Bureaucracy represents Brazil as well as football and samba. And a component that every Brazilian who has ever needed feels on their skin are the registry offices. In 2021, Brazilians spent R$ 74 , 4 billion in bureaucratic procedures in the country’s registry offices — an amount that exceeds the annual budget of most federal government ministries. The collection represented a record, an increase of 34% compared to the previous record of 2020. The data are from the National Council of Justice (CNJ).
The average gross revenue of a notary in Brazil is R$ 1.8 million per year. But there are different realities between the .726 registry offices in the country. The 30 registries of the Federal District, for example, are the which have the highest average revenue: R$ 8.9 million per year. The 1.544 from São Paulo and the 390 from Rio de Janeiro complete the podium, with respective average revenue of R$5.1 million and R$4.6 million. At the other end, the 235 registry offices in Alagoas recorded the lowest average, R$ 443 thousand per year.
The notaries themselves are victims of bureaucracy
These numbers contribute to a notary holder having registered last year average gross monthly income of R$ 129, 1 thousand. Behind them, members of the Public Ministry (R$ 53, 4 thousand), Judiciary and Court of Auditors (R$ 53, 7 thousand). In comparison, doctors have an average monthly income of R$ 30, 5 thousand and athletes and sportsmen of R$ 22, 9 thousand. The numbers are from the Federal Revenue based on the income tax declaration.
However, according to the Brazilian Football Confederation, analyzing only football players, the average salary is R$ 3 .7 thousand. The average of ball players is pulled down, since about 75% of 360 one thousand athletes registered with the organization are amateurs and do not have soccer as their main source of income.
It is symbolic that the income of the main careers in Brazil are linked to the public sector and bureaucracy in a country that is doing poorly in rankings that measure the quality of the market economy. Among them, in economic freedom (133 th place among 177 countries, according to the Heritage Foundation), of global competitiveness (59 th place among 53 countries, according to the Economic Forum World) and in the protection of property rights (74 th place among 129 countries, in the Property Rights Alliance survey).
It is worth mentioning that the amount received by the notary’s holder It is gross, deducting the operating expenses of the registry offices and leviing on it a series of taxes and fees, which vary between the federative entities. In other words, the notaries themselves are victims of Brazilian bureaucracy as well.
The national average of transfers is 28% of gross revenue from notaries, according to a study by the Association of Notaries and Registrars of the State of São Paulo (Anoreg/SP). This money is passed on to up to 74 agencies across the country, including some that are responsible for inspection of notarial acts, such as the Judiciary, but ends up being passed on even to entities such as philanthropic hospitals. Naturally, so many fees make the notarial service more expensive for the citizen, the biggest loser in this story.
“After the transfers, it is still necessary to take care of costs with employees, rent, systems, software, bills of electricity and water. On what is left, it still applies 27, 5% of the Individual Income Tax because despite the logic being a company, the individual is the one who responds”, explains Rodrigo Bachour, who has been a notary and registrar since 2017. He is currently responsible for the district of Jaciguá, District of Vargem Alta, in Espírito Santo.
It is worth remembering that any mistakes made by the registry offices are subject to the payment of compensation to those affected. “The notarization of the signature for the transfer of ownership of a car brings a net income of about R$5 to the notary, but if there is an error on the part of an employee or if he is the victim of a forgery, it can generate a huge indemnity” , he says.
Not for nothing, it is common for notaries to contract civil liability insurance, which restricts the profitability of the activity. “In practice, a well-managed registry office that has a gross monthly turnover of R$ 100 thousand ends up, in fact, , having a net income of about R$ 40 thousand per month , depending on the state”, he adds.
Among the services performed by the notaries are the resolution of several issues typical of the Judiciary, but which can be resolved in a consensual way between the parties, such as the inventory, divorce and even adverse possession. The logic is that if there is no dispute, there is no need to involve a magistrate.
