São Paulo Hikes Filming Incentives

If Brazil is now back as a serious player at the climate emergency table following Lula da Silva’s stunning presidential election win in October, film and production investmentmay not be far behind.

Launched in 2021, São Paulo city’s 20%-30% cash rebate for foreign shoots and international co-productions, the first of its kind in Brazil, is opening a call for submissions at Ventana Sur for a new fortified version, integrating São Paulo state.

Selected projects will be announced at the beginning of 2023, says Viviane Ferreira, president of Spcine, the city’s film-TV body which hosts its film commission and oversees the scheme.

2022’s rebate will increase coin for incentives from $2 million last year to $8 million. The rebates diversity and sustainability criteria also put it in the vanguard of incentives being offered around the world.

The second edition builds on the success of the first, which generated an estimated $8million for the city and 30,000 jobs directly or indirectly, a 430% return, according to Ferreira.

Three productions linking global players and São Paulo shingles tapped the rebate fundthe first time around: “O Sequestro,” co-produced by Roberto D’Avila’s Moonshot Pictures (“Spectros”) and Paramount in Spain; “Marcelo, Marmelo, Martelo” made by Coiote for Paramount; and “O Negociador” a Boutique Films title for Amazon.

“The Sao Paulo cash rebate is a fantastic incentive to make collaborations possible with international producers and distributors.

Even though it has only recently been implemented, our experience shows it is amodern, agile and efficient process, with no bureaucracy,” says Gustavo Mello at Boutique, behind Netflix’s first non-English global hit, “3%.”

While still relatively small, the rebate, however, may yet build further.

It also forms part of a bigger build in Brazil, and an evolution of production models worldwide.

Spcine is now in negotiations for 2023’s rebate budget. “The growth of the budget of the second edition of the program shows that we succeeded in proving internally to the municipal administration the great impact of a project like this,” says Luiz Francisco Vasco de Toledo, director of investments and strategic
partnerships at Spcine. “We hope to have even more resources next year. We are discussing a better budget for next year right now.”

“We are also evaluating how to convert the program into a law, not depending on decrees as of now, so ensuring it will happen every year,” Ferreira adds.

“The mayor of Sao Paulo was the one who made the first incentive last year and who just increased the budget. He is being supportive in a very consistent way,” says Vasco de Toledo.

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During his first time in office, over 2003-10, Lula launched an Audiovisual Sector Fund(FSA) which would end up channelling up to about $200 million a year into Brazilianfi lm and TV.
He looks very likely to ensure much higher levels of sustained FSA investment during his mandate than existed under the anti-culture Jair Bolsonaro.

Global streamers do not need much persuasion to bring big shoots to Brazil or sustain or grow in production there.

Brazil adapted early to a streaming world. According to Ampere Analysis’ Guy Bisson, Brazil is Netflix’s second largest market after the U.S. with an end of 2022 forecast of 16.4million subscribers. Revenue wise, it would rank sixth after the U.S., U.K., France, Germany and Canada.

The scheme’s renewal comes, moreover, in the wake of a change of perception ofpriorities in the international film and television production community, which therebate fully embraces.

Shoots can earn extra rebate points, beyond a 20% base, by the use of generators not powered by fossil fuels or a ban on single use plastics and practicing selective wastecollection, says Ferreira.

All three productions tapping the first year scheme had either at least three heads of department or at least one key creative or lead actor or supporting actor who is either Black, indigenous, trans or female.
That kind of positive action is desperately required. In 2016, 51,5% of the Brazilian population was female and 54% Black Brazilians.

Yet not one commercial film release was made by a Black woman director.

The powerhouse of the biggest economy in Latin America with a population the size of Spain’s, São Paulo city and state have 6,000 production companies in the city alone. That’s a far larger production base than rivals, which offer shoot incentives such as Colombia or the Dominican Republic.

Other cities in Brazil and Latin America, Rio de Janeiro and Buenos Aires, for example, have now launched their own incentive schemes.

Challenges remain, such as both studio space and skilled workforce availability, which is seen in other key markets worldwide.

In this sense, the São Paulo rebate has proved the tip of an iceberg, says Vasco de Toledo.
“After the release of the first project, we are witnessing other kinds of investments coming to Sao Paulo, such as new sound stages infrastructures,” he adds. More specific announcements may be made shortly.

John Hopewell contributed to this report.