Brazil COVID-19 Resources

Update 12. Mai 2020:

Brazil will continue to be consumed with a political crisis of President Bolsonaro, after several resignations from his Cabinet, judicial claims against him, and the increase in the number of COVID-19 cases in the country. Also, Governors and mayors in Brazil will evaluate new containment measures while Colombia will remain under quarantine for a few more weeks.

The Brazilian Government announced on March 27^th several measures to help small and medium-sized companies. These measures will be object of a Provisional Measure which is expected to be issued in the next couple of days. We will have more details and clarification when this piece of legislation is published.

Government announced that it will open an emergency credit line for small and medium-sized companies to finance payroll. The program will demand R$ 40 billion and will be funded mostly by the National Treasury. The benefited companies will not be able to lay off employees for two months.
The National Bank for Economic and Social Development (BNDES), will create an emergency credit line of R$ 2 billion for companies in the healthcare sector.
Caixa Econômica Federal announced a new round of interest rate cuts. Overdraft charge was reduced by almost half, from 4.95% per month to 2.9% per month. The financial institution also reduced the interest rate charged on installments of the credit card bill, which went from 7.7% per month to 2.9%. The new rates are effective from April 1^st and are valid for 90 days.
The Central Bank changed the rules on the operation of fintechs to expand the scope of operations of these companies and, with this, increase the arsenal available for the economic reaction to the new coronavirus. Companies will now be able to receive funds from the National Development Bank (BNDES) via transfers and loans, will be able to issue credit cards to their clients and investment funds in general will be able to take direct and isolated control of these fintechs.
The Securities and Exchange Commission (CVM) announced a series of measures to assist companies during the calamity period. They are:
- Dismissed publicly held companies, with shared traded on the Stock Exchange, to make public offers of shares and other securities, such as debentures, as often as they deem most convenient. Before, the minimum interval was four months.
- It made possible to issue promissory notes even by companies that do not have this provided for in their bylaws.
- Postponed to October 1^st, 2020, the mandatory application of control and data submission rules by capital market companies related to the fight against money laundering.
The Ministry of Health published an ordinance that allows small hospitals, with a number of long-term care beds between 31 and 49, to qualify to receive money from the government for use by patients discharged from ICUs and wards of other hospitals. The amount of financial compensation will vary between R$ 186.000 (31 beds) and R$ 294.000 (49 beds) per month.

Update as of 4/13/2020:

The measures the federal government has announced to mitigate the coronavirus crisis effects have reached R$ 586,6 billion (U$ 118billon) 7.8% of Brazilian GDP, similar level of Chile and Australia, for instance. The programs are robust, but the main concern is time, as the credit to businesses are taking long to reach the companies due to bureaucracy. Here are the main measures implemented to support businesses:

The Law 10.982/20 stablishes a federal program to make 3 monthly payments of R$ 600,00 (US$ 120.00) each. This is to ensure a minimum income to individual micro-entrepreneurs (MEI), informal and self-employed workers. Effective from April 2, only late last week the money started to reach the people.

Provisional Measure (MP) 944/20 from Executive Branch, effective on April 6.

this sets an emergency credit line to finance the payroll of small and medium-sized companies. It means companies with annual revenues of R$ 360 thousand to R$ 10 million.
The credit released will be of R$ 40 billion (U$ 8bi), which 85% of the amount of public funds, to help companies pay their employees’ salaries during the pandemic.
This MP allows companies to finance up to two payrolls, with a credit limit of two minimum wages (R$ 2,090) per employee.

Provisional Measure 936/20 (MP) effective on April 1.

This MP creates an emergency allowance in the event of reduction of working hours or suspension. Also rules about the right of employers to reduce working hours and wages.
The MP allows a proportional reduction of the working day and employees’ wages of 25, 50 or 70% for up 3 months. The government pays the remainder of salary using unemployment funds.
Deferral of collection of social security taxes related to march and April. The new due date will be respectively in July and September 2020.

Portaria ME 139/20.

Postponement of collection of Simple Tax System for 3 months. This System can be applied to Individual Micro-Entrepreneur (MEI), Micro-Sized Entities (ME) and Small-Sized Entities (EPP).

Resolução SER/ME 152/20.

21 of 27 states in Brazil has announced some type of financial aid to businesses and households, for instance: transferring income to the poor, reduction of state sales taxes (ICMS), postponement of collection of vehicle tax IPVA.

Legislation language: http://www.planalto.gov.br/CCIVIL_03/Portaria/quadro_portaria.htm