Welcome to this week’s gathering of Brazilian technology and innovation. Here are three major developments in Latin America’s largest economy: first, the main story from this week is this: The Brazilian Senate has issued a legal framework for startups. Subsequently, the government was warned about the dangers of the impending sale of state-owned technology companies, and the estimated 5G costs for operators were announced.
Senate Passes Legal Framework For Startups
The Brazilian Senate has passed the Legal Framework for Startups, which establishes a regulatory environment to stimulate the formation of innovative companies and provide incentives for those who invest in new technology-based companies.
Approved unanimously on Thursday (25), the latest version of the framework underwent significant changes in light of what Congress passed last December. After months of lobbying, players in the Brazilian startup ecosystem perceive the latest version of the framework as a step backwards despite the clarity the framework brings to a number of areas.
Among the highlights, the framework establishes safeguards for investor rights, as well as the establishment of a special government purchasing regime that simplifies the process for startups to compete for public sector contracts. On the other hand, the framework has pressed a number of points that the startup community deems necessary to promote segment development, as well as the ability of startups to establish themselves under a simplified tax regime. Another key point that has been excluded from the version approved by the Senate is the use of stock options to reward employees in exchange for cash.
The Legal Framework for Startups now returns to Congress, where changes made by the Senate will be either approved or vetoed, preventing discussions from moving forward.
The sale of serpro can jeopardize national security
Brazilian Ministry of Economy was warned about the potential national security risk associated with the upcoming sale of Federal Data Processing Service (Serpro). The hazards have been described in documents sent to Public Prosecutor Service in relation to state-owned companies, which will be sold in 2021 as part of a national privatization plan. Serpro handles all kinds of sensitive data on behalf of the government, ranging from processing tax returns of the entire population, to developing critical systems used by the Armed Forces.
The document poses a range of questions focused on the future of data that Serpro is dealing with in the privatization scenario. Among the points raised, the Prosecution argued that the current general data protection regulations in Brazil prevent data related to public and national security and defense from being handled by private sector organizations. In addition, he argues that handing over sensitive data or disclosing details about data processing automation technologies or platforms to governments or companies is a threat to national security.
“In the privatization process, Serpro can be controlled by a foreign company, so that foreign governments can control it directly or indirectly, have access to data and technology that is being developed in Brazil which is important for its defense, security and economy,” he said. Documents have been sent to National Auditor Court and to National Development Bank (BNDES), who are currently working on privatization plans for Serpro and Dataprev, the technology company responsible for Brazil’s social security system, will also go on sale later this year.
The cost of 5G in Brazil exceeds US $ 6 billion
Brazil’s national telecommunications agency Anatel have agreed the contents of the notification for the coming country 5G auction. The agency estimates the opportunity cost “for operators will be up to 35 billion reais (US $ 6.2 billion) to use the 3.5 GHz frequency band. In addition, companies will need to invest an additional 80 billion reais (US $ 14 billion) in 5G over 20 the next year.
The mandatory investment is the allocation of resources that operators need to set aside for deploying fiber optics in locations in the North and Northeast which remain digitally excluded, as well as cellular connectivity to 14,000 locations across the country. Additionally, telecommunications companies will need to connect all federal highways to the mobile internet, deploy fiber-optic cables that will traverse the Amazon rainforest, and launch communications networks for exclusive use by the government.