How to become an individual entrepreneur in the digital market?
Being an individual entrepreneur can be the start of a grand journey in the business world. By formalizing your venture, even if it is small in scale, you can have a number of benefits that will help considerably in planning something bigger.
To make your small business official, even if it is completely online, you need to access the Entrepreneur Portal, a government page, and create your registration as an Individual Micro entrepreneur (MEI). This registration is free, so beware of fake sites that charge up to R$200 to pretend to register.
With the process completed, you will have your CNPJ, will be able to contribute to the INSS, and will be eligible for discounts of, on average, 35% on health plan monthly fees and many other benefits. Read the text to find out more!
First Steps to Being an Individual Internet Entrepreneur
First, know that anyone who makes more than R$81,000 a year with his business, is a partner in a company, or even has more than one employee, is not allowed to be an MEI.
Second, check the list of occupations that fit the individual micro entrepreneur’s activities.
For those who work with the internet, these can be a few:
- artisan of various materials;
- editor of non-daily newspapers;
- Independent musician.
These occupations can be carried out 100% over the internet and, apparently, it is a factor that has contributed to the fact that, in 2020, Brazil has already surpassed the mark of 10 million individual micro-entrepreneurs – the highest number registered since the category was created, in 2009.
Aware of this, just access the portal and create your registration. To complete the procedure, depending on the city, you will need to go to the city hall with some documents and obtain the digital signature certificate. But there are several states where the process starts and ends without having to leave the house.
As a MEI, your main obligation is to pay the slips, even in months when there was no billing. The values, for those involved in commerce and services, even digital, range from R$57.25 to R$58.25. But where is this amount from?
It is the percentage of the minimum wage corresponding to the INSS and the ISS (Tax on Services). For those who work in commerce, as would be the example of an artisan who owns a virtual store, the ICMS (Tax on Circulation of Goods and Provision of Services) is added, hence the R$1 more.
When performing a service or selling a product to any company, you are also required to issue an invoice. There is no extra cost for that and to launch the note, just enter your city’s system, that is, it’s not on the Entrepreneur’s Portal.
Finally, the preparation of the annual gross revenue report is also mandatory. Every year, between January 2nd and May 31st, you will have to report your billing — with invoices or not! To help with organization, the Portal makes monthly report templates available, but it is not mandatory to create them.
If you bill and still don’t send the report, the IRS inspectors will probably detect it and there will be the possibility of thinking that it is tax evasion. If you don’t collect, you must fill in the report with the amount of R$ 0 and send it anyway. So stay tuned to this point!
Advantages of being a formalized individual micro-entrepreneur
Permission to work from home
The government made the process quite flexible when it allowed your MEI registry address to be the same as your home address. So, you can do home office and work over the internet from your home without any problem. However, as the CNPJ is public and is linked to your address, we recommend that you use a virtual address.
Possibility of working with a formal contract even as an individual entrepreneur
If you are still afraid to be an entrepreneur, you will certainly prefer to keep your job stable while taking your first steps as an entrepreneur. Therefore, opting for MEI is a great option, as you can legally continue to receive it while making an invoice as a micro-entrepreneur on the internet. This transition gives you much more security and the possibility to invest in your entrepreneurial skills.
Obtaining social security coverage with the lowest possible payment
While most entrepreneurs need to pay 11% of their salary to access INSS guarantees — maternity pay, sick pay, among others — their contribution as MEI is only 5%.
Provision of services or sales to the government
As an individual entrepreneur, you will be able to participate without problems in public tenders (without the need for bookkeeping and annual balance sheet survey). Even working for the government can be the gateway to several opportunities and the MEI grants this.
Access to corporate credit lines
With your CNPJ, you can open a PJ account and get a loan with much lower interest. In addition, financial institutions often launch forms of aid to the MEI. Caixa, for example, made a loan available to debtor companies with annual sales of up to R$4.9 million. At the same time, Sebrae will train and offer additional guarantees through the Guarantee Fund for Micro and Small Enterprises.
Reduced cost of hiring an employee
Although the MEI is an individual business modality, you can hire a person to be your collaborator. The difference is that you will hire him legally and regularly, but also at the lowest possible cost. As an MEI employer, this employee will correspond to 3% of the minimum wage and 8% of the FGTS.
That way, by choosing to be an individual entrepreneur you have a lot to gain. Obligations are unavoidable, however having extra security with retirement, keeping your job while experiencing entrepreneurship and being able to hire someone to work with you are some of the advantages of the MEI modality.