The startup ecosystem in Brazil faces a persistent paradox: while innovation is promoted as a growth driver, regulatory and fiscal measures create significant barriers. The increase in the Financial Operations Tax (IOF), established by Decree No. 12,466 of May 22, 2025, is a clear example of this contradiction. With high rates on credit operations, international remittances, and other financial instruments, the measure increases the cost of capital and broadens legal uncertainty, directly impacting startups in critical development phases. More than a fiscal adjustment, the increase in IOF represents an obstacle to the dynamism of the innovative economy, requiring urgent reflection on how to balance revenue collection and competitiveness.
Changes in the IOF have direct implications for startup financing. The fixed rate on credit operations between legal entities increased from 0.38% to 0.95%, while the annual cap jumped from 1.5% to 3%, according to Decree No. 12,466/2025. For Simples Nacional companies, the IOF on transactions up to R$ 30,000 now reaches 1.95% per year, an increase from the previous rate of 0.88%. Furthermore, foreign card purchases, foreign currency acquisitions, and short-term external loans, previously exempt, had been announced with a rate of 3.5%. For FecomercioSP, the combined effect of these increases will have negative consequences for the Commerce, Services, and Tourism sectors. By increasing the cost of credit, the measure discourages new investments and tends to force the passing of costs to the final customer. The result is a contraction in consumption, precisely at a time when the economy is still seeking momentum amid persistent inflation.
For startups using convertible notes or seeking international funding, the cost of raising capital has become higher, discouraging investors and complicating funding rounds. The attempt to tax foreign investments at a rate of 3.5%, although revoked by Decree No. 12,467/2025, generated distrust in the market.This unpredictability affects long-term contracts, especially those without rebalancing clauses, which can become costly.The increase in the Financial Operations Tax (IOF) will cost up to R$ 19.9 thousand for every US$ 100,000 moved by companies in remittances abroad, according to an estimate by XP via InfoMoney.
The impacts go beyond the financial. Compliance with the new rates requires complex adjustments, such as reconfiguring accounting systems and reviewing international contracts, increasing operational costs. For startups outside the major centers, access to credit is already more difficult, and the increase in IOF worsens this situation. The combination of higher costs and legal uncertainty creates a hostile environment, where fiscal and regulatory risk becomes as challenging as market validation.
In this challenging scenario, some legal and structural solutions can mitigate the effects of the increased tax burden. One of the options is raising funds from individual investors, who, under certain contractual structures, can still operate with a lower tax burden than that imposed on transactions between legal entities. Another alternative is the diversification of financing instruments and the strategic use of corporate structures that ensure greater legal and tax flexibility, always with proper legal support.
Therefore, the increase in IOF is more than a fiscal adjustment; it is a setback that compromises the market in general and especially the startup ecosystem in Brazil. For these companies, which operate with tight margins and depend on agility, the cost of fiscal and regulatory risk is a critical obstacle. Brazil must decide whether to become an innovation hub or continue penalizing risk-taking with short-term measures. In 2025, the challenge is clear: the barriers for entrepreneurs only increase. Instead of creating a favorable environment for innovation, the state system itself has contributed to instability and insecurity. A competitive global ecosystem cannot be built based on uncertainties and the persistent "Brazil risk."
