Brazilian Club Business: 5-Year Entry Stats

In this year’s Brazilian League, only eight clubs participate in the form of football joint-stock companies. Brazilian “Exame” website

[Reported by Duan Muxin, compiled by South American Overseas Chinese News Network, on January 31]The new Brazilian Football League season kicked off on January 28. What is quite striking is that in the Brazilian League, only eight clubs participate in the form of Soccer Football Societies (SAF), and it has been nearly five years since the relevant Brazilian legislation was enacted. This figure shows that despite being regarded as a modern football management model, the entrepreneurial transformation of Brazil’s top clubs is still slow.

The Brazilian “Exame” website reported that currently, eight clubs operating in the form of football joint-stock companies in Brazil include Atletico Mineiro (Atlético-MG), Bahia, Botafogo, and Fluminense.

According to statistics released by the Brazilian Football Development Institute (IBESAF) at the end of last year, as of July 22 last year, there were 117 legally registered football joint-stock companies in Brazil. This number has increased from 99 announced in February last year, showing the trend of slow progress in corporate transformation.

Discussions surrounding the corporate transformation of football clubs have recently heated up again, which is closely related to Brazil’s tax reform. According to the new regulations, starting from 2027, traditional clubs will need to pay goods and services tax (IBS) and social contribution tax (CBS). The total tax burden of the two is 10.8% of operating income, plus 5% social security tax (INSS), the overall tax rate is close to 16%. The football joint-stock company continues to apply the football-specific tax system, and the overall tax rate is only 8.5%, which has obvious advantages.

Fluminense is the last traditional giant club to complete its transformation at the end of last year. This move has been interpreted by industry insiders as the Brazilian club’s corporate transformation has entered a new stage, and tax efficiency is becoming a key driving force.

However, despite the increase in the total number of football joint-stock companies, as many as 84 of them do not participate in any level of Brazilian football leagues. Most of these clubs are small, streamlined and have limited revenue-generating capabilities. Brazilian sports law expert Cristiano Caús analyzed that for small and medium-sized teams, transforming into a football joint-stock company is almost the only feasible way to attract investment.

From the perspective of regional distribution, São Paulo currently ranks first in the country with 29 football joint-stock companies, followed by Paraná (15) and Minas Gerais (13). However, there is currently no football joint-stock company from the state of Sao Paulo competing in the Brazilian League.

In the eyes of experts, Cuiabá’s entrepreneurial transformation is exemplary. This club is located in the state of Mato Grosso. It has been operating according to the corporate model long before the introduction of relevant legislation. It then invested more than 50 million reais to build a training center. It has now been in the Brazilian League for four consecutive seasons.

Cristiano Dresch, president of the club, believes that the most important impact of the relevant legislation is to introduce a large amount of funds into the football industry. “In my opinion, this change has just begun, and many overseas companies want to invest in the Brazilian football market.”