Almost all small Brazilian companies are informal, says IBGE


By Janaina Lage from Folha Online, in Rio - 19/05/2005

A informal economy accounts for almost all small Brazilian companies, according to data released today by the IBGE (Brazilian Institute of Geography and Statistics) at Ecinf 2003 (Urban Informal Economy). The study carried out in partnership with Sebrae outlines a portrait of informality in the country.

The number of small companies in the country reaches 10,525 million - non-agricultural companies were considered in this case. Of this total, 98% are part of the informal sector, equivalent to 10,335 million companies.

According to the IBGE research methodology, an informal company is one that does not have an account system clearly separated from family accounts and employs from one to five people, including employees and small employers.

The firm may even have a CNPJ (National Register of Legal Entities), but if it does not have its own accounting system, it is informal. The self-employed and the self-employed are in this universe. But a person who works without a formal contract for a formal company is not in the universe of research.

The survey also shows that in 2003 the informal economy generated R $ 17,6 billion in revenue and accounted for a quarter of the hiring of non-agricultural workers in the country.

As informal companies employ around 13 million people, including self-employed workers, small employers, employees with and without a formal contract and unpaid workers.

Most of the vacancies created in the informal sector belong to self-employed workers (69%), 10% are employed without a formal contract, 10% are employers and 6% work with a formal contract. There are also 5% unpaid workers. This is the case of children who work with their parents in preparing food to sell in stalls or fairs, for example.

In relation to the last edition of the survey, in 1997, there was a 9% growth in the number of informal companies. The number of jobs grew 8% in this period.