (0 as piecemeal sale and 1 as going concern) 1 .. .. ..

19.6

81.3

Recovery rate Strength of insolvency framework index

Figure – Resolving Insolvency in São Paulo and comparator economies – Ranking and Score

DB 2020 Resolving Insolvency Score

70.3: Mexico (Rank: 33)

62.1: China (Rank: 51)

60.1: Chile (Rank: 53)

59.1: Russian Federation (Rank: 57) 50.4: Rio de Janeiro

50.4: São Paulo

0 100

Note: The ranking of economies on the ease of resolving insolvency is determined by sorting their scores for resolving insolvency. These scores are the simple average of the scores for the recovery rate and the strength of insolvency framework index.

Figure – Resolving Insolvency in São Paulo – Time and Cost

4.5

Time (years)

3.5

2.5

1.5

0.5

Chile China Latin America

& Caribbean

Time (years) Cost (% of estate)

22.0

4.0

18.0

14.5

2.9

16.8

2.0

12.0

1.7

1.8

1.7

2.0

9.3

9.0

Mexico OECD

high income

Rio de

Janeiro

Russian Federation

Cost (% of estate)

São Paulo

Figure – Resolving Insolvency in São Paulo and comparator economies – Measure of Quality

São Paulo

Chile

China

Mexico

Rio de Janeiro

Russian Federation

4.5

5.5

2.5

3 2

2 1.5

3 1

2.5

OECD high income

Latin America & Caribbean

3.7

5.3

2.4

2.8

1.9

0.8

2.1

1.9

0 2 4 6 8 10 12 14 16

Sub-Indicator Score

Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3)

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”

Figure – Resolving Insolvency in São Paulo and comparator economies – Recovery Rate

63.9

41.9

43.0

36.9

31.2

18.2

Recovery rate(cents on the dollar)

São Paulo Chile China Mexico Russian Federation Rio de Janeiro Latin America & Caribbea

Details – Resolving Insolvency in São Paulo

Indicator Answer Score

Proceeding liquidation (after an attempt at reorganization)

The most likely procedure applicable to our case study would be a reorganization, which will then be converted into a liquidation. Mirage may use the reorganization proceeding to gain time, find a new investor, or renegotiate its debt.

Insolvency proceedings will therefore start with Mirage (debtor) filing for court-supervised reorganization (recuperação judicial) with the Bankruptcy Court of the District of São Paulo. Mirage will benefit from the automatic stay / moratorium (article 6 of the Bankruptcy Law) and Mirage’s managers will draft a plan that foresees the continuation of Mirage’s operations as a going concern, where Mirage’s management will stay in control. However, it is very likely that this plan is not approved, and that the case will be converted into liquidation, for the following reasons: (i) BizBank will most likely vote against the plan, since for BizBank the most efficient outcome is the sale of the business as a going concern, free and clear of labor and tax claims (which cannot be achieved through a reorganization), and (ii) no plan can be approved without Mirage’s consent, as it is the only creditor holding secured debt (class II claims), and holds 70% of Mirage’s total debt.

Time (in years)

4.0

A reorganization procedure that is then converted into liquidation will approximately take 4 years in total. According to the Bankruptcy Law, the reorganization plan must be approved by the creditors within 180 days from commencement of reorganization proceedings (this is the maximum period for which the individual actions are stayed). However, this time will probably be extended several times, because the creditors are not likely to approve the reorganization plan during the first meeting. In practice, it will take almost 2 years to prepare the creditors list, draft and vote the plan, which would be rejected under our case study assumptions. The case will then be converted into liquidation (where the assets would be sold as a going concern), taking the formal conversion and the organization and execution of the sale

2 additional years (until the proceeds of the sale are finally distributed among creditors).

Outcome going concern Yes, the hotel will continue operating as a going concern, since as a result of liquidation proceedings, Mirage is likely to be sold as a going concern, free and clear of labor and tax claims, according to article 141.II.

Recovery rate

(cents on the dollar)

18.2

Cost (% of estate) 12.0 The costs associated with the case would amount to approximately 12% of the value of the debtor's estate. The main components of this total cost would be the attorney's fees, which would amount to 6% of the value of the estate, and the insolvency administrator fees, which would amount to 4%, plus 2% related to court fees.

