Investing in agricultural funds as a path to the Golden Visa in Portugal
Diverse climate, fertile soil, organic and sustainable production. The attractions of the Portuguese agricultural sector make it one of the most lucrative areas of investment in the country. Let's look at some of these aspects.
Despite facing challenges in water management, Portugal has demonstrated remarkable water advantages over other European countries, whether natural or artificial.
In 2020, Portugal's water stress index was 12.7%, well below the European Union average of around 20%. Water stress is defined as the situation that occurs when water demand exceeds the available supply.
Portugal not only boasts abundant natural waterways like the Douro and Tagus rivers, but also reservoirs such as Alqueva, the largest in Western Europe. With a capacity of 4150 hm³ of water, it not only generates electricity but also irrigates 110.000 hectares of farmland.
On the other hand, given global projections for food demand and production, the agribusiness sector will become increasingly crucial. By 2050, the world's population is projected to increase by 35%, reaching 10.500 billion people. To meet this demand, agricultural production must double during the same period; others say the increase must be 70%.
“The agri-food sector has become a target for venture capital funds and high-net-worth individuals, both for its profitability and for being a safe haven against the volatility of financial markets,” states the Spanish agricultural portal Cocampo . According to 2022 figures, more than 200 investment funds entered this market in the Iberian Peninsula in the first quarter of that year alone.
Although Portugal is traditionally known for the high quality of its wines, its cork industry and its olive oil, today the offering is greater: almonds, walnuts, table grapes, mandarins, kiwis, etc., are produced in regions such as Algarve, Alentejo, Coimbra and the Alqueva area.
One characteristic of investing in agriculture is its stability. Returns on agricultural assets have been positive every year since 1990. On average, they achieved an 11% total annual return between 1992 and 2020, outperforming all other asset classes.
Tax benefits should also be considered. Some agricultural investment funds are exempt from both Income Tax and Corporate Income Tax.
If your ultimate goal is to obtain the Golden Visa, consider that an investment in funds starting from €500.000 is perfectly compatible with this visa program.
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