Inova Simples: what the Simple Innovation Company is
Understand Inova Simples, Brazil's special regime for startups created by LC 167/2019 and LC 182/2021: simplified registration, angel investment, regulatory sandbox and how to look it up.
Inova Simples is a special simplified regime created to make it easier to open and run startups in Brazil. Established by Complementary Law 167/2019 and consolidated by the Brazilian Startup Legal Framework (LC 182/2021), the program lets innovation companies register automatically, without notary bureaucracy and with differentiated tax treatment. In this guide, we explain what Inova Simples is, who it is for, what its advantages are and how it differs from the MEI and the Simples Nacional.
What is Inova Simples?
Inova Simples is a special simplified regime that grants business initiatives of an incremental or disruptive nature differentiated treatment for opening, registering, operating and closing a company. It was added to the Statute of Micro and Small Businesses through article 65-A of Complementary Law 123/2006, introduced by LC 167/2019.
Its main goal is to remove bureaucratic barriers so entrepreneurs can validate innovative business models without the costs and complexity that usually come with formalizing a company. Registration happens automatically through the REDESIM portal (the national network for simplifying business registration and legalization), linked to gov.br.
What is an Empresa Simples de Inovação?
The Empresa Simples de Inovação (Simple Innovation Company) is the legal entity enrolled in the Inova Simples regime. It receives a special legal nature with code 2135-5 (Empresário Individual, when formed by a single owner) or other compatible corporate forms, registered directly with REDESIM.
This special legal nature signals to the Receita Federal (Brazil's federal tax authority) and other agencies that the company operates under the Inova Simples regime, granting it the benefits provided by law. When you look up a company on Inddex, you can check its legal nature and identify whether it is enrolled in this regime.
Who is Inova Simples for?
Inova Simples is aimed at startups and innovation companies. But what exactly does Brazilian law consider a startup?
The Startup Legal Framework (LC 182/2021), in its article 4, defines a startup as:
Legal definition (LC 182/2021, Art. 4): startups are newly created or recently operating companies whose activity is characterized by innovation applied to their business model or to the products or services they offer, and that cumulatively meet the following requirements: (I) gross annual revenue of up to R$ 16 million; and (II) up to 10 years since CNPJ registration.
Important: the R$ 16 million cap defines what a startup is in the broad sense. However, companies registered under the Inova Simples regime are subject to a limit of R$ 81,000/year for the experimental sale of their products or services (equivalent to the MEI ceiling), under Art. 65-A, paragraph 10 of LC 123/2006. These are two distinct concepts: the definition of a startup (R$ 16M) and the operating limit of Inova Simples (R$ 81,000).
Therefore, to qualify for Inova Simples, the company needs to carry out innovation activity — whether in products, services, processes or business models — and respect the legal limits. It is important to distinguish the broad definition of a startup (up to R$ 16 million in revenue and up to 10 years of CNPJ registration) from the Inova Simples experimental sales limit (up to R$ 81,000/year).
Features of Inova Simples
The Inova Simples regime offers a series of conveniences for Brazilian startups:
- Simplified, automatic registration via REDESIM: the entire opening process happens on the gov.br portal, with automatic CNPJ generation and no notary acts required
- No fees at the early stage:Inova Simples registration is exempt from board of trade and notary costs for the company's initial formation
- Differentiated treatment for entry and exit: both joining the regime and closing the company are simplified, letting the entrepreneur test a business model without bureaucratic strings
- Angel investment with asset protection:the angel investor is not considered a partner and does not answer for the company's debts, under articles 61-A to 61-D of LC 123/2006. This protection encourages capital contributions at early stages
- Experimental regulatory environment (sandbox): LC 182/2021 provides for the creation of experimental regulatory environments, in which startups can test innovative products and services under more flexible temporary rules
- Access to simplified public procurement: the Startup Legal Framework created specific procedures for government contracting of startups, such as the CPSI (public procurement for innovative solutions) and the innovation test
Advantages for startups
Inova Simples delivers concrete benefits that make the Brazilian environment friendlier for startups:
- CNPJ registration in minutes, with no need to visit a notary or board of trade
