RURAL "HOLDING": How it can be a solution for your agribusiness
- Piva Advogados
- Feb 19, 2024
- 2 min read
For many in the agribusiness world, the idea of a holding company may sound distant or unfamiliar. However, this business structure can be a powerful tool for managing and protecting assets and businesses in the rural sector.
First of all, it's important to understand what a holding company is. It is a business company created for the specific purpose of acquiring "quotas" and shares in other companies or consolidating personal or family assets. In short, it is a company that aims to own other companies or various investments, including real estate, financial investments and assets in general.
In the context of agribusiness, a Rural Holding Company is the total transfer of a rural family's assets through the creation of a legal entity. Its main objective will be the total management of the rural activity and all the inherent assets and it can offer a number of significant advantages. One of them is optimized succession and tax management, which can result in an increased profit margin for the producer.
Reducing the tax burden, protecting assets, simplifying asset management and facilitating succession are just some of the benefits that a Holding Company can provide.
In tax terms, a Rural Holding Company can enjoy a reduced rate of 15% on Corporate Income Tax (IRPJ) and Social Contribution on Net Profit (CSLL). In addition, the exemption from the Causa Mortis and Donation Transfer Tax (ITCMD) on the transfer of assets between heirs can result in significant savings and avoid possible family conflicts. This is because the distribution of shares after the owner's death is defined in the company's articles of association.
Another crucial point is the reduced risk of losing assets in the event of litigation or debt, since the assets are protected in a separate legal structure from that of the producer. This provides an additional layer of security for agribusiness assets.
In addition, a Rural Holding Company can simplify business administration, allowing heirs to share management of the company without the need for a physical division of properties. This means that asset succession can be planned efficiently, ensuring a smooth and organized transition for future generations.
In short, a Rural Holding Company can be a highly beneficial solution for agribusiness, offering a number of advantages in terms of succession management, asset protection and tax optimization. For rural producers looking for a solid strategy to manage their assets and business, considering the implementation of a Holding Company can be an important step in the right direction.
Bibliographic references:
Blog.aegro. https://blog.aegro.com.br/holding-rural/
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