Blog

Overview

* At the end of 2020, Brazil’s Chamber of Deputies approved the bill known as the Startups Legal Framework (Marco Legal das Startups), which aims to foster the creation of new startups over the next years.

* The proposal is designed to support startup development and offer more security to investors.

* Below, learn what changes with the approval of the bill and what the trend is for the coming years.

-

Technological innovation and the emergence of new startups are expected to become strong trends in Brazil over the coming years.

A key sign of that is the recent approval of the Startups Legal Framework (Marco Legal das Startups) by Brazil’s Chamber of Deputies.

Originally introduced in 2019, the proposal brings significant changes to how a company is defined as a startup.

According to the bill’s base text, the Startups Legal Framework classifies as startups companies and cooperative societies that work on innovation applied to products, services, or business models—even if they have only one partner.

In addition, startups must now have gross revenue of up to R$ 16 million in the previous year, be up to ten years old, and declare in their founding documents that they use innovative models.

Alternatively, they can opt into the special Inova Simples regime, as provided in the Statute of Micro and Small Enterprises approved in 2006.

This approval is a strong signal of what the coming years may look like for the sector in Brazil.

But in what way?

How can the bill encourage new investments?

How can this change benefit those who hire companies in this segment?

Find out now.

Do you know what a Squad is? Learn about X-Apps’ hiring tool!

How can the Startups Legal Framework encourage investment?

With the goal of regulating Brazil’s innovation and technology sector, the Startups Legal Framework also focuses on increasing investments in Brazilian startups.

According to the bill’s text, approval provides a simpler process to open and close startups, reducing bureaucracy and encouraging entrepreneurs to bring their ideas to life, since it should become more accessible.

In addition, so-called angel investors will take on less risk, especially in bankruptcy scenarios or when there are outstanding obligations to employees.

Previously, those investors could be held legally responsible in such cases.

With the approval of the framework, the bill exempts investors from these debts in an attempt to further stimulate investments in Brazilian startups.

The proposal also makes tax collection easier, since it introduces a system similar to how the stock market operates.

In this scenario, investors can offset losses and be taxed only on the net balance of investments made during the year.

Given that startup investing is risky, the possibility of recovering part of a potential loss can also encourage investment.

Those investments may also come from government agencies and public concessionaires.

The Startups Legal Framework also allows funds that must be invested annually in research and innovation to be applied to startup investment funds. It also incentivizes public procurement of goods and services through bids at state and municipal levels.

Why does approval indicate a trend?

Approving the Startups Legal Framework is a fundamental step toward heating up the technology market.

Especially during economic recession, a measure that increases investor security is important for project development to grow in 2021 and the following years.

And bringing an idea to market today is not cheap.

With the bill’s approval, creating startups should become faster and simpler, giving more opportunities to people aiming to grow in the innovation market.

This measure can also benefit the country as a whole, since the development of disruptive technologies tends to contribute both economically and socially.

As a result, the approval of the Startups Legal Framework signals a promising trend: more startups, more public and private investment in the area, and a potential reduction of the economic recession that hit many companies hard in 2020.

Evolving your startup with an app or web system is not cheap

Today, building a digital product for a startup is synonymous with scaling. However, developing an app or web system is not cheap.

A small app can take between 200 and 1,000 hours of work. Costs can vary widely, but you can estimate between R$ 25,000 and R$ 80,000. More complex and niche-specific apps can cost over R$ 100,000.

Project duration also varies: 2 to 4 months for smaller projects and up to 1 year for more complex ones.

For startups, it’s also important to include maintenance, updates, and hosting costs on secure and fast servers.

These costs vary and can increase depending on user volume.

So if your goal is to develop an app or transform your service into a dynamic and scalable platform for your business, the ideal is to contact a specialized and experienced company in app development for startups—such as X-Apps.

Request a quote with us.

In addition to evaluating the costs of your app, we can provide strategic consulting and help you assess the most interesting alternatives for your company in terms of quality and cost-benefit.

Learn more:

- Instagram app will allow lives with up to four users; understand

- Need an app? See how to hire an app factory

- App vs Web: which is best for your startup?