MEI vs ME: what the difference is and when to migrate
Compare Brazil's MEI and Microempresa in revenue, taxes, employees and obligations. Learn when and how to migrate from MEI to ME with a complete step by step.
The MEI (Microempreendedor Individual, Brazil's individual microentrepreneur category) and the ME (Microempresa, or microenterprise) are the two most popular company sizes in Brazil, but they differ significantly in revenue limits, taxation, obligations and room for growth. Understanding these differences is essential to choose the right classification and to know when it is time to migrate from one to the other.
What is the MEI
The Microempreendedor Individual (MEI) is a business category created by Complementary Law 128/2008 to formalize self-employed workers and small entrepreneurs. It is the simplest and cheapest way to have a CNPJ (the Brazilian company registration number) in Brazil.
The MEI was designed for low-complexity activities and small revenue. The entrepreneur works alone (or with at most one employee) and pays a fixed monthly amount that covers all applicable federal, state and municipal taxes.
Advantages of the MEI
- Free, instant registration over the internet
- Low fixed monthly tax (around R$ 82-87 in 2026)
- No formal bookkeeping required (no accountant needed)
- Simplified invoicing (nota fiscal)
- Access to social security benefits (retirement, sickness benefit, maternity pay)
- Easier access to business bank accounts and credit
Disadvantages of the MEI
- Low revenue cap (R$ 81,000/year)
- Only one employee allowed
- Restricted list of permitted activities (not every CNAE, the economic activity code, is eligible)
- Cannot have partners
- Retirement benefits capped at one minimum wage (unless complemented by extra contributions)
- Unlimited liability (personal assets answer for business debts)
What is the ME
The Microempresa (ME) is a size classification that applies to companies with gross annual revenue of up to R$ 360,000. Unlike the MEI, the ME is not a legal nature in itself, but a size classification that can be combined with different corporate types: LTDA, SLU, EI, Sociedade Simples, among others.
The ME offers more flexibility than the MEI in practically every aspect: revenue, number of employees, permitted activities and ownership structure. In return, it requires more robust accounting and tax obligations.
Advantages of the ME
- Revenue of up to R$ 360,000/year (4.4 times the MEI cap)
- No employee limit
- All economic activities are allowed
- Can have partners (if formed as an LTDA or another corporate type)
- Asset protection is possible (LTDA and SLU limit liability)
- Eligible for the Simples Nacional with rates proportional to revenue
- Preferential treatment in public procurement
Disadvantages of the ME
- Setup costs (Junta Comercial fees, accountant fees)
- A registered accountant is mandatory
- Ancillary obligations: monthly and annual filings with the tax authorities
- Simples Nacional rates range from 4% to 33% depending on revenue and activity
- More bureaucratic and slower setup process
Comparison table: MEI vs ME
| Criterion | MEI | ME |
|---|---|---|
| Annual revenue | Up to R$ 81,000 | Up to R$ 360,000 |
| Employees | Up to 1 | No limit |
| Partners | No | Yes (depending on legal nature) |
| Permitted activities | Restricted list | All |
| Tax regime | Fixed DAS (SIMEI) | Simples, Presumido or Real |
| Monthly tax | R$ 82-87 (fixed) | 4% to 33% of revenue |
| Accountant | Not required | Mandatory |
| Setup cost | Free | R$ 500-2,000 (fees + accountant) |
| Liability | Unlimited | Depends on the legal nature |
| Invoicing | Simplified | Full |
When the MEI should migrate to ME
Migrating from MEI to ME becomes necessary or advisable in the following situations:
Mandatory: revenue above the cap
If the MEI exceeds the R$ 81,000 annual limit, migration is mandatory. There are two scenarios:
- Excess of up to 20% (up to R$ 97,200): the MEI pays a supplementary tax slip on the excess amount and is automatically removed from the regime in the following year
- Excess above 20%: the removal is retroactive to the beginning of the year, and the MEI must pay taxes as an ME from January onward
Mandatory: activity not allowed
If the MEI starts carrying out an economic activity that is not on the list of CNAE codes permitted for MEIs, it must migrate to ME. This can happen as the business evolves and starts offering more specialized services.
Advisable: business growth
Even before reaching the revenue cap, migrating can pay off when:
- The business needs to hire more than one employee
- There is a need to bring in a partner (an investor or business partner)
- Corporate clients require invoices with itemized taxes
- The entrepreneur wants asset protection (by forming an LTDA or SLU)
- Revenue is consistently close to the cap
Important: do not wait until you exceed the cap to plan the migration. Talk to an accountant when revenue reaches 70-80% of the ceiling (R$ 55,000-65,000/year) to assess the right timing and the best tax regime for the ME.
