Farmland Investment in Uruguay - 2018 www.fs.com.uy - Fischer ...
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Farmland
Investment in
Uruguay
2018
www.fs.com.uy www.fs.com.uy
Advantages of Investing in Farmland
n Increasing global demand for food
n Consistent long-term appreciation
n Annual cash return
n Non-volatile asset
n Store of value
www.fs.com.uy
Why Uruguay?
Investor-Friendly Country:
n Foreign and local investors treated equally
n No limitations to ownership by foreign buyers
n No currency exchange controls or forced conversion
n Foreign currency can be used: Dollars, Euros, etc.
n No restrictions or taxes when transferring money
into, or out of the country (repatriation of capital)
www.fs.com.uy
Why Uruguay?
Stability and Safety:
n Latin America’s safest country
n Tops rankings in political and economic stability
n Tops rankings in transparency and lack of corruption
n No social turmoil: existence of middle class and
Latin America’s lowest income gap
n Solid legal system with strong reputation for respect
of contracts and private property
www.fs.com.uy
Why Farmland in Uruguay?
A) Most suitable country
B) Turnkey, easy investment to operate
C) Transparent market
www.fs.com.uy
A) Uruguay’s Suitability
n Non-degraded soil
n Even rainfall year-round
n World’s largest aquifer beneath region
n Temperate climate
n Two crops per year (over long run: 1.7)
n Competitive producer
n No government intervention in the market
n Developed land rental market
www.fs.com.uy
Uruguay: A Global Player
n 6th exporter of soybeans
n 5th exporter of dairy products
n 4th exporter of rice
n 5% of global beef exports … Plus, Uruguay
is the only country in the world with 100%
traceability of its cattle herd
A country of 3 million feeding 50 million
www.fs.com.uy
n MAPA DE
CHRIS ACA
**********
********
Source: Atlas of the Biosphere
Center for Sustainability and
the Global Environment
University of Wisconsin - Madison
www.fs.com.uy
Global soil degradation, and
where Uruguay stands
www.fs.com.uy
Global water shortage and
where Uruguay stands
Source: Intergovernmental Panel on Climate Change, 2007
www.fs.com.uyB) Turnkey, Easy Investment
Most investors choose to:
n Outsource management of the operation to
a farm management firm, which handles all
aspects of the business; or
n Lease out the land (there is a very liquid
rental market available)
www.fs.com.uyC) Transparent Market for Land
n The country is mapped, with soil types
classified according to their productivity
n Each type of soil is has a productivity
index (“CONEAT” index)
n The map is available online
n Thus, land productivity is verifiable
www.fs.com.uyThe Online “CONEAT” System
n Type http://web.renare.gub.uy/sl/coneat/
n Plug in the property number(s)
n The system will show the specific property’s:
q location and water resources (rivers, creeks, lakes)
q detailed soil map, with soil types in different colors, and
the percentage of each soil type
q description of each soil type
q the productivity index of each soil type (“CONEAT” index)
q the average “CONEAT” index for the whole property
www.fs.com.uyThe Online CONEAT System: Example
Map of the property, with Location of the property
different soil types Water
resources
Average CONEAT index for
the property
Property number
www.fs.com.uyAdvantages of the CONEAT System
n It allows anyone to verify the productivity
potential of a property in Uruguay
n It provides a tool to determine uses for a
specific farm
n The CONEAT index of a property correlates
with the price of the land. The market is
thus very transparent: it is easy to compare
properties and determine their fair value
www.fs.com.uyTypes of Land in Uruguay
n Agriculture (soybeans, wheat, rice, etc.)
n Cattle/sheep ranches, dairy farms
n Forestry: eucalyptus, pine
n Vineyards / olives / blueberries
n Oceanside rural land for development
www.fs.com.uyUruguay’s most attractive options
Agriculture: Soy, Cattle: Angus,
Wheat, Corn Hereford
► Top global quality
► Global player,
► 100% traceability
among leading
► 5% of world beef
exporters
exports
Forestry:
Eucalyptus, Pine
► World’s two
largest paper mills
► World’s highest
FSC certification
www.fs.com.uywww.fs.com.uy
www.fs.com.uy
www.fs.com.uy
The Price of Land
USD 1,500 /hect USD 3,500/hect
(USD 607 /acre) (USD 1,417/acre)
Coneat 50 Coneat 100
AGRICULTURAL
USD 8,000/hect
HEARTLAND USD 2,700/hect
(USD 3,238/acre)
(USD 1,093/acre)
Coneat 170
Coneat 80
www.fs.com.uy2018: A perfect buying opportunity?
With China’s slowdown in 2015 and the drop in
commodity prices, in 2016-2017, farm prices
decreased for the first time in over a decade.
Opportunities at 30% below the price peak of
2014 are available throughout Uruguay.
www.fs.com.uyTaxes in farming
Farming has favorable tax treatment
in Uruguay:
n Income tax:
• Flat 25% income tax rate, levied on net income
• For small farms, the rate is lower: farms with gross
income below USD 238,000 per year have a capped
tax amount of USD 5,125
n Low property taxes: average is 0.2% *
www.fs.com.uyExamples of Available
Farm Properties
on the Market
www.fs.com.uyAGRICULTURE:
65 h (160 acres) in SW, index: 160 (high)
USD 520,000 (3,238 / acre) www.fs.com.uyAGRICULTURE:
615 h (1,519 acres) in W, index: 135 (high)
USD 4.2 M (2,764 / acre) www.fs.com.uyFORESTRY:
800 h (1,976 acres) in center, near new
pulp mill site; forestry soils (index: 86)
USD 2.8 M (1,417 / acre)
www.fs.com.uyCATTLE:
650 h (1,605 acres) in E, index: 90 (avg.)
USD 1.85 M (1,174 / acre) www.fs.com.uyFischer & Schickendantz
n Leading Full-Service Law Firm
n Farmland investment advisory unit:
¨ Sourcing farmland according to client needs/preferences
¨ Structuring purchases
¨ Organizing corporate structures, ongoing farm management
n Firm Services (covering all of Uruguay):
¨ Conveyance / Legal Assistance in the Purchase Process
¨ Tax and Banking Advice
¨ Company Incorporation
¨ Title Guaranty Advice
www.fs.com.uyFischer & Schickendantz
References and Recognition:
¨ Leading source on investing in Uruguay to global publications
such as the Financial Times, The Wall Street Journal and The
New York Times (see articles in http://www.fs.com.uy/press/ )
¨ Ranked by Chambers Latin America, Leading Firm
¨ Ranked by The Legal 500, Leading Firm
¨ Ranked by International Financial Law Review
¨ Ranked by the International Tax Review
www.fs.com.uyFischer & Schickendantz
Contact Information:
Managing Partner Juan Federico Fischer
§ jfischer@fs.com.uy , info@fs.com.uy
§ Phone: (598) 2915-7468
§ Fax (598) 2916-1352
§ www.fs.com.uy
§ Main office: Rincon 487, 4th Floor,
Montevideo 11000, Uruguay
www.fs.com.uyFurther Information
fs.com.uy
uruguayfarms.com
info@fs.com.uy
fsuruguay
UruguayFarms
www.fs.com.uyYou can also read
