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How to co-finance your animated films and series in Mexico

Mexico is getting the attention of the global entertainment industry. Executives around the world are actively looking to do business with Mexican production companies and studios. Especially from the USA and Canada. Other than being in roughly the same time zone, there are new reasons for looking at Mexico as a co-production partner. A creative boom. A consolidation of the creative industries in Mexico. And of course: The potential of an industry that has plenty of room to grow.

Animation Studios from Canada and USA are saturated with work. It’s not uncommon for a studio to be working on 4 to 6 big projects at the same time. And it’s hard for them to reach talented artists to keep growing. In Mexico, things are different. There’s a lot of untapped talent in Mexico.

With the current Dollar value against the Mexican Peso, global producers get a better bang for their buck. It’s a good idea for foreign producers to invest their money in Mexican studios. But it’s also common for them to look for partners that can finance a part of their projects, so what options are there for international co-productions in Mexico?.

Here are some tools that might be the answer to that question:

GOVERNMENT COINVESTMENT GRANTS

FIDECINE

The “Fund for Investment and stimulus for films” grants a maximum of $8M MXP (~$400K USD) for live-action and animation feature films in their production, post-production, distribution or exhibition stages. It is risk capital or credit contract that covers up to 49% of the total budget. Registrations open once a year, usually in January of February.

FOPROCINE

The Fund for Quality Film Production for live-action and animation feature films, is risk capital of up to $10M MXP, (~500k USD) can be combined with EFICINE 189 (Explained below). It has 3 variants: Production, Post-Production, and Festival Invitational Support.

FONCA CULTURAL COINVESTMENTS (FONCA PROYECTOS Y COINVERSIONES CULTURALES)

The cultural co-investments program grants up to $500,000 MXP to projects that already have a contribution (Monetary or not) of at least 35% of their cost. Supporting the production of Feature Films, Shorts, Series and more. And the promotion in festivals, training and research.. If your project does not have an additional contribution, you can get up to $250K MXP. The project must be concluded within 12 months. It usually opens from April through mid-June.
See 2016 Rules

COMMING SOON: FOPROCINE SERIES

Rumor has it, IMCINE will be publishing an open call and for the first time, this fund will also support the production of TV series.

 

TAX INCENTIVES

VAT 0%

Foreign production companies should not pay taxes in Mexico, so they’re eligible for a tax reimbursement of tangible expenditures. The fiscal incentive for foreign productions known as VAT 0% works similar to a rebate and you could get a 10-12% tax return from your total expenditure in Mexico. HOW? Before you spend anything, register the project with the Ministry of Finance through a Mexican company which, at the end of the project, will apply for the tax return according to the law.

PRO-AV

PROMEXICO, has a secondary tax rebate that can be applied to foreign feature films, series and video games produced in Mexico. Applicable in co-production projects or production services for export. To apply, there’s a  minimum investment of $40M MXP before taxes (~2M USD). And it can be combined with VAT 0% to receive a maximum combined reimbursement of 17.5% of the total budget.

EFICINE 189

With Eficine 189, big companies can choose to support films with their tax money. Instead of paying directly as a tribute, they may give part of it (Up to $20M MXP, or $1M USD. And up to 10% of their taxes) to the production companies. Covering up to 80% of the budget. If you already have FIDECINE or FOPROCINE in place, you can consolidate financing with EFICINE.

 

REGIONAL GRANTS

IBERMEDIA DEVELOPMENT

Supports the development of film and TV projects in many Iberoamerican countries like Mexico. For the creation of scripts, storyboard, and funding, to the creation of a distribution plan. Amounting to up to $15K USD and up to 50% of the development budget. This is a loan that must be paid back in its totality on the first day of production.

IBERMEDIA CO-PRODUCTION

Projects in co-production between 2 Ibero-American countries are eligible to get up to $150K USD and up to 50% of the budget with the IBERMEDIA Co-Production fund. Countries outside the region can also chip in with up to 30% of the budget. In the case of animation projects, at least 70% of the animation should be created in Iberoamerican studios. Each of the countries must have confirmed at least 50% of their respective funding. This is also a loan that must be paid back from the net income of the project.

GABRIEL GARCÍA MARQUEZ GRANT

This grant supports Mexican and Central America filmmakers of indigenous descent, in the production of feature films or series. With monetary aids ranging from $70,000 MXP in screenwriting and development to $250,000 MXP in production, editing, post or distribution projects.

 

SEED CAPITAL

INADEM 3.3

This is a program by the Ministry of Economy and the National Entrepreneur Institute (INADEM) for Mexican Start-ups and Scale-ups to get up to $3M MXP (About $150K USD) for technology development and implementation, certifications for services and human talent, business consulting and equipment. It usually opens on may. (See rules for 2016)

INADEM 2.4

This program by the Ministry of Economy and INADEM created for Mexican entrepreneurs to get up to $200k – 900k MXP (About $10k – 45k USD) for strengthening, acceleration, and internationalization projects. It requires being accepted into an incubation process. It usually opens in April. It grants up to 80% of the budget in company strengthening projects, 60% in acceleration or internationalization projects.

 

GRANTS FOR MEXICAN ARTISTS

IMCINE SERIES DEVELOPMENT GRANT

In this new program, IMCINE supports Mexican creators with up to $400K MXP (~$20K USD) to develop their show, polish their bible and create a show trailer. This is the first year this grant is up, but this means great news for Mexican television creators and producers. Opens: Mid November, Closes: Early December

FONCA YOUNG CREATORS (JÓVENES CREADORES)

FONCA (National Fund for Culture and Arts) supports Mexican citizens or permanent residents between 18 to 34 years old in individual artistic projects through this program.

FILM CREATORS PROGRAM (ESTÍMULO A CREADORES CINEMATOGRÁFICOS)

The ministry of culture and IMCINE support writing, re-writing and project development of feature films through this grant of up to $150,000 MXP. It usually opens from December through mid-January. (See rules 2015)

SCHOLARSHIP FOR STUDYING ABROAD

This Program grants monthly expenses, insurance and $200,000 MXP school expenses. It usually opens from mid-april to mid-may.

APPLIED ARTS- ANIMATION FILM

This Program Grants $190,000MXP for expenses, 25,000 MXP for travel and it opens from February to March. You need to be from 20 to 30 years old.

ARTISTIC RESIDENCIES

This program grants $100,000 or $150,000 MXP

 

As we can see, there are many options to get financing for your animated series or film in Mexico. If you are interested in learning more about these financing tools, or producing your content in Mexico, we would love to talk to you!

-Thanks to Karen Witt, Diana Martinez and Eleana Oropeza for their help in bringing this article together.

ABOUT THE WRITER

Joe Alanis created Gasolina Studios. A development and production studio based in Mexico City. Currently working on animated series such as “Wings Across the World” (Australia-Mexico) and “The Adventures of Bim and Ama” (USA-Mexico). “Secret Society of Veggies” and “My Brother the Monster” are in-house productions. Now amounting for over 11 years of experience in the animation field, previous working experience includes being program director for the Animation Bachelor of Arts at Monterrey Tech (ITESM). Founder and Chief Designer at Alebrije Estudios, where he developed video games for different platforms.

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