Details – Resolving Insolvency in São Paulo – Measure of Quality
	Answer	Score
Strength of insolvency framework index (0-16)		13.0
Commencement of proceedings index (0-3)		2.5
What procedures are available to a DEBTOR when commencing insolvency proceedings?	(a) Debtor may file for both liquidation and reorganization	1.0
Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor?	(b) Yes, but a creditor may file for liquidation only	0.5
What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a) Debtor is generally unable to pay its debts as they mature (b) The value of debtor's liabilities exceeds the value of its assets	(c) Both (a) and (b) options are available, but only one of them needs to be complied with	1.0
Management of debtor's assets index (0-6)		5.5
Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the debtor?	Yes	1.0
Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts?	Yes	1.0
Does the insolvency framework allow avoidance of preferential transactions?	Yes	1.0
Does the insolvency framework allow avoidance of undervalued transactions?	Yes	1.0
Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of insolvency proceedings?	Yes	1.0
Does the insolvency framework assign priority to post-commencement credit?	(a) Yes over all pre- commencement creditors, secured or unsecured	0.5
Reorganization proceedings index (0-3)		2.0
Which creditors vote on the proposed reorganization plan?	(b) Only creditors whose rights are affected by the proposed plan	1.0
Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as what they would obtain in a liquidation?	No	0.0
Are the creditors divided into classes for the purposes of voting on the reorganization plan, does each class vote separately and are creditors in the same class treated equally?	Yes	1.0
Creditor participation index (0-4)		3.0
Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency representative?	Yes	1.0
Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor?	No	0.0
Does the insolvency framework provide that a creditor has the right to request information from the insolvency representative?	Yes	1.0
Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting creditors' claims?	Yes	1.0

Note: Even if the economy’s legal framework includes provisions related to insolvency proceedings (liquidation or reorganization), the economy receives 0 points for the strength of insolvency framework index, if time, cost and outcome indicators are recorded as “no practice.”

Resolving Insolvency – Rio de Janeiro

Indicator

Rio de Janeiro

Latin America & Caribbean

OECD high income

Best Regulatory Performance

Recovery rate (cents on the dollar)

18.2

31.2

70.2

92.9 (Norway)

Cost (% of estate)

12.0

16.8

9.3

1.0 (Norway)

Time (years) 4.0 2.9 1.7 0.4 (Ireland)

Figure – Resolving Insolvency in Rio de Janeiro – Score

Strength of insolvency framework index (0-16)

13.0

7.2

11.9

None in 2018/19

Outcome (0 as piecemeal sale and 1 as going concern) 1 .. .. ..

19.6

81.3

Recovery rate Strength of insolvency framework index

Figure – Resolving Insolvency in Rio de Janeiro and comparator economies – Ranking and Score

DB 2020 Resolving Insolvency Score

70.3: Mexico (Rank: 33)

62.1: China (Rank: 51)

60.1: Chile (Rank: 53)

59.1: Russian Federation (Rank: 57)

50.4: Rio de Janeiro

50.4: São Paulo

0 100

Figure – Resolving Insolvency in Rio de Janeiro – Time and Cost

4.5

Time (years)

3.5

2.5

1.5

0.5

Chile China Latin America

& Caribbean

Time (years) Cost (% of estate)

22.0

4.0

18.0

14.5

2.9

16.8

2.0

12.0

1.7

1.8

1.7

2.0

9.3

9.0

Mexico OECD

high income

Rio de

Janeiro

Russian Federation

Cost (% of estate)

São Paulo

Figure – Resolving Insolvency in Rio de Janeiro and comparator economies – Measure of Quality

Rio de Janeiro

Chile

China

Mexico

Russian Federation

São Paulo

4.5

5.5

2.5

3 2

2 1.5

3 1

2.5

OECD high income

Latin America & Caribbean

3.7

5.3

2.4

2.8

1.9

0.8

2.1

1.9

0 2 4 6 8 10 12 14 16

Sub-Indicator Score

Management of debtor's assets index (0-6) Commencement of proceedings index (0-3) Creditor participation index (0-4) Reorganization proceedings index (0-3)

