Attracting foreign investments is one of the top priorities of the Brazilian economic policies, as it has been for years. In globalized capital markets, being able to attract foreign investment is key, especially to countries like Brazil which combines consecutive years of fiscal deficit, high public debt and a low domestic investment rate.
This is the reason why successive administrations in the federal, state and city levels have put great attention to the issue, implementing a wide range of measures to attract foreign investment across different industries and economic sectors. In the industrial sector, Brazilian states have for years competed against each other for such investments by providing fiscal incentives and other concessions to companies interested in investing in their territories.
While the cost-effectiveness of the so-called ‘fiscal war’ between different states and cities has been under greater scrutiny, the attention of Brazilian policy makers has been focused on investments in infrastructure and industrial facilities, largely missing the fact that more and more capital is being allocated to creative industries, in general, and to audiovisual content production in particular. Globally, more than US$ 100 Billion are invested each year on content production alone, of which approximately US$ 25 Billion are invested by streaming services that are the current growth drivers in the media sector. At any rate, these impressive numbers only reflect the fact that the audiovisual industry has become a hotspot for global investments.
Unfortunately, however, Brazil has not yet been able to become a destination to these resources. Although media companies operating in the country are relevant investors in local content production, the fact is that the country is not yet considered an attractive location for international productions. Other countries, such as Colombia, to mention an example in Latin America, have already taken the lead on this matter, offering international production incentives to attract investments and, by doing so, reaping the benefits to their own economies.
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Author: Jose Mauricio Fittipaldi - partner at CQS/FV Law Firm