When people talk about the recent Spanish audiovisual boom, they often highlight as a key turning point the government’s identification of the industry as a “strategic” one. Gone are the days when naysayers jeered the subsidization of a snoozy cinema sector. Today, young people flock to film schools, international producers are setting up shop in Spain and busy crews are getting trained on some of the world’s biggest productions. Times have changed.
Then again, times are constantly changing, and as this story was being reported, the head of Spain’s film-friendly administration, Prime Minister Pedro Sánchez, announced he might resign over “harassment” of his family, rankling nerves in the film sector. Pedro Almodóvar, filming Julianne Moore and Tilda Swinton starrer The Room Next Door, penned an open letter to the El Diario newspaper, admitting that he “cried like a child” over the news. A few days later, the Prime Minister announced he would stay in office.
Sánchez championed the “Spain, Audiovisual Hub of Europe” strategic plan for Spanish cinema, launched in 2021 to pump 1.6 billion euros ($1.72 billion) into the industry through 2025. The Hub has four concentrations: attracting foreign investments and shoots, improving financial and tax instruments, training talent — especially women — and regulatory reforms and the elimination of administrative barriers.
“The Spain Audiovisual Hub Plan marked a before and after for the promotion of the Spanish audiovisual industry,” says Elisa García Grande, executive director of the Spanish Foreign Trade Institute ICEX’s Invest in Spain division, and former head of the Economic and Commercial Office of the Spanish Embassy in Washington, D.C. “It is an ambitious and innovative initiative in which more than 10 ministries are involved, working in a coordinated way to transform and enhance the entire audiovisual industry and its ecosystem.”
She highlights that the initiative “looks outward to attract investment and support the internationalization of Spanish companies, as well as inward to consolidate our bases. In a relatively short amount of time, we have managed to not only strengthen our image globally but also to increase our competitiveness on the international stage.”
Peter Welter, CEO of production services outfit Fresco Film and current vp of the national producers’ association Profilm, a key mediator between the government and the industry, credits the Hub for bringing industry and institutional representatives, like tax authorities, together for the first time. “They actually found out how the industry worked” and learned the value on return of tax incentives. “Even if we had a change of government,” Welter says, “hopefully now they know the economic importance” of the film sector.
Volcano Films executive producer and CEO Sebastián Álvarez concurs: “It’s a good initiative, which should be continued to fully develop all the program’s points, since they haven’t yet had enough time to get to know the sector and be able to act, working with it.”
The Panorama
Spain offers tax rebates of up to 30 percent on the first 1 million euros ($1.1 million) of deductible expenses and 25 percent after that, with a minimum spend in Spain of 1 million euros. As of last year, those incentives doubled their ceiling to cap out at 20 million euros ($21.3 million) per film or 10 million euros ($10.7 million) per series episode, not exceeding 50 percent of production costs. The cap makes the incentives appealing to even the biggest international productions, especially on series that often don’t shoot fully in Spain.
In some Spanish regions, incentives are even higher. The Canary Islands offer a 54 percent deduction on the first million in eligible expenditure when expenses in the Canaries exceed 1.9 million euros ($2 million), and 45 percent on the rest, with a whopping 36 million euro ($38.4 million) cap. The per-episode cap for series is 18 million euros ($19.2 million). The higher incentives here compensate for sometimes having to bring in crews and equipment from the mainland, producers say.
In parts of the Basque Country, incentives offer 35 to 60 percent in tax credits on up to 50 to 60 percent of production cost estimates, depending on project characteristics. According to Xabier Ochandiano, economic development councilor for the city of Bilbao, “The tax incentive doesn’t just seek to attract shoots; it’s about generating investments, attracting companies and businesses, consolidating a solid and stable industry, generating qualified employment and promoting local talent.” And, he admits, it will be “necessary to adjust the offer to growing demand.”
Ochandiano highlights “resounding” results for Bilbao and the surrounding Bizkaia province: A 140 percent rise in feature film shoots and 40 percent in series in 2023, and an economic return of 58.5 million euros [$62.4 million], more than four times the previous year. Some 11 films and five series have shot or are shooting since the start of the year.
A new production hub under development not far from the Guggenheim in Bilbao is one of several new or expanding soundstages in Spain that will complement the country’s notoriety for outdoor locations. “Stage infrastructure in the country is certainly expanding, which can only be good news,” says Mike Day, CEO of production services outfit Palma Pictures.
Andreas Wentz, partner and executive producer at Sur Film, which worked on Venom: The Last Dance, the first major Hollywood production to shoot at the newly reopened Ciudad de la Luz studio complex in Valencia, further identifies the importance of backlots and tanks. He says the backlot, and local weather, were key factors in bringing Venom to Spain from the U.K. after strike-induced delays pushed shoot dates back to winter.
