Whether you run a business in Lyon or are an individual, we imagine that you have certain expectations when you invest money. These may be numerical objectives or the desire to have a positive impact on the environment. On paper, a Forest Investment Group (GFI) offers both since it promises attractive returns while having an eco-responsible aspect. But is it a good plan in 2024 to invest in this type of civil society? Here are some answers!
What is a Forestry Investment Group?
A GFI (Forest Investment Group) is what we call a civil company with variable capital. That is to say, the capital is likely to decrease or increase at any time without having to make formal changes to its status. Its main interest is that it makes it possible to manage assets, in this case forestry, between several investors.
In fact, it works like an SCPI: each partner buys one or more shares, knowing that they are real forestry professionals who take care of the different tasks. This may involve forest maintenance, reforestation, wood exploitation, etc. So, if we focus on the added value of this type of investment, we can say that it is rather beneficial for our forests.
What are the advantages and limitations of a GFI?
Even if you know that your money is well spent, profitability must still be there. Because if it does not exceed the 3% annual rate of the Livret A for example, it is already much less attractive. In fact, in the case of a GFI, it is really worth seeing this as a long-term investment. Already because if you plan to benefit from a tax reduction on your income (around 18%), your investment is blocked for 66 months (5 and a half years).
In addition, as the taxation in the case of a transmission is particularly attractive with shares in a GFI, you will be able to leave them to your children. For your information, only 25% of the shares are subject to inheritance tax since there is a 75% reduction. Then, still in terms of advantages, investing in a GFI also allows you to diversify your investment portfolio. Finally, the forest being a tangible asset not correlated to traditional financial markets, we can expect a certain stability in the years to come.
As for the disadvantages now, we must first mention the risk taken as an investor. This is of course not linked only to GFIs since it also applies to SCPIs and other types of investments where returns are not guaranteed. But if the weather conditions are very bad for the forests for example, we can end up with losses on arrival. In addition, as we explained previously, you cannot sell your shares quickly, which can be restrictive if you suddenly need money.
Ultimately, we can say that investing in a Forest Investment Group is far from being a bad idea in 2024. Provided of course that you know where you are going!
