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With a tax incentive of 50%, an international benchmark, the Canary Islands continue to be a top destination for national and international film shoots

The Canary Islands Continue to Attract International Film Shoots

In May, the impact of COVID-19 on the audiovisual industry led the Spanish government to approve a significant increase in tax relief for international film shoots, as well as tax credits for Spanish productions.

In the case of the Canary Islands, which have a different tax system to that of mainland Spain, the rebate for international shoots was set at no less than 50% for the first million euros spent and 45% for the rest, one of the highest tax deductions of its kind in the world. The cap on expenditures in the Canary Islands is 18 million euros per project.

"The industry has shown great interest, especially for international projects," says Natacha Mora, coordinator of Canary Islands Film, the institution that brings together the Islands’ Film Commissions.

"The announcement generated a flood of all kinds of inquiries. Many of them resulted in the arrival of scouting teams, who are already closing off locations for future projects".

"For 2021 we can confirm a series from an international platform will be shot over several months on three of the Islands, taking advantage of the incentive. We have also confirmed a feature film from the United Kingdom and another from Norway. Beyond these, other national projects have been confirmed", she states.
Although the pandemic led to a general decline in production activity during 2020, this year the Islands have hosted around twenty films, series and documentaries.

These include "The Midnight Sky", a film directed by George Clooney that has just been released by Netflix, the series "Kamikaze" from HBO; "Sky Rojo”, created by Álex Pina and Vancouver Media also for Netflix; the second season of the celebrated series “Hierro”, an international co-production by Movistar Plus and Portocabo, and "Dos Vidas” (“Two Lives), a series produced by Bambú Producciones and Mascaret Films for TVE.

"We are confident that once we overcome this situation, our tax incentives will once again be a driving element appealing to large and medium-sized productions", says Mora.

Filming via streaming

As in other areas, regulations fighting COVID-19 have made it necessary to implement safety protocols adapted to each project and validated by occupational risk prevention companies, in order to guarantee compliance with health measures. These measures have increased budgets by between 5% and 7%, according to industry estimates, while requiring more intensive production planning.

The exceptional nature of the situation has inspired imaginative reactions from the Canarian industry.

According to Mora, "the lockdown forced many production companies to reinvent themselves and in a very short period of time they took initiative to offer shoots via streaming".

Travel restrictions became a business opportunity for some local companies, which were able to offer international shoots without the need to travel to the Islands. The initiative resulted in the filming of the first streamed advertisement, directed from London and broadcast live to the entire world.

"The initiative was developed with 100% local service providers and staff, except for the director and the director of photography," he says.

Growth of animation

For a few years now, the animation industry in the Canary Islands has been experiencing an unprecedented boom. In 2020 it has continued to grow, and has remained unaffected by the pandemic.

The fact that the new regulations on incentives included a reduction of the minimum expenditure to 200,000 euros for animation and visual effects projects has given rise to expectations of growth in the sector.

Likewise, the so-called Canary Islands Special Zone (“ZEC”), which encourages the creation of companies by offering a reduced corporate tax rate of 4%, compatible with the aforementioned tax benefits, has also contributed to this boom.

Recently, Spanish companies such as Free Your Mind, Orca Studios, Zinkia Entertainment and Koyi have established themselves in the Islands due to these tax incentives. They have been joined by international studios such as the French studios Birland (from the Amuses group) and Fortiche Production, as well as the British FuturumKids.

Among the animation projects, one stand-out example is the new season of the iconic children's series "Pocoyó", the result of a co-production agreement between Zinkia and Koyi.