Brazil entrepreneurship faces management and tax challenges

A study by Serasa Experian reveals that poor management is the primary cause of business closures in Brazil, affecting 47% of small and medium-sized entrepreneurs. This factor outweighs high taxation (40%), bureaucracy (34%), and lack of credit (29%). Approximately 58% of business owners identify financial management as a major risk to their continuity, with the concern increasing in larger companies.

In addition to management issues, entrepreneurs face significant tax uncertainty. Recent legislative changes, such as Complementary Law No. 236 and various normative instructions, require constant vigilance to navigate evolving fiscal rules. Upcoming changes, including adjustments to revenue presumption percentages and new dividend retention rules, add to the complexity of the Brazilian business environment.

Despite these hurdles, entrepreneurship remains a major driver in Brazil, which holds the second-largest entrepreneurial potential in the world. According to the Global Entrepreneurship Monitor (GEM), 31.6% of Brazilian adults are involved in entrepreneurial activities. To mitigate risks, some businesses are turning to consortiums as a strategic financial tool to acquire assets and expand operations without compromising cash flow.