- Zero cost for the company's initial registration
- Flexibility to pivot the business model without bureaucratic restrictions
- Simplified closure if the project does not move forward
- Asset protection for angel investors, making fundraising easier
- Ability to take part in public procurement even at an early stage
- Compatibility with the Simples Nacional for tax purposes
Limitations and caveats
Although Inova Simples represents significant progress, there are important limitations to consider:
- Regulation still evolving: not all provisions of LC 182/2021 have been fully regulated, which can create legal uncertainty on some points
- Innovation is required: the company must actually carry out innovative activity. It is not a regime for just any business
- Time limit: startup status is valid for up to 10 years from CNPJ registration
- Tax obligations remain: Inova Simples streamlines registration, but it does not eliminate tax obligations. The company still needs to choose a tax regime (Simples Nacional, Lucro Presumido or Lucro Real)
- Uneven municipal adoption: implementation can vary across municipalities, since municipal registration follows local rules
Inova Simples vs MEI vs Simples Nacional
It is common to confuse Inova Simples with other regimes. Here is the comparison:
| Feature | Inova Simples | MEI | Simples Nacional |
|---|---|---|---|
| Purpose | Startups and innovation | Formalizing self-employed workers | Tax regime for ME/EPP |
| Legal basis | LC 167/2019 and LC 182/2021 | LC 123/2006, Art. 18-A | LC 123/2006 |
| Maximum revenue | R$ 81,000/year (experimental sales) | R$ 81,000/year | R$ 4.8 million/year |
| Employees | No defined limit | Up to 1 | No limit (ME/EPP) |
| Registration | Automatic via REDESIM | Portal do Empreendedor | Junta Comercial + option in PGDAS |
| Setup cost | Exempt | Exempt | Variable (board of trade fees) |
| Tax regime | Compatible with Simples, LP or LR | Fixed monthly amount (DAS-MEI) | DAS on revenue |
| Angel investment | Yes, with asset protection | Not provided for | Yes (LC 123/2006) |
In short, Inova Simples is not a tax regime like the Simples Nacional or the MEI. It is a simplified registration and operation regime that can be combined with any compatible tax regime. A startup can be enrolled in Inova Simples and at the same time opt for the Simples Nacional for tax purposes.
How to check whether a company is Inova Simples
Receita Federal data includes the legal nature of every company registered in the country. On Inddex, you can search any CNPJ and check whether the company has a legal nature compatible with Inova Simples (code 2135-5 or similar).
In addition, the company's CNAE indicates its economic activity, which helps you understand whether it operates in an innovation field. With Inddex, you can cross-reference legal nature, CNAE and ownership structure data for a complete analysis of any Brazilian company.
Frequently asked questions
What is the Inova Simples revenue limit?
Two limits must be distinguished. The general definition of a startup (LC 182/2021) allows revenue of up to R$ 16 million/year. However, the Inova Simples regime itself limits experimental sales to R$ 81,000/year (the same ceiling as the MEI), under Art. 65-A, paragraph 10 of LC 123/2006. In other words, a company can qualify as a startup with revenue of up to R$ 16 million, but to operate within the Inova Simples regime, experimental sales are capped at the MEI ceiling. Once it exceeds that limit, the company must migrate to a regular regime.
Does Inova Simples replace the Simples Nacional?
No. Inova Simples and the Simples Nacional are complementary regimes with different purposes. Inova Simples deals with the company's simplified registration and operation, while the Simples Nacional is a tax regime. A startup registered through Inova Simples can opt for the Simples Nacional to pay its taxes, as long as it meets the revenue requirement (up to R$ 4.8 million/year) and carries out a permitted activity.
Can any company join Inova Simples?
No. Inova Simples is intended exclusively for innovation companies that fit the startup definition of LC 182/2021. The company must carry out activity of an innovative nature — whether in a product, service, process or business model — and have up to 10 years of CNPJ registration. In addition, experimental sales within the regime are limited to R$ 81,000/year (the MEI ceiling). Traditional companies, with no innovation component, cannot join the regime.
How do I prove I am a startup?
Startup status is self-declared at the time of registration via REDESIM. In the form, the entrepreneur describes the innovative business model in a field of up to 500 characters. No patents, certifications or prior technical reports are required. However, the company must actually carry out innovation activity, or it may be removed from the regime. Choosing a CNAE compatible with research, development or technology activities reinforces the qualification. To check the CNAE codes of similar companies, use the Inddex search.