Competitive tax incentives are proving to be a powerful driver of film production, and the Basque Country in Spain is the latest region to reputably step into this arena. Already recognized for its attractive financial perks, the region of Bizkaia has now upped the ante, offering some of the most competitive tax breaks in Spain with up to 70% in tax deductions. The results are already evident, with production seeing a 4x increase in 2023 alone, as reported by Variety. And the surge shows no signs of slowing.

“The tax incentives have given us a significant boost, enabling both regional creations and attracting productions from outside the region” said Koldo Zuazua, a leading Basque producer from Kowalski Films. “This has been a game-changer for the industry, fundamentally altering the production landscape in just a few years.”

The appeal goes beyond just financial incentives – it’s reshaping the quality and scale of projects. High-profile TV shows like Querer and Iciar Bollain’s latest film Soy Nevenka, both showcased at the San Sebastian International Film Festival, highlight this transformation.

Across Europe, co-productions have become vital to success, and Basque producers are capitalizing on this model. The region’s tax incentives are sweetening the deal, allowing producers to play a bigger role in both Spanish and international projects.

“Tax incentives have opened doors for co-productions with companies across Spain and internationally. This has allowed us to scale up, moving from being minority co-producers to playing a more significant role in larger projects,” Zuazua said.

Leire Apellaniz, from boutique production company Señor y Señora, shares this sentiment, citing collaborations with top Basque companies like Irusoin and national heavyweights like The Mediapro Studio and Apache Entertainment. This collaboration has helped Señor y Señora co-produce films such as Toronto Platform nominee Daniela Forever and the critically acclaimed Samsara.

Basque productions are known for their unique voice and innovative approach to storytelling. “Our productions are defined by narrative risks and a drive to innovate, exploring new cinematic languages and subverting genres,” Apellaniz said. Despite the region’s success, there’s no fear of resting on past accomplishments.

With cities like Bilbao, San Sebastian, and Vitoria-Gasteiz in the Basque Country offering vibrant production environments, they still face limitations in scale and now new underlying challenges have arisen as result of these new incentives.

“There’s significant rising costs of production as demand increases. The influx of projects has driven up rates for technicians and talent, and the cost of accommodation is a growing concern,” notes Xabi Berzosa, head of Irusoin. “This is not a huge territory, and we don’t have 20 DPs and 100 production teams. The number of people here is what it is, and getting a good production team for your own project takes a lot more time than some years ago.”

Addressing these growing pains will require nurturing local talent and infrastructure.

“Although there’s abundant talent in the Basque Country, especially among women, institutions need to economically and industrially strengthen small and medium-sized producers to build a robust industrial network capable of supporting the sector’s growth,” Apellaniz said.

The upcoming 1.1 million-square-foot audiovisual hub in Bilbao, featuring digital sets, studios, and post-production facilities, is a key part of this strategy. Grassroots initiatives like Talentuaren Gunea, organized by Zineuskadi, are also helping to cultivate local talent.

Ultimately, the true test of the Basque Country’s burgeoning film scene will be the quality and impact of its productions.

“I strongly believe in the power of divergent films to transform society. Our region is seizing the opportunities provided by financial policies to promote environmentalism, anti-racism, feminism, and diversity through film,” Apellaniz said.

Among the sectors thriving in the Basque Country is animation. Alberto Vázquez’s Decorado, co-produced by UniKo, follows in the footsteps of last year’s Sultana’s Dream and the Goya-winning Unicorn Wars. The studio’s CEO, Ivan Miñambres, explains how their approach has elevated their content to a global stage.

“Our strategy has always been to work locally with a global perspective. We leverage local talent in Bilbao to tell universal stories that resonate globally, allowing us to create high-quality content that stands out beyond our borders,” Miñambres said.

Animation, he adds, provides a stable production base that doesn’t require the constant travel needed for live-action shoots. With a rise in the global animation box office, this momentum is expected to fuel even more projects in the coming years.

And as other regions in Spain consider adopting similar tax incentives, Basque producers remain optimistic.

“The key to sustaining this growth will be finding a balance once other regions in Spain adopt similar tax incentives. While we might see a decrease in production volume, this should help stabilize costs and ensure that the Basque Country remains a competitive and appealing location for high-quality film production,” concludes Zuazua, showcasing the pragmatism required to navigate this booming but evolving landscape.