Figure – Resolving Insolvency in Rio de Janeiro and comparator economies – Recovery Rate

63.9

41.9

43.0

36.9

31.2

18.2

Recovery rate(cents on the dollar)

Rio de Janeiro Chile China Mexico Russian Federation São Paulo Latin America & Caribbea

Details – Resolving Insolvency in Rio de Janeiro

Indicator Answer Score

Proceeding liquidation (after an attempt at reorganization)

Insolvency proceedings will therefore start with Mirage (debtor) filing for court-supervised reorganization (recuperação judicial) with the Bankruptcy Court of the District of Rio de Janeiro. Mirage will benefit from the automatic stay / moratorium (article 6 of the Bankruptcy Law) and Mirage’s managers will draft a plan that foresees the continuation of Mirage’s operations as a going concern, where Mirage’s management will stay in control. However, it is very likely that this plan is not approved, and that the case will be converted into liquidation, for the following reasons: (i) BizBank will most likely vote against the plan, since for BizBank the most efficient outcome is the sale of the business as a going concern, free and clear of labor and tax claims (which cannot be achieved through a reorganization), and (ii) no plan can be approved without Mirage’s consent, as it is the only creditor holding secured debt (class II claims), and holds 70% of Mirage’s total debt.

Time (in years)

4.0

2 additional years (until the proceeds of the sale are finally distributed among creditors).

Outcome going concern The hotel will continue operating as a going concern, since as a result of liquidation proceedings, Mirage is likely to be sold as a going concern, free and clear of labor and tax claims, according to article 141.II.

Recovery rate

(cents on the dollar)

18.2

Details – Resolving Insolvency in Rio de Janeiro – Measure of Quality
	Answer	Score
Strength of insolvency framework index (0-16)		13.0
Commencement of proceedings index (0-3)		2.5
What procedures are available to a DEBTOR when commencing insolvency proceedings?	(a) Debtor may file for both liquidation and reorganization	1.0
Does the insolvency framework allow a CREDITOR to file for insolvency of the debtor?	(b) Yes, but a creditor may file for liquidation only	0.5
What basis for commencement of the insolvency proceedings is allowed under the insolvency framework? (a) Debtor is generally unable to pay its debts as they mature (b) The value of debtor's liabilities exceeds the value of its assets	(c) Both (a) and (b) options are available, but only one of them needs to be complied with	1.0
Management of debtor's assets index (0-6)		5.5
Does the insolvency framework allow the continuation of contracts supplying essential goods and services to the debtor?	Yes	1.0
Does the insolvency framework allow the rejection by the debtor of overly burdensome contracts?	Yes	1.0
Does the insolvency framework allow avoidance of preferential transactions?	Yes	1.0
Does the insolvency framework allow avoidance of undervalued transactions?	Yes	1.0
Does the insolvency framework provide for the possibility of the debtor obtaining credit after commencement of insolvency proceedings?	Yes	1.0
Does the insolvency framework assign priority to post-commencement credit?	(a) Yes over all pre- commencement creditors, secured or unsecured	0.5
Reorganization proceedings index (0-3)		2.0
Which creditors vote on the proposed reorganization plan?	(b) Only creditors whose rights are affected by the proposed plan	1.0
Does the insolvency framework require that dissenting creditors in reorganization receive at least as much as what they would obtain in a liquidation?	No	0.0
Are the creditors divided into classes for the purposes of voting on the reorganization plan, does each class vote separately and are creditors in the same class treated equally?	Yes	1.0
Creditor participation index (0-4)		3.0
Does the insolvency framework require approval by the creditors for selection or appointment of the insolvency representative?	Yes	1.0
Does the insolvency framework require approval by the creditors for sale of substantial assets of the debtor?	No	0.0
Does the insolvency framework provide that a creditor has the right to request information from the insolvency representative?	Yes	1.0
Does the insolvency framework provide that a creditor has the right to object to decisions accepting or rejecting creditors' claims?	Yes	1.0

Employing Workers

Doing Business presents detailed data for the employing workers indicators on the Doing Business website (https://www.doingbusiness.org). The study does not present rankings of economies on these indicators or include the topic in the aggregate ease of doing business score or ranking on the ease of doing business.

