In the last several years, the Palermo neighborhood of Buenos Aires, Argentina, has attracted an increasing number of film production and TV channel companies, earning it the name of “Palermo Hollywood.” The area is developing into a major content production center for the Spanish-speaking world at large. In addition, it also houses many digital media companies who have an important international component.
In June of last year, the Buenos Aires City Governor, Mauricio Macri, along with the Minister of Economic Development, Francisco Cabrera, and the Buenos Aires City Chief of Staff, Horacio Rodriguez Larreta, gathered at the Espacio Cultural Carlos Gardel to announce the city’s draft bill for the promotion of the country’s audiovisual industry.
The draft bill for promoting the audiovisual industry has two key points. First, it declares audiovisual work an industry, and provides tax benefits and financial support for audiovisual-related activities. And second, it calls for the creation of an Audiovisual District, which would encompass the Chacarita, Paternal, Palermo, Colegiales and Villa Ortuzar neighborhoods, and provide additional functional and tax benefits for companies that set up shop in that area.
The Palermo area is currently home to about 100 production companies: Palermoset, Ideas del Sur, Promofilm, Estudio Mayor, Canal 9, Mandarina TV, America, Endemol Argentina, KAPOW, Flehner Films, Fire Advertainment, and La Cornisa Productions, among many others.
According to a British Television Distributors' Association report, Argentina ranks fourth among the world’s top content-producing and exporting countries, after England, the U.S., and Holland. And audiovisual activity in Buenos Aires is intense— the local industry has more than 400 companies (80% of them SMEs), which employ over 55,000 people, and racked up more than $1 billion in billings last year.
Several canned productions sold abroad started out as very successful programs in Argentina. “Los Simuladores,” for example, was exported by Telefe Contenidos to Mexico, Chile, Spain, Russia, Greece, France and the U.S. And Polka dubbed the Spanish version of “Desperate Housewives” for Colombia, Chile, Ecuador and the U.S. Hispanic market.
The draft bill not only aims to entice new production companies to move to the District and strengthen the area’s growth as an audiovisual production center by providing incentives, but also to keep production companies that are already there from leaving. Due to the explosion in real estate prices in Argentina, property prices in Buenos Aires have increased so exorbitantly that many producers have moved to the city’s suburbs or left altogether, going to other countries such as Uruguay.
Cabrera told Clarin: “The bill has three objectives. The first is to prevent production companies from leaving as a result of further increases in property prices. Second, the law would declare this activity an industry, which today is considered a service. And third, it would define an area of the city as an audiovisual district, boosting activity and encouraging more companies to move here.” Audiovisual productions, under their current “service” classification, are taxed at 3.5% of gross income, while the tax rate for “industries” located in the city is 0% to 1% if their billings exceed $20 million annually. If approved, the new law would apply to the entire city, not just the District.
For companies already established in the District or those who move there, the benefits will be even greater. They will be exempt from paying turnover tax, property tax in Buenos Aires, and revenue stamps for 15 years if they are domestic firms, or ten years if they are foreign companies. In addition, they will have access to loans from the city to finance their move or acquire working capital.
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