RIO DE JANEIRO, BRAZIL – The Covid-19 crisis in 2020 was not only health-related. The need for social isolation that forced establishments to cease activities and paralyzed business was one of the aggravating aspects resulting from the pandemic.
The Brazilian (and world) economy was also severely affected, due to the alarming growth in the number of unemployed people and companies that had to close their doors.
On the other hand, Brazilians had to reinvent themselves and find new ways to overcome the crisis, which resulted in a considerable increase in the number of companies opened in 2020 – the highest growth since 2011.
According to data surveyed by Serasa Experian, over 3 million companies were opened in 2020, a growth of almost 9% compared to 2019, which surpassed the 2011 record.
An overwhelming percentage of these companies (79%) aare Individual Micro-entrepreneurs, the so-called MEIs, most of which are self-employed workers who have opened a Legal Entity Tax Registration (CNPJ) to render services as a company rather than an individual.
Being able to issue invoices, pay INSS (National Institute of Social Security) to guarantee rights such as retirement and maternity or sick pay, are some of the main advantages of opening a MEI.
According to Serasa economist, Luiz Rabi, this is a reflection of “entrepreneurship out of necessity.” The main activity fields of companies opened in 2020 were as follows:.
⦁ Food, accounting for almost 10%.
⦁ Clothing, with 6.2%.
⦁ Repairs and maintenance, with 6.1%.
The numbers reflect a reality seen last year: selling food does not require such a high cost to open a business.
The rise in the number of clothing manufacturing companies is partially explained by the number of Covid-19 masks being manufactured, while the maintenance and repair companies were very much in demand, since people began to spend much more time indoors.
The regions recording the highest number of new company registrations were the North, with an almost 21% increase over 2019, with about 174,500 new ventures; the Midwest, with 13.3% growth; and, finally, the South region, with 11.5%.
The most surprising aspect is that, according to Sebrae data, in relation to the total number of companies currently open in Brazil, the North region ranks last, with about 826,000 companies. In penultimate place is the Midwest region, with 1,707,753 companies.
The South region ranks second, with more than 3 million active establishments, while the Southeast region leads the ranking with over 10 million active companies.