The most recent round of data collection was completed in May 2019. See the methodology for more information.

What the indicators measure

Case study assumptions

Hiring

(i) whether fixed-term contracts are prohibited for permanent tasks; (ii) maximum cumulative duration of fixed-term contracts;

(iii) length of the maximum probationary period; (iv) minimum wage;(v) ratio of minimum wage to the average value added per worker.

Working hours

(i) maximum number of working days allowed per week; (ii) premiums for work: at night, on a weekly rest day and overtime;

(iii) whether there are restrictions on work at night, work on a weekly rest day and for overtime work; (iv) length of paid annual leave.

Redundancy rules

(i) whether redundancy can be basis for terminating workers; (ii) whether employer needs to notify and/or get approval from third party to terminate 1 redundant worker and a group of 9 redundant workers; (iii) whether the law requires employer to reassign or retrain a worker before making worker redundant; (iv) whether priority rules apply for redundancies and reemployment.

To make the data comparable across economies, several assumptions about the worker and the business are used.

The worker:

Is a cashier in a supermarket or grocery store, age 19, with one year of work experience.
Is a full-time employee.
Is not a member of the labor union, unless membership is mandatory.

The business:
Is a limited liability company (or the equivalent in the economy).
Operates a supermarket or grocery store in the economy’s largest business city. For 11 economies the data are also collected for the second largest business city.
Has 60 employees.
Is subject to collective bargaining agreements if such agreements cover more than 50% of the food retail sector and they apply even to firms that are not party to them.
Abides by every law and regulation but does not grant workers more benefits than those mandated by law, regulation or (if applicable) collective bargaining agreements.

Redundancy cost

(i) notice period for redundancy dismissal; (ii) severance payments, and (iii) penalties due when terminating a redundant worker. Data on the availability of unemployment protection for a worker with one year of employment is also collected.

Employing Workers – São Paulo

Details – Employing Workers in São Paulo

Answer

Hiring

Fixed-term contracts prohibited for permanent tasks? Yes

Maximum length of a single fixed-term contract (months) 24.0

Maximum length of fixed-term contracts, including renewals (months) 24.0

Minimum wage applicable to the worker assumed in the case study (US$/month) 397.7

Maximum length of probationary period (months) 3.0

Ratio of minimum wage to value added per worker 0.4

Working hours

Standard workday 8.0

Maximum number of working days per week 6.0

Premium for night work (% of hourly pay) 20.0

Premium for work on weekly rest day (% of hourly pay) 0.0

Premium for overtime work (% of hourly pay) 60.0

Restrictions on night work? Yes

Restrictions on weekly holiday? No

Restrictions on overtime work? No

Paid annual leave for a worker with 1 year of tenure (working days) 26.0

Paid annual leave for a worker with 5 years of tenure (working days) 26.0

Paid annual leave for a worker with 10 years of tenure (working days) 26.0

Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 26.0

Redundancy rules

Dismissal due to redundancy allowed by law? Yes

Third-party notification if one worker is dismissed? No

Third-party approval if one worker is dismissed? No

Third-party notification if nine workers are dismissed? No

Third-party approval if nine workers are dismissed? No

Retraining or reassignment obligation before redundancy? No

Priority rules for redundancies? No

Priority rules for reemployment? No

Redundancy cost

Notice period for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 4.7

Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 8.6

Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 6.4

Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 1.7

Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 6.6

Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 8.3

Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 16.6

Unemployment protection after one year of employment? Yes

Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 8.9

Employing Workers – Rio de Janeiro

Details – Employing Workers in Rio de Janeiro

Answer

Hiring

Fixed-term contracts prohibited for permanent tasks? Yes

Maximum length of a single fixed-term contract (months) 24.0

Maximum length of fixed-term contracts, including renewals (months) 24.0

Minimum wage applicable to the worker assumed in the case study (US$/month) 396.1

