Brazil offers multiple options for entrepreneurs looking to start a business. Among the most common structures are MEI (Microempreendedor Individual) and LTDA (Sociedade Limitada). Both serve different purposes and come with their own rules, benefits, and limitations.
If you're considering company registration in Brazil, it's essential to understand how MEI and LTDA compare — especially in terms of liability, taxation, size, and eligibility. This guide will help you choose the right business type when you're ready to register a company in Brazil or explore opening a company in Brazil as a foreign or local entrepreneur.
Understanding MEI (Microempreendedor Individual)
MEI is a simplified form of business structure introduced in Brazil to support small entrepreneurs and informal workers. It’s ideal for freelancers, artisans, and individuals starting a small-scale business on their own.
Key Features:
Designed for solo entrepreneurs with no partners
Simplified taxation and compliance
Limited annual revenue
Can hire only one employee
Easy to register and low maintenance
Requirements to Register as MEI:
Annual revenue must not exceed R$ 81,000
No participation in another company as partner or owner
Only specific economic activities are permitted (listed by the Brazilian government)
Must be a Brazilian citizen or permanent resident
Taxation:
MEI pays a fixed monthly tax via the DAS (Documento de Arrecadação do Simples Nacional)
No need to file corporate tax returns separately
Covers INSS (social security), ISS or ICMS, depending on the business activity
Pros of MEI:
Very low operational costs
Easy online registration
Access to social security benefits
No accounting requirements
Fast process to open a business in Brazil
Cons of MEI:
Strict limits on revenue and business activities
Cannot have partners
Limited ability to scale
Understanding LTDA (Sociedade Limitada)
LTDA, or Limited Liability Company, is one of the most common and flexible business structures in Brazil. It is ideal for small to medium-sized enterprises (SMEs) and allows multiple partners or shareholders.
Key Features:
Allows one or more partners (quotaholders)
No revenue cap (unlike MEI)
Legal separation between company and owners
Suitable for local and foreign investors
Can operate in virtually any legal business activity
Requirements to Register an LTDA:
Legal company name (with LTDA suffix)
Company bylaws (Contrato Social)
A registered business address in Brazil
CPF (for locals) or passport/CNPJ for foreign partners
Registration with the Board of Trade (Junta Comercial) and Federal Revenue (Receita Federal)
Taxation:
LTDA companies can choose from several tax regimes, depending on their revenue:
Simples Nacional (for small businesses under R$ 4.8 million/year)
Lucro Presumido (for businesses under R$ 78 million/year)
Lucro Real (for larger or more complex businesses)
Pros of LTDA:
Scalable business structure
No restrictions on number of employees or revenue
Legal protection for owners’ personal assets
Preferred structure for foreign investment
Eligible for a wider range of business activities and contracts
Cons of LTDA:
More complex and expensive to register
Ongoing accounting and tax compliance required
Requires legal and financial management
Also Read: How to Register a Company in Singapore: Step-by-Step Guide
MEI vs LTDA: Side-by-Side Comparison
| Feature | MEI | LTDA |
|---|---|---|
| Legal Entity | Individual | Separate legal entity |
| Number of Owners | One (no partners allowed) | One or more partners (quotaholders) |
| Annual Revenue Limit | R$ 81,000 | No limit |
| Tax Regime | Fixed monthly tax (DAS) | Simples Nacional, Presumido, or Real |
| Allowed Activities | Limited list by government | Almost any legal business activity |
| Employees | Max 1 employee | Unlimited |
| Accounting Requirement | Not required | Mandatory accounting and reporting |
| Social Security | Included in DAS payment | Separate INSS registration needed |
| Business Registration Time | Fast (same day in many cases) | Slower (several days to weeks) |
| Foreign Ownership | Not allowed | Allowed (with local representation) |
Which Structure is Best for You?
Choosing between MEI and LTDA depends on the size, goal, and nature of your business. Here’s how to decide:
Choose MEI If:
You are starting a small, low-risk business
Your revenue will be under R$ 81,000 per year
You’re not planning to have business partners
You want minimal bureaucracy and low-cost maintenance
You're a Brazilian citizen or permanent resident
Choose LTDA If:
You plan to scale your business
You want to operate in industries not covered by MEI
You’re partnering with others or opening a business as a foreigner
Your expected revenue will exceed R$ 81,000
You need a formal structure for contracts, investors, or international trade
Can a Foreign Investor Open a MEI in Brazil?
No. The MEI structure is not available to foreigners unless they have permanent residency status in Brazil. If you're a foreign investor or entrepreneur, your best option for company registration in Brazil is typically an LTDA.
In that case, you'll need:
A local legal representative
A CNPJ number
An official business address
To appoint a Brazilian resident as administrator
Also Read: Company Registration in USA: Requirements, Costs, and Timeline
What Happens if You Outgrow the MEI Limit?
If your revenue exceeds R$ 81,000/year, you must transition to another legal structure — typically an EI (Empresário Individual) or LTDA. You will also have to:
Register under a new tax regime (Simples Nacional or others)
Begin accounting and tax compliance
Possibly adjust your business activities or employee count
Failing to update your registration can result in penalties and loss of MEI benefits.
Steps to Register a Company in Brazil
For MEI:
Access the Portal do Empreendedor (official MEI website)
Fill in your CPF and business details
Choose your economic activity (CNAE)
Receive your CNPJ instantly
Start issuing invoices
For LTDA:
Draft a Contrato Social (Articles of Incorporation)
Register with the Junta Comercial of your state
Obtain your CNPJ from Receita Federal
Register for municipal and state licenses
Set up accounting and tax compliance systems
Final Thoughts
Brazil offers accessible paths for both small-scale and larger business ventures. If you're just getting started as a solo entrepreneur with minimal overhead and local citizenship, MEI is an excellent way to launch quickly and cost-effectively.
However, if you're aiming for a long-term, scalable, or international venture — or you’re a foreign investor — an LTDA is the right choice for you.
Choosing the right structure early can save you from legal issues, tax burdens, and re-registration costs down the line. As you explore opening a company in Brazil, take time to understand each model’s benefits, and consult legal or accounting experts when needed.
Also Read: Company Registration in Dubai: Everything You Need to Know
FAQs
1. Can I switch from MEI to LTDA later?
Yes. If your business grows, you can transition from MEI to LTDA by canceling your MEI registration and initiating a new company formation process.
2. Is MEI registration really free?
Yes. You can register as an MEI online at no cost. However, you’ll need to pay a monthly DAS fee, which includes tax and social contributions.
3. Can a foreigner open an LTDA in Brazil?
Yes, but you’ll need a legal representative residing in Brazil, along with proper documentation, a business plan, and registration through GAFI and Receita Federal.
4. What’s the fastest way to register a company in Brazil?
For locals, MEI is the fastest, often completed online within a day. LTDA registrations take longer due to legal requirements but can still be done efficiently with help from professionals.