Asked about the quality of service provided by notaries, Bachour states that any notary public today competes in the services of deeds and notarization . “This no longer occurs in the real estate registry, so due to the lack of competition, it is possible that some notaries will accommodate and the client will not be treated in the best way. As it is a monopolistic service in that region, regardless of the quality of the service, the citizen will have to go back and solve it, so this wears down the image of the registry offices, even when this thinking is not the rule. I know several real estate registrars who do an exceptional job”, he says.
“ I try to reduce bureaucracy to provide legal certainty for the acts and make life easier for the citizen, but there is a limit. The notary and the registrar must follow the legal requirements exactly. If the law says that it is necessary to request certain documents, I am obliged to comply. We are taxed as bureaucratic, but we are only following the law. So society needs to come to an understanding and change the laws”, argues Bachour.
It used to be worse
The Covid pandemic-12 sped up levels of digitization, including the notaries. Prior to 2020, all notarial services required a physical presence, and the signature of documents in person. It has been replaced by solutions like digital formatting and video calling that are here to stay. One of them is E-notariado, an application that helps in the recognition of signatures and powers of attorney.
“We always think: why the hell does this exist? But every bureaucracy has a reason behind it because there is always someone who benefits from it”, explains Geanluca Lorenzon, former Secretary of Advocacy for Competition and Competitiveness at the Ministry of Economy (SEAE).
He explains that most of the time the justification of a bureaucracy is an exaggerated risk or because in other sectors it works that way. In this sense, interest groups make it difficult to open markets and reduce bureaucracy. “Dealing with groups always involves opposition and a lot of money behind it. After all, people are afraid of losing something in discussions and reform proposals”, he says.
The most complex country in the world to do business
) The evidence that it is difficult to do business in Brazil is not just anecdotal. The country leads the Global Corporate Complexity Index, prepared by the TMF Group, followed by France, Peru, Mexico and Colombia.
According to the report, the main drivers of complexity in Brazil are both the volume of regulations to follow at the federal, state and municipal levels, as well as the regulatory changes each year in these three tax regimes.
“In Brazil, not only are there tax differences between different states and municipalities in which a company operates, but equally between the different business sectors. Brazil is also the jurisdiction that makes the largest number of changes in tax rates each year – an important factor for it to be at the top of this ranking”, states the report.
One of the processes most complex transactions in Brazil involves the purchase, sale or merger between companies, the so-called M&A. “It is 34 days for companies to regularize the situation in the Union, states and municipalities. Although the process is now mostly digital, companies and their foreign shareholders must appoint a local resident representative”, criticizes TMF.
Iberian heritage
Many Brazilians blame Portugal for the bureaucratic heritage of notaries, but the model is not unique to Brazil. Altogether, there is a notarial system in 86 countries, according to the International Union of Latin Notaries ( UINL). This includes 16 of the 28 countries that make up the European Union and 15 From 15 components of G15. In other words, the notary system does not need to be synonymous with bureaucracy.
“There is an old joke that along with our caravels were the language and legal formalism”, jokes Fernando Araújo, a Portuguese lawyer and professor at the Portuguese Catholic University.
“Brazilians have inherited a very heavy legal instrument, but the Portuguese themselves have been trying to get rid of it in the last three decades”, he analyses.
At the beginning of the century, Portugal promoted several reforms in the actuarial system, creating the Notary Statute, which restricted charges and made the service cheaper, in addition to a reform in 544 that “ privatized” notary services.
“ A broad movement towards administrative simplification was carried out in an attempt to avoid bureaucracy on the part of notaries. We ended the monopoly of certifications, authentications and signature acknowledgments. Several services that were previously exclusive are now provided by other entities and authorities”, he explains.
In this decentralization process, lawyers started to have the prerogative of giving public faith to acts, especially simple recognitions, authentication of private documents and minor bureaucratic tasks. “Technology has helped to create a decentralized system, but with security. Not every lawyer does this procedure. It is necessary to go through certification and qualification”, says Araújo.
