Advantages of Investing in Farmland

  • Increasing global demand for food
  • Consistent long-term appreciation
  • Annual cash return
  • Non-volatile asset
  • Store of value

Investor-Friendly Country

  • Foreign and local investors treated equally
  • No limitations to ownership by foreign buyers
  • No currency exchange controls or forced conversion
  • Foreign currency can be used: Dollars, Euros, etc.
  • No restrictions or taxes when transferring money into, or out of the country (repatriation of capital)

Stability and Safety

  • Latin America’s safest country
  • Tops rankings in political and economic stability
  • Tops rankings in transparency and lack of corruption
  • No social turmoil: existence of middle class and Latin America’s lowest income gap
  • Solid legal system with strong reputation for respect of contracts and private property

Why Farmland in Uruguay?

Advantage # 1: Uruguay’s Suitability

  • Non-degraded soil
  • Even rainfall year-round
  • World’s largest aquifer beneath region
  • Temperate climate
  • Two crops per year (over long run: 1.7)
  • Competitive producer
  • No government intervention in the market
  • Developed land rental market

Uruguay: A Global Player

  • 6th exporter of soybeans
  • 5th exporter of dairy products
  • 4th exporter of rice
  • 5% of global beef exports ... Plus, Uruguay is the only country in the world with 100% traceability of its herd

A country of 3 million feeding 40 million people

Plus: One of the World’s Best Places for Forestry

  • Fastest growth rate of eucalyptus, due to soil, climate and water availability: 8-10 year cycles
  • World’s highest FSC certification: 85% of forests
  • In 2006 UPM (Finland) and in 2010 Stora Enso (Sweden) built the world’s largest and newest pulp mills ....and in 2019 UPM launched a new one:

Global soil degradation, and where Uruguay stands

Escasez de agua a nivel global y la posición de Uruguay

Advantage # 2: Turnkey, Easy Investment

Most investors choose to:

  • Outsource management of the operation to a farm management firm, which handles all aspects of the business (expertise is widespread and available); or
  • Lease out the land (there is a very liquid rental market available).

Advantage # 3: Transparent Market for Land

  • The country is mapped, with soil types classified according to their productivity
  • Each type of soil is has a productivity index (“CONEAT” index)
  • The map is available online
  • Thus, land productivity is verifiable

The Online “CONEAT” Productivity Index

  • Type here
  • Plug in the property number(s)
  • The system will show the specific property’s:
    • location and water resources (rivers, creeks, lakes)
    • detailed soil map, with soil types in different colors, and the percentage of each soil type
    • description of each soil type
    • the productivity index of each soil type (“CONEAT” index)
    • the average “CONEAT” index for the whole property

The Online CONEAT System: Example

Advantages of the CONEAT System

  • It allows anyone to verify the productivity potential of a property in Uruguay
  • It provides a tool to determine uses for a specific farm
  • 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

Types of Land in Uruguay

  • Agriculture (soybeans, wheat, rice, etc.)
  • Cattle/sheep ranches, dairy farms
  • Forestry: eucalyptus, pine
  • Vineyards / olives / blueberries
  • Oceanside rural land for development

Uruguay’s Most Attractive Options

The Price of Land

Farming has favorable tax treatment in Uruguay:

Income tax:

  • Flat 25% income tax rate, levied on net income
  • For small farms, the rate is lower: farms with gross income below USD 250,000 per year have a capped tax amount of USD 5,125 (IMEBA system, which taxes sales –at 0 to 2%- instead of net income).
  • Certain timber operations qualify for tax breaks

Low property taxes: average is 0.2% *

Our Services

We are a full-service Law and Tax Firm, with a specialized division assisting overseas farmland investors, both institutional and individual.

Our Farmland investment advisory unit assists with:

  • Sourcing farmland according to client needs/preferences
  • Structuring purchases
  • Organizing corporate structures, setting up ongoing farm management

Our Legal and Tax Services include:

  • Conveyance / Legal Assistance in the Purchase Process
  • Tax and Accounting Support
  • International Taxation
  • Company Incorporation
  • Legal Services in general (contractual, corporate, labor).

Andersen is the Uruguayan member firm of Andersen Global®, an international association of member firms comprised of tax and legal professionals worldwide.