Juliana Mello

Juliana Mello


The Brazil Business

Updated

Jessica Romano

How to open a boteco in Brazil

Juliana Mello

Juliana Mello


The Brazil Business

Updated

A boteco – which is the Brazilian version of a pub - is one of the most popular establishments nationwide. We will explain what are the procedures necessary to open and run this kind of business in Brazil.

Some foreigners who come to Brazil are taken by the idea of opening a boteco, which is a commercial establishment similar to a pub. In order to check the viability of opening a pub in Brazil and before getting worried about fees, documents and licenses, it is important to understand the whole concept of a boteco and why Brazilian people like it so much, so that you can find out if this type of business really suits you.

In a few words, boteco is the Brazilian name for a place where people gather to drink, eat and chat. You can call it a bar or a pub, but in the mind of a typical Brazilian, a boteco has its own and particular description. There is something cultural involved, it is possible to really feel the Brazilian way of life when visiting a boteco.

What is a boteco?

The origin of botecos in Brazil remounts to the beginning of the 19th century, when Portuguese and Spanish immigrants opened establishments to sell several items, like dry goods, medicines, tobacco, and drinks.

It did not take long for the boteco to become a spot where everybody occasionally met and ended up chit-chatting: women went to buy household supplies; while men were having their after work drinks, leaned on the counter.

As time went by, local botecos started to develop their own characteristics and to invest in their strong points. Therefore, they got gradually specialized as bakeries, drug stores, grocery stores, cafeterias, bars etc.

In the early 20th century, when new European immigrants came to Brazil, botecos incorporated fresh elements. Features of Italian cantinas, French cafes, English pubs, and German taverns began to compose the botecos. There were influences even from Asian and Arabic immigrants.

Botecos and the Brazilian Culture

As true community centers, botecos sheltered a great variety of meetings. In Rio de Janeiro they were like a stage, where bohemian composers used to strum their guitars and drum on the tables, singing through the night.

Brazilian rhythms like Samba and Chorinho were basically born inside the Rio's botecos. The worldwide known Bossa Nova song “Garota de Ipanema” (Girl from Ipanema) was composed in a sidewalk table of a boteco by the beach.

All over the country, poems were recited by the tables, among heated discussions between writers and intellectuals of all affairs. Political issues of great matter were discussed, social movements composed, journalists gathered, even soccer federations were created over chats in botecos. In short, they are an undeniable part of Brazilian culture.

And of course, they are also part of Brazilians' life story. While sat in a boteco, people share their news and opinions about facts and life, having relaxed conversations . In Brazil, it is commonly said that everyone in a boteco is a philosopher, which pretty much gives the idea that a boteco is not just a bar, it is a socializing point, one of those few places where people can fully exercise freedom of expression.

Brazilians love their botecos, no matter if they occupy a whole block or a little neighborhood corner. The most important thing is to feel cozy.

Do you identify with this kind of business?

A boteco is always a relaxed and outgoing place, with simple decoration and homely environment. That is not the kind of business that can be administered from afar. The owner must be a person that enjoys socializing with his clients, getting feedback and guaranteeing their loyalty, making them feel at home. Also, you have to fit well with different types of people, because botecos are known for being a very democratic place.

Other thing to consider is that a bar never goes on vacation, and normally at the beginning of the business, the owner often accumulates several tasks. Working on weekends and at dawn is usual.

In Brazil, boteco competitiveness is fierce. According to Bars and Restaurants Brazilian Association (Abrasel), out of a hundred new bars that opens in the country, 35% shut down in less than one year. It is a challenging business that forces establishments to be always recycling to distinguish. Besides, this marketplace is versatile, demanding for constant changes and adaptations to new trends. 

Opening a boteco

Opening a boteco, bar, cafeteria, restaurant or a similar business basically requires the same procedures. One of the first steps is to create an entity in Brazil, which can be a little tricky as it involves a lot of organizations and documents. The best option is to hire an accountant for guidance.

The procedures to start this type of business in Brazil vary according to the state, as it relies on each local Junta Comercial (Board of Trade). Nevertheless, the following steps are adopted throghout the country:

  • Registering at Junta Comercial (Board of Trade)
  • Registering at Secretaria da Receita Federal (Federal Internal Revenue Department) in order to get a CNPJ (Cadastro Nacional da Pessoa Jurídica), which is the Brazilian Taxpayer Identification for companies
  • Registering at the local prefecture to verify if the chosen location for the establishment is legal (if it has Habite-se and approval from the local Fire Department)
  • Obtaining the business license (alvará de funcionamento)

Facilities

Anvisa - which is the Health Surveillance National Agency - is responsible for supervising businesses operating in the Foods and Beverage sector. Botecos must meet the organization rules. Otherwise, the owner can be finned and, upon recurrence, the establishment will be shut down. The basic facilities necessary to open a boteco are:

  • Independent area for receiving and storing goods
  • Independent area for cooking and handling food
  • Independent area for hygiene and separated place for cooking utensils
  • Employees bathrooms, separated by gender
  • Locker rooms, separated by gender, with individual locker and shower
  • Customers' bathroom, separated by gender
  • All areas and facilities (floor, walls, lining, ceiling, doors, windows); must be covered in flat materials and light colors to better cleanse
  • The place must have uniform lighting and good ventilation

Rules regarding hygiene conditions

  • Employee's health control
  • Pest control
  • Personal hygiene and uniforms to employees
  • Environmental hygiene

Employment rules

Depending on the services rendered, employees must be registered according to the CLT system, which contemplates the Brazilian labor laws. In general, employers must provide:

Taxes and contributions

In a “boteco business” tributary planning must include the collection of:

  • Federal taxes and contributions: IRPJ, CSLL, Cofins, INSS and FGTS
  • State government tax ICMS
  • Municipality fees: ISS and TFE (an annually supervisory fee)

These taxes and contributions will be paid by Lucro Real, Lucro Presumido, Lucro Arbiritado or Simples Federal tax systems.

Franchises

Another option to open a boteco is getting a franchise business. In Brazil, huge breweries and successful traditional botecos created very lucrative franchising networks. The positive aspect is that you will start your business already carrying a strong name and an organized structure, but on the other hand, there is a high initial investment, from BRL 28.000.

Not so strict in practice

As legal procedures and regulations demand a lot of time and effort, it is very common for Brazilians to open small commercial establishments – such as botecos -, illegally. It is not unusual to see a boteco operating in the garage of a household, for example, and it is hard to see more than one person in charge of the business.

Nevertheless, if the organization in charge of supervision discovers that these establishments are operating illegally, the owner will be finned and in some cases, may respond for criminal charges.

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