Brazil is getting in on the film fund game.
Risk capital firm Rio Bravo is partnering with Aracruz Celulose paper manufacturer and Brazil’s state-backed BNDES bank to launch an equity investment film fund, taking advantage of Brazil’s new tax breaks for film financing.
The fund, RB Cinema II, will be capitalized between $9.5 million to $14.5 million, fund manager Thierry Perone said at Berlin.
RB Cinema II will launch in the second half of this year. Half of its coin will target the exhibition sector. RB Cinema is negotiating three six- to 10-screen multiplexes in Brazil, said Perone.
Remaining coin will be split between local comedies and largely high-end international co-productions financed by RB Cinema’s new sales and distribution company, which was unveiled this Berlin.
RB Cinema I, which packs the same partners, recently put through a $3 million capital increase, which has been 100% subscribed by BNDES.
The new, and larger, second investment fund will benefit from highly attractive film tax incentives.
A modified law offers 6% deductions — not rebates — on tax liability to corporate investors and ordinary individuals buying shares in film funds such as RB Cinema.
“That’s really crucial,” said Perone. “The vast majority of tax paid in Brazil is by individuals not companies.”
In another departure, broadcasters can tap tax incentives for film investment.