Maximum length of probationary period (months) 3.0

Ratio of minimum wage to value added per worker 0.4

Working hours

Standard workday 8.0

Maximum number of working days per week 6.0

Premium for night work (% of hourly pay) 20.0

Premium for work on weekly rest day (% of hourly pay) 0.0

Premium for overtime work (% of hourly pay) 50.0

Restrictions on night work? Yes

Restrictions on weekly holiday? No

Restrictions on overtime work? No

Paid annual leave for a worker with 1 year of tenure (working days) 26.0

Paid annual leave for a worker with 5 years of tenure (working days) 26.0

Paid annual leave for a worker with 10 years of tenure (working days) 26.0

Paid annual leave (average for workers with 1, 5 and 10 years of tenure, in working days) 26.0

Redundancy rules

Dismissal due to redundancy allowed by law? Yes

Third-party notification if one worker is dismissed? No

Third-party approval if one worker is dismissed? No

Third-party notification if nine workers are dismissed? No

Third-party approval if nine workers are dismissed? No

Retraining or reassignment obligation before redundancy? No

Priority rules for redundancies? No

Priority rules for reemployment? No

Redundancy cost

Notice period for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 4.7

Notice period for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 8.6

Notice period for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 6.4

Severance pay for redundancy dismissal for a worker with 1 year of tenure (weeks of salary) 1.6

Notice period for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 6.6

Severance pay for redundancy dismissal for a worker with 5 years of tenure (weeks of salary) 8.3

Severance pay for redundancy dismissal for a worker with 10 years of tenure (weeks of salary) 16.6

Unemployment protection after one year of employment? Yes

Severance pay for redundancy dismissal (average for workers with 1, 5 and 10 years of tenure, in weeks of salary) 8.9

PEO Brazil

Brazil is an enticing choice as a PEO (Professional Employer Organization) country due to its vibrant and diverse economy, rich cultural heritage, and vast talent pool. As one of the largest economies in Latin America, Brazil offers numerous business opportunities across various industries, making it an attractive destination for international expansion. The country’s favorable regulatory environment and improving infrastructure create a conducive environment for businesses looking to set up operations. Additionally, Brazil’s multilingual workforce, skilled in a wide range of sectors, provides a competitive edge for companies seeking to tap into a dynamic and adaptable labor market. Despite its challenges, Brazil’s strategic location, favorable time zone, and increasing connectivity make it an excellent choice for businesses seeking to extend their global footprint and access the vast consumer market in South America.

PEO services in Brazil offer a strategic and practical solution for foreign companies looking to enter this vibrant South American market. By partnering with a reputable PEO service provider, businesses can outsource their human resources, payroll, and compliance needs to local experts. The PEO acts as the official employer of record, ensuring compliance with Brazilian labor laws and regulations. This streamlines the process of market entry, as foreign companies can avoid the complexities of establishing a legal entity. PEO services also provide access to a skilled local workforce, facilitating cultural integration and smooth business operations. With administrative tasks managed by the PEO, companies can focus on their core competencies and take advantage of Brazil’s vast market potential, abundant natural resources, and diverse consumer base. PEO services in Brazil serve as a valuable tool for international companies seeking growth and success in this dynamic and promising market.

Business Reforms in Brazil

From May 2, 2018 to May 1, 2019, 115 economies implemented 294 business regulatory reforms across the 10 areas measured by Doing Business. Reforms inspired by

Doing Business have been implemented by economies in all regions. The following are reforms implemented since Doing Business 2008. =Doing Business reform making it easier to do business. = Change making it more difficult to do business.

DB2020

Starting a Business: Brazil made starting a business easier by making business registration faster and by decreasing the cost of the digital certificate. This reform applies to both São Paulo and Rio de Janeiro.

Registering Property: Brazil made property registration easier by improving the quality of the land administration system. This reform applies to São Paulo and Rio de Janeiro. Brazil (São Paulo) also introduced online payment and Brazil (Rio de Janeiro) created an online system to obtain property certificates.

