The Bank is simplifying and streamlining the process for those seeking to formalise their status as microentrepreneurs.
The campaign is set to help provide clarity on both the myths and truths around becoming an individual microentrepreneur.
São Paulo, 22 November 2023.
Starting this week, Santander Brazil will begin offering a platform, on its official website for corporate customers, that allows informal microentrepreneurs to set up a CNPJ (corporate tax ID number) quickly, for free and under its guidance. Through the service, the Bank aims to make it possible for those who are already entrepreneurs, but still have "natural person" status, to access all the benefits that come with formally working as an MEI (individual microentrepreneur). Anyone can use the platform for free; there is no need to be an account holder or sign an agreement with Santander. Simply visit the following link: www.santandernegocioseempresas.com.br/abra-seu-cnpj/. It is worth mentioning that the registrant must meet all the conditions of the MEI, e.g. not having an equity stake in other companies.
The initiative is part of the Programa Avançar, a programme through which Santander delivers non-financial offerings to any of its customers who are entrepreneurs and own a small business, such as courses that provide guidance and certifications. To make it possible to set up a CNPJ in a hassle-free way, Avançar has partnered with MaisMEI, a start-up that specialises in solutions for self-employed professionals and which already has a platform for MEI-related services. In partnership with Santander, the Bank will offer access to the platform on its website.
In tandem with the launch of this free service, the Bank is mounting an unprecedented campaign on its digital channels to combat disinformation and provide clarity on the myths and truths around formally becoming an entrepreneur. Starting this month, around 1,800 representatives from the Bank specialising in financial education will work directly with informal entrepreneurs across the country, who are currently still using banking services as natural persons, to transform the finances of small businesses.
In view of reaching the microentrepreneur, the Bank will focus initially on the customer base of Prospera Santander Microfinança, a microfinance programme that has already helped 2.3 million customers and disbursed R$20 billion in credit. The Bank's strategy is to make use of the direct channel that Prospera representatives have with this audience to expand the financial advisory services that are available currently. Thus, providing microentrepreneurs more clarity on the formalisation process.
To start, the most considerable downside experienced by entrepreneurs when they have not obtained formal status is not being able to access to lines of credit and other banking solutions that can help their business to prosper. The formalisation process, in addition to setting up an MEI current account, allows entrepreneurs to separate their personal expenses from the fixed and variable costs that relate to their business. This provides, for example, better management of cash flow and profits.
"Professionals now have more accurate information to control their expenses and security in order to accelerate growth when the time comes to do so", states Franco Fasoli, Business director at Santander. The Bank's plan, according to the director, is for representatives to act as financial advisors, highlighting the true benefits of the formalisation process.
"The opportunity to access a pension; sick pay and paid maternity leave; the benefit of being able to trade with suppliers when you can issue an invoice... these are just some examples of what can be gained that many still are unaware of," Fasoli concludes.
Learn more about the myths vs truths when it comes to becoming an MEI
With a view to providing information that is going to help microentrepreneurs to make better decisions, Santander has collated a list of five major myths surrounding the formalisation process and five major benefits of becoming an MEI. These tips were cultivated by the institution based on research data from the Prospera Santander Microfinanças programme.
MYTH 1 – Costs and red tape around obtaining a CNPJ
Setting up a CNPJ MEI is completely free and guaranteed by law. It is a completely online process that takes 5 to 10 minutes.
MYTH 2 – High taxes payable
Unlike small, medium and large enterprises, MEIs are exempt from income tax. There is just a single tax known as DAS (Simplified Tax Returns Document), which, nowadays, ranges from R$66 to R$71 per month.
MYTH 3 – Loss of Bolsa Família (family allowance)
The law governing Federal Government programmes like Bolsa Família and LOAS (Organic Law on Social Assistance) does not provide for the withdrawal of the citizen's eligibility when they undergo the formalisation process. As such, the MEI will not lose any social benefits purely as a result of the formalisation of their business.
MYTH 4 – Becoming an MEI doesn't change anything
A study by Prospera Santander Microfinanças shows that around 80% of the country's microentrepreneurs have never heard of the term "MEI". A significant proportion of those who are aware of the model don't believe in its benefits.
MYTH 5 – It is costly to hold a bank account as a legal entity
These alleged current account fees for MEIs are a myth that hinders the chance for microentrepreneurs to have a bank as their business partner, helping them grow. At Santander, MEI customers are guaranteed access to a series of free services such as, for example, sending and receiving Pix payments, and the exclusive financial management tool CoPiloto. What's more, as customers opt in to certain services, the monthly maintenance fee for the account may drop to zero.
BENEFIT 1 – Right to a pension
Some microentrepreneurs don't look towards the future, in which, at some point in their life, they will need to stop working. As an MEI, workers who contribute for 20 years and reach the minimum age – 62 for women and 65 for men – have the right to a pension. What's more, they can continue working as an MEI after retirement.
BENEFIT 2 – Right to sick pay and paid maternity leave
If microentrepreneurs stop working for any reason, the business also stops. The profits too. All MEIs have the right to receive assistance in the event that they suffer accidents or health issues that may impede their work. In the case of mothers, after 10 months of contributions as an MEI, it is possible to apply for paid maternity leave and receive a minimum of 1 payslip for four months. This assistance is also available in the event of adoption.
BENEFIT 3 – Separate personal and business expenses
An individual entrepreneur wears many hats in their business: salesperson, accountant, stock taker, marketing manager. The company, in turn, has its own finances. When personal expenses are separated from those of the business, it becomes easier to determine their income. Ideally, they should have a separate current account for rental of the premises, working capital and management of cash flow.
BENEFIT 4 – Better price negotiation
As an MEI, you can buy and sell directly from manufacturers and suppliers, purchasing products at a lower price. This is only possible if you have a CNPJ and transactions are made between businesses.
BENEFIT 5 – MEI attracts more customers
The formalisation process allows microentrepreneurs to issue invoices. This opens them up to a realm of opportunities to sell more and expand their customer list. It's worth remembering that in order to sell more, they must issue invoices.