Running a small business in Brazil can be challenging, especially when it comes to taxes. However, the Microempreendedor Individual (MEI) system was created to help small entrepreneurs legally operate their businesses while reducing tax burdens. This article will explain what MEI is, its benefits, tax obligations, and how to register as an MEI to save money while staying compliant with Brazilian tax laws.
What Is MEI?
The Microempreendedor Individual (MEI) is a legal business category in Brazil designed for self-employed professionals and small entrepreneurs. It allows individuals to formalize their businesses, pay lower taxes, and gain access to benefits such as social security.
To qualify as an MEI, you must:
✔ Have an annual revenue of up to BRL 81,000 (approximately BRL 6,750 per month).
✔ Not be a partner, administrator, or owner of another company.
✔ Have a maximum of one employee, who must receive at least the minimum wage or the category’s salary.
✔ Work in an eligible professional category (over 400 professions qualify).
Benefits of Becoming an MEI
The MEI system provides multiple advantages for small entrepreneurs, including:
✅ Lower Taxes
Instead of paying multiple taxes, MEIs only pay a fixed monthly tax known as DAS (Documento de Arrecadação do Simples Nacional). The amount varies depending on the business sector:
- Commerce and Industry: BRL 70.60 (ICMS included)
- Services: BRL 75.60 (ISS included)
- Commerce + Services: BRL 76.60
This tax covers INSS (social security), ICMS (state tax), and ISS (municipal tax), significantly reducing tax costs compared to other business structures.
✅ Access to Social Security Benefits
By paying the DAS monthly tax, MEIs gain access to retirement, maternity leave, sick leave, and other INSS benefits.
✅ Simplified Bureaucracy
MEIs do not need an accountant and can handle most financial and tax matters through the Portal do Empreendedor website.
✅ Ability to Issue Invoices (Notas Fiscais)
Having an official CNPJ and issuing invoices allows businesses to work with larger clients, government institutions, and corporate customers.
✅ Eligibility for Business Loans and Credit Lines
Banks offer special credit lines for MEIs, with lower interest rates and better financing conditions.
How to Register as an MEI
Becoming an MEI is completely free and can be done in a few steps:
1️⃣ Access the Portal do Empreendedor (gov.br/mei).
2️⃣ Click on “Formalize-se” and log in using your gov.br account.
3️⃣ Fill in your business information, including your activity and address.
4️⃣ Confirm the data and submit the application.
5️⃣ Generate your CNPJ and MEI Certificate instantly.
MEI Tax Obligations
Even though MEIs enjoy simplified taxation, they still have certain responsibilities:
📌 Monthly DAS Payment
MEIs must pay the fixed monthly tax (DAS) by the 20th of each month. This can be done through boleto, Pix, or online banking.
📌 Annual Declaration (DASN-SIMEI)
MEIs must submit an annual DASN-SIMEI declaration reporting their total revenue from the previous year. The deadline is May 31st each year.
📌 Issuing Invoices (NF-e)
If selling to other businesses (B2B), MEIs must issue Notas Fiscais. However, issuing invoices for individual customers (B2C) is optional.
What Happens If You Exceed the Revenue Limit?
If an MEI earns more than BRL 81,000 in a year, they must:
🔹 Pay additional taxes on the excess income.
🔹 Transition to a Microempresa (ME) under the Simples Nacional tax regime.
If revenue exceeds BRL 97,200, the business must retroactively pay the correct tax amount, which can be costly.
Final Tips to Save on Taxes Legally
✔ Keep your revenue below the BRL 81,000 limit to stay in the MEI category.
✔ Pay your DAS tax on time to avoid fines and penalties.
✔ Keep business and personal finances separate by using a business bank account.
✔ If growing, plan your transition to Microempresa (ME) to avoid unexpected tax increases.
By following these guidelines, small entrepreneurs can legally save money while growing their businesses in Brazil.