DB2019

Starting a Business: Brazil made starting a business easier by launching online systems for company registration, licensing and employment notifications. This reform applies to both Rio de Janeiro and São Paulo.

Getting Electricity: Brazil (São Paulo) improved the reliability of electricity by modernizing its grid network and introducing new software programs allowing better outage management and distribution planning.

Registering Property: Brazil (Rio de Janeiro) made registering property more expensive by increasing the municipal property transfer tax.

Getting Credit: Brazil improved access to credit information by distributing at least two years of historical data. This reform applies to both São Paulo and Rio de Janeiro.

Trading across Borders: Brazil reduced the time required for import documentary compliance by introducing electronic certificates of origin. This reform applies to both Rio de Janeiro and São Paulo.

Employing Workers: Brazil changed regulations pertaining to intermittent work, work scheduling, compensation, employee termination and union representation. This reform applies to both Rio de Janeiro and São Paulo.

DB2018

Trading across Borders: Brazil reduced the time for documentary compliance for both exporting and importing by enhancing its electronic data interchange system. This reform applies to both Rio de Janeiro and São Paulo.

DB2017

Starting a Business: Brazil reduced the time needed to start a business by implementing an online portal for business licenses in Rio de Janeiro. However, Brazil also made starting a business more difficult by shortening the opening hours of the business registry in Rio de Janeiro.

Trading across Borders: Brazil made trading across borders easier by implementing an electronic system for importing, which reduced the time required for documentary compliance. This reform applies to both Rio de Janeiro and São Paulo.

Enforcing Contracts: Brazil made enforcing contracts easier through a new mediation law—that includes financial incentives for parties to attempt mediation—and a new code of civil procedure. These reforms apply to both Rio de Janeiro and São Paulo.

Employing Workers: Brazil expanded eligibility for unemployment benefits to employees with one year of continuous work experience. This reform applies to both Rio de Janeiro and São Paulo.

DB2016

Registering Property: Brazil made transferring property in São Paulo more expensive by increasing the property transfer tax.

Trading across Borders: Brazil reduced the time for documentary and border compliance for exporting by implementing the electronic SISCOMEX Portal system. This reform applies to both Rio de Janeiro and São Paulo.

DB2013

Registering Property: Brazil made transferring property more difficult by introducing a new certificate on good standing on labor debts, adding to the number of due diligence procedures.

Enforcing Contracts: Brazil made enforcing contracts easier by implementing an electronic system for filing initial complaints at the São Paulo civil district court.

Employing Workers: Brazil increased the notice period applicable in cases of redundancy dismissal of employees.

DB2012

Getting Credit: Brazil improved its credit information system by allowing private credit bureaus to collect and share positive information.

DB2011

DB2010

Starting a Business: Brazil made starting a business easier by eliminating the requirement to obtain a fire brigade license and inspection before obtaining an operating permit from the municipality.

Paying Taxes: Brazil made paying taxes less costly for companies by abolishing the tax on check transactions.

DB2009

Trading across Borders: Brazil reduced the time for exporting and importing by implementing the electronic data interchange systems SISCARGA and SISCOMEX CARGA as well as a risk-based inspection system for cargo. An increase in the number of banks offering letters of credit also contributed to the reduction in time.

DB2008

Trading across Borders: Brazil made trading across borders easier by updating its electronic data interchange system for customs.

Enforcing Contracts: Brazil made enforcing contracts easier by updating and streamlining its civil procedure rules.

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Economy Profile Brazil

Ease of Doing Business in Brazil

Rankings on Doing Business topics – Brazil

Topic Scores

Starting a Business

What the indicators measure

Procedures to legally start and formally operate a company (number)

Time required to complete each procedure (calendar days)

Cost required to complete each procedure (% of income per capita)

Paid-in minimum capital (% of income per capita)

The business:

The owners:

Starting a Business – São Paulo

Figure – Starting a Business in São Paulo – Score

Figure – Starting a Business in São Paulo and comparator economies – Ranking and Score

