The bill for the creation of the new Brazilian investment fund dedicated to agribusiness (Investment Funds of Agroindustrial Chains (FIAgro) was approved by Congress, currently awaiting presidential sanction or veto.
FIAgro is extremely welcome to the agribusiness sector due to its ability to boost investment in the area. Increasing the number of players and bringing all the agility of the capital market.
FIAgro is intended for investment in (i) rural real estate, (ii) equity in agro-industrial companies, (iii) financial assets, credit securities or securities issued by individuals and companies that are part of the agro-industrial production chain, (iv) agribusiness securities and receivables (eg CRAs, etc).
For this, taxation is very similar to that of the Brazilian Real Estate Investment Funds (FIIs), but with some peculiarities. We highlight some important points:
There is an income tax exemption for financial investments made by FIAgro in certain assets also linked to agribusiness.
Income tax is levied at the rate of 20% on the distribution by FIAgro of income and gains, as well as on capital gains in the event of redemption by the shareholder.
However, the income of individuals is exempt from income tax when distributed by FIAGRO, in the same way as the income tax exemption of FIIs. That is, when certain requirements are respected: (i) minimum of 50 shareholders, (ii) shareholder with less than 10% of the shares, (iii) shareholder whose shares entitle him to receive income lower than 10% of the total income, (iv) traded in the stock exchange.
FIAGRO brings real potential to revolutionize the market, with great tax benefits.