South American Real Estate News

Investing in farmland in Uruguay: all the prices and benefits for each agricultural activity

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They start at USD 1,800 per hectare. Experts assure that they have a profitability of 4% in dollars. All the steps to make the investment as a foreigner

Among the investments that are earning interest, especially from those looking to Uruguay as a more stable country than Argentina to ‘plant’ capital, the fields for agricultural production became one of the stars .

“The Uruguayan agricultural sector, historically, has been a sector protected by the government of the day. No tax withholdings are applied to any of the activities and all commodities are priced in dollars, this being the currency of exchange”, highlights Guillermo Binello, division agricultural real estate Amarras Uruguay.

The expert details that the prices of the fields vary according to the activity and move in the following values:

  • Agricultural fields in the Core area: between USD 6,500/8,000 per hectare.
  • Mixed fields: (30/40% with agricultural soils) between USD 3,500/4,500 per hectare.
  • Cattle fields (breeding): between USD 1,800/2,500 per hectare
  • Cattle fields with the possibility of rearing and wintering between USD 3,000/4,000 per hectare.
  • Forest fields: between USD 2,500 / 3,500 x hectare (the third pulp mill is being built, with an estimated investment of USD $ 5,000 million.)

Binello further explained that l The return on invested land capital varies, depending on the activity, between 3 and 4%. Land appreciation historically has been 2/3% above American inflation.

From Buenos Aires, the real estate advisor Horacio Ludigliani reinforces the idea in comparison with the possibilities that exist in Argentina. “ In terms of investments in fields, we are at the lowest price in dollars per hectare in recent decades . Not only because of the increase in the dollar, the lack of legal certainty and of an economic path also threatens that investment. Global investors prefer to invest in Uruguay or Paraguay, countries that allow them access to the North American currency and to repatriate their investments, “he told El Cronista.

Binello also adds that livestock trusts were developed in Uruguay, which for the expert is an “excellent option to invest smaller amounts and begin to know the management of the Uruguayan countryside. Profitability, in this case, is in the order of 7% to 8% per year. “

Among other characteristics that must be taken into account to invest, he points out that “the ownership of the land has titles in perfect condition, there are no rights and shares. The purchase can be made by both a natural person and a legal entity, having no need to be established in Uruguay. Also no There is no restriction on either the size of the farms or their location for foreigners “.

And another important issue highlighted by Binello is that “this market offers free availability of foreign currency, being able to turn it without any type of tax restriction. And on the other hand, the markets are crystal clear and VAT is not applied on production or machinery “.

On the other hand, other data that make Uruguayan fields interesting is that the livestock sector in that country is supported by a large distribution of cold storage plants and there are no health problems since it is vaccinated against foot-and-mouth disease, provided by the State. 100% of the herd has an electronic chip, thus facilitating control and traceability. Currently Uruguay has approximately 130 markets enabled to export meat, including Japan, Korea and the United States .

Source: La Cronista

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