Source: O Estado de S. Paulo, 30/06/2009

With the mission of formalizing 1 million workers, such as marketers, manicurists, seamstresses, artisans and street vendors, within a year, the law that creates the figure of the individual entrepreneur comes into force as of tomorrow. Approved last year, Complementary Law 128 promises to remove self-employed workers or small business owners from informality, with even one employee. By paying a monthly fee of around R $ 50, the entrepreneur with revenues of up to R $ 36 thousand per year gains benefits such as retirement, maternity allowance and easier accounting.

But, in a country where around 10 million people work informally and the bureaucracy for opening new businesses is high, implementing this proposal will be a great challenge. “Many people live outside the law because they are afraid of being inspected by the government,” says Fernando de Holanda Barbosa Filho, a researcher at the Brazilian Institute of Economics (Ibre) of the Getúlio Vargas Foundation (FGV) and responsible for the underground economy index, which measures the production of goods and services that is outside official controls.

In order to attract entrepreneurs and facilitate the adhesion process, a portal was created where the interested party can obtain the CNPJ and registration with the Commercial and Social Security Board. After this process, the new entrepreneur must print the payment forms and make the payment in banks and lottery shops. Sebrae promises to put agents on the streets to publicize the initiative. "We have to do a job of convincing," says the president of Sebrae, Paulo Okamotto.

Some states are also beginning to mobilize to win over new taxpayers. Today, the governor of São Paulo, José Serra, signs a state decree with measures to facilitate the formalization of the self-employed. The main one will make licensing for low-risk activities automatic. According to the Employment Secretary of São Paulo, Guilherme Afif Domingos, obtaining permits is one of the biggest problems with formalization.

The goal of the São Paulo government is to include 3,2 million people in the formal market by the end of 2010. The number would double the total number of enrollments in the State Commercial Boards. “This number corresponds to the population of Uruguay, that is, there is a country hidden in São Paulo.”

LC 128 also provided that the accounting offices opting for Super-Simples (small business legal regime) assist entrepreneurs in formalizing. According to José Maria Chapina Alcazar, president of Sescon-SP, a union of accounting services companies in São Paulo, the requirement was a counterpart to the inclusion of the category in Simples. But it can be a source of business. "This audience may become, in the future, a great entrepreneur."

The merchant Idália de Jesus, 48, is optimistic about this possibility. Since 2005, she has been selling clothes purchased in Brás, a popular shopping area in São Paulo, in a small rented room in Guarulhos (SP). It has no employees and no accounting, nor does it pay social security contributions. "I depend on the money that comes in to replace merchandise," she says, who left the profession of domestic to become an informal seller, where she earns an income of R $ 1,5. With the formalization, it intends to obtain small loans in the bank to increase the offer of products in its store.