New Civil Code Could Cost the Economy up to R$350 Billion
Studies project up to R$353.6 billion in economic losses with the new Civil Code. Read in Gazeta do Povo.
TL;DR
- The Senate is aiming to approve a new Civil Code by year-end, despite studies estimating potential negative economic impacts of R$353.6 billion.
- Economic risks include increased judicial costs, higher credit expenses, reduced investment, and a potential increase in litigation.
- The proposed changes, affecting around 900 articles and introducing 300 new rules, could lead to significant adaptation costs for businesses, especially in the tech sector.
- Concerns exist about weakened loan guarantees, particularly the fragility of fiduciary alienation, which could increase interest rates and impact the financial system.
- New regulations may deter foreign investment by requiring prior executive authorization and physical presence in Brazil for foreign companies.
- The Senate denies rushing the process, stating it follows internal procedures, including public hearings and debates.