The Portuguese professor points out that in the main cities of Portugal, such as Lisbon and Porto, the process as a whole was very decentralized in practice. “Old notaries complained a lot about loss of revenue, which indicates that there were artificial barriers”, he analyzes.
Even territorial competences, such as land registration, disappeared with computerization and Portugal. deeds is still commonly done in notaries when the deals represent a greater financial volume. So in practice the ‘filet mignon’ remains with them, but in low-value transactions decentralization has become common, so it made life a lot easier for the citizen”, he analyzes.
Asked whether Brazilians are right to complain about Portugal’s heritage, Araújo ponders. “On the one hand, Brazilians have already had 200 years to correct inherited evils, but maybe 200 years might not be that long.”
“Portuguese legal formalism is extremely cumbersome, but Portugal is in a strong movement of administrative, bureaucratic and legal simplification… these reforms do not always occur at the speed that one would like, but at least this has been tried in Portugal”, he adds.
“Although there is a lot of interest in simplification, Brazil has the problem of having a lot of people who depend on confusion administrative. These artificial difficulties cials are the livelihood of millions of people, so it makes it difficult to approve improvements. Portugal, in this sense, benefited from the fact that it is a smaller country”, he analyzes when comparing with Brazil.
How to reduce bureaucracy in Brazil?
It is not so simple to get rid of the plague of bureaucracy. In addition to the resistance of interest groups that seek to obstruct or minimize possible losses in the face of a process of debureaucratization, the legislative process in Brazil imposes a high quorum and the need for up to seven votes to be approved, including committees. Not to mention the high party fragmentation, which makes it difficult to form political consensus.
Finally, parliamentarians’ short-term agendas tend to overlap with the creation of a structuring agenda. There is a need to form political conviction, and this usually requires a period of maturation for society to advance reforms that profoundly transform certain sectors.
Geanluca Lorenzon, who helped coordinate the passage of the Freedom Act Economically, it provides a good example of this difficulty.
“Approving major reforms are not routine opportunities, they need a whole conjuncture. The agenda of the MP for Economic Freedom in 2019 was connected with the electoral result, there were many political actors who wanted to be present and respond to that context. These opportunities need to be taken advantage of when they arise”, he explains.
“Another example was the Electronic Signature Law, which completely changed the issue of digital certificates and partially reduced bureaucracy in notaries. The pandemic provided a political justification for finally adopting a simpler model. Approving a reform is a mixture of strategy and taking advantage of opportunities in the scenario”, analyzes Lorenzon.
It is not enough just to change the law
The aforementioned Law of Economic Freedom’s primary objective was to remove bureaucratic obstacles to business, respect property rights, and restrict government influence in the economy. Sanctioned three years ago, however, one of the parties related to the reduction of bureaucracy, which involves the waiver of a business license for low-risk activities, depends on municipal regulation, but only 10, 6% of municipalities with more than 10 a thousand inhabitants regulated it, totaling 390 cities in the country.
The number is from the Freedom to Work Map, developed by the Liberal Institute of São Paulo. The organization’s president, Marcelo Faria, analyzes that the implementation of legislation that takes power away from local authorities is difficult.
“There are cities that we had contact that even approved the law, but dispensing with less activities than that could because the income of inspectors in that region is related to productivity. Dismissing many permits is in the interest of inspectors”, he says.
The survey shows that cities in the North and Northeast have made very little progress in implementing this legislation. “One hypothesis we have is that advancing the law in cities in the interior means that businessmen will be less dependent on public agents, especially councilors, so the law is simply not implemented”, analyzes Faria.
“ Brazilian bureaucracy is, above all, a cultural product of how we do things. As in a company, changing people, changing processes, changing mission and changing values is easier. The most difficult thing is to change the culture, this is what we as a country need to overcome”, concludes Lorenzon.
As long as this does not change, the profession with the highest income will tend to be those that represent, at least symbolically , the opposite of what we should be as a country.
