Economic Freedom Law: a milestone for companies

Dated September 2019, the Economic Freedom Law (LLE) aims to reduce bureaucracy, simplify rules, stimulate competitiveness and innovation, bring speed to administrative procedures for releasing economic activity, which, not uncommonly, are time-consuming due to several factors, such as excessive regulation.

Removing state bureaucratic obstacles so that the private sector can generate wealth is a fundamental part for the country to improve its business environment, from a national and international perspective (1).

Bureaucracy, an artificial cost attributed to the enterprise, is one of the barriers to economic growth, considering that it “robs workers and entrepreneurs of time and resources that could be directed to the production of goods and services desired by the market" (2) .

It is worth remembering that international indicators that measure the degree of economic freedom of countries reveal that, by increasing the economic freedom of a society, there is greater promotion of prosperity, reduction of poverty and improvement in the quality of life than in any government program that a nation less free to promote to its population.

According to data from the Fraser Institute, Brazil, in terms of economic freedom, is not at an advanced stage, on the contrary, it is well below what is reasonable (3).

In this sense, in order for us to promote the country's economic freedom, there is a need for municipalities and states to locally implement the legal provisions of the Federal Law on Economic Freedom. On a national scale, 12 states of the Federation have not yet incorporated the LLE, and only 529 mapped cities (4) have approved a Decree or an Economic Freedom Law (LLE) by November 09, 2022 (5).

The LLE is innovative, without a doubt, and brought, for example, the end of permits for low-risk establishments, such as beauty salons, shoemakers and bars; the digitization of documents; greater freedom for innovation; the flexibility of trading hours; and the provision that recording time and overtime is only mandatory for companies with more than 20 employees. These are just a few examples of the milestone that LLE represents.

From the perspective of the act of releasing economic activity that involves State approval, the LLE brings instruments that are relevant to the speed of this act, such as the exemption from public acts; automatic release or simplified release procedure and tacit approval.

Therefore, for the free enterprise agenda to lead the Brazilian economy to continuous and robust growth, the LLE and its instruments need to be accepted and effectively applied by states and municipalities.

By Larissa Milkiewicz, lawyer working in Environmental Law and agribusiness; vice-president of the Agrarian and Agribusiness Law Commission of the OABPR

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BIBLIOGRAPHY

1 - OECD: See more at https://www.gov.br/economia/pt-br/acesso-a-informacao/reg/arquivos/tomada-de-subsidio-01-2022-v11.pdf

2 - Read more at: https://www.mises.org.br/article/2083/o-crescimento-economico-e-facil-e-natural%E2%80%94basta-o-governo-permitir. Accessed on: Nov. 20 2022.

3 - GWARTNEY, James; LAWSON, Robert; HALL, Joshua; MURPHY, Ryan. Economic Freedom of the World: 2020 Annual Report. Vancouver: Fraser Institute, 2020, p. 5. Available at: https://www.fraserinstitute.org/sites/default/files/economic-freedom-of-the-world-2020.pdf.

4 - All Brazilian cities with more than 10 thousand inhabitants were mapped. See more at: https://liberdadeparatrabalhar.com.br/. Accessed on: Nov. 20 2022.

5 - Amapá, Amazonas, Bahia, Ceará, Goiás, Maranhão, Paraíba, Piauí, Rio Grande do Norte, Rondônia, Sergipe and Tocantins. https://liberdadeparatrabalhar.com.br/. Accessed on: Nov. 20 2022.