Small businesses make $77 bi yearly, about 1/3 of Brazil GDP

Small businesses in Brazil generate an income of approximately BRL 420 billion a year—one third of the country’s GDP. The estimate can be found in Atlas dos Pequenos Negócios (“Atlas of Small Businesses”), published by support service for micro and small enterprises SEBRAE.

According to the study—the first of its kind—small firms bring BRL 35 billion into the Brazilian economy every month. The survey gauged the participation of micro and small enterprises as well as individual micro-entrepreneurs, a category known in Brazilian legislation as MEI.

In the publication, MEI entrepreneurs are reported to generate BRL 11 billion every month, or BRL 140 billion a year. Micro and small companies make BRL 23 billion every month, raising BRL 280 billion per year.

As it stands today, smaller businesses account for 30 percent of the Brazilian GDP—a proportion that may reach 40 percent if the country climbs three percent a year in the next decade, said SEBRAE head Carlos Melles.

“In developed countries, the slice of small businesses in the GDP stands at 40 to 50 percent. If we manage to boost this growth in ten years, the whole economy should benefit, thanks to the power of micro and small companies to generate income and jobs,” he noted.

Growth

From 2012 to 2021, the number of self-employed workers in Brazil rose 26 percent, from 20.5 million to 25.9 million. In the same period, the amount of workers registered as MEI skyrocketed from 2.6 million to 11.3 million, up 323 percent. The surge among MEI entrepreneurs is over 12 times higher than among informal business people.

The report further reveals that 28 percent of MEI were active outside the formal market under special taxing regime RET. Of these, 13 percent had informal entrepreneurship as their main occupation, and 15 percent worked as unregistered employees. The proportion of informal people has been on the wane. About 2.5 million people were brought out of informality (28 percent of the 8.7 million active MEI workers) as a result of their registration as MEI.

In the case of micro and small enterprises, 13 percent of entrepreneurs were informal before opening up shop. Of this total, six percent were active as informal entrepreneurs and seven percent were unregistered employees.