Figure – Starting a Business in São Paulo – Procedure, Time and Cost

Details – Starting a Business in São Paulo – Procedure, Time and Cost

1 Check the availability of the company name and the feasibility of the location

2 Apply for registration with the Federal Tax Authority (Receita Federal)

3 Pay registration fees

4 Register with the State Commercial Registry (JUCESP) to complete registration with the Federal and State Tax Authorities (CNPJ and ICMS), Social Security (INSS) and the Companies Registry (NIRE)

5 Register with the Municipal Taxpayers’ Registry (Secretaria Municipal da Fazenda de São Paulo)

6 Obtain a digital certification (token) for the use of e-invoices

7 Obtain an operations license (Auto de Licença de Funcionamento) from the Municipality

9 Register the employees in the social integration program (Programa de Integração Social – PIS)

11 Registration with the Employers' Union and with the Employees' Union

Starting a Business – Rio de Janeiro

Figure – Starting a Business in Rio de Janeiro – Score

Figure – Starting a Business in Rio de Janeiro and comparator economies – Ranking and Score

Figure – Starting a Business in Rio de Janeiro – Procedure, Time and Cost

Details – Starting a Business in Rio de Janeiro – Procedure, Time and Cost

1 Check the availability of the company name and the feasibility of the location

2 Apply for registration with the Federal Tax Authority (Receita Federal)

3 Pay registration fees

4 Register with the State Commercial Registry (JUCERJA) to complete registration with the Federal and State Tax Authorities (CNPJ), Social Security (INSS) and the Companies Registry (NIRE)

5 Register with the Rio de Janeiro Taxpayers’ Registry (Secretaria Municipal de Fazenda)

6 Apply and obtain digital a certification (token) for the use of e-invoices

7 Obtain an operations license (Alvará de Licença para Estabelecimento) from the Municipality

8 Update employees' information with Social Security (Programa de Integração Social – PIS)

Register with the Employers' Union and with the Employees' Union

9 Notify the Ministry of Labor (Cadastro Geral de empregados e desempregados, CAGED)

Dealing with Construction Permits

What the indicators measure

Procedures to legally build a warehouse (number)

Time required to complete each procedure (calendar days)

Cost required to complete each procedure (% of income per capita)

Building quality control index (0-15)

The construction company (BuildCo):

The warehouse:

The water and sewerage connections:

Dealing with Construction Permits – São Paulo

Figure – Dealing with Construction Permits in São Paulo – Score

Figure – Dealing with Construction Permits in São Paulo and comparator economies – Ranking and Score

Figure – Dealing with Construction Permits in São Paulo – Procedure, Time and Cost

Figure – Dealing with Construction Permits in São Paulo and comparator economies – Measure of Quality

Details – Dealing with Construction Permits in São Paulo – Procedure, Time and Cost

1 Request and obtain proof of land ownership from the Real Estate Registry

2 Obtain results of Soil study

3 Obtain results of topographical study

4 Obtain Technical Term of Responsibility -ART

5 Request and obtain proof of land tax payment from the Treasury Department of the Municipality

6 Register employees with the Social Security Office

7 Request and obtain construction approval permit and construction execution permit

8 Submit project for analysis by Fire Department and obtain report

Details – Dealing with Construction Permits in São Paulo – Measure of Quality

Dealing with Construction Permits – Rio de Janeiro

Figure – Dealing with Construction Permits in Rio de Janeiro – Score

Figure – Dealing with Construction Permits in Rio de Janeiro and comparator economies – Ranking and Score

Figure – Dealing with Construction Permits in Rio de Janeiro – Procedure, Time and Cost

Figure – Dealing with Construction Permits in Rio de Janeiro and comparator economies – Measure of Quality

Details – Dealing with Construction Permits in Rio de Janeiro – Procedure, Time and Cost

1 Request and obtain proof of land ownership from the Real Estate Registry

2 Obtain a topographic map

3 Obtain soil test

4 Obtain Technical Term of Responsibility -ART

5 Request and obtain proof of land tax payment from the Treasury Department of the Municipality

6 Register employees with the Social Security Office

7 Request and obtain construction approval permit and construction execution permit

8 Submit project for analysis by Fire Department and obtain report

Details – Dealing with Construction Permits in Rio de Janeiro – Measure of Quality