An analysis of the effects of the formalization of the clothing manufacturing sector in Passos-MG

Abstract

This study aimed to analyze the effects of the formalization of Individual Microentrepreneurs (MEI) in the clothing sector in Passos, Brazil, using the SWOT analysis framework. The qualitative research employed unstructured questions to examine the internal and external factors affecting microentrepreneurs. The results indicated that formalization offers benefits such as increased market credibility, access to social security benefits, facilitated credit, and improved fiscal organization. However, challenges were identified, including the obligation to pay the Simples Nacional tax (DAS) during periods of low demand and the sector’s seasonality. It was also found that regularization is associated with opportunities for expansion and profitability, while the lack of financial planning and dependence on continuous services pose potential threats. The study concludes that, although essential for strengthening the sector, formalization requires ongoing support through training and tax incentives.