In a bid to tap the hefty 38% tax breaks of Spain’s Canary Islands, Beverly Hills-based Defiant Pictures, run by producers Lucas Jarach and Nicolas Veinberg, has launched a private capital film fund in partnership with Spanish investment firm Grupo Eneas. Fund will disburse coin for an annual slate of five Canary Islands-based pics with budgets ranging from $3 million to $25 million.
Since the Canary Islands incentive requires producers to raise private capital from island-based investors to fund up to 38% of a picture’s budget, gaining access to these local investors can be a challenge, per Jarach.
Eneas’ ready access to a large pool of local private investors guarantees the stability of the financial structure. These companies can then reclaim their investment as a tax deduction at the end of the fiscal year.
Rafael Lopez is the head of Eneas’ Canary Island outfit.
First pic out the gate is Andy Tennant’s “Wild Oats,” above, starring Shirley MacLaine, Jessica Lange, Demi Moore, Billy Connolly and Spain’s Santiago Segura, which shot for 23 days on Gran Canaria, one of the larger islands of the archipelago. “Wild Oats” also benefited from sponsorship deals with national air carrier Iberia and the Lopesan hotel group to cover accommodations and air transport.
“Shooting here is cheaper than in Louisiana, “ says Jarach, who points out that Spanish crews are not only top-notch, but non-union.
“Wild Oats” follows a retired widow, played by MacLaine, who receives an unexpected cash windfall erroneously and decides to keep the money and escape to the Canary Islands with her best friend, played by Lange.
Veinberg and Jarach produced the comedy in association with Blythe Frank.
Next up is “The Dead Ones,” starring Monica Bellucci, followed by the time travel romance “Timeless,” in which Veinberg and Jarach partnered with “Enchanted” and “Salt” producer Sunil Perkash, and which will be released in the U.S. by Relativity Media.
The Canary Islands film fund comes at a time when the rest of Spain is facing looming cutbacks in tax breaks. Per a proposed tax reform bill, the new 15% rebate for international non-Spanish shoots may be capped at around $3.4 million per film.
The nationwide tax break on investment in Spanish homegrown movies will edge up from 18% to 20%, Spanish tax minister Cristobal Montoro said. However, this is only on the first million euros ($1.4 million) of investment, giving Spanish movies just a $27,200 gain. It will also be capped at $4.1 million per production.
“This (draft proposal) is more intended for big studio movies that are trying to tap into the large incentive with no cap, and shooting very briefly in Spain,” says Jarach. “That’s why our films’ budgets are only $3 million to $25 million, and our productions will need to shoot (primarily) in the Canary Islands. Also, the Canary Islands legislation is a bit different from the rest of Spain.”