Financing options for your audiovisual project in 2022
Hello!
Time doesn't stop and dreams only come true when we strive to make them come true. In our post today we are going to talk a little about funding for audiovisuals in Brazil and how to get financial help to get your project off the ground.
Many are those who think that producing films, series, documentaries are the exclusive result of a combination of dreamers, and that money comes easily and without complications. This is a big mistake.
Audiovisual is an industry, like any other, that employs around 6 million people every year, pays taxes and needs to know how to count the pennies to be able to take your project from the pre production processes to the long-awaited day of the work's launch.
Did you know that our audiovisual is responsible for 2.67% of the Brazilian GDP (Gross Domestic Product)?
DIRECT AND INDIRECT SPONSORSHIP
There are two categories of possible funding in Brazil, and we will call them sponsorship to facilitate the understanding of this matter.
Companies and individuals can sponsor directly, without receiving IR benefits, but linking the work chosen for the financial incentive with their brand. Currently, direct sponsorships are rare, but they can happen.
Most sponsorships or incentives are known as indirect, and these are regulated by laws and by ANCINE in general. In this form of financing, companies and individuals can use their IR (Income Tax) as a form of incentive currency for cinematographic productions.
However, the producers need to follow some requirements, they are necessary to be contemplated with the financial incentive, since the government will decide what is allowed or not to be produced under this granted benefit.
ANCINE
Let's start with who regulates and supervises audiovisual financing in our country.
Part of ANCINE's attributions is to release the assigned resources and ensure that all conditions of laws such as the Rouanet Law (8.313/91), Audiovisual Law, FSA (Audiovisual Sector Fund) and Pay TV Law are strictly complied with.
In other words, ANCINE is today the main responsible for releasing national resources for audiovisual productions, as it is it who approves or not most of the projects.
On December 21, 2021, ANCINE and BNDES approved a new contract to guarantee the FSA – Audiovisual Sector Fund for the next 5 years, with an amount of up to 5 billion reais in investments aimed at audiovisual.
In addition to this news, the first FSA public notice has already been approved, where 100 million reais will be earmarked for the conclusion of the production of feature films. Each selected project can receive a maximum of R$ 3 million.
Still this year, the public notice to be launched by BRDE will make available another R$ 11.6 million in investments in the stage of commercialization of the works. Applications will be open between January 31 and March 31, 2022.
ROUANET LAW (Law 8.313/91)
The Rouanet Law was created to encourage the government to encourage culture through a policy of tax incentives for cultural projects and actions.
A company, for example, that sponsors a project, can offer up to 4% of the Income Tax as support and obtain a reduction of this amount. An individual can sponsor the corresponding to 6% of their IR.
Between 2006 and 2007, the Rouanet Law stopped accepting fiction features. But it continues to exist for the other categories of audiovisual productions.
AUDIOVISUAL LAW
The Audiovisual Law created in 1993, had a date to end in 2017, but it is persisting and it seems that it will stay with us at least until 2024.
The Audiovisual Law has some similarities with the Rouanet Law, as it is also a form of indirect support and is also based on the IR deduction, following the same rule of 4% deduction for companies and 6% for individuals.
The big difference lies in the fact that this law authorizes the amount invested to be recorded in the company's accounting as operating expenses, when the IR amounts are used in the purchase of Audiovisual Investment Certificates (CAV).
In this type of financing, companies seek not only the tax benefit, but also the association of their institutional image with the product made with the ceded resource, in addition to becoming “partners” in the production and receiving part of the income obtained from the commercialization of the work, according to conditions established in the CAV.
Projects under this law can be independent productions of short, medium and feature films, telefilms, mini-series, series or cultural and educational programs for TV.
PAULO GUSTAVO LAW
At the end of last year we saw the approval of a new law that will certainly be of great help to the sector in 2022, we are talking about the Law PLP 73/2021, known as the Paulo Gustavo Law.
This law provides for the financial support of R$ 3.8 billion to the cultural and artistic sector through funds from the Union, which will be transferred to states and municipalities.
We do not yet have the full text of this new law, but we know that its basis is established in offering financial assistance with emergency actions to deal with the economic and social effects of the pandemic on the Brazilian cultural sector.
The important thing is to remember that any investment contributes to the productive sector in a context of heating up of the audiovisual economy.
“FUND ME” MOVEMENT
Another way to ask for help besides knocking on company doors and bothering those at home is to ask for help from the immense universe of the internet. That's right.
Is it difficult to get capital for that production? Create a “Gofundme” and see culture buffs move to bring in much-needed cash.
That's exactly what the producer Coala Filmes did, by launching an online funding campaign on the cartases platform.
The goal is to raise 200 thousand reais to take the animation "Bob Spit - we don't like people" to the Oscars 2022!
CASH REBATE
Another way to help with the costs of your production is to keep an eye on this new movement called CASH REBATE, which is nothing more than an incentive program that allows reimbursement of expenses in the execution of an audiovisual project.
This form of assistance is strongly linked to plurality and representation, so if your project has these situations present, you may be awarded this benefit in your state.
Last year we saw SPCINE successfully implement this program in conjunction with the state of São Paulo, offering a Cash Rebate of up to 30% of production costs.
Keep an eye on government and business programs to encourage culture so you don't miss the application deadlines.
INSURANCE
Finally, let's talk a little about the importance of including two insurance premiums in your production costs, before participating in any type of financial incentive program, and raising funds faster and more responsibly.
Having in your budget the estimated cost of audiovisual insurance plus E&O insurance will put you ahead of the competition. This happens because it demonstrates responsibility and companies, people and even the federal government itself will look more closely at your project.
Thinking about protecting your image, people and goods will make your project stand out, no doubt about it!
For this reason, talk to those who understand the subject and are passionate about audiovisual. We at Prospecto are specialists in this segment and will assist you in the pricing of your risk and subsequent insurance contracting.
Interesting topic today, isn't it? We hope we have helped to map out useful and possible ways to bring in capital and make your dream come true!
We look forward to seeing you on our next #MondayBlog.
Have a great week, lovers!
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