Being an individual micro-entrepreneur has advantages that are often unknown, such as a discount on the purchase of a car and social security contributions

The Covid-19 pandemic has caused an unprecedented health and economic crisis in the world. In Brazil, rising unemployment, with a rate of 14,4 million unemployed in the second quarter of 2021, according to the Brazilian Institute of Geography and Statistics (IBGE), made many people seek an alternative source of income. And many found this alternative in individual microentrepreneurship (MEI).

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According to the Ministry of Economy, of the 3.359.750 companies opened throughout 2020, 2.663.309 were registered as MEI, a number that represents an increase of 8,4% compared to 2019. Currently, microentrepreneurship corresponds to 56,7 % of total business in the country.

What is Individual Microentrepreneur?

The Individual Microentrepreneur, or MEI, is a self-employed professional who has a National Register of Legal Entities (CNPJ). The category was created to regularize the situation of informal professionals.

Micro-entrepreneurs are considered to be providers of various services, artisans, hairdressers, manicurists, salespeople, etc.

To fit into the category of MEI, it is necessary:

• Have an income of up to R$81.000 per year, or R$6.750 per month;
• Have, at most, one hired employee who receives a minimum wage or the minimum wage for the category;
• Not having participation as a partner or owner in another company.

How much does it cost to be a Microentrepreneur?

To be an individual micro-entrepreneur, it is necessary to pay the Simples Nacional (DAS), which is nothing more than a shared tax collection, collection and inspection regime. Below, check out the value of Simples Nacional for the MEI areas of operation:

• Commerce or Industry: R$56;
• Provision of services: BRL 60;
• Commerce and services together: R$61.

This value is calculated based on the minimum wage. Therefore, even if your billing increases, the tax amount will not change and will be corrected annually, according to the minimum wage.

However, even if there is no billing, MEI should continue to pay Simples Nacional. Non-payment of the contribution generates charges and may even lead the micro-entrepreneur to be expelled from the category.

MEI not only regulates informal professionals, but also has a series of benefits. Are they:

issue invoice

One of the great advantages of being MEI is the possibility of issuing an invoice. This allows the micro-entrepreneur to sell products or provide services to companies that can only make payments upon presentation of an invoice.

In addition, another advantage is being able to participate in bids and offer products and/or services to the federal government or public institutions.

The CNPJ also facilitates negotiation with suppliers. Through it, it is possible to buy directly from the manufacturer, thus reducing production costs. You can also control your notes with a good ERP system that helps you manage your company in a simpler way.

social security benefits

Another great advantage of the MEI is the social security coverage provided by the payment of Simples Nacional. The counting of contributions, however, only takes effect from the first DAS payment. The pension benefits are:

• Retirement due to age and disability;
• Sick pay;
• Aid-incarceration;
• Maternity pay;
• Pension for death (family).

To access these benefits, however, it is necessary to pay up to date and contribute the number of installments for each social security category, which varies between 1 month and 15 years (in the case of retirement).

Bank services

The MEI has access to several indirect banking services. The main one are the microcredit lines offered by banks and directed to the microentrepreneur.

Interest rates are lower when compared to regular credit lines, and requirements for credit approval are facilitated and correspond to the reality of MEI.

The credit offered is smaller than that directed to companies. And bureaucracy also decreases, offering advantages for both financial institutions and micro-entrepreneurs. MEI also has access to other financial services, such as:

• Debit or credit card;
• Debit or credit machines;
• Business insurance;
• Anticipation of receivables;
• Investment options in the corporate account.
• Discount on car purchase

Discount on buying a car

Microentrepreneurs are entitled to buy cars between 2,5% and 30% off. This benefit is granted by automakers through a discount on ICMS, the Tax on Circulation of Goods and Services.

The automakers that are part of the program are Renault, Chevrolet, Volkswagen and Fiat.

MEI has technical support from SEBRAE

Being a micro-entrepreneur also means having technical support from the Brazilian Micro and Small Business Support Service (SEBRAE). Together with SEBRAE, MEI can:

• Answer questions about entrepreneurship;
• Learn about negotiations, prices and conditions for your business;
• Get better deadlines in negotiations with suppliers.
• Low cost of taxes

The amount paid in taxes for those who are MEI is much lower than that paid by companies. In addition, the taxable amount is calculated on the minimum wage, and does not change with an increase in income.

registration of an employee

Those who are MEI also have the benefit of hiring up to one employee, who must receive a minimum wage or the floor of the category. The cost of hiring is 11% of the payroll, with 3% referring to the social security charge and rate, and 8% to the FGTS.

How to register MEI?

The benefits are many and having a CNPJ is also easy. Before starting the registration for MEI, it is necessary to register in the Federal Government Services Portal. Next, gather the following documents:

• CPF;
• Voter card or receipt of the last income tax return (IRPF);
• residential or commercial zip code;
• Phone number.

Once this is done, log in to the Entrepreneur Portal and click on Formalize to have your CNPJ registered.

Now that you have a sense of your rights, know that, above all, planning is essential for your success.