Panama Agricultural Investment With Low Risk, High Return
A little more than a month ago (late July), I wrote to report that a development group I’ve been working with in Panama since early 2014 was launching a new plantation project on the heels of their very successful Lady Victoria mango plantation.
Originally, this latest plantation, limes, was planned at 100 hectares. However, those 100 hectares sold out in less than a week.
The developer responded to the overwhelming interest by opening up an additional 100 hectares of limes to individual investors. As of yesterday, all but 29 of those hectares have been sold.
Agricultural investments have been a focus for me for the past half-dozen years. Unfortunately, as I’ve been reporting, it’s not easy to find agricultural projects geared toward the small investor. That’s one reason this current opportunity is so appealing and is selling so quickly. This investment is completely turnkey and hassle-free for the individual investor. The development group will take care of all of the work—planting, irrigation infrastructure, fertilization, and eventually caring for the trees and harvesting the crop.
High Income Opportunity
I see other reasons why this opportunity is proving extraordinarily successful.
First is the return. The IRR projection over the first 20 years of the plantation is just about 18%. That’s a phenomenal annualized return. For that level of return, you would expect great risk. However, this group is nearly finished implementing a 650-hectare mango plantation (in the last 18 months). It has a proven track record, meaning fulfillment risk is minimal. Furthermore, the developers own the land, they have their team on the ground, and they are preparing 150,000 lime saplings in the nursery for planting.
Second is the minimum investment amount. The full launch price for 1 hectare of lime trees is US$44,000; however, the developers have agreed to a US$5,000 discount for Live and Invest Overseas readers only, meaning that the cost to you as a LIOS reader is just US$39,000.
As I explained in my initial report on this opportunity, greening (that is, a fungus attacking citrus crops) is causing shortages of limes in the United States. Meantime, demand continues to grow, especially for organic limes. Lime consumption in the United States has increased tenfold since 1980, according to the USDA, and lime prices have doubled since 2014, thanks to the reduced supply and the growing demand.
Demand is so great and supply so limited that one big U.S. wholesaler has contacted the development group in Panama to ask them to target this market. In other words, the developers I’m talking about already have a buyer. In fact, the project team has a letter of intent from this U.S. distributor to buy all the organic limes the plantation can produce. The distribution chain is already in place.
Investors in this new organic limes plantation own the land, the trees, the irrigation systems, and everything that is implemented on their property. The developers prepare the land and plant the trees, then the plantation is handed over to the management company, which cares for the trees. In addition, intercropping is part of the plan.
Small cash flows are created from the intercropping starting in year 2. The lime trees start producing in year 4, with production jumping in year 5 and increasing slightly each year until year 10.
The developers will replant any trees that die in the first 10 years. Note, though, that the limes being planted are a variety of a Persian lime that is resistant to disease and pests thanks to its thicker rind.
This variety is also large, larger than a key lime, and seedless, making it more attractive to the consumer market.
Investing in agriculture can provide a great cash yield. The very big downside is that, typically, historically, you have to invest in and farm your own plantation. This is your chance to invest in a turnkey opportunity where you own the land and the trees… and someone else manages the farm for you.
The developer had planned to increase prices for this lime plantation, but it has sold too quickly for that to make sense. With only 29 hectares remaining, the developer has decided to close out the opportunity at the original launch price of just US$39,000 for Live and Invest Overseas readers.
The remaining 29 hectares will not last much longer. This is your last chance to take advantage of this opportunity.
For more information, contact the InvestGPS team here. Identify yourself as a Live and Invest Overseas reader when you get in touch to receive the discounted price.
“Lief, I always see people writing in to you worried about accidently messing up their U.S. citizenship by living or owning property oversees.
“Not being facetious here, but a serious question came up at a barbeque last weekend when I was discussing with friends about going expat at retirement. Specifically, how does one resign his U.S. citizenship?
“Can it be revoked, short of outright treason?”
According to the State Department’s page on the subject, it’s technically possible to lose your U.S. citizenship if you are naturalized as a citizen of another country with the intent of relinquishing your U.S. citizenship. However, the State Department presumes you intend to keep your citizenship unless you tell them otherwise.
In other words, the only way to lose your U.S. citizenship is to renounce it formally. This is generally done at a U.S. consulate abroad. It’s a lengthy process requiring an interview that must be scheduled in advance. I was told by a colleague recently that the American consulate in London has something like a 12-month waiting list for an appointment.
You aren’t going to lose your citizenship accidentally. And you don’t lose it by moving to another country, by establishing residency in another country, or by buying property in another country.
Remember: The U.S. government doesn’t want you to relinquish your U.S. citizenship. Doing so is the only way to walk away from your U.S. tax obligation.