President Jair Bolsonaro sent Congress the complementary bill 249/2020, also known as the Legal Framework for Startups. The proposal establishes actions to be taken to improve the business environment for companies focused on innovation, including changes in investment and procurement rules by public agencies.
Bolsonaro published on Monday (19) in his Twitter a video that appears next to the finance minister, Paulo Guedes, and the Special Secretary for Production, Employment and Competitiveness, Carlos da Costa. “We have evolved a lot in the last few months, but we want to go even further, facilitating the business environment”, said the president.
– Bill: Legal Framework for Startups.
– Jair M. Bolsonaro (@jairbolsonaro) October 19, 2020
According to Folha de S.Paulo, the Legal Framework for Startups project has been prepared since last year by members of the Ministries of Economy and Science, Technology and Innovations, in addition to representatives of the private sector and public institutions. The purpose of the proposal is to encourage investments and offer more legal certainty in the sector.
The project considers startups to be “business organizations, nascent or in recent operation, whose performance is characterized by innovation applied to the business model or to the products or services offered”. The rules provided for in the text would apply to companies with annual revenues of up to R $ 16 million and CNPJ (National Register of Legal Entities) that has existed for a maximum of six years.
The government’s proposal foresees changes in investment rules for startups. The text points out, for example, that the CVM (Brazilian Securities and Exchange Commission) will decide on conditions that facilitate the IPO of companies that have annual gross revenue of up to R $ 500 million.
The text also determines that the CVM will define rules on angel investment. The contracts in this type of investment would have the maximum period extended, from five to seven years, and would allow the parties to define the periodic remuneration of the investor or the conversion of the contribution into equity interest.
The project also defines rules to facilitate the participation of startups in tenders. To foster the sector, public agencies will be able to create exclusive notices for companies focused on innovation. The analysis of the proposals should consider, among other factors, “the potential to solve the problem by the proposed solution and, if applicable, the probable savings for the public administration”.
According to the current version of the project, the agreements will be signed through the so-called Public Contract for Innovative Solution (CPSI). The agreement would have a maximum value of R $ 1.6 million and valid for up to one year, with the possibility of extension for an equal period. After that, startups could still sign, without bidding, a contract to supply “the product, process or solution resulting from the CPSI” in the amount of up to R $ 8 million for two years, with the possibility of extension for another two years.