Montevideo — Uruguay is looking to attract film and TV productions by big-name producers such as Netflix, Amazon, Disney and HBO, with tax breaks and by touting its location possibilities, where, the government says, filming is facilitated given the short travel times between places.
The initiative follows the recent filming in the country of Conquest, produced by Keanu Reeves for Netflix, Yosi, the Regretful Spy, produced by Amazon Prime and starring Natalia Oreiro, and Amsterdam, to be released this year by HBO.
Netflix is also preparing a film based on the 1952 air crash in the Andes, survived by a group of passengers, and part of a local rubgy team, to coincide with the 50th anniversary of the disaster.
The Uruguayan government and the country’s audiovisual industry are seeking to position Uruguay as a filming hub for productions by offering incentives, including a cash rebate, which consists of a refund of up to 25% of the expenses incurred during filming in the country, a percentage that varies according to the size of the production.
Production companies can also apply for VAT exemption on production expenses of projects produced abroad and filmed in Uruguay.
Earlier this year, Uruguay’s Industries Minister Omar Paganini traveled to the United States, where he met with executives of major companies of the entertainment industry, and where he conveyed the message that the government will continue to support the sector.
However, he also heard some concerns from producers, such as Uruguay needing to offer larger studios in order to be able to develop indoor productions as well, government sources told Bloomberg Línea. Currently, most productions filmed in Uruguay are made on location, rather than in studios.
Both the government and the industry point out that the sector can continue to grow, as well as the spillover in terms of hotel, catering, transportation and salaries.
According to data from Musitelli Film & Digital, Uruguay saw around 24 weeks of content filming in the country in 2019, and which in 2020 climbed to 40 weeks and in 2021 was 142 weeks. Meanwhile, so far in 2022, there have been 77 weeks of filming to mid-August.
Conquest was filmed in Montevideo in September 2021, using locations such as the Salvo Palace and Independence Square.
Government incentives
The main tax refund tool is the Uruguay Audiovisual Program (PUA), with which the government has committed up to $12 million in rebates for local and foreign productions, an increase over the $4 million earmarked at the beginning of the program in 2019, and which later grew to $7 million.
Those funds earmarked for cash rebates, in turn, are distributed among applicants based on the size of their project.
For projects between $350,000 and $4 million, the rebate can be 25%, up to $700,000. For productions spending between $4 million and $8 million, a return of 17.6%, up to $850,000 is foreseen, while for productions spending more than $8 million, a return of 10.6%, and up to $1 million cash back is pledged.
In his mid-year trip, the minister addressed this point in meetings with representatives of Netflix, Amazon, HBO, and Disney.
“The minister went to give assurance that the cash rebate is going to continue over time, and also that we are boosting institutional support for this industry,” Guzman Acosta y Lara, director of telecommunications at the Ministry of Industries, told Bloomberg Línea.
“We are open to any type of investment that you want to make for the region. Uruguay has free zones that are attractive places for filming,” he added.
Ernesto Musitelli, director of one of Mustelli Film & Digital, one of Uruguay’s largest firms in equipment supply for international film productions, says the size of the cash rebate offered by Uruguay is “competitive”.
“This is not a novelty for Uruguay. Countries that want to attract foreign productions and boost domestic production, these are the mechanisms. The 25% is good. There are countries that offer a little more, but it is a competitive level and it is a strategic element. If you don’t have the incentives, it’s very easy to anticipate that business will fall off,” he said.
Based on government data accessed by Bloomberg Linea, during 2021 Chilean drama series El Presidente, aired by Amazon Prime and which is about corruption in soccer’s world governing body FIFA, achieved a return of $1 million. Meanwhile, Yosi received a rebate of $325,990 for its first season, and Porn and Ice Cream, also from Amazon and starring Sofía Morandi and Martín Piroyansky, received a rebate of $402,080.
Leonardo Sbaraglia and Julieta Díaz also filmed Asfixiados for Star+ last year between Montevideo and Punta del Este, and Togo, the first Netflix movie made in Uruguay, was filmed last year.
The amount of money spent on productions in Uruguay varies, but is usually between $2 million and $4 million, and which are the expenses incurred in Uruguay and do not include actors’ or foreign crew’s salaries, or post-production, according to sources from the audiovisual sector.
The structure to develop the industry
The desire to develop the audiovisual industry in Uruguay is part of a broader policy of the government and businesses to position Uruguay as a tech hub.
“Film production in Uruguay developed with the development of production services for advertising, but in recent years there has undoubtedly been a shift in the business and clearly there is a reconversion of many production companies towards the content sector, such as films, series and documentaries. And there are platforms such as Amazon, Netflix, Disney, or HBO. That is what is being addressed today,” Musitelli said.
The government has promoted the creation of a national audiovisual agency to centralize in a single compartment the various state programs designed to promote the industr, and which until now were divided between the ministries if Industry, and education and culture.
Foreign trade agency Uruguay XXI would also be involved.
In practical aspects, one of the issues highlighted by the government is that Uruguay offers short distances between locations, allowing for the use of multiple places.
“Those are things that the industry has been handling well. There was good technical support, with camera and lighting service providers, and it is getting to have an important maturity in the development of these projects,” Acosta y Lara said.
Another factor is that productions are moving for reasons of convenience. In the northern hemisphere in winter they need to film advertising campaigns for the summer, and they move to other countries such as South Africa, Argentina or Chile. And Uruguay is also looking to position itself in that group.
Acosta y Lara also said that the government is working on getting together with private companies to ensure that there is sustainability during filming, and that the environment is conserved.
Uruguay also hopes that, with the arrival of more international productions, such activity will give a long-term boost to the local filmmaking industry.
The economic benefits
Aiguá is a town with a population of 2,500, in the middle of the mountains between Maldonado, Rocha and Lavalleja, but the filming of Uruguayan movie La Teoría de los Vidrios Rotos benefited varous businesses and saw daily life in the town altered.
Both government and audiovisual industry sources pointed out that investments in the sector also have an “immediate” spillover into other sectors of the economy, such as hotels, equipment hire, catering and other services, both in Montevideo and in the interior of the country.
“It is a sector that has a big spillover. There is a complex system of services around any audiovisual production that goes from occupying a hotel bed, renting a catering service, to transportation and paying extras,” Jorge Céspedes, director of culture of Maldonado municipality, told Bloomberg Línea.
The departmental government of the area that has Punta del Este as its jewel has developed a one-stop shop to expedite requests for filming at locations in the region, Céspedes said.
Sources at the municipality of Maldonado point out that the audiovisual activity can also generate a new tourist niche.
“It has a collateral effect. As a correlate of audiovisual production there are people who visualize certain locations in a film and then feel motivated to go to the place where that film was made,” said Céspedes.
“Little by little, a very specific market is beginning to be segmented,” he said.
One example is the Hotel Argentino, in Piriápolis, which was the location for the Uruguayan film Whisky, which enjoyed distribution in Argentina and Brazil.
For the municipality, the idea is to take advantage of “what today appears as something new” and generate tourism interest.
Translated from the Spanish by Adam Critchley