The Federal Government sanctioned Law n. 14.130/2021, providing the creation of Agribusiness Investment Funds (FIAGROs), co-property ventures designed to invest in agribusiness activities, financial assets, and rural land. FIAGROs may also be designed to foster sustainable agriculture, promoting the adoption of better governance practices.
The Federal Government sanctioned Law n. 14.130/2021, which amended Law n. 8.668/1993 and established the legal framework of Agribusiness Investment Funds (FIAGROs), co-property ventures designed to invest in rural land acquisition, agribusiness activities, agribusiness financial assets, and credit rights (article 20-A).
According to the new law, FIAGROs may be established as closed-end or open-end funds (article 20-B) and are subject to 20% income tax rate (article 20-C). They share some of the same legal dispositions of Real Estate Investment Funds (FIIs, in the Portuguese acronym), provided in article 20-F.
Representing a new source of financing for the agribusiness sector, the new investment fund may contribute to the adoption of better environmental, social, and corporate governance (ESG) practices, hence, the improvement of sustainable agriculture in Brazil. FIAGROs may be created under sustainable frameworks and be aligned with the ESG initiatives carried out by the Securities and Exchange Commission of Brazil (CVM) (see CVM’s 2021 Agenda).
