BUENOS AIRES — With rising costs in Argentina, film finance hard to secure and auds flocking to Hollywood fare, local producers are not only turning to their Latin American neighbors for coin but also selling remake rights to hemispheric hits that have crossover potential in English-language markets.

It’s a cold dose of reality for Argentina, one of the busiest production markets in Latin America in the past decade, after a 70% currency devaluation created a favorable exchange rate. But now an overvalued peso and 25% annual inflation is making it hard to get by, threatening to slow the nation’s output of 100 features a year.

Producer-scribe Jose Levy is among those going to others for funding, turning to Mexico to make thriller “Clipeado” (Clipped). Levy and other producers are on the hunt for coin in Brazil, Colombia and Mexico, where state financing has become greater than in Argentina.

Argentine producers have long raised coin in Europe, but with the region suffering from the economic downturn, eyes have turned to its Latin American neighbors. Daniel Burman, who financed his “Lost Embrace” with coin from Europe and his BD Cine banner in Buenos Aires, has tied up funding for his next two projects from Brazil’s Gullane. Argentina’s Haddock Films, which co-produced Oscar-winning “The Secret in Their Eyes,” is partnering with Brazil’s Urca Films on the comedy “Happy Hour.”

“Clipped” will be produced by Levy in Mexico with Matthias Ehrenberg of Rio Negro Prods. Jamie Camil (“Saving Private Perez”) stars, with lensing set for next year. Pic will be helmed by musicvideo director Gustavo Adrian Garzon.

Levy had sought to produce in Buenos Aires in 2008, setting the budget at 5.4 million pesos. But a surge in inflation and the value of the currency drove up spending 40% to 7.5 million pesos ($1.8 million) even with cuts in locations and special effects. The rise in costs put a monkey wrench in the project, stalling the startup over the last three years as actors fell out and investors raised concerns over potential returns.”Argentina is not as competitive now,” Levy says. “And it’s riskier. It’s easier to recoup the budget in Mexico, where the market is bigger.”

Mexico has 5,000 screens and nearly three times the population of Argentina, which has 800 screens and 40 million people. It also has more possibilities for sales to TV networks, both in Mexico and the U.S. Hispanic market, and better financing options for pics targeted to a wider audience, says Levy.

In Argentina, half a film’s state funding is tied to box office, with higher grossers receiving more. This makes private financing hard to raise, particularly for bigger budget films, Levy says. U.S. studio films dominate the Argentine box office, taking in 85% of receipts; local releases take in about 10%.

Mexico’s state financing system, on the other hand, offers straight tax incentives. The incentives can defray up to $1.8 million in upfront funds, regardless of a movie’s B.O. results — more than the maximum of $1 million of total support in Argentina, Levy says.

While Mexico’s higher production costs will boost “Clipped’s” budget to $2.5 million, he expects to raise most of that there, leaving less to secure in co-production, presales and other deals.

Another strategy for Latin American films is to extend profit potential via sales of remake rights for popular pics.

Levy and Nicolas Veinberg have optioned Spanish-Argentine romantic comedy “Elsa & Fred” for a U.S. remake, gaining the rights from Argentina’s Marcos Carnevale, who directed the original. The pic, about two elderly neighbors who find it’s never too late to fall in love, scored well in Argentina, Mexico and Spain in 2005 and sold to more than 30 countries including France, Italy and the U.S. It built a healthy B.O. run in Germany, screened for more than a year in Puerto Rico and was spun off into a legit performance in Mexico.

Patricia Riggen (“Under the Same Moon”) is attached, and half of the $6.5 million budget has been committed for a mid-2012 shoot, Levy says, who adds that more production partners are being sought. Shirley MacLaine is in negotiations to star, with Michael Caine expressing interest for the other leading role.

It’s the first of several remakes the producers are planning with the idea of squeezing more revenue out of films that have crossover potential with U.S. audiences.

“We think that the strategy of taking a successful movie from outside the Hollywood system and remaking it for U.S. audiences is a more risk averse way to finance projects,” Levy says. “It has been happening with a lot of European and Asian movies, but not with Latin American movies.”

But the producers are not alone in the remakes push. Buenos Aires sales outfit FilmSharks Intl. over the past year or so has been stocking its catalog with remake rights for films out of the region, betting that buyers want tested products like Panamanian comedy “Chance” and Carnevale’s latest film “Viudas” (Widows).

“The challenge will be to make an excellent remake of a movie that already was very good,” Levy says. “It already has a bar to surpass in terms of results.”