How to migrate from MEI to ME
The migration process involves steps with the Receita Federal (Brazil's federal tax authority) and the state Junta Comercial (board of trade):
- Request removal from the SIMEI: go to the Simples Nacional portal and request to leave the MEI regime. State the reason (excess revenue, hiring, activity not allowed, etc.)
- Notify the Junta Comercial: file the sole proprietor application or the articles of association with the state Junta Comercial, changing the classification from MEI to ME
- Choose the legal nature: decide whether the company will remain an Empresário Individual (EI), be converted into an SLU (for asset protection) or into an LTDA (to bring in partners)
- Choose the tax regime: with the help of an accountant, opt for the Simples Nacional, Lucro Presumido or Lucro Real, according to the company's revenue and expense profile
- Update registrations: update the operating license with the city government, state tax registrations (if applicable) and bank records
The CNPJ is kept throughout the migration. The number does not change; only the classification and the associated tax obligations do.
Monthly costs: DAS-MEI vs Simples Nacional ME
The cost difference between MEI and ME is significant and deserves careful consideration:
MEI: fixed DAS
The MEI pays a fixed monthly amount (DAS-MEI) of around R$ 82-87 in 2026, composed of:
- 5% of the minimum wage for the INSS (social security)
- R$ 1.00 of ICMS (for commerce or industry)
- R$ 5.00 of ISS (for services)
This amount does not vary with revenue. An MEI billing R$ 1,000/month pays the same as an MEI billing R$ 6,000/month.
ME: Simples Nacional
Under the Simples Nacional (Brazil's simplified tax regime for small businesses), the ME pays a rate on gross revenue. The effective rate depends on the revenue accumulated over the previous 12 months and on the annex of the activity:
- Annex I (Commerce): from 4%
- Annex II (Industry): from 4.5%
- Annex III (Services): from 6%
- Annex IV (Services): from 4.5%
- Annex V (Services): from 15.5%
On top of the Simples DAS, the ME has fixed accountant costs (R$ 200-800/month for microenterprises) and occasional annual fees.
Can an MEI have partners?
No. The MEI is, by definition, individual. The entrepreneur is the sole owner and cannot bring in partners under any circumstances. If a partnership becomes necessary, the company must be formed as an ME (or another size) with a legal nature that allows partners, such as the LTDA.
The ME, on the other hand, may or may not have partners, depending on the chosen legal nature:
- ME as EI: no partners (single owner)
- ME as SLU: no partners (single owner, with limited liability)
- ME as LTDA: two or more partners
- ME as Sociedade Simples: two or more professional partners
For more details on corporate types, see the article Types of companies in Brazil.
How to check whether a company is an MEI
On Inddex, you can check whether a company is classified as an MEI by looking up its registration data. Each company page displays the MEI option, when applicable, along with the other data such as company size, legal nature and Simples Nacional option.
To look it up:
- Go to the Inddex search
- Search by the company's CNPJ or name
- On the company page, check the "Company size" and "MEI option" fields
Companies classified as MEI will show the size "Microempreendedor Individual" and the MEI option marked as "Yes". If the company has migrated to ME, the size will be "Microempresa" and the MEI option will be "No".
Frequently asked questions
Can a company go back to being an MEI after migrating to ME?
Yes, as long as the company once again meets all MEI requirements: revenue within the cap, only permitted activities, at most one employee and no partners. Reclassification is requested through the Simples Nacional portal at the beginning of the calendar year (January).
Does the CNPJ change when an MEI becomes an ME?
No. The CNPJ number stays the same. What changes is the size classification, the legal nature (if amended) and the tax obligations. Existing contracts, bank accounts and registrations remain valid.
How long does the migration from MEI to ME take?
The removal request on the Simples Nacional portal is processed within a few days. The amendment at the Junta Comercial can take 5 to 15 business days, depending on the state. The full process, including updating licenses and registrations, usually takes 15 to 30 days.
Do I need an accountant to be an MEI?
No. The MEI is exempt from formal bookkeeping and can meet all of its tax obligations without an accountant: paying the monthly DAS-MEI and filing the Simples Nacional annual statement (DASN-SIMEI). For the ME, an accountant is required by law.