More than 600 people were involved in that production, and local reports celebrated the significant inward investment in the tourism and hospitality industry. “Everybody benefits” from regional incentives, Welter says. “The regional film commissions and offices are working hand in hand, and they know that if they attract [shoots], their neighbor will benefit from that as well because many productions travel across the country.”
Post-Strike Outlook
Locals say the post-strike Hollywood slowdown and restructuring has meant a significant drop in U.S. shoots, even while national and European productions have remained strong. “We’re still finding that due to the strikes of last year, our U.S. workflows have pushed toward slightly later in the year,” says Day. “U.S. productions have been a little slow to reboot and restart.”
Álvarez agrees: “Fortunately, in the last three months we’ve noticed the North American market vibrating again. We’ve had nonstop meetings with producers.”
Last spring, Wentz says Sur Film saw the shoot on Tenerife — the largest of Spain’s Canary Islands — for its planned co-production of Pawel Pawlikowski’s The Island, starring Joaquin Phoenix and Rooney Mara, fall apart at the last minute when the completion bond company wouldn’t cover the potential risk of the actors strike. Partners are now looking to refinance.
Besides Venom and the second season of Max’s House of Dragon, some other recent international shoots in Spain include Gerard Butler starrer Den of Thieves 2: Pantera from director Guy Ritchie; Peter Cattaneo’s The Penguin Lessons starring Steve Coogan, a co-production with Barcelona’s Nostromo Pictures; such series as the second season of Disney+’s Andor and new Star Wars series The Acolyte, Paramount+’s Special Ops: Lioness with Nicole Kidman, Apple TV+’s Foundation, Netflix’s Who Is Erin Carter? and Helicopter Heist, and the BBC’s This City Is Ours.
(Center): Master Sol (Lee Jung-jae) in Lucasfilm’s ‘The Acolyte’
Lucasfilm Ltd.
Producers suggest the country needs to consider an increase to the cap — again — to stay competitive with other European territories raising theirs to 40 percent. That puts Spain 15 points behind some and at risk of losing out to popular shooting destinations like South Africa, Hungary and Malta. “The raise of the cap was very, very positive,” Welter says. “We always apologize, saying we’re terribly sorry that we’re always asking for more, but we have to stay competitive in order to keep this going.”
“This is a race,” he adds. “Everybody, obviously, tries to tie down Hollywood productions because it’s good money, it’s jobs, it’s creating an industry, and I think it’s done a lot of good all over Europe in general.”
Day agrees: “The incentives are strong, the percentages are competitive, the caps are strong, particularly for television and episodic. But perhaps some enhancement would be beneficial if we, as a country, continue to want to attract those big-budget tentpole franchise movies.”
Álvarez adds that he’d like to see improvements in Spanish bank advances against guarantees and the speed and agility of administrative processes. But, he says, “taking into account that we are one of the youngest countries to have tax incentives, each year we are closer to having these aspects oiled for the future.”
Wentz notes that the U.K. often wins out over European territories on U.S. productions because some creative costs, like American actors’ salaries, don’t qualify for local tax rebates. “Still,” he says, “the production solution is a combination of right locations, right climate, professional crew and a tax rebate. And we have all those components.”
‘Making It Easy’
García Grande also notes that “international companies established in Spain can operate and benefit from the same incentives for filming as any other Spanish company,” which means they act in the same Spanish and European system for production and co-production aids.
“Spain is an attractive place to settle for numerous reasons, and there are no restrictions on foreign investments,” she adds. “We are the main bridge of economic and cultural connection between Europe and Latin America, acting as a gateway between the two markets. But we also offer a dynamic internal European market and access to more than 1.9 billion potential customers.” She also notes that Spain’s double tax treaties with 99 countries “facilitate the repatriation of profits, consolidating our position as a key center for international investments.”
Helping companies navigate the Spanish tax landscape, set up or expand operations in Spain, find business opportunities and connect with investors are among the personalized support services facilitated through the “Shooting in Spain” brand and the centralized information point Spain Audiovisual Bureau, which García Grande says has helped almost 1,000 companies since its creation in 2022. Her office is now working on placing representatives in key international cities like L.A. and Singapore. All of this forms part of a “global mission” newly encapsulated in the slogan, “Making It Easy for You.”
In addition to the expanding incentives and new fast-tracking of work visas, Spain has long been an attractive shooting location for its crew expertise, security, diverse settings and favorable climate. “We have locations that can resemble very diverse destinations around the world,” notes Álvarez, who also points to “a very varied spectrum of architectural and cultural profiles.”
Welter highlights a “positive vicious cycle” in terms of training crews. “We train people on an international level to get top-level technicians, which then benefits the national industry in order to create profit and better content, which goes out to the international market as well.”
He adds: “If the national market maintains itself with quality, and quality technicians, that is something that the international market benefits from when they come to shoot in Spain.”
